District of New Jersey

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

John R. Moritz, 44, of Mason, Ohio, pleaded guilty before U.S. District Judge Kevin McNulty to an information charging him with one count of wire fraud.

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

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

The fraud count carries a maximum potential penalty of 20 years in prison and up to a $250,000 fine. Sentencing is scheduled for July 9, 2014.

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

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

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

TRENTON, N.J. - A Brooklyn, N.Y., man admitted today in Trenton federal court to traveling to New Jersey in order to coerce a Jewish man to give his wife a religious divorce – referred to as a “get” – through threats of violence, U.S. Attorney Paul J. Fishman announced.

Simcha Bulmash, 30, pleaded guilty today before U.S. District Judge Freda L. Wolfson to an information charging him with traveling in interstate commerce to commit extortion. His bail conditions include a $500,000 bond and GPS monitoring.

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

On Oct. 9, 2013, Bulmash and a group of conspirators – including Jay Goldstein, 59, Moshe Goldstein, 31, Avrohom Goldstein, 34, David Hellman, 31, Ariel Potash, 40, Binyamin Stimler, 38, and Sholom Shuchat, 29 – traveled from New York to a warehouse in Edison, N.J., with the intent of forcing a Jewish man to give his wife a “get,” a divorce document which, according to Jewish Law, must be presented by a husband to his wife to effect their divorce.

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

The group was then arrested by a team of FBI agents and charged by criminal complaint – along with rabbis Mendel Epstein, 68, and Martin Wolmark, 55 – in connection with the scheme. Hellman pleaded guilty to an information charging him with traveling in interstate commerce to commit extortion on March 6, 2014.  Moshe and Avrohom Goldstein pleaded guilty to the same charge on March 11, 2014. The charges against the remaining alleged conspirators remain pending. All of the defendants reside in Brooklyn, except Potash and Wolmark, who live in Monsey, N.Y.

During his guilty plea proceeding, Bulmash also admitted that on Aug. 22, 2011, he and others went to a residence in Brooklyn where they restrained, assaulted and injured a man in an attempt to extort a divorce from him. That conduct will be considered by the court during sentencing, currently scheduled for July 10, 2014.

Bulmash faces a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, for the investigation leading to today’s guilty plea. He also thanked the Lakewood, N.J., Police Department for their role.

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

The pending charges and allegations against related defendants are merely allegations, and they are considered innocent unless and until proven guilty.

14-104                                                                

Defense counsel: Robert C. Gottlieb Esq., New York

Bulmash, Simcha Information

NEWARK, N.J. - A federal grand jury in Newark today returned a nine-count indictment charging a former Bergen County tax return preparer for his alleged role in filing false federal income tax returns and filing false personal returns, U.S. Attorney Paul J. Fishman announced.

Wayne Dunich-Kolb, 49, formerly of Saddle River, N.J., was charged with aiding and assisting in the filing of false federal income tax returns for tax years 2007, 2008, 2009, 2010 and 2011; and with preparing and signing his own false federal income tax returns for tax years 2007, 2008, 2009 and 2010. Dunich-Kolb’s will make his initial court appearance on March 27, 2014, before U.S. Magistrate Judge James B. Clark III.

According to the indictment: Dunich-Kolb owned and operated a tax preparation business called Dunich-Kolb LLC, which he ran from his residence in Saddle River. He caused many of his clients to form fictitious partnerships or corporations that existed in name only and had no business purpose other than to falsely reduce the clients’ tax liability.

Dunich-Kolb prepared false and fraudulent business returns for clients’ fictitious businesses by fabricating and inflating business expenses, such as advertising, travel and other miscellaneous expenses, in order to generate false and fraudulent business and partnership losses, which he then used to substantially reduce taxpayers’ taxable income on their individual federal income tax returns. 

He falsified clients’ 2007, 2008, 2009, 2010 and 2011 individual federal income tax returns by fabricating and inflating deductions for unreimbursed employee business expenses, including home office, vehicle mileage and fuel expenses. 

Dunich-Kolb caused these false and fraudulent individual federal income tax returns to be filed with the IRS, resulting in a total tax loss of more than $1.6 million for 10 clients.

Dunich-Kolb also falsified his own personal federal income tax returns for tax years 2007, 2008, 2009 and 2010.  For these tax years, Dunich-Kolb’s client invoices reflected that he charged his clients an annual total of approximately $600,000 to $860,000 per year. Dunich-Kolb claimed approximately zero tax due and owing for tax years 2007 and 2008 and tried to obtain refunds for prior year tax payments that he never made, and substantially offset his tax liabilities for tax years 2009 and 2010 by claiming false credits for prior year tax payments that he never made.

Each of the nine tax counts carries a maximum potential penalty of three years in prison and a $250,000 fine.

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

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

The government is represented by Assistant U.S. Attorney Shirley U. Emehelu of the U.S. Attorney’s Office Economic Crimes Unit.

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Defense counsel:  TBA

Dunich-Kolb, Wayne Indictment

CAMDEN, N.J. – A woman and two men from Camden were charged today for their alleged participation in a scheme in which they stole business checks from the U.S. Mail in New Jersey, Pennsylvania and Delaware, altered them, and cashed them using a series of conspirators, U.S. Attorney Paul J. Fishman announced.

Ivory Vernon, 29, was arrested today by Camden County Sheriff’s officers on unrelated charges. She is being charged federally in a 10-count indictment that was unsealed today with bank fraud and conspiracy to commit bank fraud.

The indictment also charges Joseph Reevey, 38, with bank fraud and conspiracy to commit bank fraud; and Ibn Muhammad, 35, with bank fraud, conspiracy to commit bank fraud, and illegal possession of a firearm. Vernon, Reevey, who is in Pennsylvania state custody, and Muhammad, who is in federal custody, are all scheduled to appear before U.S. District Judge Jerome B. Simandle in Camden federal court on April 9, 2014.

According to indictment unsealed today:

From Aug. 6, 2012, through Aug. 1, 2013, Muhammad, Reevey, Vernon and others stole checks from curbside U.S. mailboxes in business industrial parks in New Jersey, Pennsylvania, and Delaware. Reevey and his conspirators would then recruit others to cash the stolen checks. Muhammad and other conspirators would alter the stolen checks so that the name of the “payee” would match the name of the recruited check casher. Reevey, Vernon, Warner and others would travel with the recruited check cashers to a bank, often in rented cars.

Muhammad, Reevey, Vernon and their conspirators cashed or attempted to cash more than 45 stolen and altered business checks worth more than $200,000. The scheme resulted in a total loss of more than $100,000 to the victim banks.

Muhammad’s illegal gun possession charge stems from the discovery of a Smith & Wesson revolver and a Browning pistol at his Camden residence when law enforcement authorities executed a search warrant in May of 2013.

On the counts of bank fraud and conspiracy to commit bank fraud, Muhammad, Reevey, and Vernon each face a maximum potential penalty of 30 years in prison and a fine of $1 million, or twice the gross gain or loss resulting from the offense. On the count of illegal possession of a gun, Muhammad faces a maximum potential penalty of 10 years in prison and a fine of $250,000.

U.S. Attorney Fishman credited special agents from the U.S. Postal Inspection Service, Philadelphia Division, under the direction of Inspector in Charge David Bosch; troopers from the N.J. State Police, under the direction of Col. Rick Fuentes; special agents from the Bureau of Alcohol Tobacco, Firearms, and Explosives under the leadership of Acting Special Agent in Charge George Belsky, and officers from the Gloucester Township and Pennsauken Township police departments for the investigation leading to today's arrest.

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

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

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Defense counsel:

Muhammad: Lisa Lewis Esq., Camden, N.J.
Reevey: Edward Crisonino Esq., Westmont, N.J.
Vernon: Brian O’Malley Esq., Haddon Heights, N.J.

Muhammad, et al., Indictment

NEWARK, N.J. – A member of a massive, international counterfeit goods conspiracy was sentenced today to 38 months in prison for his role in the scheme, U.S. Attorney Paul J. Fishman announced.

Ning Guo, 40, of the People’s Republic of China, previously pleaded guilty before U.S. District Judge Esther Salas to an information charging him with one count of conspiracy to traffic in counterfeit goods and one count of money laundering conspiracy. Judge Salas imposed the sentence today in Newark federal court.

Two other conspirators have already been sentenced, and two await sentencing. Yi Jian Chen, 53, and Hui Huang, 33, both of Brooklyn, each previously pleaded guilty to one count of conspiracy to traffic in counterfeit goods and await sentencing. Jian Zhi Mo, 45, of Flushing, N.Y. and Yuan Feng Lai, 28, of New York City, each previously pleaded guilty to one count of conspiracy to traffic in counterfeit goods and were each sentenced to 14 months of home confinement.

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

From August 2008 through February 2012, the defendants ran an international counterfeit goods smuggling and distribution conspiracy. The defendants and others imported more than 35 containers of counterfeit goods – primarily cigarettes, handbags, and sneakers – into the United States from China. These goods, if legitimate, would have had a retail value of more than $300 million. 

The conspirators sought help in importing counterfeit goods into the United States and used a corporation to import the goods through Port Newark-Elizabeth Marine Terminal in Elizabeth, N.J.  This corporation was actually a front company set up by law enforcement to act as an importer. The conspirators imported the counterfeit goods using fraudulent customs paperwork, which, among other things, falsely declared the goods within the containers.

Certain conspirators controlled the importation of the counterfeit goods into the United States. Some conspirators managed the distribution of counterfeit goods once they arrived in the United States. Others paid individuals they believed controlled an importation company with connections at the port. In fact, these individuals were undercover law enforcement agents.

Some conspirators acted as wholesalers for the counterfeit goods, supplying retailers who sold counterfeit goods to customers in the United States. A number of conspirators, including Guo, also engaged in a money laundering conspiracy to disguise and conceal the source of what they believed to be the profits of certain unlawful activity, moving this money through banks in the United States, China, and elsewhere, to disguise the sources of the funds.

Law enforcement introduced several undercover special agents to the conspirators. These undercover agents purported to have connections at the port, which allowed them to obtain containers that were on hold, get them released and pass them through to the conspirators. The conspirators paid the undercover agents more than $900,000 for these “services.” 

Undercover agents 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.

Guo’s primary role was to transport and store imported counterfeit merchandise for the conspirators after it arrived at the port. He was also involved in the actual importation of the goods from China. Guo communicated with the undercover agents in numerous recorded calls and meetings about importing counterfeit goods from China and clearing the goods through customs.  Guo was also involved in an international money laundering scheme through which he and others laundered the proceeds of the counterfeit goods smuggling scheme. 

In addition to the prison term, Guo is subject to deportation.

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

14-098            
                                         
Defense counsel: Richard Willstater Esq., White Plains, N.Y.

NEWARK, N.J. – An Allentown, Pa., man previously charged with sex trafficking of a minor was indicted today on additional charges of conspiracy to use an interstate facility in aid of prostitution business, transportation of a minor to engage in prostitution, coercion and enticement to engage in prostitution, and obstruction, U.S. Attorney Paul J. Fishman announced.     

The 10-count superseding indictment returned by a federal grand jury against Francisco Torrellas, a/k/a “Francisco Fordham Jr.,” “Dream,” “Daddy,” and “Pretty,” includes one count of conspiracy in connection with the defendant’s operation of a prostitution business; five counts of violating the Travel Act, i.e., using an interstate facility to carry on his prostitution business; one count of transporting a minor to engage in prostitution; one count of coercion and enticement to engage in prostitution; and one count of obstruction of justice. The original count of sex trafficking of a minor on which the defendant was indicted on June 27, 2012, remains in place.

According to the superseding indictment and other documents filed in court:

From November 2010 to February 2013, Torrellas allegedly conspired with others to operate a prostitution business in New Jersey, Pennsylvania and elsewhere. Torrellas managed the business, traveled, and caused prostitute employees, including a minor, to travel interstate for the purpose of engaging in sex acts in exchange for money.   

Torrellas used the Internet to post advertisements for sexual services on the website Backpage.com. Torrellas also developed rules for the prostitutes, booked hotel rooms, and, while incarcerated, used the phone to manage, promote, and carry on his prostitution business, specifically causing his conspirators and others to direct the proceeds of the business to his commissary account at the Essex County Correctional Facility. Torrellas also attempted to influence, delay or prevent the testimony of another person or persons in connection with the case against him.

The conspiracy count carries a maximum potential penalty of five years in prison. The Travel Act counts each carry a maximum potential penalty of five years in prison. The counts relating to trafficking and transportation of a minor carry a mandatory minimum penalty of ten years in prison and a maximum penalty of life imprisonment. The count relating to coercion and enticement to engage in prostitution carries a maximum potential penalty of 20 years in prison and the count charging obstruction of justice carries the maximum term that could have been imposed for the offenses charged. The defendant also faces a fine of $250,000 or twice the amount of the gain or loss from the offense for each count of conviction.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; and the Secaucus, Jersey City, and the Allentown, Pa., police departments with the investigation leading to today’s superseding indictment. 

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

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

14-097                                     

Defense counsel: Michael N. Pedicini Esq., Chatham, N.J.

Torrellas, Francisco SIndictment

TRENTON, N.J. — A Newark, N.J., man was sentenced today to 114 months in prison for his role in an armed robbery and shooting of a retired police officer working as an armed money courier, U.S. Attorney Paul J. Fishman announced.

Theodore Lada, 40, previously pleaded guilty before U.S. District Judge Peter G. Sheridan to an information charging him with conspiracy to commit Hobbs Act robbery and Hobbs Act robbery. Judge Sheridan imposed the sentence today in Trenton federal court.

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

On May 19, 2011, Lada and James Sodano, 70, of West Orange, N.J., confronted a retired police officer working as an armed money courier for a check cashing service as he was delivering a bag containing $400,000 to a Newark bar. As he exited his car, Lada approached him and the two men exchanged gunfire. The courier fell to his knees and Lada fled.

Sodano approached the courier from behind, shooting him in the jaw. As the victim fell, he fired a shot, hitting Sodano in the leg. Sodano shot him again, hitting the victim in the arm. Sodano then pulled the bag of money from beneath the victim as he was lying face down on the ground. Sodano drove off in his car, but crashed three and a half blocks away. When police arrived, they found Sodano, wearing a bulletproof vest and a pair of gloves, slipping in and out of consciousness, still holding on to the steering wheel. Police found a pool of blood, several weapons, ammunition and the bag containing the $400,000 inside the car. Lada was apprehended nine months later after DNA evidence connected him to the crime scene.

In addition to the prison term, Judge Sheridan sentenced Lada to three years of supervised release and ordered him to pay $375,551.56 in restitution to the victim.

Following a two-and-a-half week trial, a jury convicted Sodano on April 2, 2013, on all three counts charged in the indictment: conspiracy to commit Hobbs Act robbery; Hobbs Act robbery; and possessing, carrying and using a firearm, which was discharged in connection with the robbery. Sodano was sentenced to a total of 468 months in prison and five years of supervised release. He was also ordered to pay $375,551.56 in restitution to the victim.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, for the investigation leading to today’s sentence. He also thanked the Essex County Prosecutor’s Office and the Newark Police Department, for their roles in the case.

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

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Defense counsel: Olubukola O. Adetula Esq., Irvington, N.J.

More than $33 Million in Alleged Illegal Trades Netted $5.6 Million Over Four-Year Scheme

NEWARK, N.J. - The managing clerk of the New York office of Simpson Thacher & Bartlett LLP – a prominent, international law firm – and a professional stock broker who worked at Oppenheimer & Co. and Morgan Stanley were arrested today and charged with participating in a multi-year insider trading scheme that allegedly netted more than $5.6 million in illicit profits, New Jersey U.S. Attorney Paul J. Fishman announced.

Steven Metro, 40, of Katonah, N.Y., and Vladimir Eydelman, 42, of Colts Neck, N.J., are both charged by complaint with one count of conspiracy to commit securities fraud and tender offer fraud, as well as multiple counts of securities fraud and tender offer fraud: Metro is charged with nine counts of securities fraud; Eydelman is charged with eight counts of securities fraud; and each defendant is charged with four counts of tender offer fraud.  FBI agents arrested Metro in Katonah and Eydelman in Colts Neck this morning. Both men are scheduled to appear this afternoon before U.S. Magistrate Judge Madeline Cox Arleo in Newark federal court. 

“These defendants are charged with using confidential information that Metro stole from his employer to reap huge illegal profits,” U.S. Attorney Fishman said. “They allegedly rigged the system by exploiting sensitive information that was not available to other investors. This kind of activity undermines the integrity of our financial markets and weakens investor confidence.”

“As alleged in the complaint, Metro, Eydelman and another engaged in a lengthy insider trading scheme that reaped more than five million in illicit profits,” said FBI Special Agent in Charge Aaron T. Ford. “The FBI is committed to investigating allegations of insider trading and will hold violators accountable to ensure the integrity of the financial markets.  We will continue to work with our partners to identify securities fraud so investors maintain a high level of confidence in the markets.”

According to the complaint unsealed today: Metro, Eydelman, and a third person who subsequently became a cooperating witness – referred to in court documents as “the CW” – engaged in an insider trading scheme that began in 2009. The conspirators invested more than $33 million and reaped more than $5.6 million in illicit profits over the life of the scheme.

Starting in November 1999, Metro worked at the New York office of Simpson Thacher & Bartlett LLP, one of the nation’s premier mergers and acquisitions law firms. During the period of the trading scheme, he was the firm’s managing clerk, responsible for, among other things, filing pleadings on behalf of attorneys. Eydelman was a broker-dealer employed first at Oppenheimer & Co. and most recently by Morgan Stanley, both renowned investment firms. 

While at the law firm, Metro repeatedly obtained inside information regarding anticipated corporate mergers and acquisitions on which his firm was working. He disclosed the material, nonpublic information to his friend, the CW. Metro would arrange to meet the CW in person and would disclose inside information, including the stock exchange ticker symbol of the company in which to invest, and the pricing and/or timing of the planned transaction. The CW would write the information on a small piece of paper or napkin.

The CW would then meet with Eydelman, usually the same day, to divulge the stolen information. These meetings usually occurred at an agreed-upon location near the large clock in New York City’s Grand Central Terminal. The CW would show Eydelman the paper or napkin on which the CW had written the ticker symbol of the company whose securities should be purchased. After Eydelman memorized the ticker symbol, the CW then would place the paper or napkin into his mouth and chew it until it was destroyed.

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

Over the four-year period, the CW reinvested approximately $7,000 in profits that Metro made on the first deal, and updated Metro on the running balance of his profits from the insider trading scheme. As of October 2013, by which time the conspirators had traded ahead of at least 13 planned corporate transactions, Metro’s share of the profits had reached approximately $168,000.

The complaint specifically identifies the 12 transactions and one uncompleted transaction ahead of which Eydelman, Metro, and the CW traded between February 2009 and February 2013 – as outlined in an appended chart.

The complaint also details a number of recorded meetings among the conspirators.  During the course of one meeting with the CW on Jan. 28, 2014, Metro expressed his desire to cash out his share of the illicit profits. Metro stated to the CW, “You gotta try to liberate some cash, somewhere, or I’m going to be freakin’ flat out.” Metro also promised to let the CW know of any planned M&A deals that he came across in the future, stating that although “Right now it’s all been private equity, private equity...I think this year, it’s going to be a good year[.]”

In a meeting on Feb. 6, 2014, Eydelman indicated he would be willing to pay a portion of the cash proceeds owed to Metro. Eydelman stated, “I got seven [thousand]….That’s all I can do, without [my wife] knowing.”

Eydelman came through with the $7,000 in cash for the CW to use to compensate Metro for tipping them inside information. During a recorded meeting with the CW on Feb. 20, 2014, Eydelman handed the CW a small plastic shopping bag with a cigar manufacturer’s logo on it, stating, “Take these cigars, put it to good use.” Eydelman enclosed $7,000 in cash in the cigar bag he handed to the CW.

The conspirators attempted to hide their illegal conduct. In addition to the CW destroying pieces of paper on which he wrote the ticker symbols provided by Metro, Eydelman sent the CW “covering” emails that contained false justifications designed to suggest that their trades in the subject securities were based on research, not inside information.

While Metro relied on the CW to reinvest his illicit profits on his behalf, Eydelman realized substantial personal profits on an ongoing basis from the insider trading scheme and used these unlawful proceeds to purchase a new 2011 Maserati Grand Turismo for $117,700 and to spend tens of thousands of dollars on expensive jewelry. Eydelman also used illicit proceeds to purchase his residence and to pay the mortgage on the property.

The conspiracy count with which Metro and Eydelman are each charged carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the aggregate loss to victims or gain to the defendants. On the substantive securities fraud and tender offer fraud charges, they each face a maximum of 20 years in prison and a $5 million fine. The complaint also seeks the forfeiture of Eydelman’s residence.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, for the investigation leading to today’s arrests and complaint.  He also thanked the U.S. Securities and Exchange Commission’s Market Abuse Unit, under the direction of Daniel Hawke. He also thanked the New York FBI, under the direction of Assistant Director in Charge George C. Venizelos, for assistance with the investigation.

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

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

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

14-093    
                                                  
Defense counsel: Metro: TBA
Vladimir Eydelman: William Silverman Esq., New York

Alleged Insider Trades

APPROX. DATE(S) OF PURCHASES

ANNOUNCEMENT DATE

SECURITY

APPROX. ILLICIT PROFIT

2/17/2009

Sirius XM Radio

$212,814

12/29/2009-1/15/2010

1/18/2010

Brinks Home Security

$773,154

7/8/2010-7/15/2010

7/15/2010

Smithtown Bancorp

$29,010

10/20/2010-10/29/2010

11/1/2010

CNA Surety Corporation

$241,141

4/11/2011-4/12/2011

4/13/2011

Graham Packing Company Inc.

$105,964

1/31/2011-4/19/2011

4/26/2011

SMART Modular Technologies

$1,575,382

4/4/2011-4/21/2011

4/27/2011

Vital Images, Inc.

$39,233

4/29/2011

5/2/2011

International Coal Group, Inc.

$231,276

6/21/2011-8/22/2011

8/23/2011

PharMerica Corp.

$1,517,092

4/16/2012-4/20/2012

5/1/2012

Collective Brands, Inc.

$360,775

5/14/2012-10/1/2012

N/A

“Company A”

N/A

9/20/2012-9/25/2012

9/27/2012

Sealy Corporation

$14,509

1/31/2013-2/15/2013

2/20/2013

Officemax Inc.

$573,332

APPROX. TOTAL ILLICIT PROFITS

$5,673,682

Metro, Steven, and Eydelman, Vladimir Complaint

NEWARK, N.J. — A Bergen County, N.J., man today admitted using the Internet and social media to fabricate a fictitious high school girl, using that fake personality to engage in an online relationship with a teenage male, and then making a false report to a U.S. Embassy that the girl was kidnapped, U.S. Attorney Paul J. Fishman announced.

Andriy Mykhaylivskyy, a/k/a “Andriy Haddad,” 19, of Rutherford, N.J., pleaded guilty today before U.S. District Judge Claire C. Cecchi in Newark federal court to an information charging him with making false statements in a matter within the jurisdiction of the executive branch of the U.S. government.

According to documents filed in this case and statements made in court: Mykhaylivskyy admitted he used Facebook, Twitter, Skype, text messages, and other electronic means to create a fake online identity for a teenage girl he called “Kate Fulton.” He pretended to be Kate Fulton while he initiated and maintained an electronic relationship with “Individual One,” a then18-year-old New Jersey resident.

On July 2, 2013, Mykhaylivskyy called the U.S. Embassy in Chisinau, Moldova, and reported the false kidnapping of Kate Fulton. Mykhaylivskyy also admitted that he both personally, and as Kate Fulton, informed Individual One that Kate Fulton had been kidnapped. On July 8, 2013, Individual One called the U.S. Embassy in Sofia, Bulgaria, seeking assistance regarding the kidnapping of Kate Fulton, who was allegedly kidnapped while vacationing in Burgas, Bulgaria. 

Mykhaylivskyy also admitted to sending tweets from Kate Fulton on June 29, 2013, after she was allegedly kidnapped, including one that read “Someone help me.” During his plea hearing, Mykhaylivskyy acknowledged that he knew at all times that Kate Fulton was not a real person and had not been kidnapped.

Mykhaylivskyy admitted one instance of obstruction of justice. During his August 27, 2013, initial appearance in Newark federal court, he was told not to have contact with witnesses. However, upon arriving at jail later that day, he called and spoke to Individual One and told him Kate Fulton had been arrested in California. During the call, Mykhaylivskyy arranged to meet Individual One in person and asked him to delete both Mykhaylivskyy’s and Kate Fulton’s personal Facebook and Twitter accounts.

The charge to which Mykhaylivskyy pleaded guilty is punishable by a maximum of five years in prison and a statutory maximum fine of $250,000. Sentencing is scheduled for June 25, 2014.

U.S. Attorney Fishman credited the U.S. Department of State’s Diplomatic Security Service (DSS) Office of Protective Intelligence Investigations and DS agents assigned to the DSS New York Field Office for their assistance in the investigation leading to today’s guilty plea. He also thanked members of the FBI Newark Joint Terrorism Task Force for their assistance in the investigation.

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

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

Mykhaylivskyy Information

Deposited Hundreds of Thousands of Dollars into Personal Accounts

NEWARK, N.J. - A Newark man was sentenced today to 57 months in prison for his role in a scheme to steal personal checks from the U.S. Mail and fraudulently endorse and deposit them into personal checking accounts, U.S. Attorney Paul J. Fishman announced.

Karron Hinton-Lovelace, 28, previously pleaded guilty before U.S. District Judge Kevin McNulty to an information charging him with one count of conspiracy to commit bank fraud. Judge McNulty imposed the sentence today in Newark federal court.

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

Hinton-Lovelace and his conspirators stole blank checks that were sent via U.S. Mail to 122 unsuspecting victims. The defendants fraudulently endorsed the blank checks for a certain sum and deposited those checks into legitimate bank accounts that they opened at the victim banks, which included TD Bank, Bank of America, Capital One Bank, Garden State Community Bank, Hudson City Savings Bank, PNC Bank and Valley National Bank. Before the victims discovered the checks were stolen or the banks discovered the checks were fraudulent, Hinton-Lovelace and his co-conspirators had withdrawn the funds, either via ATMs or by entering the banks and filling out withdrawal slips. U.S. Postal Inspection Service and FBI agents obtained bank video surveillance, which captured many of the fraudulent deposits and withdrawals.

Hinton-Lovelace and his conspirators deposited $1,478,695 in fraudulent checks into y 258 different bank accounts. Their conduct resulted in a $648,194 loss.

In addition to the prison term, Judge McNulty sentenced Hinton-Lovelace to five years of supervised release. As part of his plea agreement, Hinton-Lovelace agreed to pay $648,194 in restitution to the victims.

Several of Hinton-Lovelace’s conspirators have pleaded guilty to conspiracy to commit bank fraud and been sentenced to prison terms for their roles in the scheme. Four defendants were sentenced in April 2013. Constance Bowles, 23, of Newark, was sentenced to 6 months in prison and six months in a halfway house. Garnet Hinton, 24, Union, and Keonnah McLean, 24, Newark, were each sentenced to 23 months in prison. Martell Arline, 23, of Newark, was sentenced to 36 months in prison.

Kurtis Steele, 27, of Irvington, was sentenced to 46 months in prison on May 29, 2013, and Guy Hicks, 51, of Newark, was sentenced to 36 months in prison on Oct. 9, 2013.

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

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

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

Medicines had been donated to be used for indigent patients

TRENTON, N.J. – A Union County, N.J., woman was sentenced today to 70 months in prison for her role in defrauding a charity program out of more than $7 million in donated HIV and cancer medication by using her access to a company hired to administer the program, U.S. Attorney Paul J. Fishman announced.

Lateefah McKenzie Body, 35, of Linden, N.J., was previously convicted of one count of conspiracy to commit mail fraud and nine counts of mail fraud following a two-week trial before U.S. District Judge Mary L. Cooper, who imposed the sentence today in Trenton federal court.

Another conspirator, Keisha Jackson, 47, of Perth Amboy, N.J., pleaded guilty to conspiracy to commit bank fraud and was sentenced on Dec. 20, 2013, to 51 months in prison.

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

A pharmaceutical company donated millions of dollars’ worth of FDA-approved prescription medicines – including for the treatment of HIV and cancer – at no cost to qualified patients experiencing financial difficulties.  Jackson, Bryant, and McKenzie Body were all, at various times, employed as customer service representatives at a corporation hired to provide administrative support in operating the donated medicines program. They were responsible for receiving applications for the program, entering the applications into the computer system, and using the computer system to cause the donated medicines to be delivered to the physicians of patients who met certain eligibility criteria, including financial status.

As part of the scheme, McKenzie Body entered approximately 600 fraudulent orders into the company’s system, causing medicines to be delivered to Jackson’s home and other addresses controlled by those involved in the scheme. After McKenzie Body was terminated from the company for unrelated reasons, McKenzie Body enlisted Bryant to take over entering fraudulent orders.  Bryant agreed, and entered approximately 950 fraudulent orders, again causing medicines, which could then be resold at a profit, to be delivered to Jackson’s home and other addresses controlled by those involved in the scheme.

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

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

The government is represented by Assistant U.S. Attorneys Andrew Leven of the Healthcare and Government Fraud Unit and Danielle Corcione of the General Crimes Unit in Newark.

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Defense Counsel: James Patton Esq., Livingston, N.J.

Organization Allegedly Capitalized on Information Hacked
From The Customers of More Than a Dozen Global Financial Institutions

NEWARK, N.J. – Three alleged members of an international cybercrime, money laundering and identity theft conspiracy were charged in New Jersey today with a scheme to use information hacked from customer accounts held at more than a dozen banks, brokerage firms, payroll processing companies and government agencies in an attempt to steal at least $15 million from American customers, U.S. Attorney Paul J. Fishman announced.

The three defendants – Oleksiy Sharapka, 33, and Leonid Yanovitsky, 39, both of Kiev, Ukraine; and Richard Gundersen, 47, of Brooklyn, N.Y., were indicted by a federal grand jury on charges of conspiracy to commit wire fraud, conspiracy to commit access device fraud and identity theft, and with aggravated identity theft.

According to the Indictment and other documents filed in the case:

Sharapka allegedly directed the conspiracy with the help of Yanovitsky. Gunderson allegedly facilitated the movement of fraud proceeds. Sharapka and Yanovitsky are fugitives.  Gundersen will be arraigned on the new charges on a date to be determined.

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

After obtaining unauthorized access to the bank accounts, the defendants and conspirators diverted money from them to bank accounts and pre-paid debit cards the defendants controlled. They then implemented a sophisticated “cash out” operation, employing crews of individuals known as “cashers” to withdraw the stolen funds, among other ways, by making ATM withdrawals and fraudulent purchases in New York, Massachusetts, Illinois, Georgia and elsewhere.

As part of the scheme, the defendants stole identities from individuals in the United States, which they used to facilitate the cash out operation, including by transferring money to cards in the names of those stolen identities. They also used some of those identities to file fraudulent tax returns with the IRS seeking refunds.

The defendants and their conspirators laundered the proceeds of the scheme, often through international wire transfer services, to the leaders of the conspiracy overseas.

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

If convicted, each of the defendants face a maximum potential penalty of 20 years in prison on the conspiracy to commit wire fraud count, five years in prison on the conspiracy to commit access device fraud and identity theft count, and a consecutive term of two years in prison on the aggravated identity theft counts. The wire fraud and identity theft counts also carry a maximum fine of $250,000, or twice the gross amount of pecuniary gain or loss resulting from the offenses. The money laundering conspiracy count carries a maximum fine of $500,000, or twice the value of the monetary instruments involved.

U.S. Attorney Fishman credited the U.S. Secret Service, under the direction of Special Agent in Charge James Mottola; U.S Immigration and Customs Enforcement/Homeland Security Investigations, under the direction of Special Agent in Charge Andrew M. McLees; Department of Defense, Criminal Investigative Service, under the direction of Special Agent in Charge Jeffery D. Thorpe; and IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen, with the ongoing investigation.

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

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

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

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Defense counsel: Gundersen: Cynthia H. Hardaway Esq., Newark

Sharapka et al. Indictment

NEWARK, N.J. — A Bronx, N.Y., man today admitted his role in conspiring to steal government funds through his involvement in an extensive scheme to fraudulently obtain income tax refund checks issued by the United States, U.S. Attorney Paul J. Fishman announced.

Luis Pena, 31, was the third member of the conspiracy to plead guilty this week; Gloria Rivera, 43, of Bronx, also pleaded guilty today and Lourdes Ortiz, 41, of Bronx, pleaded guilty March 10, 2014. Each defendant pleaded guilty before U.S. Magistrate Judge Michael A. Hammer in Newark federal court to separate informations charging them with conspiracy to commit theft of government property.

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.
   
• Participants complete Individual Income Tax Return 1040 Forms using the fraudulently obtained information, falsifying wages earned, taxes withheld and other data and always ensuring the fraudulent form generates a tax refund check from the U.S. Treasury.
   
• They direct the U.S. Treasury Department to mail the fraudulently obtained checks to locations the perpetrators control or can access. In some cases, SIRF perpetrators bribe mail carriers to remove the checks from their mail routes.
   
• With the checks in hand, they generate cash proceeds by depositing the Fraudulent Treasury Checks into bank accounts that they control.

According to documents filed in these cases and statements made in court: Pena, Rivera, and Ortiz, each admitted that they knew that the U.S. Treasury checks involved in the conspiracy had been generated by conspirators filing false and fraudulent income tax returns with the IRS in order to obtain refunds to which they were not entitled. All three stated that they knew that the tax refund scheme was intended to, and did, defraud the IRS and the U.S. Treasury.  At the time of the conspiracy, Rivera and Ortiz were employed as mail carriers by the U.S. Postal Service.

In 2011, Pena approached Rivera and arranged to direct fraudulent tax refund checks to Rivera’s mail route and have those checks intercepted and retrieved by Rivera in exchange for a cash payment to Rivera of at least $400 per check. After directing the checks to Rivera’s mail route, Pena provided Rivera with identifying information for the fraudulent treasury tax refund checks that he directed to her mail route. 

Rivera, however, became unable to work due to illness in September 2011 and was replaced by mail carrier Ortiz on the Flushing, Queens, N.Y., mail route. Rivera approached Ortiz and asked Ortiz to intercept the fraudulent checks in exchange for approximately $200 per fraudulent check.  Ortiz agreed.
 
Using the information provided by Pena, from September 2011 through May 2012, Rivera – or Ortiz on Rivera’s behalf – intercepted from the Flushing mail route the fraudulent checks that corresponded to the information given to Rivera by Pena.  In exchange for the intercepted checks, Pena gave Rivera cash payments, which Rivera passed along – in part – to Ortiz. 

The fraudulently obtained tax refund checks stolen by Pena, Ortiz, and Rivera totaled $336,647. 
Once the stolen checks were returned to Pena, he passed the checks on to other conspirators, many of whom were in Newark, N.J.  They cashed the checks, primarily by using bank accounts controlled by conspirators.

The charge to which the defendants pleaded guilty carries a maximum penalty of five years in prison and a fine of up to $250,000, or twice the gross amount of any pecuniary gain or loss. Sentencing for Ortiz is scheduled for July 7, 2014; for Rivera, July 8, 2014, and for Pena, July 9, 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; special agents of the U.S. Postal Inspection Services, under the direction of Inspector in Charge Maria Kelokates; special agents of the U.S. Secret Service, under the direction of Special Agent in Charge James Mottola; and special agents of the U.S. Postal Service - Office of the Inspector General, under the direction of Special Agent in Charge Rafael Medina.
The government is represented by Assistant U.S. Attorney Sara F. Merin of the U.S. Attorney’s Office General Crimes Unit in Newark.

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Defense counsel: Ortiz: Olubukola Adetula Esq., Irvington, N.J.
Rivera: Elizabeth Smith, Esq., Mendham, N.J.
Pena: Patrick Brackley Esq., New York

Pena Information
Ortiz Information
Rivera Information

CAMDEN, N.J. – A Brooklyn, N.Y., woman was sentenced today to 262 months in prison for her role as the leader of a ring responsible for shipping dozens of stolen and carjacked luxury cars and SUVs worth more than $2.5 million from New Jersey to Africa, U.S. Attorney Paul J. Fishman announced.

Hope K. Kantete, 44, was convicted on June 28, 2013, of 10 counts of transportation of stolen vehicles in interstate or foreign commerce and a single count of conspiracy to transport stolen vehicles in interstate or foreign commerce. Kantete was convicted after a three-week trial before U.S. District Judge Robert J. Kugler, who imposed the sentence today in Camden federal court.

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

The stolen car exportation ring was investigated by a multi-agency task force led by the U.S. Immigration and Customs Enforcement/Homeland Security Investigations (HSI). The investigation revealed that Kantete employed other individuals who were responsible for purchasing stolen and carjacked vehicles from thieves operating in northern New Jersey and New York. Kantete then had individuals “re-tag,” or place new vehicle identification numbers, on the stolen cars and create fraudulent title documents so that the cars could be shipped out of the country. After the documents were created, Kantete arranged to have the cars loaded onto shipping containers and sent to ports in West Africa. The cars could be re-sold in West Africa for at least twice their retail value in the United States.

In addition to the prison term, Judge Kugler sentenced Kantete to three years of supervised release and ordered her to pay restitution of $346,937, based on a loss estimated at $2.5 million to $7 million.

U.S. Attorney Fishman credited special agents of HSI, under the leadership of Executive Associate Director James Dinkins and Special Agent in Charge Andrew M. McLees; and the N.J. State Police, under the direction of Superintendent Col. Rick Fuentes, for the investigation leading to today’s sentencing.  He also thanked U.S. Customs and Border Protection; the Waterfront Commission of New York Harbor; Acting Essex County Prosecutor Carolyn Murray, Middlesex County Prosecutor Andrew Carey, Acting Hudson County ProsecutorGaetano T. Gregory, and Acting Union County Prosecutor Grace H. Park, the Essex and Hudson County Sheriff’s Departments, the Newark Police Department, the U.S. Coast Guard Investigative Service and the Port Authority of New York and New Jersey for their roles.

The government is represented by Assistant U.S. Attorney José R. Almonte and James M. Donnelly of the U.S. Attorney’s Office Criminal Division in Newark.

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

CAMDEN, N.J. – An Ocean County, N.J., man today admitted his role in a $40.8 million mortgage fraud conspiracy in which he used his position as a loan officer of Wells Fargo Home Mortgage Inc. to get the company to release more than $4.6 million based on fraudulent mortgage loan applications, U.S. Attorney Paul J. Fishman announced.

Robert Serao, 48, of Bayville, N.J., pleaded guilty before U.S. District Judge Joseph E. Irenas in Camden federal court to Count One of an indictment charging him with conspiracy to commit wire fraud. He is the 10th defendant to plead guilty in the case.

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 with Stephen Corba, Charles Harvath, Joseph Witkowski and others 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 closing 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.

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

The wire fraud conspiracy charge to which Serao pleaded guilty carries a maximum potential penalty of 30 years in prison and a $1 million fine.  Sentencing for Serao is currently scheduled for June 24, 2014.

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 guilty plea.

The pending charges and allegations against any related defendants are merely allegations, and they are considered innocent unless and until proven guilty.

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, N.J.                               

Serao Indictment

NEWARK, N.J. – Two pharmacists – twin brothers who previously owned the West Orange Pharmacy – were each sentenced 42 months in prison today for reaping at least $1.5 million in illicit gains by defrauding patients, Medicaid and insurance companies over the past 15 years, U.S. Attorney Paul J. Fishman announced.

Robert and William Carlucci, both 70 and of Florham Park, N.J., previously pleaded guilty before U.S. Magistrate Judge Michael A. Hammer to separate informations charging them with conspiring to commit health care fraud. The sentenced was imposed today by U.S. District Judge Faith Hochberg in Newark federal court.

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

Robert Carlucci, William Carlucci, and another conspirator, Leonard “Lenny” Stefanelli, 49, of East Hanover, N.J., participated in a variety of schemes designed to cheat customers and bilk insurance companies out of at least $1.5 million. Stefanelli pleaded guilty before Judge Hammer on Jan. 24, 2014, to an information charging him with illegally dispensing oxycodone and is scheduled to be sentenced April 30, 2014.

They used a practice they referred to as “TRADE-QUICK” to under-fill prescriptions.  Each letter in “TRADE-QUICK” corresponded to a number, beginning with “T” for “1” through “K” for “0.” The conspirators would enter a two-letter code into the West Orange Pharmacy computer system that indicated how much of the prescription they intended to fill. The code “QK” indicated that a prescription for 90 dosage units would instead be filled with 60 dosage units, because the “Q” stood for the number “6” and the “K” stood for the number “0.” After under-filling the prescription, the co-conspirators billed Medicaid and other insurance companies for the fully filled prescription.

Without informing the patients, the conspirators substituted generic drugs for the brand-name drugs prescribed by the patients’ physicians. Then they billed Medicaid and other insurance companies for the full amount of the brand-name drugs. The conspirators entered the prescribing physicians’ phone numbers into the West Orange Pharmacy computer system as a code to indicate that they were utilizing this particular scheme.

The conspirators also filled outstanding refills on a given prescription without the patients’ knowledge and then billed Medicaid and the private insurers for the refills. They entered a dot (“.”) into the West Orange Pharmacy computer system as a code to indicate that they were utilizing this particular scheme.

The conspirators would sometimes lose money on a given prescription. On those occasions, they looked through a patient’s profile and found additional costs that they could pass on to Medicaid and other insurance companies. They would submit bills for these additional costs, and they would enter the code “COV” into the West Orange Pharmacy computer system to reflect this scheme.

The conspirators purchased prescription drugs back from their customers and would reuse those drugs to fill other patient prescriptions. They billed Medicaid and other insurance companies for the full amount of the filled prescriptions.

The conspirators purchased prescription drugs from non-licensed wholesalers at a substantial discount to the drugs’ wholesale price, then dispensed these discounted drugs to patients and billed Medicaid and private insurers for the full costs associated with the drugs.

In addition to the prison term, Judge Hochberg sentenced each of the Carlucci brothers to three years of supervised release and fined them $75,000 each.

U.S. Attorney Fishman credited special agents of the DEA Tactical Diversion Squad, under the direction of Special Agent in Charge Carl 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 sentencings. 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: Robert Carlucci: Ricardo Solano Esq., Newark
William Carlucci: Mark Berman Esq., River Edge, N.J.
Stefanelli: Carlos Ortiz Esq., Morristown, N.J.

NEWARK, N.J. - A Plainfield, N.J., woman was sentenced today to 87 months in prison for playing a role in three armed robberies of banks in Somerset and Middlesex counties, U.S. Attorney Paul J. Fishman announced.

Andrea Dorsey, 54, of Plainfield, N.J., previously pleaded guilty before U.S. District Judge Kevin McNulty to an information charging her with three counts of bank robbery. Judge McNulty imposed the sentence today in Newark federal court.

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

Claude Williams, 62, of Elizabeth, N.J., was charged on Aug. 16, 2013, in a 17-count indictment with one count of conspiracy to commit bank robbery, seven counts of bank robbery, eight counts of using a firearm in furtherance of a crime of violence, and one count of attempted bank robbery. Those charges remain pending against Williams.

Williams would usually send an accomplice into banks shortly before robbing them. Dorsey admitted she went into banks to gather information for Williams about how many employees were working and served as the getaway driver during the armed robberies of the Financial Resources Federal Credit Union located in Somerset, N.J., on Sept. 26, 2011; the Somerset Savings Bank located in Somerville, N.J., on Nov. 21, 2011; and the Fulton Bank located in Metuchen, N.J., on June 20, 2012.

Williams and Dorsey were arrested July 30, 2012, near a Unity Bank in Somerset. Williams was wearing a bandana and law enforcement found a handgun and white gloves in the car.

In addition to the prison term, Judge McNulty sentenced Dorsey to four years of supervised release and ordered her to pay $59,387 in restitution.

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

U.S. Attorney Fishman credited special agents with the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, with the investigation. He also thanked the Somerset County Prosecutor’s Office and the Middlesex Borough, Piscataway, Clifton, Metuchen, North Plainfield and Plainfield Police Departments for their roles in the investigation.

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

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Defense counsel: Anthony J. Iacullo Esq., Nutley, N.J.

NEWARK, N.J. – A Newark man admitted today to committing 14 armed robberies of commercial establishments throughout Union, Essex, Hudson and Bergen counties, U.S. Attorney Paul J. Fishman announced.

Jamar Darby, aka “Rhino,” 27, pleaded guilty before U.S. District Judge William H. Walls to two counts of an indictment charging him with conspiracy to commit Hobbs Act robberies and with brandishing a firearm during one of those robberies.

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

Darby conspired with others to rob commercial establishments as follows:

Pao Da Terra

Newark

Dec. 29, 2012

Newark

Jan. 20, 2013

Newark Community Pharmacy

Newark

Jan. 24, 2013

Linden Stationary

Linden

Feb. 1, 2013

Delta Gas Station

Newark

Feb. 1, 2013

Shoppers Express

Belleville

Feb. 2, 2013

Krauszers

Kearny

Feb. 10, 2013

Krauszers

Bloomfield

Feb. 13, 2013

Pat’s Deli

Newark

Feb. 19, 2013

Smashburger

Paramus

March 16, 2013

Krauszers

Bloomfield

March 29, 2013

South Wood Discount Liquor

Linden

April 17, 2013

Newark Community Pharmacy

Newark

May 1, 2013

Subway Restaurant

Verona

May 20, 2013

Darby and his conspirators robbed each of these establishments at gunpoint, stealing cash, cigarettes and other items. In 13 of the 14 robberies, Darby and his conspirators used zip ties or duct tape to restrain their victims. During the Pat’s Deli robbery on Feb. 19, 2013, Darby and a conspirator restrained several victims with duct tape after threatening one victim with a .45 caliber semi-automatic handgun.

The Hobbs Act conspiracy to which Darby pleaded guilty carries a maximum penalty of 20 years in prison. The charge of brandishing a firearm during a violent crime carries a maximum penalty of life in prison and a mandatory minimum sentence of seven years in prison, which must run consecutively to any other prison term. Each count also carries a maximum $250,000 fine or twice the gross gain or loss arising out of the offense. Sentencing is scheduled for June 17, 2014.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, with the investigation leading to today’s guilty plea. He also thanked the Belleville, Bloomfield, Kearny, Linden, Maplewood, Newark, Paramus, Verona and West Orange Police Departments, along with the N.J. State Police and the Essex County Prosecutor’s Office for their work on this case.

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

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Defense counsel: Anthony C. Mack Esq., Newark                         

Darby Indictment

NEWARK, N.J. – Federal charges are filed in Newark against a man who allegedly contacted a consumer products company and claimed he poisoned its products and would return them to store shelves if his demands were not met, New Jersey U.S. Attorney Paul J. Fishman announced today.

Brian Henderson, 49, of Hallendale, Fla., is charged by criminal complaint with two counts of threatening to tamper with a consumer product. Henderson is already in custody on bank robbery charges filed Dec. 19, 2013, in the Southern District of Florida, and will appear in Newark federal court on a date to be determined.

An additional indictment was unsealed today in the Southern District of Florida charging Henderson with a scheme to extort Publix Super Markets Inc., by threatening to bomb its stores.

According to the District of New Jersey complaint made public today and statements made in court:

On July 28, 2013, Henderson contacted the company, headquartered in New Jersey and referred to in court documents as “Company 1,” by sending a message through its online customer care center. In the message, Henderson threatened to place 20 poisoned packages of the company’s products on the shelves of 20 different stores unless he was paid an unspecified sum of money. The message was addressed to the chairman of the board of directors and the company’s chief executive officer.

Henderson sent another message on Aug. 5, 2013, saying:

“I am the angel of death. I have put poison in 20 packages of your products. I will put them back on the shelves unless you pay me what you owe me. Last week I gave you an e-mail address that no longer works. You will have until Thurs 8/8 at 5pm to reply to my new e-mail address or I will replace the products and alert the media. You can handle this quietly and cheaply or publicly and very very expensive [sic].”

The complaint does not allege that Henderson actually poisoned any consumer product.

The second threat was transmitted from an internet protocol address which, at that time, was assigned to the wireless network of a restaurant in Dania, Fla. Security footage retrieved from the restaurant shows an individual believed to be Henderson.

Law enforcement executed a search warrant at Henderson’s residence on Dec. 14, 2013, recovering what appeared to be a draft of an extortion demands.

Each count of threatening to tamper with consumer products carries a maximum potential penalty of five years in prison and a $250,000 fine.

U.S. Attorney Fishman credited special agents of the FBI in New Jersey, under the direction of Special Agent in Charge Aaron T. Ford, and in Florida, under the direction of Special Agents in Charge George Piro in Miami and Paul Wysopal in Tampa, with the investigation leading to today’s charges.

The government is represented by Assistant U.S. Attorneys Daniel V. Shapiro and Andrew Kogan of the U.S. Attorney’s Office Economic Crimes Unit in Newark.

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

Henderson Complaint

TRENTON, N.J. - The owner of Kenal Enterprises LLC was sentenced today to one year and one day in prison for filing false income tax returns for several years, U.S. Attorney Paul J. Fishman, District of New Jersey, and Assistant Attorney General Kathryn Keneally of the U.S. Department of Justice, announced.

Kenneth Morton of Pitman, N.J., owner of Kenal (d/b/a) Ken Morton Roofing and Siding, a residential roofing company located in Pitman, previously pleaded guilty before U.S. District Judge Peter G. Sheridan to an information charging him with filing false income tax returns for tax years 2007 through 2009. Judge Sheridan imposed the sentence today in Trenton federal court.

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

From early 2007 through late 2009, Morton cashed $3,946,046 of Kenal’s gross receipts at a check cashing agency, the majority of which he did not deposit into his business bank account and did not report on his individual income tax returns. For the 2007, 2008, and 2009 tax years, Morton had unreported gross receipts of $1,343,348; $1,471,430; and $1,131,268, respectively, causing a loss to the IRS of $241,412.

In addition to the prison term, Judge Sheridan sentenced Morton to one year of supervised release and ordered him to pay $241,412 in restitution. 

U.S. Attorney Fishman and Assistant Attorney General Keneally credited special agents of IRS – Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen, for the investigation leading to today’s sentence. 

The government is represented by Trial Attorneys Jessica Moran and Tino Lisella of the Justice Department’s Tax Division. Additional information about the Tax Division and its enforcement efforts may be found at www.justice.gov/tax.

14-081                                                              

Defense counsel: Rocco Cipparone Jr. Esq., Haddon Heights, N.J.

TRENTON, N.J. - An Ocean County, N.J., attorney was sentenced today to six months in prison and six months of home confinement for evading federal income taxes after hiding assets in an attorney trust account in his wife’s name when he was already in debt to the IRS, U.S. Attorney Paul J. Fishman announced. 

Lee Gottesman, 58, of Toms River, N.J., previously pleaded guilty before U.S. District Judge Freda L. Wolfson an indictment charging him with one count of federal income tax evasion and one count of failing to pay payroll taxes for the employees of his law firm. Judge Wolfson imposed the sentence today in Trenton federal court.

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

Gottesman operated a law firm in Toms River. In  2002, the IRS filed a levy on Gottesman’s assets because of unpaid taxes. Gottesman then opened a sub-account, within his attorney trust account, in the name of his wife. His wife had never been a legal client of his.

Gottesman ran nearly all of his personal and business expenses through the account, closing all other business and personal accounts in his name. His payments from the account included more than $90,000 in mortgage payments for his home; more than $17,000 in household expenses, including maintenance on his pool, landscaping services and construction costs; and thousands of dollars in other personal expenses, such as life insurance premiums, auto body repair work and personal credit card payments. The scheme allowed Gottesman to avoid paying personal income taxes on the hidden income. 

Gottesman also withheld payroll and other taxes from his employees’ pay, but never filed the required forms or turned the withheld payments over to the IRS. Gottesman specifically admitted he did not pay all his personal income taxes owed for 2006 or payroll taxes for 2009.

In addition to the prison term, Judge Wolfson sentenced Gottesman to three years of supervised release. He will also be responsible for paying all taxes owed from 2006 to the present, $27,384.99.

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

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

14-080                                                              

Defense counsel: Salvatore Alfano Esq., Bloomfield, N.J.

TRENTON, N.J. - A pair of Brooklyn brothers have admitted on consecutive days to crossing state lines as part of a plan to violently coerce an unwilling husband to grant his wife a religious divorce, U.S. Attorney Paul J. Fishman announced.

Avrohom Goldstein, 34, pleaded guilty today to an information charging him with traveling in interstate commerce to commit extortion. Moshe Goldstein, 31, entered his guilty plea March 10, 2014, to the same charge. Both brothers entered their guilty pleas before U.S. District Judge Freda L. Wolfson in Trenton federal court.

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

On Oct. 9, 2013, Moshe Goldstein, Avrohom Goldstein and a group of conspirators – including David Hellman, 31, their father, Jay Goldstein, 59, Simcha Bulmash, 30, Ariel Potash, 40, Binyamin Stimler, 38, and Sholom Shuchat, 29 – traveled from New York to a warehouse in Edison, N.J., with the intent of forcing a Jewish husband to give his wife a "get," a document which, according to Jewish Law, must be presented by a husband to his wife to effect their divorce.

During their guilty plea proceedings, Moshe and Avrohom admitted that when they arrived at the warehouse, the group met with an individual who, unbeknownst to them, was an undercover FBI agent posing as the “husband’s” brother in law. The brothers admitted that they discussed a plan and prepared to confine, restrain and threaten the victim.

The group was then arrested by a team of FBI agents and charged by criminal complaint – along with rabbis Mendel Epstein, 68, and Martin Wolmark, 55 – in connection with the scheme. All of the defendants reside in Brooklyn, except Potash and Wolmark, who live in Monsey, N.Y.

Hellman, the first defendant to plead guilty, admitted the same conduct in Trenton federal court on March 6, 2014; the charges against the alleged conspirators remain pending.

Moshe and Avrohom Goldstein also admitted that on Aug. 22, 2011, they and others went to a residence in Brooklyn where they restrained, assaulted and injured a man in an attempt to extort a divorce from him. That conduct will be considered by the court during sentencing, currently scheduled for June 16, 2014, for Moshe Goldstein and June 20, 2014, for Avrohom Goldstein. Each brother is bailed on a $500,000 bond and subject to GPS monitoring.

The brothers each face a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, for the investigation leading to the guilty pleas. He also thanked the Lakewood, N.J., Police Department for their role.

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

The pending charges and allegations against related defendants are merely allegations, and they are considered innocent unless and until proven guilty.

14-082                                                      

Defense counsel: Moshe Goldstein: Roger Stavis Esq., New York
Avrohom Goldstein: Charles Waldron Esq., Lawrenceville, N.J.

Goldstein, Avrohom Information
Goldstein, Moshe Information

NEWARK, N.J. — An Essex County, N.J., doctor practicing family medicine in East Orange, N.J., today admitted receiving cash kickbacks for diagnostic testing referrals of his patients and failing to file tax returns on $1 million of income over a three-year period, U.S. Attorney Paul J. Fishman announced.

Yash Khanna, M.D., 72, of Livingston, N.J., pleaded guilty before U.S. District Judge Claire C. Cecchi in Newark federal court to a six-count superseding indictment charging him with conspiracy to violate the federal health care anti-kickback statute; soliciting and receiving more than $10,000 in illegal cash kickbacks for patient referrals in violation of the anti-kickback statute; and failing to file tax returns for tax years 2008, 2009, and 2010.

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

From 2009 through 2011 Khanna owned and operated his own medical practice, Family Medicine and Pediatrics LLC. He agreed with representatives of a diagnostic testing facility called Orange Community MRI LLC (Orange MRI) that he would be paid cash in exchange for patients he referred for testing. He received cash kickbacks from Orange MRI for diagnostic tests performed on Medicare and Medicaid patients and met with an Orange MRI representative at his office on Oct. 4, 2011, and Nov. 10, 2011, taking envelopes with cash. Khanna acknowledged taking kickback cash from Orange MRI on other occasions as well. 

Khanna admitted to earning income of more than $381,000 in 2008, $400,000 in 2009, and $214,000 in 2010. He intentionally failed to file tax returns or ask for extensions during those years.    

The anti-kickback charges each carry 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. The tax charges each carry a maximum penalty of one year in prison and a maximum $100,000 fine, or twice the gain or loss caused by the offense. Sentencing is scheduled for June 27, 2014.

Khanna is the 15th doctor convicted in the government’s investigation of Orange MRI and its corrupt referring doctors. Healthcare practioners convicted in the case have so far forfeited a total of $460,140.

U.S. Attorney Fishman credited special agents of the U.S. Department of Health and Human Services, Office of the Inspector General, under the direction of Special Agent in Charge Tom O’Donnell; special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen; and criminal investigators with the U.S. Attorney’s Office for the investigation leading to the guilty plea. 

The case is being prosecuted by Deputy Chief Scott B. McBride of the U.S. Attorney’s Office’s Economic Crimes Unit and Deputy Chief Joseph G. Mack of the U.S. Attorney’s Office’s Health Care and Government Fraud Unit.

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

14-079               

Defense counsel: Christopher L. Patella Esq., Bayonne, N.J.                                                                                   

Khanna Superseding Indictment

TRENTON, N.J. – The owners of a tax preparation business that filed fraudulent tax returns on behalf of inmates at various New Jersey prisons were indicted today on additional charges of mail fraud and making claims to the United States for payment of fraudulent tax refunds, U.S. Attorney Paul J. Fishman announced.        

The 20-count superseding indictment returned by a federal grand jury against Kamal J. James, aka “Bro Messiah Aziz El,” of Seaford, Del., and Crystal G. Hawkins, aka “Sis. Crystal Gabri El,” of Laurel, Del., adds 16 counts of making claims to the United States for payment of fraudulent tax refunds, and three counts of mail fraud. The original count of conspiring to defraud the United States, on which the defendants were indicted on Jan. 16, 2014, remains in place.

According to the superseding indictment and other documents filed in court:

Between October 2011 and October 2013, defendants James and Hawkins operated Release Refunds, a purported tax preparation business – previously based in Brick, N.J., and now in Seaford, Del. – through which they solicited current and former New Jersey prison inmates as clients and then filed fraudulent tax returns on their behalf.   

To execute the scheme, James and Hawkins sent Release Refunds “promotional” flyers to inmates at various New Jersey prisons and halfway houses offering tax return preparation services. The pair asked inmates interested in Release Refunds’ services to provide basic identification information and to sign income tax returns and other IRS documents, but not to include any information about their income or withholdings. James and Hawkins then filled in the missing income information on the return forms, fabricating the inmates’ earnings to trigger fraudulent and inflated refunds.

During the course of the investigation, an undercover IRS-Criminal Investigation agent posing as an inmate in a New Jersey prison submitted a completed Release Refunds form and sent it to James and Hawkins. They then sent the “inmate” blank income tax forms and other IRS documents and instructions to sign the documents. James and Hawkins did not request any financial information from the undercover agent before preparing three fraudulent tax returns – including false income information that James and Hawkins provided – to be filed on behalf of the agent for tax years 2010 through 2012. The fraudulent returns resulted in several thousand dollars in refunds and a $1,485 fee for the defendants.

The conspiracy count carries a maximum potential penalty of 10 years in prison. The fraudulent claims counts each carry a maximum potential penalty of five years in prison and the mail fraud counts each carry a maximum potential penalty of 20 years in prison. The defendants also face a fine of $250,000 or twice the amount of the gain or loss from the offense for each count of conviction.

U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s charges. He also thanked the U.S. Postal Inspection Service and the N.J. Department of Corrections for their roles in the case.

The government is represented by Assistant U.S. Attorney Nicholas P. Grippo of the U.S. Attorney’s Office Criminal Division in Trenton and Trial Attorney Tino Lisella of the Justice Department’s Tax Division.

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

14-078                                        
Defense counsel: James: Pro se; (Bruce Throckmorton Esq., Trenton, standby counsel)
Hawkins: Pro se; (Andrea Bergman Esq. Assistant Federal Public Defender, Trenton, standby counsel)

TRENTON, N.J. - A Brooklyn, N.Y., man admitted today in Trenton federal court to traveling to New Jersey in order to coerce a Jewish man to give his wife a religious divorce – referred to as a “get” – through threats of violence, U.S. Attorney Paul J. Fishman announced.

David Hellman, 31, a personal trainer, pleaded guilty before U.S. District Judge Freda L. Wolfson to an information charging him with traveling in interstate commerce to commit extortion. His bail conditions include a $500,000 bond and GPS monitoring.

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

On Oct. 9, 2013, Hellman and a group of conspirators – including Jay Goldstein, 59, Moshe Goldstein, 31, Avrohom Goldstein, 34, Simcha Bulmash, 30, Ariel Potash, 40, Binyamin Stimler, 38, and Sholom Shuchat, 29 – traveled from New York to a warehouse in Edison, N.J., with the intent of forcing a Jewish man to give his wife a “get,” a divorce document which, according to Jewish Law, must be presented by a husband to his wife to effect their divorce.

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

The group was then arrested by a team of FBI agents and charged by criminal complaint – along with rabbis Mendel Epstein, 68, and Martin Wolmark, 55 – in connection with the scheme. Hellman is the first defendant to plead guilty; the charges against the alleged conspirators remain pending. All of the defendants reside in Brooklyn, except Potash and Wolmark, who live in Monsey, N.Y.

During his guilty plea proceeding, Hellman also admitted that on Aug. 22, 2011, he and others went to a residence in Brooklyn where they restrained, assaulted and injured a man in an attempt to extort a divorce from him. That conduct will be considered by the court during sentencing, currently scheduled for June 12, 2014.

Hellman faces a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, for the investigation leading to today’s guilty plea. He also thanked the Lakewood, N.J., Police Department for their role.

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

The pending charges and allegations against related defendants are merely allegations, and they are considered innocent unless and until proven guilty.

14-077                                                        

Defense counsel: Michael Bachner Esq., New York

Hellman, David Information

CAMDEN, N.J. - A Montgomery County, Pa., man today admitted his role in three bank robberies in Pennsylvania, U.S. Attorney Paul J. Fishman announced.

Kyle Wilson, 22, of Fort Washington, Pa., pleaded guilty before U.S. District Judge Joseph H. Rodriguez in Camden federal court to an information charging him with three counts of bank robbery. In June 2012, Wilson pleaded guilty before Judge Rodriguez to a separate information charging him with traveling from Pennsylvania to New Jersey to commit an aggravated assault in furtherance of an extortion scheme. All three of the bank robberies to which Wilson pleaded guilty occurred after his June 2012 plea while he was released on bail pending sentencing. He is currently detained.

Although the three bank robberies occurred in Pennsylvania, Wilson waived his right to contest venue so that all of his pending criminal charges – the robberies and the prior aggravated assault conviction – could be resolved in the District of New Jersey.
According to documents filed in this case and statements made in court:

• On March 6, 2013, Wilson entered a Citizens Bank located inside a Giant Store in Montgomeryville, Pennsylvania. He approached the teller and handed him a withdrawal slip that read “the gun will go off, give me some money.”  The teller handed Wilson cash, and Wilson left the store.

• On March 11, 2013, Wilson entered a PNC Bank located inside a Giant Store in Plymouth Meeting, Pennsylvania. He approached the teller and handed him a note.  The teller then heard Wilson warn him not to “hit any buttons” and demand money. The teller handed Wilson cash and Wilson left the store.

• On March 14, 2013, Wilson entered a First Niagara Bank in Lower Providence Township, Pennsylvania. He approached the teller, displayed what appeared to be a small black gun, and demanded money. The teller handed Wilson cash, and Wilson left the store.

Each of the three bank robbery counts with which Wilson is charged carries a maximum potential penalty of 20 years in prison and a fine of $250,000, or twice the gross amount of any pecuniary loss or gain from the offense. Sentencing is scheduled for June 9, 2014.

U.S. Attorney Fishman credited special agents of the Department of Labor, Office of Labor Racketeering and Fraud Investigations, under the direction of Special Agent-in-Charge Robert Panella; the Department of Labor-Wage and Hour Division, under the direction of George Ference, regional administrator; Naval Criminal Investigative Service, under the direction of Special Agent in Charge Cheryl DiPrizio, Northeast field office; and the Air Force Office of Special investigations, under the direction of Special Agent Seth Neville, detachment commander, Joint Base McGuire-Dix-Lakehurst. He also thanked the U.S. Attorney’s Office for the Eastern District of Pennsylvania.

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

14-076                                                            

Defense counsel:  Stanley O. King Esq., Woodbury, N.J.

Wilson, Kyle Information

CAMDEN, N.J. – A former attorney in the Haddonfield, N.J., office of a firm specializing in toxic tort litigation today admitted that he falsified defendants’ names in more than 100 asbestos suits filed in New York State courts in order to increase business and his standing in the firm, U.S. Attorney Paul J. Fishman announced.

Arobert C. Tonogbanua, 44, of Sicklerville, N.J., pleaded guilty before U.S. District Judge Noel L. Hillman in Camden federal court to an information charging him with one count of wire fraud. During the proceeding, Tonogbanua admitted that he fraudulently inserted the names of his former law firm’s clients into legitimately filed asbestos suits and charged the clients more than $1 million in attorney’s fees, costs and settlements to defend them.

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

From 2008 through April 9, 2012, Tonogbanua worked at the Haddonfield office of a firm specializing in toxic tort litigation, workers’ compensation and immigration law, during which time he engaged in the wire fraud scheme.

Specifically, Tonogbanua admitted, he obtained copies of legitimately filed asbestos complaints and fraudulently altered them by deleting a named defendant and inserting the name of one or more of his firm’s clients. Tonogbanua admitted that, unbeknownst to anyone else at the firm, he forwarded those fraudulently altered complaints by email, fax and otherwise to the firm’s clients, their representatives and insurance companies.

After notifying the firm’s clients of the suits, Tonogbanua – and others at the firm who were not involved in the scheme – undertook the representation of the clients, by attending depositions, answering discovery and even settling claims. It is estimated that Tonogbanua inserted his firm’s clients’ names into more than 100 lawsuits, resulting in the generation of more than $1 million in fraudulent fees, costs and settlements. Tonogbanua personally benefitted from the scheme through bonuses and increased compensation.

Tonogbanua faces a maximum potential penalty of 20 years in prison and a $250,000, or twice the gross gain or loss from the scheme – whichever is greater. Sentencing is currently scheduled for June 17, 2014.

Under the terms of the plea agreement, Tonogbanua has agreed to make full restitution to his former law firm for all of the losses resulting from his fraudulent scheme. The firm has already repaid its clients.

U.S. Attorney Fishman credited special agents of the Federal Bureau of Investigation, under the direction of Special Agent in Charge Edward J. Hanko in Philadelphia, with the investigation leading to Tonogbanua’s guilty plea.

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

14-075                                                   

Defense counsel:  Michael Miller Esq., Turnersville, N.J.

Tonogbanua, Arobert Information

NEWARK, N.J. - An Essex County, N.J., man has been convicted on all counts in connection with a March 2012 carjacking, U.S. Attorney Paul J. Fishman announced today.

Anthony Jefferson, 21, of Newark, was convicted of one count of conspiracy, one count of carjacking and one count of brandishing a firearm in furtherance of a carjacking following a five-day trial before U.S. District Judge Kevin McNulty in Newark federal court. The jury deliberated two hours before returning the guilty verdicts on March 3, 2014.

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

On the morning of March 11, 2012, Jefferson and Sharod Culp, 21, of Newark, approached two individuals who were sitting in a parked 2009 Hyundai Sonata in the area of Patterson Street in Newark. Culp pointed a firearm at the victims, and both Culp and Jefferson ordered the victims to get out of the car.  After robbing and taunting the victims, Culp and Jefferson fled the area in the carjacked vehicle. 

After the carjacked vehicle was recovered, it was processed for evidence, and latent fingerprints identified to be those of Culp and Jefferson were found inside the vehicle.  Both victims positively identified Culp as one of the people who carjacked them; one of the victims also identified Jefferson to be the other person who carjacked them. Culp pleaded guilty in July 2013 to carjacking and brandishing a weapon in furtherance of a carjacking and is awaiting sentencing.

The charge of carjacking carries a maximum potential penalty of 15 years in prison.  The charge of use of a firearm in furtherance of a crime of violence carries a maximum potential penalty of life in prison and a mandatory minimum sentence of seven years in prison, which must run consecutively to any other prison term.  Each of the two counts also carries a maximum fine of $250,000. Sentencing will be scheduled at a later date.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark; the Newark Police Department, under the leadership of Acting Director Sheilah A. Coley; and the Essex County Prosecutor's Office, under the direction of Acting Prosecutor Carolyn A. Murray; as well as criminal investigators from the U.S. Attorney's Office in Newark with the investigation leading to the conviction. 

The government is represented by Assistant U.S. Attorneys Robert Frazer and Elizabeth Harris of the U.S. Attorney's Office Criminal Division in Newark.

14-074                                                              

Defense counsel: Vincent Sanzone Jr. Esq., Elizabeth, N.J.

NEWARK, N.J. – Two of the stars of the Bravo TV television show “The Real Housewives of New Jersey” today admitted committing a string of crimes as part of a long-running financial fraud conspiracy, U.S. Attorney Paul J. Fishman announced.

Teresa Giudice, 41, and Giuseppe “Joe” Giudice, 43, both of Towaco, N.J., pleaded guilty before U.S. District Judge Esther Salas in Newark federal court to several counts of the superseding indictment returned against them in July 2013. The Giudices each pleaded guilty to one count of conspiracy to commit mail and wire fraud, one count of bankruptcy fraud by concealment of assets, one count of bankruptcy fraud by false oaths, and one count of bankruptcy fraud by false declarations. Giuseppe Giudice also pleaded guilty to one count of failure to file a tax return.

“Teresa and Giuseppe Giudice used deception and fraud to cheat banks, bankruptcy court and the IRS,” said U.S. Attorney Fishman. “With their guilty pleas, they admitted the schemes with which they were charged. Having now confessed their wrongdoing, the Giudices face the real cost of their criminal conduct.”

“The Federal Deposit Insurance Corporation (FDIC) Office of Inspector General (OIG) is pleased to join our law enforcement colleagues in announcing these guilty pleas today,” A. Derek Evans, Special Agent in Charge of FDIC-OIG, New York Region, said. “We are committed to combating bank fraud and bringing to justice those who engage in criminal conduct that undermines the integrity of our nation's financial institutions.”

“Tax violations have been erroneously referred to as victimless crimes, which is a far cry from reality,” Acting Special Agent in Charge Jonathan D. Larsen, IRS-Criminal Investigation, Newark Field office, said. “Every time someone in America cheats on their taxes there are over 300 million victims. Tax fraud and bankruptcy fraud are real crimes with serious consequences as evidenced today by the guilty pleas of Giuseppe and Teresa Giudice.”

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

From September 2001 through September 2008, Giuseppe and Teresa Giudice engaged in a mail and wire fraud conspiracy in which they submitted fraudulent applications and supporting documents to lenders in order to obtain mortgages and other loans. The Giudices falsely represented on loan applications and supporting documents that they were employed and/or receiving substantial salaries when they were either not employed or not receiving such salaries.

In September 2001 Teresa Giudice applied for a $121,500 mortgage loan for which she submitted a loan application falsely claiming she was employed as an executive assistant. She also submitted fake W-2 forms and fake pay stubs purportedly issued by her employer. For a $361,250 mortgage loan that Teresa Giudice obtained in July 2005, she and Giuseppe Giudice prepared a loan application which falsely stated she was employed as a realtor and that she made a monthly salary of $15,000. In reality, Teresa Giudice was not employed at the time.

The Giudices also admitted they committed bank fraud and loan application fraud in the course of obtaining loans from several banks. On Oct. 29, 2009, they filed a petition for individual Chapter 7 bankruptcy protection in U.S. Bankruptcy Court in Newark. Over the next few months, they filed several amendments to the bankruptcy petition. As part of the bankruptcy filings, the Giudices were required to disclose to the United States Trustee their assets, liabilities, income and any anticipated increase in income. The Giudices intentionally concealed businesses they owned, income they received from a rental property, and Teresa Giudice’s true income from the television show “The Real Housewives of New Jersey,” website sales, and personal and magazine appearances. The Giudices concealed their anticipated increase in income from the then-upcoming second season of the show.

Giuseppe Giudice also admitted that during tax years 2004 through 2008, he received income totaling $996,459 but did not file tax returns for those years.         

The conspiracy to commit mail and wire fraud count to which the Giudices each pleaded guilty carries a maximum potential penalty of 20 years in prison and a $250,000 fine. Each of the bankruptcy fraud counts carries a maximum potential penalty of five years in prison and a $250,000 fine. Teresa Giudice’s plea agreement requires her to pay $200,000 to the government at the time of sentencing, which is scheduled for July 8, 2014.

The plea agreements also require the Giudices to forfeit money which they obtained via conspiracy to commit mail and wire fraud and bankruptcy fraud, in an amount to be determined by the court at sentencing.

U.S. Attorney Fishman credited special agents of the FDIC-OIG New York, under the direction of SAC Evans; special agents of the IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Larsen; and Region 3 U.S. Trustee Roberta A. DeAngelis and the Newark office of the U.S. Trustee, with the investigation which led to today’s guilty pleas.

The government is represented by Assistant U.S. Attorney Jonathan W. Romankow of the office’s Criminal Division, and Counsel to the U.S. Attorney Rachael A. Honig, in Newark.

13-073                                              

Defense counsel: Teresa Giudice: Henry E. Klingeman Esq., Newark
Giuseppe Giudice: Miles Feinstein Esq., Clifton, N.J.

Giudice, Giuseppe and Teresa Superseding Indictment
Giudice, Giuseppe Plea Agreement
Giudice, Teresa Plea Agreement

NEWARK, N.J. — A Louisiana man appeared in Newark federal court today to face a charge that he sexually touched a sleeping woman who did not know him aboard a flight from Houston to Newark Liberty International Airport, U.S. Attorney Paul J. Fishman announced.

Devender Singh, 61, an Indian national who lives in Baton Rouge, was arrested on March 2, 2014 – the day his plane arrived in Newark – and was taken into federal custody by the FBI. He appeared this afternoon, to face a complaint charging him with one count of abusive sexual contact, before U.S. Magistrate Judge Madeline Cox Arleo in Newark federal court and was detained with the option to request a bail hearing.

According to the complaint filed today:

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

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

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

If convicted of the abusive sexual contact charge, Singh faces a maximum potential penalty of two years in prison and a $250,000 fine, or twice the gain or loss from the offense.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, and the Port Authority Police Department, under the direction of Superintendent Michael A. Fedorko, with the investigation leading to the charge.

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

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

14-072                                                       

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

Singh Complaint

NEWARK, N.J.— With tax season already upon us, U.S. Attorney Paul J. Fishman and IRS-Criminal Investigation Special Agent in Charge Shantelle P. Kitchen, Newark Field Office, are reminding New Jersey taxpayers about the importance of filing complete and accurate tax returns by the April 15 deadline.

They also urged those who are hiring someone else to prepare their returns to be careful when choosing a professional tax preparer.

“Many taxpayers appropriately hire somebody to prepare their tax returns for them,” U.S. Attorney Fishman said. “Given the importance of filing an accurate and timely tax return, this is a decision that should be made carefully. You should choose a return preparer with the same diligence you would use in selecting a doctor or a lawyer.”

“While the vast majority of return preparers are professional, honest and provide a valuable service to their clients, there are some who are not,” SAC Kitchen said, highlighting two recent cases of return preparers who pleaded guilty to preparing false tax returns for clients:

• Sean Gunby, of Jersey City, pleaded guilty Dec. 16, 2013, to one count of aiding and assisting in the preparation of false tax returns.  Gunby was the sole owner and operator of Gunby Consulting Inc. and Gunby Consulting Group., Gunby admitted that for the tax years 2006 through 2010 he prepared false tax returns for his clients by fabricating and inflating certain expenses, deductions and credits on Schedules A, C, D and E, of his clients personal tax returns. By falsifying this information, Gunby was able to obtain tax refunds for his clients greater than those they were lawfully entitled to receive. The total amount of tax the IRS was defrauded of as a result of the fraudulent returns prepared by Gunby is $84,559.  Gunby faces a maximum prison sentence of three years when he is sentenced on April 4.
  
  
• Carlyle Frasier, of Maplewood, N.J., owner of Fraser CPA and Taxko Inc., a tax preparation business, pleaded guilty Jan. 28, 2014, before U.S. District Judge Joel A. Pisano in Trenton federal court to an information charging him with one count of aiding and assisting in the preparation of false individual income tax returns.  From 2008 through 2011, Fraser prepared and filed false individual income tax returns for his clients. On April 8, 2011, Fraser prepared a false 2010 individual income tax return for an undercover agent, which claimed false deductions for medical and dental expenses, charitable contributions, unreimbursed employee expenses, tuition, a business loss, and a capital gains loss. In preparing false individual income tax returns for his clients, Fraser caused a tax loss to the IRS of $149,739.  Frasier faces a maximum prison sentence of three years when he is sentenced on June 25, 2014.

“Tax violations have been erroneously referred to as victimless crimes, but it’s the honest law-abiding citizen who is harmed when someone tries to cheat our nation’s tax system,” SAC Kitchen said.
 
“Our tax system depends on honest people filing returns that are complete and accurate,” U.S. Attorney Fishman said. “My office along with IRS-Criminal Investigation will investigate and prosecute those who violate our tax laws.”

Recent tax cases investigated by IRS-Criminal Investigation and prosecuted by the U.S. Attorney’s Office here in New Jersey include:

• Amadeus Manata, of Warren, N.J., pleaded guilty Jan. 10, 2014, to an information charging him with one count of subscribing to false personal federal income tax returns.  For the tax years 2005 through 2007, Manata filed U.S. individual income tax returns in which he claimed to report all of his income from his pizzeria, Pizza Pasta Etc., but which omitted $563,343 in cash he had diverted from the businesses for his personal use. Manata’s intentional failure to disclose true, correct and complete information to the IRS resulted in a tax loss to the United States of $190,712.  Manata faces up to three years in prison when he is sentenced on April 16, 2014.
  
  
• Rafael Holguin, of Rochelle Park, N.J., pleaded guilty Jan. 30, 2014, to an information charging him with one count of subscribing to a false corporate tax return for the 2008 calendar year.  Holguin was the sole owner of Bronx Express Liquors.  For the 2008 calendar year, Holguin signed and filed a false corporate tax return on behalf of Bronx Express Liquors. This return was false in that Holguin failed to include $391,831 of taxable income.  In addition, Holguin admitted that he failed to report $513,744 of additional taxable income on the corporate tax returns for 2007 and 2009. Holguin’s intentional failure to report the additional taxable income for the years 2007, 2008 and 2009 resulted in a tax loss to the government of $388,876.  Holguin faces up to three years in prison when he is sentenced on May 12, 2014.

IRS-Criminal Investigation is the law enforcement side of the IRS. Special agents investigate potential violations of the Internal Revenue Code and related financial crimes in a manner that fosters confidence in the tax system and compliance with the law.

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CAMDEN, N.J. — The former chairman of the Woodland Park, N.J., Democratic Committee was sentenced today to 24 months in prison for bribing two individuals he thought were IRS officials to eliminate his tax debt, U.S. Attorney Paul J. Fishman announced.

Michael Kazmark, 61, of Woodland Park, previously pleaded guilty before Chief U.S. District Judge Jerome B. Simandle to an information charging him with one count of bribing a federal public official in exchange for official action. Judge Simandle imposed the sentence today in Camden federal court.

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

Kazmark failed to pay federal income taxes from 1997 through 2005. In 2010, Kazmark owed the IRS $98,046 in unpaid federal income taxes, interest and penalties. On April 18, 2010, Kazmark made an application to the IRS for an offer in compromise, requesting that he pay $48,800 to the IRS in order to settle his entire federal tax debt.

On Oct. 5, 2010, Kazmark paid a $1,000 bribe to an undercover FBI agent and IRS employee, posing as IRS officials, in exchange for their official assistance in transferring his offer in compromise file to one of the officials for acceptance. On Nov. 23, 2010, Kazmark made a $17,500 bribe payment to the individuals, believing it was in exchange for their official assistance in placing his federal tax liability in noncollectible status for two years and agreeing to accept Kazmark’s offer in compromise for the amount of the check that he had already paid to the IRS – $9,760 – if he did not incur any additional federal tax liability for two years. 

In addition to the prison term, Judge Simandle sentenced Kazmark to two years of supervised release. As a condition of that release, Kazmark is required to pay his full tax liability to the IRS.

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 the U.S. Treasury Inspector General for Tax Administration, under the direction of Special Agent in Charge Robert Geary, for the investigation leading to today’s sentence.

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

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Defense counsel: Miles Feinstein Esq., Clifton, N.J.

NEWARK, N.J. – A pediatrician with a practice in Staten Island and Brooklyn, N.Y., admitted today he accepted bribes in exchange for test referrals as part of a long-running scheme operated by Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, N.J., its president and numerous associates, New Jersey U.S. Attorney Paul J. Fishman announced.

Demetrios Gabriel, 46, of Brooklyn pleaded guilty today before U.S. District Judge Stanley R. Chesler in Newark federal court to an information charging him with one count of accepting bribes. 

Including Gabriel, 24 people – 13 of them physicians– have pleaded guilty in connection with the bribery scheme, which its organizers have admitted involved millions of dollars in bribes and resulted in more than $100 million in payments to BLS from Medicare and various private insurance companies.

According to documents filed in this and related cases and statements made in court: Gabriel admitted he accepted bribes in return for referring patient blood specimens to BLS and was paid more than $4,500 per month. Gabriel received a flat fee of $3,000 per month in cash, plus additional cash based on the number of patient blood samples his pediatric practice referred to BLS each month. In addition, Gabriel received $1,500 per month through credit card payments to a restaurant he owns.

The bribery count to which Gabriel pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for July 18, 2014. As part of his guilty plea, Gabriel agreed to forfeit $200,000, representing the bribes he received from BLS.

The investigation has recovered more than $7 million to date through forfeiture.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Thomas O’Donnell; IRS– Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen; and inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, with the ongoing investigation leading to today’s guilty pleas.

The government is represented by 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 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 $520 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: Joseph Corozzo Esq., New York

Gabriel Information

TRENTON, N.J. – A former substitute teacher at a private school in Jersey City, N.J., was sentenced today to 121 months in prison for distributing images of child sexual abuse over the Internet, U.S. Attorney Paul J. Fishman announced.

Guy West, 45, of Jersey City, previously pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton federal court to an information charging him with one count of distribution of child pornography. Judge Sheridan imposed the sentence today in Trenton federal court.

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

West was working as a permanent substitute teacher who regularly taught and supervised children between the ages of 2 and 14 at the time of his January 2013 arrest. West admitted that on Dec. 18, 2012, he made images and videos of child pornography stored on his computer available for others to download via a peer-to-peer file-sharing network. On that date, an undercover law enforcement agent successfully downloaded 120 images and 24 videos of child sexual abuse from West via the file-sharing network.

As part of his guilty plea, West agreed to forfeit the computers and computer accessories he used to commit the offense.

In addition to the prison term, Judge Sheridan sentenced West to serve a lifetime of supervised release. Restitution is to be determined.

U.S. Attorney Fishman credited special agents of the FBI, Newark Division’s Child Exploitation Task Force, under the direction of Special Agent in Charge Aaron T. Ford in Newark; officers of the Jersey City Police Department, under the direction of Chief of Police Robert Cowan; and the Hudson County Prosecutor’s Office, under the direction of Acting Prosecutor Gaetano T. Gregory with the investigation leading to today’s sentencing.

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

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Defense counsel: Nace Naumoski Esq., Roseland, N.J.                                                                                            

Allegedly Urged Clients to Feign Spousal Abuse to Stay in United States

CAMDEN, N.J. – A woman who allegedly filed false and fraudulent immigration petitions for clients while working as a paralegal in Atlantic County, N.J., made her initial court appearance today on conspiracy charges, U.S. Attorney Paul J. Fishman announced.

Maria James, 68, of Willingboro, Burlington County, N.J., was charged by complaint Feb. 19, 2014, with one count of conspiracy to commit mail fraud. She appeared before U.S. Magistrate Judge Ann Marie Donio in Camden federal court this morning and was released on a $50,000 bond.

According to documents filed in this case:

From 2002 through June 2011, James worked from an office in Brigantine, Atlantic County, as a paralegal on immigration issues, working for three different lawyers. She solicited and recruited as clients for the lawyers’ immigration practices various individuals who were illegally in the United States. James arranged for two marriages and also filed numerous fraudulent immigration petitions seeking to allow her clients to obtain legal permanent resident status.

At least 22 of James’ former clients have admitted that the immigration petitions submitted by James and the attorneys for whom James worked contained false and fraudulent information.  Many of the petitions were based upon false claims of physical abuse by spouses against the illegal alien clients, and contained fraudulent supporting documentation, including photographs taken by or at the direction of James. She allegedly used makeup or ketchup to fake the injuries. James then filed or directed the filing of petitions with U.S. Customs and Immigration Services by U.S. Mail or Federal Express.

The charge of conspiracy to commit mail fraud carries a maximum potential penalty of 20 years in prison and a $250,000 fine.

U.S. Attorney Fishman credited special agents of the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Andrew McLees in Newark; and IRS – Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen; with the investigation leading to today’s charge.

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

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: Edward Crisonino Esq., Westmont, N.J.

James Complaint

NEWARK, N.J. – An internist with a practice in Montclair, N.J., admitted today accepting bribes in exchange for test referrals as part of a long-running scheme operated by Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, N.J., its president and numerous associates, U.S. Attorney Paul J. Fishman announced.

Charles Goldberg, 60, of West Orange, N.J., pleaded guilty before U.S. District Judge Stanley R. Chesler in Newark federal court to an information charging him with one count of accepting bribes. 

Including Goldberg, 23 people – 12 of them physicians– have pleaded guilty in connection with the bribery scheme, which its organizers have admitted involved millions of dollars in bribes and resulted in more than $100 million in payments to BLS from Medicare and various private insurance companies.

According to documents filed in these and related cases and statements made in court: Goldberg admitted accepting bribes of $1,800 per month through a sham lease agreement with BLS, which identified the waiting room, bathroom and one examination room in Goldberg’s office as being leased.

The bribery count to which Goldberg pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine. He will be sentenced on a date to be determined. As part of his guilty plea, Goldberg agreed to forfeit $58,000, representing the bribes he received from BLS.

The BLS investigation has recovered more than $7 million to date through forfeiture.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Thomas O’Donnell; IRS – Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen; and inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, with the ongoing investigation leading to today’s guilty pleas.

The government is represented by 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 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: A. Ross Pearlson Esq., West Orange, N.J.  
      
Goldberg Information

NEWARK, N.J. — Two of the leaders of a scheme to steal account information from bank customers throughout New York, New Jersey and Connecticut by installing secret card-reading devices on ATMs were in court today for separate proceedings, U.S. Attorney Paul J. Fishman announced.

Bogdan Radu, 31, of Queens, N.Y., pleaded guilty before U.S. District Judge William J. Martini in Newark federal court to an information charging him with one count of conspiracy to commit bank fraud and one count of aggravated identity theft. Marius Vintila, 31, of Queens, was arraigned before Judge Martini after being charged in a six-count indictment on Feb.18, 2014, with conspiracy to commit bank fraud, aggravated identity theft, conspiracy to possess 15 or more counterfeit access devices, possession of 15 or more counterfeit access devices, conspiracy to possess access device-making equipment and possession of access device-making equipment. The ATM skimming operation involving Romanian nationals living in Queens is one of the largest ever uncovered by law enforcement.

Also today, Constantin Ginga, 53, who previously pleaded guilty before Judge Martini to one count of conspiracy to commit bank fraud and one count of aggravated identity theft, was sentenced to 57 months in prison and two years of supervised release. Restitution will be determined at a later date. On Feb. 25, 2014, another defendant, Marius Cotiga, 35, pleaded guilty to an information charging him with one count of conspiracy to commit bank fraud.

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

Radu admitted designing and creating ATM skimming devices and pinhole cameras. Each skimmer, an electronic device, would read and record identity and account information contained in the magnetic strip of a customer’s ATM card. The pinhole camera secretly recorded bank customers’ keystrokes as they entered their personal identification numbers. Radu taught others how to install them on bank ATMs, and gave his conspirators the devices and pinhole cameras to install on bank ATMs throughout New Jersey, New York, Connecticut and Florida. After capturing customer account information, Radu and others created counterfeit ATM cards they used to withdraw millions of dollars in cash from bank ATMs. From June 2012 through July 2013, they used these devices and cameras to defraud Wells Fargo, Citibank and TD Bank of $5 million.

Vintila worked with Radu to design and create the skimming devices and pinhole cameras and recruited individuals, including Cotiga and Ginga, to install them on bank ATMs. Vintila also used an alias to rent multiple self-storage units, in which he stored the contents of an entire skimming operation, including skimming devices, pinhole cameras, super glue, tape, SD cards, batteries, computers, molds, fraudulent ATM cards and cash proceeds. He was apprehended in Sweden and extradited to the United States on Feb. 7, 2014.

Cotiga and Ginga admitted they installed skimmers and pinhole cameras at bank ATMs and subsequently used counterfeit ATM cards to withdraw cash from bank ATMs. Cotiga, Ginga and others stole approximately $985,000 from Citibank ATMs in New Jersey, New York and Connecticut.

The charges to which Radu and Cotiga pleaded guilty arose from a larger investigation into a skimming scheme that targeted customers in the tri-state area in 2012 and early 2013. Of the 11 others charged in the scheme, all Romanian nationals who lived in Queens, 10 are in custody.

The bank fraud conspiracy charge to which Radu and Cotiga each pleaded guilty carries a maximum potential penalty of 30 years in prison and a $1 million fine. The aggravated identity theft charge to which Radu pleaded guilty carries a mandatory, consecutive penalty of two years in prison and a $250,000 fine. Sentencings for Radu and Cotiga are currently scheduled for June 5, 2014.

U.S. Attorney Fishman praised special agents of the U.S. Secret Service, Newark Field Office, under the direction of Special Agent in Charge James Mottola, along with special agents of Immigration and Customs Enforcement, Homeland Security Investigations in Newark, under the direction of Special Agent in Charge Andrew M. McLees, with the investigation. He also thanked the Englewood, N.J., Police Department for their role in effecting Ginga’s arrest.

The charges and allegations against the other defendants charged in the pending complaints are merely accusations, and the defendants are considered innocent unless and until proven guilty.

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

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Defense counsel: Radu: John P. McGovern Esq., Newark
Vintila: Chris Adams Esq., Colts Neck, N.J.
Ginga: Warren Sutnick Esq., Hackensack, N.J.
Cotiga: John Weichsel Esq., Hackensack

Radu Information
Cotiga Information

TRENTON, N.J. - An Ocean County, N.J., man was sentenced today to 264 months in prison for running a real estate investment fraud scheme that caused $200 million in losses and laundering the proceeds of the scheme, U.S. Attorney Paul J. Fishman announced.

Eliyahu Weinstein, a/k/a “Eli Weinstein,” a/k/a “Edward Weinstein,” a/k/a “Eddie Weinstein,” 38, of Lakewood, N.J., previously pleaded guilty before U.S. District Judge Joel A. Pisano to two counts of an indictment charging him with conspiracy to commit wire fraud, and money laundering. Weinstein’s co-defendant, Vladimir Siforov, is charged in the indictment with three counts of wire fraud and remains a fugitive.

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

From June 2004 through August 2011, Weinstein orchestrated – with the help of Siforov and others – a real estate investment fraud scheme headquartered in Lakewood that resulted in multimillion-dollar losses to victim investors.

To induce victims to invest, Weinstein and others made various types of materially false and misleading statements and omissions. Weinstein and others told victims that Weinstein’s inside access to certain real estate opportunities allowed him to buy a particular piece of property at a below-market price. Weinstein and others also told victims that their money would be used to purchase a specific property, and the property would be quickly resold – or “flipped” – to a third-party purchaser that Weinstein had lined up. Victims were also told that the victims’ money would be held in escrow until the closing of a purported real estate transaction.

Weinstein bolstered his lies by creating, and causing to be created, various types of fraudulent documents, including “show checks,” which Weinstein led victims to believe represented Weinstein’s investments in specific transactions, but which in fact were never deposited; forged checks, which had actually been negotiated for small amounts, but which Weinstein altered so as to appear worth millions of dollars; and various kinds of phony legal documents, including mortgages, and deeds.

Weinstein and others initially targeted victims from the Orthodox Jewish community to which Weinstein belonged, exploiting his standing in, and knowledge of, the customs and practices of this community to further the scheme. Weinstein abused the Orthodox community’s practice of engaging in transactions based on trust, and without paperwork, to obtain money from his victims without substantial written records.  He would then falsely represent that specific real estate transactions existed, that the victims’ monies were used to fund those transactions, or that the victims’ profits from those transactions were being “rolled” into new investments. Weinstein also used a portion of the fraud’s proceeds to fund “charitable and religious contributions,” which he used to elevate his reputation within the Orthodox Jewish community.

By 2010, Weinstein had tarnished his reputation in the Orthodox Jewish community due to the massive losses caused by his fraud scheme and found it difficult to obtain more money to further the scheme from within the community. In April 2010, Weinstein and others began soliciting victims from outside of the Orthodox Jewish community, whom they defrauded out of additional millions of dollars.

Weinstein also used millions of dollars fraudulently obtained from his victims to fund his own lavish spending, including millions of dollars’ worth of antique Judaica and other artwork; a multimillion-dollar collection of jewelry and watches; gambling in Las Vegas and elsewhere; and Weinstein’s personal expenses, including millions of dollars in credit card bills, millions of dollars in legal bills, and luxury car-lease payments.

In addition to the prison term, Judge Pisano sentenced Weinstein to three years of supervised release. Judge Pisano ordered Weinstein to pay restitution of $215.4 million and forfeiture of $215.4 million.  

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, for the investigation leading to today’s sentence. He also credited agents of IRS–Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen, for their important contributions to the investigation.

The government is represented by Assistant U.S. Attorneys Zach Intrater, Gurbir S. Grewal, Rachael A. Honig and Evan Weitz.

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

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

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Defense counsel: Eric Creizman Esq., New York

TRENTON, N.J. – The former director of finance of the Middlesex County-based integrated logistic services company Toll Global Forwarding today admitted stealing more than $1.3 million from her former employer through an elaborate false invoicing scheme, U.S. Attorney Paul J. Fishman announced.

Karen Sipes, 40, of Brick, N.J., pleaded guilty before U.S. District Judge Joel A. Pisano in Trenton federal court to an information charging her with wire fraud for her theft from the multi-national company based in Carteret, N.J. She was originally charged by complaint in November 2012.

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

While Sipes was employed at Toll Global Forwarding (TGF) – from August 2010 through August 2012 – she was responsible for entering vendor transactions and invoices into TGF’s accounts payable accounting system and paying those vendors by preparing checks from TGF.  As a result, Sipes had access to and significant control over TGF’s accounts payable accounting and bill payment systems.

 In the false invoicing scheme, Sipes identified vendors with a high number of transactions and invoices in TGF’s accounting system. She admitted she would then create and input fake transactions and invoices for them, preparing checks payable to herself.

Sipes also admitted that she identified legitimate vendor transactions and invoices and changed vendors’ names to her name, making those checks payable to herself. She also used TGF checks to pay the credit card bill of a family member and accessed TGF’s accounting system to remove any record of the fraudulent transactions.

The wire fraud count to which Sipes pleaded guilty carries a maximum potential penalty of 20 years in prison and a $250,000 fine. As part of her guilty plea, Sipes is required to pay restitution of $1,335,698.93 to Toll Global Forwarding. Sentencing is scheduled for July 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, with the investigation leading to today’s guilty plea. 

 The government is represented by Assistant U.S. Attorney Courtney M. Oliva and 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:  Michael Critchley Sr. and Edmund DeNoia, Esqs., Roseland, N.J.

NEWARK, N.J. – Diagnostic Imaging Group (DIG) has agreed to pay a total of $15.5 million to resolve allegations that its diagnostic testing facilities falsely billed federal and state health care programs for tests that were not performed or not medically necessary and by paying kickbacks to physicians.

U.S. Attorney for the District of New Jersey Paul J. Fishman, Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery, and U.S. Attorney for the Eastern District of New York Loretta E. Lynch announced the settlement today.

DIG has agreed to pay $13.65 million to the federal government and an additional total of $1.85 million to New York and New Jersey. DIG operates a chain of diagnostic testing facilities through its subsidiary, Doshi Diagnostic Imaging Services, which is headquartered in Hicksville, N.Y. DIG previously operated chains in New Jersey and Florida through subsidiaries Doshi Diagnostic Imaging Services of New Jersey and Signet Diagnostic Imaging Services.

“Health care providers who make decisions based on profit instead of medical need compromise patient safety and confidence,” U.S. Attorney Fishman said. “Unnecessary tests and the payment of kickbacks also siphon precious resources from our health care system. The settlement we’re announcing today is an appropriate response to these unacceptable practices.”

“When health care providers pay kickbacks and submit false claims to Medicare, they not only deplete the Medicare Trust Fund, they undermine the integrity of the health care system,” said Assistant Attorney General Stuart F. Delery. “The Justice Department will relentlessly pursue those who misuse federal health care funds for their own profit.”

The settlement announced today resolves allegations that DIG submitted claims to Medicare, as well as the New Jersey and New York Medicaid Programs, for 3D reconstructions of CT scans that were never performed or interpreted.  Additionally, DIG allegedly bundled certain tests on its order forms so that physicians could not order other tests without ordering the additional bundled tests, which were not medically necessary. Today’s settlement also resolves allegations that DIG paid kickbacks to physicians for the referral of diagnostic tests. According to the government, the kickbacks were in the form of payments that DIG made to physicians ostensibly to supervise patients who underwent nuclear stress testing. These payments allegedly exceeded fair market value and were, in fact, intended to reward physicians for their referrals.   

“Patients deserve testing decisions based solely on medical need, not doctors’ pocketbooks,” said U.S. Attorney Lynch. “We will continue to work with our federal and state law enforcement partners to investigate vigorously allegations of fraud on federal programs like Medicare and to pursue those who seek to fraudulently deplete the Medicare Trust Fund.”

“Paying physicians for their referrals and submitting false claims to increase Medicare and Medicaid reimbursements – as was alleged in this case – simply cannot be tolerated,” said Inspector General of the U.S. Department of Health and Human Services Daniel R. Levinson.  “Besides levying a hefty penalty, the settlement requires an independent organization to review Diagnostic Imaging Group’s claims for five years and to send reports to the government.”

The allegations resolved by today’s settlement were raised in three lawsuits filed under the qui tam, or whistleblower, provisions of the False Claims Act.  The Act allows private citizens with knowledge of fraud to bring civil actions on behalf of the government and to share in any recovery.  The three whistleblowers will receive the following amounts as part of today’s settlement: Mark Novick, M.D., $1.5 million; Rey Solano, $1.07 million; Richard Steinman, M.D., $209,250.

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.

The government is represented by Assistant U.S. Attorney Charles Graybow of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark and Trial Attorneys Arthur Di Dio and William Olson of the Justice Department’s Civil Division in all aspects of the case, as well as Assistant U.S. Attorney Paul Kaufman of the U.S. Attorney’s Office for the Eastern District of New York with regard to the Steinman qui tam. New York was represented the New York Attorney General’s Medicaid Control Fraud Unit in New York City, and New Jersey was represented by the New Jersey Attorney General’s Government & Healthcare Fraud Section in Newark.

The settlement is the culmination of an investigation conducted jointly by special agents of the Department of Health and Human Services Office of Inspector General and special agents of the FBI in Newark under the direction of Special Agent in Charge Aaron T. Ford, with contributions from the Railroad Retirement Board.

The claims settled by this agreement are allegations only, and there has been no determination of liability. The three cases are captioned United States ex rel. Mark Novick, M.D. v. Doshi Diagnostic Imaging Services P.C., Civil Action No. 09-4992 (D.N.J.), United States ex rel. Rey Solano v. Diagnostic Imaging Group et al., Civil Action No. 10-267 (D.N.J.) and United States ex rel. Richard Steinman, M.D. v. Diagnostic Imaging Group, et al., Civil Action No. 10-4161 (E.D.N.Y.).

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Defense counsel for Doshi: Mitchell Lazris Esq. and Ronald Wisor Esq., Washington

Counsel for Relators: Novick qui tam – bundling, including 3D reconstruction: Marc S. Raspanti Esq. and Michael A. Morse Esq., Philadelphia
Solano qui tam – stress-testing: Eric H. Jaso Esq., New York, and David Bocian Esq., Radnor, Pa.
Steinman qui tam – 3D reconstruction: Timothy McCormack Esq., Washington

Doshi Executed Settlement Agreement

NEWARK, N.J. – The owner of a New Jersey-based insurance adjusting company was arrested today for allegedly defrauding the N.J. Turnpike Authority and certain insurance companies of more than $200,000, U.S. Attorney Paul J. Fishman announced.

Robert Napolitano, 54, of Clifton, N.J., the owner of Dawn to Dusk LLC, an insurance adjusting company that investigated and provided adjusting services to property and casualty insurance carriers in New Jersey, was arrested by special agents of the FBI and charged by complaint filed Feb. 19, 2014, and unsealed today with one count of mail fraud. Napolitano is scheduled to make his initial appearance before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court later today.

According to the complaint:

From October 2011 to June 2013  Napolitano obtained by fraud more than $200,000 from the Turnpike Authority (NJTA) and certain insurance companies in several ways, including instructing insurance companies whose motorists caused damage to the N.J. Turnpike to issue checks payable to Dawn to Dusk. After the checks were mailed to Dawn to Dusk, Napolitano did not forward the payments to the NJTA and instead shared the money with his previously charged conspirator, Gerardo A. Blasi, an NJTA claims manager.

Blasi, 55, of Clifton, pleaded guilty Dec.11, 2013, before U.S. District Judge Kevin McNulty to an information charging him with using the mails to facilitate a scheme and artifice to defraud the NJTA and certain insurance companies in connection with his theft of more than $1.5 million from the authority and the insurance companies. He is scheduled to be sentenced March 19, 2014.        

The fraud count with which Napolitano is charged is punishable by a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense.

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

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

NEWARK, N.J. – The owner of Clevett Worldwide Mailers LLC, a Succasunna, N.J., bulk mailing house, was sentenced today to 24 months in prison for defrauding clients of more than $1 million through a fraudulent bulk-mailing scheme in which he shredded millions of pieces of mail rather than delivering them, U.S. Attorney Paul J. Fishman announced.

Mark Clevett, 37, of Randolph, N.J., previously pleaded guilty before U.S. District Judge Kevin McNulty to an indictment charging him with one count of conspiracy to commit wire fraud. Judge McNulty imposed the sentence today in Newark federal court. Clevett’s father, Harold Clevett, 68, of Middlesex, N.J., who also previously pleaded guilty to the same charge, will be sentenced March 27, 2014.

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

Mark Clevett owned, and both Clevetts operated, Clevett Worldwide Mailers, which contracted with international and domestic customers to handle large mailings. Customers sent their mail jobs to Clevett Worldwide Mailers for sorting, addressing and delivery to the post office. The company received fees for each piece of mail and for the total weight of the mail that it handled.

Both father and son admitted that rather than sending their clients’ mail as contracted, they directed their employees to throw away all or part of it, and even called in a shredding company to destroy unsent mail.

Mark and Harold Clevett also acknowledged they charged their customers for the full amount of the mailings, even sending some of their customers fraudulent postal forms to make it appear as though the mailings were delivered. The pair admitted that between 2007 and June 2011, they discarded and shredded nearly 3 million pieces of customer mail and reaped nearly $1 million in illicit profits.

In addition to the prison term, Judge McNulty sentenced Mark Clevett to serve three years of supervised release and ordered him to pay restitution of restitution and forefeiture of $999,461.

U.S. Attorney Fishman credited postal 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 sentencing.

The government is represented by Assistant U.S. Attorneys Rahul Agarwal and Michael Robertson of the U.S Attorney’s Office in Newark. 

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Defense counsel: Harold Clevett: Brian J. Neary Esq., Hackensack, N.J.
Mark Clevett: Don Larsen Esq., Montville, N.J.       

NEWARK, N.J. – Federal agents arrested a Middlesex County, N.J., man today in Mercer County, N.J., for violating the Mann Act, a federal law prohibiting interstate transportation of a minor for illicit purposes, U.S. Attorney Paul J. Fishman announced.

Jayme Shannon, 51, of East Brunswick, N.J., was arrested at a residence in East Windsor, N.J., this morning by FBI agents and detectives with the Bergen County Prosecutor’s Office on a federal complaint charging him with interstate transportation of a minor for illicit purposes. Shannon is scheduled to make his initial appearance before U.S. Magistrate Judge Mark Falk in Newark federal court this afternoon.

According to the Complaint:

In September 2013, Shannon met the 15-year old victim in the internet chat room “Chatavenue.com” and continued to communicate with the victim in September and October 2013.

On Oct. 14, 2013, Shannon arranged to meet the victim at the Skyview Motel in Fort Lee, N.J. After renting a motel room that morning, Shannon drove from New Jersey to New York, where he picked up the victim. Shannon then drove the victim from New York to the motel for the purpose of engaging in sexual conduct and did, in fact, engage in sexual conduct with the victim in the motel.

On Oct. 14, 2013, police officers found Shannon and the victim inside the Skyview Motel.  Fort Lee Police arrested Shannon, who was charged in New Jersey Superior Court with sexual assault and endangering the welfare of a child.

The federal count with which Shannon is charged carries a minimum penalty of 10 years in prison and a maximum penalty of life imprisonment.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; the Bergen County Prosecutor’s Office, under the direction of Prosecutor John L. Molinelli; and the Fort Lee Police Department, under the direction of Chief Keith Bendul, with the investigation leading today’s arrest.

The government is represented by Assistant U.S. Attorney Josh Hafetz of the U.S. Attorney’s General Crimes 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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Shannon Complaint

Helped Clients Fraudulently Obtain Multiple Home Equity Loans.

CAMDEN, N.J. – A real estate consultant was sentenced today to 20 months in prison for helping five people defraud banks by obtaining multiple home equity loans on the same property, U.S. Attorney Paul J. Fishman announced.

William Barksdale, 47, of Burlington, N.J., previously pleaded guilty before U.S. District Judge Robert B. Kugler to an information charging him with one count of conspiracy to commit wire fraud. Judge Kugler imposed the sentence today in Camden federal court.

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

Barksdale was the owner of Barksdale Business Group, Barksdale Investment Properties, and Barksdale Loan Consultants. He devised a scheme to obtain multiple home equity lines of credit on a single home for more than the property was worth. A homeowner would submit loan applications to several lenders simultaneously without advising each lender about the other applications. Any bank conducting a title search would receive a clean title report because the other home equity lines of credit had not yet been recorded.

Barksdale advised five people to secure multiple home equity loans using his scheme, and each obtained at least three home equity loans on a single property. One individual obtained seven home equity loans on one home. Each person paid Barksdale a portion of the fraudulent proceeds. Many of the home equity loans later went into default. The scheme caused more than $1 million in losses.

In addition to the prison term, Judge Kugler sentenced Barksdale to five years of supervised release. A restitution hearing will be held at a later date.

U.S. Attorney Fishman credited agents of the FBI’s Trenton Resident Agency, under the direction of Special Agent in Charge Aaron T. Ford, and agents of the N.J. Division of Criminal Justice, under the leadership of Director Elie Honig, with the investigation leading to today’s sentencing.

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

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Defense counsel: Robert N. Agre Esq., Haddonfield, N.J.                                                          

Barksdale Information

Helped Clients Fraudulently Obtain Multiple Home Equity Loans.

CAMDEN, N.J. – A real estate consultant was sentenced today to 20 months in prison for helping five people defraud banks by obtaining multiple home equity loans on the same property, U.S. Attorney Paul J. Fishman announced.

William Barksdale, 47, of Burlington, N.J., previously pleaded guilty before U.S. District Judge Robert B. Kugler to an information charging him with one count of conspiracy to commit wire fraud. Judge Kugler imposed the sentence today in Camden federal court.

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

Barksdale was the owner of Barksdale Business Group, Barksdale Investment Properties, and Barksdale Loan Consultants. He devised a scheme to obtain multiple home equity lines of credit on a single home for more than the property was worth. A homeowner would submit loan applications to several lenders simultaneously without advising each lender about the other applications. Any bank conducting a title search would receive a clean title report because the other home equity lines of credit had not yet been recorded.

Barksdale advised five people to secure multiple home equity loans using his scheme, and each obtained at least three home equity loans on a single property. One individual obtained seven home equity loans on one home. Each person paid Barksdale a portion of the fraudulent proceeds. Many of the home equity loans later went into default. The scheme caused more than $1 million in losses.

In addition to the prison term, Judge Kugler sentenced Barksdale to five years of supervised release. A restitution hearing will be held at a later date.

U.S. Attorney Fishman credited agents of the FBI’s Trenton Resident Agency, under the direction of Special Agent in Charge Aaron T. Ford, and agents of the N.J. Division of Criminal Justice, under the leadership of Director Elie Honig, with the investigation leading to today’s sentencing.

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

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Defense counsel: Robert N. Agre Esq., Haddonfield, N.J.                                                          

Barksdale Information

NEWARK, N.J. - Two Romanian natives residing in Queens, N.Y., were sentenced today to prison terms for a scheme to steal account information from bank customers throughout New York, New Jersey, and Connecticut by installing secret card-reading devices on ATMs, U.S. Attorney Paul J. Fishman announced.                                                                                                                                                             

Ioan Leusca, a/k/a “Ionel Spinu,” 30, and Dezso Gyapias, a/k/a “Valentin Folea,” 29, were each sentenced to 57 months in prison.

The defendants previously pleaded guilty before U.S. District Judge William J. Martini to separate informations charging each with one count of conspiracy to commit bank fraud and one count of aggravated identity theft. Leusca and Gyapias have been held without bail since their arrests on Jan. 13, 2013. Judge Martini imposed the sentences today in Newark federal court.

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

Leusca and Gyapias admitted that they and their fellow conspirators installed skimmers and pinhole cameras at bank ATMs. The devices were installed on multiple ATMs in New Jersey and Connecticut. Each skimmer, an electronic device, would read and record identity and account information contained in the magnetic strip of a customer’s ATM card. The pinhole camera secretly recorded bank customers’ keystrokes as they entered their personal identification numbers. Leusca and Gyapias admitted that they and other conspirators went back to collect the devices containing the recorded information.

Leusca and Gyapias acknowledged that after the stolen customer account and identification information had been loaded onto blank ATM cards, they and their conspirators used those cards to steal $985,000 from Citibank ATMs in New Jersey, New York and Connecticut. 

The charges leading to their sentences arose from a larger investigation into a skimming scheme that targeted customers in the tri-state area in 2012 and early 2013. Together, the schemes cost a number of banks a total of $5 million in cash stolen from their customer accounts.

Of the eight others charged in relation to the wider scheme, all Romanian nationals who lived in Queens, seven are in custody. The leaders of the scheme, Marius Vintila, 31, and Bogdan Radu, 31, were charged by criminal complaint on July 10, 2013. Vintila and Radu designed and created the actual skimming devices and pinhole cameras and recruited individuals, including Leusca and Gyapias, to install them on bank ATMs. Vintila used an alias to rent multiple self-storage units, in which he stored the contents of an entire skimming operation, including skimming devices, pinhole cameras, super glue, tape, SD cards, batteries, computers, molds, fraudulent ATM cards, and cash proceeds. Radu taught co-conspirators how to install the skimming devices, and used an alias to move skimming devices and cash proceeds overseas. 

Other charged conspirators, including Constantin Ginga, 53, Marius Cotiga, 35, Constantin Pendus, 30, Emil Revesz, 30, Florin Apetrei, 18 and another individual charged as “first name unknown, last name unknown,” a/k/a “Chioru,” installed the devices designed by Vintila and Radu onto bank ATMs and used fraudulent ATM cards to steal millions of dollars. They used hats, jackets, scarves and sunglasses to disguise themselves while installing the devices and while using the cards to withdraw money. 

Ginga, Cotiga, Leusca, Gyapias, Pendus, Revesz, Apetrei, and Radu are in custody in New Jersey and being held without bail. Ginga previously pleaded guilty to conspiring to commit bank fraud and aggravated identity theft and awaits sentencing on Feb. 26, 2014. On Sept. 24, 2013, Vintila was apprehended in Sweden and extradited to the United States in February 2014. Vintila was charged in a six-count indictment on Feb.18, 2014, with conspiracy to commit bank fraud, aggravated identity theft, conspiracy to possess 15 or more counterfeit access devices, possession of 15 or more counterfeit access devices, conspiracy to possess access device-making equipment, and possession of access device-making equipment. The individual known as “Chioru” remains at large.

In addition to the prison terms, Judge Martini sentenced Leusca and Gyapias to two years each of supervised release and to pay $985,000 in restitution.    

U.S. Attorney Fishman praised special agents of the U.S. Secret Service, Newark Field Office, under the direction of Special Agent in Charge James Mottola, along with special agents of the U.S. Department of Homeland Security’s Immigration and Customs Enforcement, Homeland Security Investigations in Newark, under the direction of Special Agent in Charge Andrew M. McLees, with the investigation leading to today’s sentences.

The charges and allegations against the other defendants charged in the pending complaints are merely accusations, and the defendants are considered innocent unless and until proven guilty.

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

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Defense counsel: Leusca: Frank Arleo Esq., West Orange, N.J.
Gyapias: Joseph Rotella Esq., Newark

TRENTON, N.J. - A Hudson County, N.J. man, who served as the senior accountant of the City of Bayonne Department of Community Development (CBDCD) today admitted accepting $65,000 in bribe payments in exchange for his assistance in awarding projects funded by U.S. Department of Housing and Urban Development grants, U.S. Attorney Paul J. Fishman announced.

Anselmo Crisonino, 53, of Bayonne, pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton federal court to a four-count information charging him with one count of accepting bribe payments totaling approximately $65,000 from Joseph Arrigo, the owner of a contracting company in Bayonne. Crisonino also pleaded guilty to one count of theft and conversion of federal funds ($422,360), one count of conducting an illegal gambling business, and one count of submitting a false tax return for tax year 2011.

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

The CBDCD was an agency that received funds from the U.S. Department of Housing and Urban Development (HUD) under a federal program that provided grants up to $20,000 to low income families to rehabilitate their homes and to repair conditions affecting health and safety, accessibility, energy efficiency or code compliance. The CBDCD also provided these HUD funds under the same federal program to nonprofit organizations. Crisonino was responsible for reviewing applications and awarding such funds to qualified applicants.

In September 2010, Crisonino solicited cash bribe payments from Arrigo in exchange for Crisonino’s assistance in awarding HUD grant funds from the CBDCD to Arrigo as the owner of Shadow Contracting LLC.  From September 2010 to February 2013, Crisonino received cash payments from Arrigo totaling approximately $65,000 in exchange for Crisonino’s assistance in awarding HUD grant funds from the CBDCD to Arrigo that totaled approximately $426,000.

Between September 2010 and February 2013, Crisonino awarded HUD grant funds to several contractors and plumbers in Bayonne through the CBDCD, despite the fact that Crisonino knew that the submitted bids for the projects were fraudulent and were the result of collusion by the contractors and plumbers. Crisonino also approved change orders on projects where little to no legitimate work had been done by the contractors and plumbers at the job sites. The approved change orders allowed the CBDCD to disperse additional HUD grant funds to the projects that had already reached the maximum $20,000 grant allotment.

Crisonino also pleaded guilty to conducting an illegal gambling business in northern New Jersey. The illegal gambling business was administered and managed through a website that Crisonino and others accessed through usernames and passwords.

He admitted making and subscribing a U.S. Individual Tax Return, Form 1040, for tax year 2011 filed with the IRS, which he did not believe to be true and correct as to every material matter, including approximately $65,000 in unreported income through the bribe payments.

The bribery and theft of government funds charges to which Crisonino pleaded guilty are each punishable by a maximum potential penalty of 10 years in prison. The charge of conducting an illegal gambling business is punishable by a maximum potential penalty of five years in prison. The charge of filing a false tax return is punishable by a maximum potential penalty of three years in prison. All of four charges are also punishable by a $250,000 fine. Sentencing is currently scheduled for June 4, 2014.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark: special agents of the U.S. Department of Housing and Urban Development, Office of the Inspector General, under the direction of Special Agent in Charge Christina Scaringi; and special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen in Newark, with the continuing investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Jacques S. Pierre of the Special Prosecutions Division and Assistant U.S. Attorney Steven G. Sanders of the Appeals Division.

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Defense counsel: Daniel J. Welsh Esq., Jersey City, N.J.

Crisonino, Anselmo Information

NEWARK, N.J. - A Bulgarian national today admitted his participation in the Shadowcrew forum, an online marketplace for hacking and identity theft that was the largest of its kind when dismantled by the Department of Justice and the U.S. Secret Service in 2004, U.S. Attorney Paul J. Fishman announced.

Aleksi Kolarov, 31, pleaded guilty before U.S. District Judge William J. Martini in Newark federal court to Count One of the indictment, which charges him with conspiracy to commit both identity theft and access device fraud.

“Aleksi Kolorov has now admitted his role in the most notorious online cybercrime marketplace of its time, selling the means to steal money and identities to other criminals,” U.S. Attorney Fishman said. “His efforts to hide his illegal activity behind computers and foreign borders did not deter us. It is vital that law enforcement work internationally to bring cybercriminals to justice, no matter how long it takes.”

Kolarov evaded capture until June 14, 2011, when Paraguayan law enforcement authorities arrested him at a hotel in Asunción, Paraguay. He was found in possession of hundreds of thousands of dollars in various currencies, counterfeit payment cards and electronic implements to re-encode cards.

“The arrest and extradition of Aleksi Kolarov to the United States demonstrates the steadfast commitment of the Secret Service to protect our nation’s financial infrastructure from unlawful acts committed by cyber-criminals on our homeland,” Special Agent in Charge James Mottola of the U.S. Secret Service, Newark Field Office, said. “The successful apprehension of suspects is due to the efforts our special agents and participating members of the electronic crimes task forces which include federal, state and local law enforcement agencies, private industry and academia.”

According to documents filed in this case and statements made in court: Shadowcrew.com was an illegal online marketplace that trafficked in at least 1.5 million stolen credit and bank card numbers and caused more than $4 million in losses to the institutions issuing the cards.

Kolarov, along with the other 18 individuals charged in the indictment, participated in the international conspiracy to operate the Shadowcrew site. As part of the organization, Kolarov served as a vendor, using the site to sell illicit merchandise and services to other members. At one time, Shadowcrew.com had approximately 4,000 members dedicated to facilitating malicious computer hacking and the dissemination of stolen credit card, debit card and bank account numbers and counterfeit identification documents, such as drivers’ licenses, passports and Social Security cards. The conspiracy to commit this activity, often referred to as “carding,” facilitated the use of account numbers and counterfeit identity documents to steal identities and defraud banks and retailers.

Of the 19 international participants charged in the indictment, only three remain at large.

The count to which Kolarov pleaded guilty is punishable by a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gross amount of pecuniary gain or loss resulting from the offense. Sentencing is scheduled for May 28, 2014.

U.S. Attorney Fishman credited the U.S. Secret Service, under the direction of Special Agent in Charge Mottola, with the investigation leading to the charges. He also thanked the Computer Crime and Intellectual Property Section and Office of International Affairs in the Department of Justice’s Criminal Division for its role in the case and the U.S. Marshals Service for facilitating the extradition. U.S. Attorney Fishman also praised the Paraguayan authorities for their vital role.

The government is represented by Assistant U.S. Attorney Daniel V. Shapiro of the Computer Hacking and Intellectual Property Section of the Economic Crimes Unit in Newark.
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Defense counsel: Nicholas Wooldridge Esq., New York

Kolarov, Aleski Indictment

NEWARK, N.J. – A Union County, N.J., man today admitted distributing images of child sexual abuse over the Internet, U.S. Attorney Paul J. Fishman announced.

John Ellenbacher, 48, of Linden, N.J., pleaded guilty before U.S. District Judge Katharine S. Hayden in Newark federal court to an information charging him with one count of distributing images of child pornography over the Internet.

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

Ellenbacher admitted that between August 15, 2012, and August 21, 2012, he distributed 90 images and 6 videos depicting child sexual abuse to others via email. As part of his guilty plea, Ellenbacher agreed to forfeit the computers and computer accessories he used to commit the offense. He will also be required to register as a sex offender.

The distribution of child pornography count to which Ellenbacher pleaded guilty is punishable by a maximum potential penalty of 20 years in prison and a mandatory minimum prison sentence of five years, and a fine of $250,000. Sentencing is scheduled for July 8, 2014.

U.S. Attorney Fishman credited special agents of the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Andrew M. McLees with the investigation leading to today’s guilty plea.

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

Ellenbacher Information

NEWARK, N.J. – A pain management doctor with a practice based in Red Bank, N.J., admitted today that he embezzled more than $1.1 million from a medical practice, U.S. Attorney Paul J. Fishman announced.

Robert Muscio, 40, a resident of Colts Neck, N.J., pleaded guilty before U.S. District Judge Stanley R. Chesler in Newark federal court to one count of committing mail fraud to embezzle those monies. 

According to documents filed in this case and statements made in court: Between 2007 and 2008, Muscio misused his position as medical director of a practice – with which he is no longer associated – to write checks on the practice’s bank account to pay his personal expenses. To conceal this misconduct from his partners, Muscio falsely described the payments as business expenses of the practice.

The mail fraud count to which Muscio pleaded guilty is punishable by a maximum potential penalty of 20 years in prison and a $250,000 fine. Sentencing is scheduled for May 21, 2014.

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 Thomas O’Donnell, and the FBI, under the direction of Special Agent in Charge Aaron T. Ford, with the investigation leading to today’s guilty plea.

The government is represented by Senior Litigation Counsel Andrew Leven of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark.

U.S. Attorney Paul J. Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $520 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: Joseph J. Benedict Esq., New Brunswick, N.J.

Muscio Information