District of New Jersey

NEWARK, N.J. - An Essex County, N.J., man today admitted his role in defrauding Home Depot Inc. out of more than $470,000 through an elaborate “double-dipping” scheme that he committed at various Home Depot locations, including in New Jersey, U.S. Attorney Paul J. Fishman announced.

Daniel Chalet, 28, of Bloomfield, N.J., pleaded guilty before U.S. Magistrate Judge James B. Clark III to an information charging him with conspiracy to commit wire fraud.

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

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

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

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

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

The conspiracy count to which Chalet pleaded guilty is punishable by a maximum potential penalty of 20 years in prison and a $250,000 fine. Sentencing is scheduled for April 15, 2014.

U.S. Attorney Fishman credited special agents of the U.S. Secret Service, under the direction of Special Agent in Charge James Mottola, for the investigation leading to today’s guilty plea.

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

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Defense counsel: Richard Roberts Esq., Newark

Chalet, Daniel Information

NEWARK, N.J. – An Orange County, N.Y., man who owned a New Jersey company admitted today to filing false income tax returns, U.S. Attorney Paul J. Fishman announced.

Richard Jackowitz, 60, of Warwick, N.Y., pleaded guilty before U.S. District Judge Susan D. Wigenton in Newark federal court to two counts of an information charging him with filing false tax returns.

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

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

The tax charge to which Jackowitz pleaded is punishable by a maximum potential penalty of three years in prison and a $250,000 fine. As part of his plea agreement, Jackowitz also agreed to pay $319,940 in restitution to the government. Sentencing is scheduled for March 25, 2014.

U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen; and special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, for the investigation leading to today’s guilty plea.

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

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

Jackowitz Information

Medicines Had Been Donated to be Used for Indigent Patients

TRENTON, N.J. – A New Jersey woman was sentenced today to 51 months in prison for her role in defrauding a charity program out of more than $7 million in donated HIV and cancer medication, U.S. Attorney Paul J. Fishman announced.

Keisha Jackson, 48, of Perth Amboy, N.J., previously pleaded guilty before U.S. District Judge Mary L. Cooper in Trenton federal court to conspiracy to commit mail fraud.

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

A pharmaceutical company donated millions of dollars’ worth of FDA-approved prescription medicines – including HIV and cancer treatments – at no cost to qualified patients experiencing financial difficulties. Jackson was employed as a customer service representative at a corporation providing administrative support for the donated medicines program.

Jackson conspired with Lateefa McKenzie Body, 35, of Linden, N.J., and others who entered hundreds of fraudulent orders into the company’s system and had the medicines delivered to Jackson’s address and other addresses she controlled. The medicines were then resold, and Jackson received payment for accepting the shipments.

Jackson admitted she understood that the payments were coming from sale of the stolen medications and that hundreds of shipments came to her home.

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

McKenzie Body was convicted in August 2013, following a jury trial, of one count of conspiracy to commit mail fraud and nine counts of mail fraud. She awaits sentencing.

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

The government is represented by Senior Litigation Counsel Andrew Leven and
Unit Chief Jacob T. Elberg of the U.S. Attorney’s Office Health Care and Government Fraud Unit.

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Defense counsel: Pasquale Giannetta Esq., Wayne, N.J.

CAMDEN, N.J. – A Camden man is charged in a scheme to produce and sell fake government documents after federal agents broke up his alleged fraudulent operation, U.S. Attorney Paul J. Fishman announced today.

Domingo Luna, 33, aka “Morro,” of Camden, N.J., was arrested by special agents of Immigration and Customs Enforcement, Homeland Security Investigations (ICE HSI) on Dec. 12, 2013. A Mexican citizen not legally in the United States, he has been held in ICE administrative custody since that time. Luna was charged federally late yesterday in a criminal complaint with one count of making fake identification documents and one count of producing counterfeit permanent resident, or “green” cards.

Luna appeared this morning before U.S. Magistrate Judge Joel Schneider in Camden federal court and was detained.

According to the criminal complaint and statements made in court: Federal law enforcement officers learned that a man nicknamed “Morro” was producing and selling false and fraudulent U.S. Social Security cards, permanent residence cards and driver’s licenses from a location in Camden. From early to mid-December 2013, “Morro,” who was later identified as Luna, sold an undercover law enforcement officer two fake social security cards, a fraudulent permanent residence card and a Pennsylvania driver’s license. Luna took pictures of the officer with a digital camera and produced the documents at the Camden address. 

On Dec. 12, 2013, law enforcement officers executed a search warrant on Luna’s residence, where they found evidence of a sophisticated fraudulent document-making operation, including computer equipment, a digital camera, a laminating machine and at least 25 fake cards.

The charges of producing a false identification card and green card carry a maximum potential penalty of 15 years and 10 years in prison, respectively. Each charge also carries a maximum $250,000 fine.

U.S. Attorney Fishman credited special agents of ICE HSI, under the direction of Special Agent in Charge Andrew M. McLees, and ICE Enforcement and Removal Operations, under the direction of Newark, N.J., Field Office Director John Tsoukaris, with the investigation leading to today’s arrests.

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

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Defense counsel: Assistant Federal Public Defender Tom Young Esq., Camden                                                    

NEWARK, N.J. – Two Elizabeth, N.J., women admitted today to conspiring to commit bank fraud by depositing more than half a million dollars in counterfeit checks into different TD Bank accounts, U.S. Attorney Paul J. Fishman announced.

Latisha White, 28, and Synethia Bland, 30, each pleaded guilty before U.S. District Judge William J. Martini to one count of bank fraud conspiracy in the superseding indictment against them.

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

Between October 2009 and May 2012, White created counterfeit checks on her computer using commercially available check-writing software. White and Bland deposited the counterfeit checks into multiple accounts at TD Bank. In addition, Bland recruited others to use their own accounts or open new accounts to deposit the counterfeit checks.

White and Bland employed a variety of methods to withdraw the fraudulent funds, including making ATM cash withdrawals, submitting cash withdrawal slips and making debit card purchases on merchandise and postal money orders.

White and Bland each admitted they arranged the deposit of more than 150 counterfeit checks into more than 120 different bank accounts. They also each admitted that they deposited counterfeit checks that totaled more than $500,000.

The charge to which White and Bland pleaded guilty carries a maximum potential penalty of 30 years in prison and a maximum fine of $1 million. Sentencing is scheduled for April 24, 2014.

U.S. Attorney Fishman credited special agents of the U.S. Secret Service, under the direction of Special Agent in Charge James Mottola; postal inspectors, under the direction of Inspector in Charge Maria L. Kelokates; and investigators at the Union County Prosecutor=s Office, under the direction of Acting Prosecutor Grace H. Park, and the Morris County Prosecutor’s Office, under the direction of Acting Prosecutor Fredric M. Knapp.

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

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Defense counsel:

Bland: Rubin Sinins Esq., Springfield, N.J.

White: Ruth Liebesman Esq., Paramus, N.J.

Bland, Synethia and White, Latisha Superseding Indictment

WASHINGTON – Zhifei Li, the owner of an antique business in China, pleaded guilty today to being the organizer of an illegal wildlife smuggling conspiracy in which 30 rhinoceros horns and numerous objects made from rhino horn and elephant ivory worth more than $4.5 million were smuggled from the United States to China.

The guilty plea was announced by Paul J. Fishman, U.S. Attorney for the District of New Jersey; Robert G. Dreher, the Acting Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice; Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, and Dan Ashe, Director of the U.S. Fish and Wildlife Service (USFWS).

“The brutality of animal poaching, wherever it occurs, feeds the demand of a multibillion-dollar illegal international market,” said U.S. Attorney Fishman. “As a major hub of international commerce through our ports and busy airport, the District of New Jersey plays an important role in curbing the escalation of this devastating trade. Zhifei Li’s conviction is a warning to those who would be lured by the profits of dealing in cruelty.”

Li, 29, of Shandong, China, the owner of Overseas Treasure Finding in Shandong, pleaded guilty today before U.S. District Judge Esther Salas in Newark, N.J., to a total of 11 counts: one count of conspiracy to smuggle and violate the Lacey Act; seven counts of smuggling; one count of illegal wildlife trafficking in violation of the Lacey Act; and two counts of making false wildlife documents. 

Li was arrested in Florida in January 2013 on federal charges brought under seal in New Jersey and shortly after arriving in the country. Before he was arrested, he purchased two endangered black rhinoceros horns from an undercover USFWS agent in a Miami Beach hotel room for $59,000 while attending an antique show. Li was arrested as part of “Operation Crash” – a nationwide effort led by the USFWS and the Justice Department to investigate and prosecute those involved in the black market trade of rhinoceros horns and other protected species.

In papers filed in Newark federal court, Li admitted that he was the “boss” of three antique dealers in the United States whom he paid to help obtain wildlife items and smuggle them to him via Hong Kong. One of those individuals was Qiang Wang, aka “Jeffrey Wang,” who was sentenced to 37 months in prison on Dec. 5, 2013, in the Southern District of New York. Li played a leadership and organizational role in the smuggling conspiracy by arranging for financing to pay for the wildlife, purchasing and negotiating the price, directing how to smuggle the items out of the United States, and obtaining the assistance of additional collaborators in Hong Kong to receive the smuggled goods and then smuggle them to him in mainland China.

“The take-down of the Li smuggling ring is an important development in our effort to enforce wildlife protection laws. Rhino horn can sell for more than gold and is just as rare, but rhino horn and elephant ivory are more than mere commodities. Each illegally traded horn or tusk represents a dead animal, poaching, bribery, smuggling and organized crime,” said Acting Assistant Attorney General Dreher. “The Justice Department will continue to vigorously enforce the law designed to protect wildlife. This is a continuing investigation.”

“The illegal trade in rhino horn has devastated the wild population of these magnificent animals; with the real possibility emerging that all sub-species will be extinct in the wild within our lifetimes,” said U.S. Attorney Ferrer. “Additionally, the poaching activities have cost the lives of enforcement rangers and wardens as the traffickers have resorted to greater levels of violence to feed the black market. This case reflects the seriousness with which we regard these activities and our commitment to work collectively to quash the conduct and hold the law-breakers accountable.”

“The staggering prices paid for rhino horn by criminals like Zhifei Li and his accomplices ensure that unscrupulous poachers continue to slaughter these animals, and it’s our hope that his conviction serves as a warning to other traffickers of the severe consequences they face,” said Fish and Wildlife Service Director Ashe. “The unparalleled greed of criminal trafficking rings like Li’s fuel the poaching epidemic that is decimating rhinoceros populations in the wild. Regardless of whether the horns he smuggled were sawed off the corpse of a rhino last year or a decade ago, each one represents the death of one of the world’s most endangered animals.”

Rhinoceros are a herbivore species of prehistoric origin and one of the largest remaining mega-fauna on earth. They have no known predators other than humans. All species of rhinoceros are protected under United States and international law. Since 1976, trade in rhinoceros horn has been regulated under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (known as CITES), a treaty signed by over 170 countries around the world to protect fish, wildlife and plants that are or may become imperiled due to the demands of international markets.

In pleading guilty, Li admitted that he sold 30 smuggled, raw rhinoceros horns worth approximately $3 million – approximately $17,500 per pound – to factories in China where raw rhinoceros horns are carved into fake antiques known as Zuo Jiu (which means “to make it as old” in Mandarin. In China, there is a centuries old tradition of drinking from an intricately carved “libation cup” made from a rhinoceros horn. Owning or drinking from such a cup is believed by some to bring good health, and true antiques are highly prized by collectors. The escalating value of such items has resulted in an increased demand for rhinoceros horn that has helped fuel a thriving black market, including recently carved fake antiques.

According to the charges, plea agreement and a detailed joint factual statement filed in in Newark federal court:

The investigation of Li began in November 2011, after a confidential informant sold two raw rhino horns to a middleman at the Vince Lombardi rest stop on the New Jersey Turnpike in an Operation Crash undercover sale.  These government-supplied rhino horns were, in turn, sold to a Long Island City antiques dealer who was working for Li.

At Li’s direction, raw rhino horns were hidden by wrapping them in duct tape, hiding them in porcelain vases and falsely describing them on customs and shipping documents, including by labeling them as porcelain vases or handicrafts.

Li purchased 25 raw rhino horns, including 13 endangered black rhinoceros horns weighing approximately 151 pounds, through connections in New York and New Jersey, and another five raw rhino horns weighing at least 20 pounds through an accomplice in Dallas, Texas.

Li sold whole rhino horns to factories where they would be carved into fake antiques.  The leftover pieces from the carving process were sold for alleged “medicinal” purposes even though rhino horn is made of compressed keratin, the same material in human hair and nails and has no proven medical efficacy.

Between 2011 and 2013, Li purchased approximately 60 carved ivory items from U.S. auction houses with an approximate market value of $500,000, all of which were smuggled to China at Li’s direction.

Before arriving in Miami, Li sent a text message to the Long Island City antiques dealer saying that he had as much as $500,000 to spend in the U.S. on antiques and rhino horn. When purchasing two rhino horns from an undercover USFWS agent at a Miami Beach hotel, Li told the covert agent that he was interested in buying more rhino horns regardless of quality, as much as the agent could find, and inquired if the horns could be shipped directly to Hong Kong.

In April 2012, after a Dallas-based accomplice purchased a large, eight-pound raw rhino horn for Li in Florida worth more than $140,000, Li sent the dealer an email directing him to cut the horn into two pieces, wrap them in electrical tape, and send them to Hong Kong in separate packages. The email included a photo of the rhino horn with a red line drawn though it indicating where the lengthy horn should be cut.

After Li’s conspirator in Long Island City purchased two raw elephant tusks for Li weighing more than 100 pounds, Li sent instructions by email that the shipper should declare the contents as “automobile parts” and not use the word “tusk” on the shipping documents.

Li smuggled libation cups carved from rhinoceros horns from the U.S. to Hong Kong.  Rhino carvings valued as much as $242,500 were sold to Li’s customers in China. In early 2013, one of those customers, Shusen Wei, pleaded guilty in the Southern District of Florida to knowingly buying a smuggled rhino carving from Li.

The plea agreement requires Li to forfeit $3.5 million in proceeds of his criminal activity as well as several Asian artifacts. Also, various ivory objects seized by the USFWS as part of the investigation will be surrendered. The maximum potential penalty is 10 years for each of the smuggling counts and five years for each of the other offenses, as well as a $250,000 fine per count, or twice the gross gain or loss from the offense. Sentencing before Judge Salas has been scheduled for April 1, 2014.

The investigation is continuing and is being handled by the U.S. Fish & Wildlife Service’s Office of Law Enforcement, the U.S. Attorney’s Office for the District of New Jersey, the U.S. Attorney’s Office for the Southern District of Florida and the Justice Department’s Environmental Crimes Section.

The government is represented by Assistant U.S. Attorneys Kathleen P. O’Leary and Barbara Ward of the New Jersey U.S. Attorney’s Office Criminal Division and Asset Forfeiture and Money Laundering Unit, Assistant U.S. Attorney Thomas Watts-FitzGerald of the U.S. Attorney’s Office for the Southern District of Florida and Senior Counsel Richard A. Udell of the Justice Department’s Environmental Crimes Section of the Environment and Natural Resources Division.

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Defense counsel: Gary Cutler Esq., New York                                                                                                                 

Li, Zhifei Superseding Information
Li, Zhifei JFS
Li, Zhifei JFS Exhibits
Li Exhibt 1
Li Exhibit 1a
Li Exhibit 2
Li Exhibit 7
Li Exhibit 10
Li Exhibit 10a
Li Exhibit 11
Li Exhibit 12

TRENTON, N.J. – An Ocean County, N.J., man was sentenced today to 20 years in prison for sexually abusing a toddler and streaming footage of the assault over the Internet, U.S. Attorney Paul J. Fishman announced.

Rodford W. Brindley, 68, of Toms River, N.J., previously pleaded guilty before U.S. District Judge Joel A. Pisano to an information charging him with one count of sexual exploitation of a minor. Judge Pisano imposed the sentence today in Trenton federal court.

According to documents filed in this case and statements made in court: Brindley engaged in online chats with someone whom he believed to be a mother living in Ohio, but who was, in fact, an Ohio law enforcement officer. On April 2, 2012, with no encouragement from the officer, Brindley sexually abused a child in his care at his Toms River home and streamed live video of that conduct over the Internet. He was arrested the same day by Ocean County authorities. He has been in custody since the case was adopted federally in May 2012.

In addition to the prison term, Judge Pisano sentenced Brindley to serve five years of supervised release. He is also required to register as a sex offender.

U.S. Attorney Fishman credited special agents of the FBI’s Child Exploitation Task Force, under the direction of Special Agent in Charge Aaron T. Ford in Newark; the Ocean County Prosecutor’s Office, under the direction of Prosecutor Joseph D. Coronato; and the Franklin County Sheriff’s Department in Ohio, for the investigation leading to today’s sentence.

The government is represented by Assistant U.S. Attorney Harvey Bartle, Attorney-in-Charge of the U.S. Attorney’s Office in Trenton.

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Defense counsel: William Cunningham Esq., Brick, N.J.

NEWARK, N.J. – A Bergen County, N.J., man admitted today to engaging in the sex trafficking of a young boy and distributing child pornography over the Internet and was sentenced during the same proceeding to 210 monthsin prison. He was also ordered to pay $1.2 million in restitution to his victims, New Jersey U.S. Attorney Paul J. Fishman announced.

Edward M. De Sear, 67, of Saddle River, N.J., pleaded guilty before U.S. District Judge William J. Martini to a superseding information charging him with one count of sex trafficking of a child and four counts of distributing child pornography. Judge Martini imposed the sentence today in Newark federal court.

At the time of his initial arrest in July 2011 on a federal complaint charging him with distribution of child pornography, De Sear was a partner at the New York office of a prominent international law firm. He was released on bail and taken into custody again in August 2012, when he was charged in an indictment with multiple offenses related to images of children being sexually abused.

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

De Sear admitted that in June 2011, he arranged for a young boy to travel from Paris to Brussels, Belgium, and sexually abused the child. De Sear facilitated the boy’s international travel by, among other means, paying cash to the boy’s father.

On several occasions between May 2010 and February 2011, De Sear also distributed hundreds of video and image files depicting young children being sexually abused, sometimes violently, via a peer-to-peer file-sharing program.

In addition to the prison term and restitution, Judge Martini ordered De Sear to pay a $25,000 fine and sentenced him to a lifetime of supervised release He is also required to register as a sex offender.

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

The government is represented by Assistant U.S. Attorneys Shirley U. Emehelu and Leslie F. Schwartz of the U.S. Attorney’s Office Criminal Division in Newark.

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Defense counsel: John Vazquez and Michael Critchley Sr., Esqs., Roseland, N.J. 

De Sear, Edward Superseding Information

TRENTON, N.J. - A Brooklyn, N.Y., man was sentenced today to 48 months in prison for his involvement in a plot to burglarize a pharmacy in Englishtown, N.J., and distribute stolen narcotics, U.S. Attorney Paul J. Fishman announced.

Dzheykhun Avshalumov, 24, previously pleaded guilty before U.S. District Judge Freda L. Wolfson to an information charging him with one count of conspiracy to distribute and possess with intent to distribute oxycodone. Judge Wolfson imposed the sentence today in Trenton federal court.

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

The Union Hill-Supremo Pharmacy in Englishtown was burglarized shortly after 4:00 a.m. on June 17, 2012. Avshalumov and his conspirators filled 17 garbage bags and two cardboard boxes with merchandise from the pharmacy, including approximately 1,988 dosage units of methylphenidate, 500 dosage units of hydromorphone, 300 dosage units of Opana (a trade name for oxymorphone) and 3,800 dosage units of oxycodone – all Schedule II controlled substances. 

The stock lost by the pharmacy was valued at approximately $350,000. Avshalumov admitted that he stole the drugs, and that he did so knowing they would be distributed.

In addition to the prison term, Judge Wolfson sentenced Avshalumov to three years of supervised release and ordered him to pay $334,722.12 in restitution.

Two of Avshalumov’s conspirators have previously pleaded guilty to this criminal conduct. James Zarbailov pleaded guilty before Judge Wolfson to conspiracy to distribute and possess with intent to distribute oxycodone. Zarbailov was sentenced to 63 months in prison on Nov. 18, 2013. David Mordukhaev pleaded guilty before Judge Wolfson to the same offense, and was sentenced to 65 months in prison on Dec. 11, 2013.

U.S. Attorney Fishman credited special agents of the FBI’s Red Bank Resident Agency, under the direction of Special Agent in Charge Aaron T. Ford in Newark, and law enforcement officers from the Marlboro Township Police Department, under the direction of Police Chief Bruce E. Hall, for the investigation leading to today’s sentence.

The government is represented by Assistant U.S. Attorney John E. Clabby of the U.S. Attorney’s Office Criminal Division in Trenton.

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Defense counsel: Michael A. Armstrong Esq., Willingboro, N.J.

NEWARK, N.J. – A New Jersey doctor admitted today to 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, New Jersey U.S. Attorney Paul J. Fishman announced.

Glenn Leslie, 59, of Ramsey, N.J., 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 Leslie, 21 people – 11 employees or associates of BLS, and 10 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:

During his guilty plea proceeding, Leslie admitted to accepting bribes in return for referring patient blood specimens to BLS, approximately $5,000 a month. Leslie’s referrals alone allowed BLS to collect approximately $380,000 from government and private payors.

The bribery count carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for April 1, 2014. As part of his guilty plea, Leslie also agreed to forfeit the bribes he received from BLS.

The investigation has recovered more than $6.75 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 $500 million in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.

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Defense counsel: Michael J. Beatrice Esq., Mahwah, N.J.

Leslie Information

NEWARK, N.J. – Three Florida men were sentenced today in New Jersey federal court for their roles in conspiring to possess and sell prescription medication taken from stolen tractor trailers, New Jersey U.S. Attorney Paul J. Fishman announced.

Ernesto Romero-Vidal a/k/a “Bemba,” 48, was sentenced to 80 months in prison; Rocke R. Lopez-Batista a/k/a “El Nino,” 28, was sentenced to 40 months in prison; and Ariel Garcia, 40, was sentenced to 18 months in prison.

All three defendants previously pleaded guilty before U.S. District Judge William J. Martini to separate informations charging them with conspiracy to possess stolen prescription medicine. Romero-Vidal also pleaded guilty to three additional counts of conspiring to receive and sell stolen goods, including pharmaceuticals belonging to drugmakers Bayer, Perrigo and Sandoz Inc.

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

During their guilty plea proceedings, Romero-Vidal, Lopez-Batista and Garcia admitted that from September 2009 through October 2009, they conspired with others to possess prescription respiratory medicine manufactured by Mylan Inc. that was taken from a stolen tractor trailer in Tampa, Fla. on Sept. 8, 2009.

On October 20, 2009, Tapanes and a conspirator delivered samples of the stolen prescription medicine to a confidential source in Elizabeth, N.J. Nine days later, Tapanes and Garcia delivered a tractor trailer containing the stolen medicine to a confidential source. Later that same day, Tapanes, Lopez-Batista, and Garcia were present at a meeting in Garcia’s home during which the confidential source provided them with a cash payment of $140,000 for the stolen medicine. Romero-Vidal received a payment of $4,000 from the confidential source in connection with his role for brokering this sale.

Romero-Vidal also admitted he received approximately $3,500 for brokering the sale of medication stolen from a Bayer product distribution center in Olive Branch, Miss. on March 23, 2009, and $5,000 as partial payment towards the delivery of stolen Perrigo products – stolen along with a tractor trailer in Dallas on March 3, 2010 – to New Jersey.

He also admitted participating in the sale of Sandoz Inc., prescription respiratory medicine to two separate groups of buyers. The Sandoz products were stolen along with another tractor trailer in Chambersburg, Pa., on Dec. 2, 2009.  

In addition to the prison term, Judge Martini sentenced each defendant to pay $264,900 in restitution. The judge also ordered Garcia to serve three years of supervised release, and Lopez-Batista and Romero-Batista each to serve a year of supervised release.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen; and detectives of the North Bergen Police Department, under the direction of Chief Robert J. Dowd, with the investigation. 

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

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Defense counsel: 

Romero-Vidal: Robert Olejar Esq., Randoph, N.J.
Lopez-Batista: Pasquale Giannetta Esq., Wayne, N.J.
Garcia: Chester Keller, First Assistant Federal Public Defender, Newark

TRENTON, N.J. – A Trenton, N.J., man with a previous conviction for drug distribution today admitted possessing three firearms, including a loaded semi-automatic rifle and a loaded revolver, U.S. Attorney Paul J. Fishman announced.

Isaiah Harris, 26, pleaded guilty before U.S. District Judge Michael A. Shipp in Trenton federal court to an information charging him with one count of being a convicted felon in possession of firearms and ammunition.

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

At approximately 6:00 a.m. on Nov. 15, 2012, law enforcement officers entered a residence on Stuyvesant Avenue in Trenton to execute an unrelated warrant for Harris’ arrest and encountered Harris in a bedroom on the second floor. They recovered a loaded Taurus .38-caliber revolver from the bed Harris had been occupying and later discovered in the bedroom a loaded Norinco SKS, 7.62 semi-automatic rifle and a partially disassembled second Norinco SKS, 7.62 semi-automatic rifle. Harris admitted at his plea hearing that he possessed these weapons.

The firearms charge to which Harris pleaded guilty carries a maximum potential penalty of 10 years in prison and a $250,000 fine. Sentencing is scheduled for March 25, 2014.

U.S. Attorney Fishman credited special agents and task force officers of the ATF’s Trenton Field Office, under the direction of Acting Special Agent in Charge George Belsky in Newark, N.J., and law enforcement officers from the Trenton Police Department, under the direction of Police Director Ralph Rivera Jr.; the Mercer County Sheriff’s Office, under the direction of Sheriff John Kemler; and the Mercer County Prosecutor’s Office, under the direction of Prosecutor Joseph L. Bocchini Jr., for the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney John E. Clabby of the U.S. Attorney’s Office Criminal Division in Trenton.

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Defense counsel: Assistant Federal Public Defender Lisa Van Hoeck Esq., Trenton

Harris, Isaiah Information

TRENTON, N.J. – A Trenton, N.J., man with a previous conviction for drug distribution today admitted possessing three firearms, including a loaded semi-automatic rifle and a loaded revolver, U.S. Attorney Paul J. Fishman announced.

Isaiah Harris, 26, pleaded guilty before U.S. District Judge Michael A. Shipp in Trenton federal court to an information charging him with one count of being a convicted felon in possession of firearms and ammunition.

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

At approximately 6:00 a.m. on Nov. 15, 2012, law enforcement officers entered a residence on Stuyvesant Avenue in Trenton to execute an unrelated warrant for Harris’ arrest and encountered Harris in a bedroom on the second floor. They recovered a loaded Taurus .38-caliber revolver from the bed Harris had been occupying and later discovered in the bedroom a loaded Norinco SKS, 7.62 semi-automatic rifle and a partially disassembled second Norinco SKS, 7.62 semi-automatic rifle. Harris admitted at his plea hearing that he possessed these weapons.

The firearms charge to which Harris pleaded guilty carries a maximum potential penalty of 10 years in prison and a $250,000 fine. Sentencing is scheduled for March 25, 2014.

U.S. Attorney Fishman credited special agents and task force officers of the ATF’s Trenton Field Office, under the direction of Acting Special Agent in Charge George Belsky in Newark, N.J., and law enforcement officers from the Trenton Police Department, under the direction of Police Director Ralph Rivera Jr.; the Mercer County Sheriff’s Office, under the direction of Sheriff Jeff Gray; and the Mercer County Prosecutor’s Office, under the direction of Prosecutor Joseph L. Bocchini Jr., for the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney John E. Clabby of the U.S. Attorney’s Office Criminal Division in Trenton.

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Defense counsel: Assistant Federal Public Defender Lisa Van Hoeck Esq., Trenton

Harris, Isaiah Information

NEWARK, N.J. - A resident of Florida and Ohio today admitted his role in defrauding a charter flight company and other merchants of hundreds of thousands of dollars in luxury goods and services, U.S. Attorney Paul J. Fishman announced.

Dante G. Dixon, 45, of Miami, Fla., and Akron, Ohio, pleaded guilty before U.S. District Judge William J. Martini in Newark federal court to an information charging him with conspiracy to commit wire fraud.

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

From May through June of 2013, Dixon and others conspired to fraudulently obtain at least three private charter flights from Jet Aviation, an international business aviation services company, with U.S. headquarters in Teterboro, N.J., which provides charter flight services. Dixon and others also conspired to obtain tens of thousands of dollars in other luxury goods and services, all via sham lines of credit issued to a well-known financial institution, for the defendants and others’ use by misrepresenting that they were employees at the financial institution.

On May 5, 2013, an individual using the name “Josh Stevens” called Jet Aviation=s offices in Chicago, Ill., and Van Nuys, Calif., to inquire about its private charter flight services.  That individual identified himself as being employed as a senior vice president at a well-known financial institution and provided an email address purporting to be affiliated with the financial institution. A Jet Aviation employee sent a draft Charter Services Agreement to the provided email address. The agreement was signed by “Josh Stevens” and returned to Jet Aviation on May 9, 2013, falsely listing “Josh Stevens” as a senior vice president and Dixon as a vice president at the well-known financial institution. The aviation company established an account and a line of credit for $350,000, which the defendants and others used to take four private charter flights.

As a result of their misrepresentations to Jet Aviation, Dixon and others fraudulently obtained private high-end charter flights and limousine car services, with a total value of $175,790, for which Jet Aviation never received payment.

Dixon and others made similar misrepresentations about their purported employment at the financial institution to other luxury service providers and obtained approximately $20,000 in luxury watches, sunglasses, and sterling silver and leather business cardholders, and approximately $25,500 in hotel stays at a luxury hotel in Miami.

As a result of their scheme, Dixon and others fraudulently obtained more than $220,000 in luxury goods and services.

The conspiracy to commit wire fraud to which Dixon pleaded guilty is punishable by a maximum potential penalty of 20 years in prison and a fine of $250,000.  Sentencing is scheduled for April 23, 2014.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, for the investigation leading to today=s guilty plea.

The government is represented by Assistant U.S. Attorney Aaron Mendelsohn of the U.S. Attorney=s Office Economic Crimes Unit in Newark.

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: Lorraine Gauli-Rufo Esq., Verona, N.J.

Dixon, Dante Information

NEWARK, N.J. - A resident of Florida and Ohio today admitted his role in defrauding a charter flight company and other merchants of hundreds of thousands of dollars in luxury goods and services, U.S. Attorney Paul J. Fishman announced.

Dante G. Dixon, 45, of Miami, Fla., and Akron, Ohio, pleaded guilty before U.S. District Judge William J. Martini in Newark federal court to an information charging him with conspiracy to commit wire fraud.

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

From May through June of 2013, Dixon and others conspired to fraudulently obtain at least three private charter flights from Jet Aviation, an international business aviation services company, with U.S. headquarters in Teterboro, N.J., which provides charter flight services. Dixon and others also conspired to obtain tens of thousands of dollars in other luxury goods and services, all via sham lines of credit issued to a well-known financial institution, for the defendants and others’ use by misrepresenting that they were employees at the financial institution.

On May 5, 2013, an individual using the name “Josh Stevens” called Jet Aviation=s offices in Chicago, Ill., and Van Nuys, Calif., to inquire about its private charter flight services.  That individual identified himself as being employed as a senior vice president at a well-known financial institution and provided an email address purporting to be affiliated with the financial institution. A Jet Aviation employee sent a draft Charter Services Agreement to the provided email address. The agreement was signed by “Josh Stevens” and returned to Jet Aviation on May 9, 2013, falsely listing “Josh Stevens” as a senior vice president and Dixon as a vice president at the well-known financial institution. The aviation company established an account and a line of credit for $350,000, which the defendants and others used to take four private charter flights.

As a result of their misrepresentations to Jet Aviation, Dixon and others fraudulently obtained private high-end charter flights and limousine car services, with a total value of $175,790, for which Jet Aviation never received payment.

Dixon and others made similar misrepresentations about their purported employment at the financial institution to other luxury service providers and obtained approximately $20,000 in luxury watches, sunglasses, and sterling silver and leather business cardholders, and approximately $25,500 in hotel stays at a luxury hotel in Miami.

As a result of their scheme, Dixon and others fraudulently obtained more than $220,000 in luxury goods and services.

The conspiracy to commit wire fraud to which Dixon pleaded guilty is punishable by a maximum potential penalty of 20 years in prison and a fine of $250,000.  Sentencing is scheduled for April 23, 2014.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, for the investigation leading to today=s guilty plea.

The government is represented by Assistant U.S. Attorney Aaron Mendelsohn of the U.S. Attorney=s Office Economic Crimes Unit in Newark.

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: Lorraine Gauli-Rufo Esq., Verona, N.J.

Dixon, Dante Information

TRENTON, N.J. - An Ocean County, N.J., woman was sentenced today to 24 months in prison for concealing from a bankruptcy trustee profits she had made on a Ponzi scheme investment, U.S. Attorney Paul J. Fishman announced.

Marjorie Parise, 51, of Manahawkin, N.J., previously pleaded guilty before U.S. District Judge Freda L. Wolfson to one count of bankruptcy fraud. Judge Wolfson imposed the sentence today in Trenton federal court.

According to documents filed in this case and statements made in court: In 2003, Parise and her husband invested approximately $115,750 with a company known as Global Trading Investments LLC and received in return profits totaling $429,154.91.  However, the owners of Global Trading were operating a Ponzi scheme and the profits that Parise received were actually the investments of other individuals. Global Trading subsequently filed for Chapter Seven bankruptcy protection.

On Aug. 24, 2006, a judgment was entered against Parise requiring her to return the profits she had made from her investments in the scheme.  Parise instead took numerous steps to fraudulently conceal a significant amount of funds and assets from the trustee, including making false statements and omissions during a deposition in the bankruptcy proceeding.

From Sept. 14, 2006, through Dec. 8, 2006, she also withdrew at least $455,850 in cash from the bank accounts that had not been disclosed to the trustee. Parise made 67 currency withdrawals, none of which exceeded the $10,000 threshold for the filing of Currency Transaction Reports.  In November 2006, Parise transferred ownership of her residence from her name only to the names of both her and her husband and increased the home equity line of credit on the home.

On July 7, 2008, Parise filed for individual Chapter Seven bankruptcy protection. On her bankruptcy petition, she fraudulently failed to report millions of dollars in real estate holdings plus hundreds of thousands of dollars in personal assets.

In addition to the prison term, Judge Wolfson sentenced Parise to three years of supervised release and ordered her to pay $353,404 in restitution.

U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen in Newark, for the investigation.

The government is represented by Assistant U.S. Attorney R. Joseph Gribko of the U.S. Attorney=s Office in Trenton.

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Defense counsel: Michael Pinsky Esq., Haddon Township, N.J.

NEWARK, N.J. - An ophthalmologist with a medical practice in Englewood, N.J., admitted today to lying to federal agents during a health care fraud investigation into the reuse of single-use vials of prescription Lucentis medication for multiple patients, U.S. Attorney Paul J. Fishman announced.

Bernard J. Fowler, 68, of Mahwah, N.J., pleaded guilty to an information charging him with making false statements to federal agents with the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG). He entered his plea before U.S. District Judge Susan D. Wigenton in Newark federal court.

According to documents filed in this case and statements made in court: Fowler was a licensed and board-certified ophthalmologist, operating his own medical practice called Retina Vitreous Consultants, when he was interviewed by HHS-OIG special agents on July 27, 2011. Fowler no longer operates the practice.

During his guilty plea, Fowler admitted that in 2008 and 2009, he had administered injections from one vial of Lucentis to more than one patient on multiple occasions, but told the investigating agents that he had not. Fowler admitted he knew the statement was false and he intended to deceive the agents.

In addition to the potential health risks of reusing single-use vials on multiple individuals, such reuse can generate fraudulent billings to patients and insurers based on the approximately $2,000 cost of a full vial.

The false statements charge carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gain or loss caused by the offense. Sentencing is scheduled for March 24, 2014.

U.S. Attorney Fishman credited special agents of HHS-OIG, 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, for the investigation leading to the guilty plea.

The government is represented by Assistant U.S. Attorneys Scott B. McBride and R. David Walk of the U.S. Attorney’s Office’s Health Care and Government Fraud Unit.

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Defense counsel: David M. Laigaie Esq., Philadelphia

Fowler, Bernard Information

Also Ordered to Pay Approximately $630,000 in Fines and Forfeiture

NEWARK, N.J. - An internal medicine specialist who wrote illegal prescriptions for oxycodone was sentenced today to 136 months in prison for his role in a conspiracy that put tens of thousands of prescription pills on the streets for resale, U.S. Attorney Paul J. Fishman announced.

Michael Durante, 59, of Montclair, N.J., was previously convicted at trial of 16 of the 17 counts in the superseding indictment against him: one count of conspiracy to distribute oxycodone and 15 counts of unlawful distribution of the drug. The jury returned the verdict on the second day of deliberations following a nearly three-month trial before U.S. District Judge Stanley R. Chesler. Judge Chesler imposed the sentence today in Newark federal court. 

According to the evidence at trial:

Between July 2009 and March 2011, Durante sold prescriptions for more than 80,000 oxycodone pills to patients who were engaged in drug trafficking.  The street-level redistribution of the pills prescribed by Durante was accomplished primarly by two “crews,” one headed by Andre Domando, 49, of Belleville, N.J., and the other by Dennis Abato, 61, of Lakewood, N.J., who each had a stable of patients they brought to Durante’s medical practice in Nutley, N.J. Durante gave them prescriptions for large quantities of oxycodone that would ultimately be sold through the redistribution network. 

Recordings played at trial illustrated Durante’s understanding of the illegal distribution he facilitated. For example, in an February 2011 recording, Durante said he knew Domando was reselling the prescriptions for a large profit, stating, “I just know because my friend does the same thing you do. He sells these for a thousand to twelve hundred dollars a bottle.” Durante, referring to prescriptions he provided to Domando over the previous week, then stated “[s]o two last week, four this week – you should have six thousand dollars in your pocket,” adding, “I know what people do with these things. You gotta have at least twelve, fifteen thousand dollars a month of income here.” 

Durante was also captured on tape accepting $300 from Domando in exchange for prescriptions, as well as $100 for an extra prescription he sold to an undercover agent. At trial, a witness testified that he delivered envelopes of cash to Durante in exchange for extra prescriptions.

Additionally, Durante falsified medical records in the files of the patients who received the oxycodone prescriptions. For example, Durante falsely documented physical exams, including blood pressure and heart rates, of a patient who was in Florida at the time of Durante’s purported exam.  Durante repeatedly omitted from the progress notes for patients many of the additional prescriptions he had sold, or falsely wrote that prescriptions had been provided to replace lost prescriptions – including one note that a dog may have eaten replacement prescriptions he provided to Domando. 

In addition to the prison term, Judge Chesler sentenced Durante to three years of supervised release and ordered him to pay $629,461 in restitution. Durante is also required to pay a $4,000 fine. Judge Chesler sentenced Domando to 48 months in prison in November 2013. Abato awaits sentencing.     

U.S. Attorney Fishman credited the New Jersey DEA Tactical Diversion Squad, made up of DEA special agents, diversion investigators and intelligence analysts; FBI and IRS-Criminal Investigation special agents; and law enforcement officers from the Essex County Sheriff’s Department and the Elizabeth, Clinton Township (Hunterdon County), Toms River and Newark Police Departments with the investigation.

The government is represented by Assistant U.S. Attorneys Anthony Mahajan and Osmar J. Benvenuto of the U.S. Attorney’s Office Criminal Division, and Marion Percell of the Office’s Asset Forfeiture and Money Laundering Unit, in Newark.

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Defense counsel: Cathy Fleming and Harold Ruvoldt Esqs., New York

NEWARK, N.J. – A Morris County, N.J., doctor practicing internal medicine admitted today to taking cash kickbacks for making referrals to a diagnostic testing lab in Orange, N.J., U.S. Attorney Paul J. Fishman announced.

Mahesh Patel, 64, of Florham Park, N.J., a board-certified physician, pleaded guilty before U.S. District Judge Claire C. Cecchi in Newark to an information charging him with soliciting and receiving more than $6,000 in illegal cash kickbacks for patient referrals in violation of the federal health care anti-kickback statute.

Patel is the 15th individual to be convicted in connection with the government’s ongoing investigation of illegal payments made by Orange Community MRI LLC (Orange MRI), a diagnostic testing facility, U.S. Attorney Paul J. Fishman announced.

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

Patel operated his own medical practice in Orange. From 2010 through November 2011, Patel agreed to take cash payments from Orange MRI in exchange for MRI scans he referred to the diagnostic testing facility. Patel admitted to receiving cash on a per-patient basis for nearly two years, and that on one of the occasions on which he received cash, Oct. 13, 2011, he received $375 in exchange for his prior referral of Medicare and Medicaid patients.        

The anti-kickback charge carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gain or loss caused by the offense. Sentencing is scheduled for April 8, 2014.

Twelve health care providers, including Patel, have agreed to forfeit $360,510 in illegal cash kickbacks. Also, Ashokkumar Babaria, 63, of Moorestown, N.J., Orange MRI’s former medical director, agreed to forfeit his revenue from corrupt referrals, which the government estimates is in excess of $2 million. Chirag Patel, 38, of Warren, N.J., Orange MRI’s former executive director, also agreed to forfeit $89,180 in corrupt gains.

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

The government is represented by Assistant U.S. Attorneys Deputy Chief Joseph Mack and Scott B. McBride of the U.S. Attorney’s Office’s Health Care and Government Fraud Unit in Newark.

U.S. Attorney Paul J. Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $500 million in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.

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Defense counsel: Robert J. Cleary Esq. and William C. Komaroff Esq., New York

Patel, Mahesh Information

NEWARK, N.J. — A New Jersey attorney and a tax preparer today admitted their roles in a long-running, large-scale mortgage fraud that caused losses of more than $30 million, U.S. Attorney Paul J. Fishman announced.

Michael Rumore, 55, of Toms River, N.J., and Kenneth Jones, 64, of Elizabeth, N.J., both pleaded guilty before U.S. District Judge Esther Salas in Newark federal court to informations charging them with conspiracy to commit bank fraud. Jones also pleaded guilty to aiding and abetting the filing of false and fraudulent tax returns. 

According to documents filed in this case and statements made in court: From 2006 to 2010, Rumore, Jones and numerous others engaged in two related mortgage fraud conspiracies through a company called Premier Mortgage Services (PMS).  The conspirators targeted properties in low-income areas of New Jersey. After recruiting “straw buyers,” they used a variety of fraudulent documents, some of them created by Jones, to make it appear as though the straw buyers possessed far more assets and earned far more income than they actually did.

The conspirators then submitted these fraudulent documents as part of mortgage loan applications to financial institutions. Relying on these fraudulent documents, financial institutions provided mortgage loans for the subject properties. The conspirators then split the proceeds from the mortgages among themselves at closing time, including at closings presided over by Rumore. The closings went forward through the use of fraudulent settlement statements (HUD-1s), which hid the true sources and destinations of the mortgage funds provided by financial institutions.  The straw buyers had no means of paying the mortgages, and many of the properties entered into foreclosure proceedings. The conspirators defrauded financial institutions out of more than $30 million.  

The conspirators each performed different roles in the scheme. Michael Rumore was an attorney licensed in New Jersey and served as the settlement agent on mortgage loans brokered by other conspirators.  Rumore used his status as an attorney to further the fraudulent scheme, including by convening closings, receiving funds from lenders, and preparing HUD-1s that purported to reflect the sources and destinations of funds for mortgages on subject properties B when in fact, the HUD-1s were neither true nor accurate. Rumore disbursed mortgage loan proceeds directly to PMS and other conspirators, including amounts not reflected on the HUD-1s. Rumore received a fee for each fraudulent loan in which he participated.

Jones, a tax preparer, created numerous false documents used in the scheme.  When contacted by loan officers, Jones would create fraudulent verifications of employment for straw buyers, which claimed falsely that the straw buyers were employed by certain businesses. Jones included his own phone numbers on the verifications of employment, so that when financial institutions called to verify the information, Jones would answer and confirm the false statements. Jones received a fee for each fraudulent document that he created.  Jones also engaged in a separate scheme in his capacity as a tax preparer, to which he also pleaded guilty. Jones would inflate the deductible expenses to which his clients were purportedly entitled, obtaining larger tax refunds for his clients than they should have received. 

The bank fraud conspiracy count to which Rumore and Jones pleaded guilty is punishable by a maximum potential penalty of 30 years in prison and a fine of $1 million. The aiding and abetting false tax returns to which Jones pleaded guilty is punishable by a maximum potential penalty of three years in prison and a $250,000 fine.  Sentencing is scheduled for March 31, 2014.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, and special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen, for the investigation leading to today’s guilty plea. Fishman also thanked the Social Security Administration-Office of Inspector General, under the direction of Special Agent in Charge Edward Ryan, for its participation in the investigation.

The government is represented by Assistant U.S. Attorneys Rahul Agarwal of the U.S. Attorney’s Office Special Prosecutions Division and Zach Intrater of the Criminal Division.

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: Rumore:  Donna Newman Esq., Westfield, N.J., and New York
Jones:  Hassan Abdellah Esq., Elizabeth, N.J.

Rumore Information
Jones Information

TRENTON, N.J. – A former South Plainfield, N.J., police captain admitted today to exploiting a minor girl by enticing her to live-stream sexually explicit acts via the Internet in exchange for payment, U.S. Attorney Paul J. Fishman announced.

Michael Grennier, 51, of South Plainfield, pleaded guilty before U.S. District Judge Freda L. Wolfson in Trenton federal court to an information charging him with one count of production of child pornography. Grennier was charged by complaint on Feb. 19, 2013, and has been in custody since that date.

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

On Feb. 14, 2013, Grennier enticed a girl to perform sexually explicit acts and stream images of herself over the Internet while he watched remotely from his home computer. During the webcam session, Grennier exchanged text messages with the minor in which he directed her actions. Grennier admitted during his guilty plea proceeding that he promised to buy his victim clothing in exchange for her performance.

At the time of his arrest, Grennier was working for a private computer forensics firm. Prior to his retirement, he was a computer forensics specialist for the South Plainfield Police Department.

The production count carries a maximum potential penalty of 30 years in prison and a $250,000 fine. The mandatory minimum sentence for this offense is 15 years in prison. Sentencing is currently scheduled for March 27, 2014.

U.S. Attorney Fishman credited special agents of the FBI’s Child Exploitation Task Force, under the direction of Special Agent in Charge Aaron T. Ford, for the investigation leading to today’s plea. He also thanked the South Plainfield Police Department, under the direction of Chief of Police James Parker, and the Middlesex County Prosecutor’s Office, under the direction of Acting Prosecutor Andrew Carey, for their assistance with the investigation.

The government is represented by Assistant U.S. Attorney Harvey Bartle, Attorney-in-Charge of the U.S. Attorney’s Office in Trenton.

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Defense counsel: Frank Arleo Esq., West Orange, N.J.

Grennier Information

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

Hai Dong Jiang, 37, and Fei Ruo Huang, 37, both of Staten Island, N.Y.; Hai Yan Jiang, 34, of Richardson, Texas; Xiance Zhou, 39, and Jian Chun Qu, 33, both of Bayside, N.Y.; and Ming Zheng, 48, of New York, pleaded guilty today before U.S. District Judge Esther Salas in Newark federal court.  Dong Jiang, Ruo Huang, and Yan Jiang pleaded guilty to informations charging them each with one count of conspiracy to traffic in counterfeit goods. Xiance Zhou and Qu pleaded guilty to informations charging them each with one count of conspiracy to structure money. Zheng pleaded guilty to an information charging him with a conspiracy to launder money. 

Wei Qiang Zhou, 38, of Brooklyn, N.Y., pleaded guilty Dec. 3, 2013, Patrick Siu, 41, of Richardson, Texas, pleaded guilty Dec. 4, 2013, and Da Yi Huang, 43, of Staten Island, pleaded guilty Dec. 11, 2013, all before Judge Salas in Newark federal court, to informations charging them each with one count of conspiracy to traffic in counterfeit goods.

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

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

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

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

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

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

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

Roles of the Individual Defendants

• Patrick Siu, a/k/a “Sam Huang,” facilitated the importation and distribution of counterfeit goods, by serving as the “hub” for communications between customs brokers, UCs, and the conspirators.  Siu sent false and fraudulent shipping documents to UCs and customs brokers (including by interstate and international faxes and e-mails); engaged in conversations with UCs, customs brokers, and other conspirators in furtherance of the smuggling scheme; and created or caused to be created false and fraudulent identification documents.

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

• Hai Yan Jiang, a/k/a “Yan,” served as one of the directors of the smuggling scheme.  Yan Jiang made decisions regarding what kind of counterfeit goods should be manufactured; arranged for payment for counterfeit merchandise; supervised the distribution of that merchandise in and around the New York/New Jersey area; and interacted with wholesalers of counterfeit goods by arranging payments by the wholesalers to the directors of the scheme.

• Fei Ruo Huang, a/k/a “Emily,” a/k/a “Ah Yue,” was another director of the smuggling scheme.  Ruo Huang coordinated the distribution of counterfeit merchandise once it arrived in the New York/New Jersey area.  Ruo Huang directed merchandise to warehouses, where it was stored and then delivered to wholesalers.

• Da Yi Huang, a/k/a “Boss,” a/k/a “Da Nian,” was another director of the smuggling scheme.  Da Yi negotiated pricing for counterfeit merchandise; made payments for the counterfeit merchandise; and participated in deciding which counterfeit products should be ordered from China.

• Wei Qiang Zhou’s primary role was to assist other conspirators in arranging for transportation of counterfeit merchandise.

• Xiance Zhou and Jian Chun Qu’s primary roles were to wire proceeds obtained from the smuggling scheme to accounts in China.  Conspirators in the scheme dropped off large sums of money to Xiance Zhou and Qu and others – sums far in excess of $10,000 at a time.  Xiance Zhou and Qu, then divided these large sums into amounts of less than $10,000, deposited them into accounts they controlled to evade reporting requirements, and wired the money – in increments of less than $10,000 – to China and elsewhere.

• Ming Zheng, a/k/a “Uncle Mi,” was a money launderer.  Other conspirators obtained cash from UCs, which was purportedly the proceeds of gambling and other unlawful activities.  These other conspirators then provided the money to Zheng. For every $50,000 in cash the UCs provided, Zheng and others would return approximately $42,500 – via wire transfers from banks in China – into a bank account set up by the UCs.  When other conspirators, including Ning Guo, received money from the UCs to be laundered, he would then contact Zheng, who in turn contacted a Chinese-based conspirator, and transferred the money to locations in China. Then the money (less the laundering fee) was transferred from in Fujian, China, to a bank in Guangzho, China, where it was subsequently withdrawn and physically transported via courier to a bank in Hong Kong.  The final transfer was from the bank in Hong Kong to the UCs’ bank account. Zheng was therefore instrumental in each of the money laundering transactions – he received the cash from other conspirators and caused it to be transferred overseas in furtherance of the laundering process.

The conspiracy to traffic in counterfeit goods count to which Da Yi Huang, Hai Dong Jiang, Hai Yan Jiang, Fei Ruo Huang, Patrick Siu, and Wei Qiang Zhou pleaded guilty is punishable by a maximum potential penalty of 10 years in prison and a fine of $2 million. The money laundering count to which Zheng pleaded guilty is punishable by a maximum potential penalty of 20 years in prison and a fine of $500,000 or twice the gain or loss caused be the offense.  The structuring conspiracy to which Zhou and Qu pleaded guilty is punishable by a maximum potential penalty of 5 years in prison and a fine of $250,000.  Sentencing for Siu and Qiang Zhou is scheduled for March 17, 2014.  Sentencing for Qu, Zhou and Zheng is scheduled for March 24, 2014. Sentencing for Hay Yan Jiang, Hai Dong Jiang and Fei Ruo is scheduled for March 25, 2014.

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

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

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Defense counsel: Qiang Zhou:  Jonathan Marks Esq., New York
Siu: Robert Gottlieb Esq., New York
Da Yi Huang:  Daniel Kratka Esq., New York
Hai Dong Jiang:  Joseph Conway Esq., Mineola, N.Y.
Hai Yan Jiang: Benjamin Herzweig Esq., Patchogue, N.Y.
Fei Ruo Huang:  Adam Mehfar Esq., New York
Qu:  Alan Liebowitz Esq., Englewood, N.J.
Xiance Zhou:  Patrick Brackley Esq., New York
Ming Zheng:  Stacey Van Malden Esq., Bronx, N.Y.

TRENTON, N.J. – A Brooklyn, N.Y., man admitted today to participating in three armed robberies of electronics stores, including two armed robberies in Woodbridge, N.J., and Linden, N.J., U.S. Attorney Paul J. Fishman announced.

Terrell McQueen, 30, pleaded guilty before U.S. District Judge Joel A. Pisano in Trenton federal court to a superseding information charging him with one count of conspiracy to commit Hobbs Act robberies.

McQueen was arrested on May 22, 2013, and originally charged in an indictment in connection with two armed robberies of electronics stores in Woodbridge and Linden. McQueen has been in custody since his arrest.

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

Between May 30, 2012, and Oct. 2, 2012, McQueen conspired with others to commit a series of gunpoint electronics store robberies in New Jersey and New York during which he and accomplices robbed merchandise for illegal resale. McQueen provided the firearms used in both of the New Jersey robberies, coordinated the resale of the stolen merchandise and distributed the profits from the robberies to the other perpetrators.

The charge of conspiracy to commit Hobbs Act robberies carries a maximum potential penalty of 20 years in prison and a $250,000 fine. Sentencing is scheduled for June 9, 2014.

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

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

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Defense counsel: Anthony J. Pope Esq., Newark, N.J.

McQueen Superseding Information

TRENTON, N.J. – A Monmouth County, N.J., man admitted today to evading taxes on income from his ownership of a casino in Trinidad, resulting in an approximately $1.3 million loss to the United States, U.S. Attorney Paul J. Fishman announced.

David Migliore, 50, of Brielle, N.J., pleaded guilty before U.S. District Judge Mary L. Cooper in Trenton federal court to one count of an indictment charging him with evading taxes with respect to his 2011 personal tax return. 

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

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

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

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

The tax evasion count to which Migliore pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gain or loss arising out of the offense together with the costs of prosecution. Sentencing is scheduled for March 20, 2014.

Pursuant to the plea agreement, Migliore agreed to pay restitution of $1,286,657 to the IRS.

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

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

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

Migliore, David Indictment

Also Pleads Guilty to Separate Extortion, Narcotics Distribution and Weapons Charges;     Co-Defendant Admits Narcotics Distribution

TRENTON, N.J. — A Mercer County, N.J., man admitted today he conspired with the Mayor of Trenton and others to extort bribes and kickbacks in connection with a Trenton parking garage project, U.S. Attorney Paul J. Fishman announced.

Joseph Giorgianni (a/k/a “Jo Jo”), 64, of Ewing Township, N.J., pleaded guilty before U.S. District Judge Michael A. Shipp in Trenton federal court to Count One of an indictment returned in December 2012 charging him with conspiring with Trenton Mayor Tony F. Mack, 47, Ralphiel Mack, 41, (Mayor Mack’s brother) both of Trenton, and others to obstruct interstate commerce by extorting individuals under color of official right by corruptly arranging to obtain, and obtaining, money and things of value in exchange for Tony Mack’s exercise of official authority and influence.

Giorgianni also pleaded guilty to Count Eight in the indictment, charging him with conspiring with City of Trenton employee Charles Hall III, 50, of Trenton, to obstruct interstate commerce by extorting another individual under color of official right by corruptly arranging to obtain, and obtaining, money and things of value from that individual in exchange for Hall’s exercise of official authority and influence in connection with the administration of a power-washing contract.

Giorgianni also pleaded guilty to charges contained in a separate indictment returned in March 2013 which included conspiring with others, including Hall, to distribute and possess with intent to distribute oxycodone (Count One) and to being a felon in possession of a firearm (Count Six).

An associate of Giorgianni, Mary Manfredo, 65, of Lawrenceville, N.J., pleaded guilty to conspiring with Giorgianni, Hall and others to distribute and possess with intent to distribute oxycodone (Count One of the March 2013 indictment).

Hall, a former City of Trenton employee, pleaded guilty in February 2013 to conspiring to obstruct commerce by extortion under color of official right by agreeing with Giorgianni, Tony Mack and Ralphiel Mack to obtain payments from the purported developers of the parking garage project in exchange for Tony Mack’s official assistance on the project. Hall also admitted his involvement in the narcotics distribution conspiracy involving Giorgianni, Manfredo and others in connection with the purchase and sale of oxycodone.

The extortion and narcotics conspiracy counts are punishable by a maximum potential prison term of 20 years in prison per count. The firearms count carries a maximum penalty of 10 years in prison. All offenses except the narcotics offense carry a maximum fine of $250,000; the narcotics offense has a $1 million maximum fine. Sentencing for both defendants has been scheduled for March 19, 2014.

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

The government is represented by Assistant U.S. Attorneys Eric W. Moran and Matthew J. Skahill of the U.S. Attorney’s Office Special Prosecutions Division in Trenton and Camden, respectively.

The charges and allegations in the referenced indictments are merely accusations, and all defendants with pending charges are presumed innocent unless and until proven guilty.

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Defense Counsel: Giorgianni: Jerome A. Ballarotto Esq., Trenton
Manfredo: Anthony Simonetti Esq., Hightstown, N.J.

Giorgianni, Joseph et al. Indictments

D.C. Air and Seafood To Pay $520,371 in Restitution

NEWARK, N.J. – A Maine seafood company and one of its owners admitted in federal court today that they conspired to falsify records and obstruct justice to conceal the overfishing of Atlantic Sea Scallops, submitting documents that failed to report approximately 79,666 pounds harvested off the coast of New Jersey and Cape Cod in Massachusetts, New Jersey U.S. Attorney Paul J. Fishman announced.

D.C. Air & Seafood Inc., a seafood wholesaler based in Winter Harbor, Maine, and one of its owners, Christopher Byers, 41, also of Winter Harbor, pleaded guilty to separate informations charging them with conspiring with each other and with six fishing boat operators to prepare false reports to conceal the overharvesting. Byers entered the guilty pleas on behalf of himself and the company before U.S. District Judge William H. Walls in Newark federal court. The six boat operators previously pleaded guilty before Judge Walls and await sentencing.

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

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

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

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

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

The charge to which Byers pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for March 18, 2014.

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

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

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

D.C. Air & Seafod Information
Byers Information
D.C. Air, Byers Plea Agreements

NEWARK, N.J. – A Newark, N.J. man today admitted committing two armed robberies of commercial establishments in Essex County, N.J., U.S. Attorney Paul J. Fishman announced.

Antwon Yarbrough, 27, of Newark, N.J., pleaded guilty before U.S. District Judge William H. Walls to an information charging him with one count of conspiring to commit Hobbs Act robberies.

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

Between April 2013 and May 2013, Yarbrough conspired with others to rob a Krauszers store in West Orange, N.J., on April 24, 2013, and a Subway restaurant in Verona, N.J., on May 20, 2013. Yarbrough and his conspirators robbed these establishments at gunpoint. In each robbery, Yarbrough and his co-conspirators used plastic zip ties to restrain their victims. They then stole cash, cigarettes, and other items.

In the Krauszers robbery on April 24, 2013, Yarbrough and another robber entered the store wearing dark hoodies, face masks, and gloves. Yarbrough secured the door from the inside using a zip tie, while the other robber pointed a firearm at an employee and forced the employee to the floor. The robber restrained the employee with zip ties then struck the employee in the head with the gun. Yarbrough restrained the hands and feet of two other victims, one of whom Yarbrough struck in the head with his forearm. Yarbrough and the other robber then emptied the cash register of several hundred dollars, stole several cartons of Newport cigarettes, and fled.

In the Subway robbery on May 20, 2013, Yarbrough and two other robbers again entered the restaurant wearing dark hoodies, face masks, and gloves. Both robbers accompanying Yarbrough brandished firearms. After entering the restaurant, the robbers restrained an employee by tying the employee’s hands and feet with zip ties. The robbers then emptied the cash register of several hundred dollars and fled.

The Hobbs Act conspiracy to which Yarbrough pleaded guilty is punishable by a maximum potential penalty of 20 years in prison, and a fine of $250,000, or twice the gross gain or loss arising out of the offense. Sentencing is scheduled for March 18, 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: Stacy Biancamano Esq., West Orange, N.J.

Yarbrough Information

NEWARK, N.J. – A former claims manager for the N.J. Turnpike Authority today admitted devising a scheme which led to the theft of at least $1.5 million from the authority and various insurance companies, U.S. Attorney Paul J. Fishman announced.

Gerardo A. Blasi, 55, of Clifton, N.J., pleaded guilty before U.S. District Judge Kevin McNulty to an information charging him with using the mails as part of a scheme to defraud the Turnpike Authority and certain insurance companies and to obtain money and property by false and fraudulent pretenses, representations and promises.

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

From May 2009 until June 2013, while working as the claims manager for the Turnpike Authority (NJTA) it was Blasi’s job to negotiate and recover the costs of repairs from insurance companies of motorists who caused damage to property belonging to the NJTA.  With the assistance of representatives from two New Jersey-based insurance claims adjusting companies, Blasi inflated the costs to repair the damages done to NJTA property by insured motorists. The inflated claims were submitted to the motorists’ insurance companies and payment was directed through the mail to the one of the New Jersey-based claims adjusting companies instead of to the NJTA. Payments for actual costs were passed on to the NJTA, and Blasi and his conspirators shared the difference between the inflated costs and the payments for actual costs sent to the NJTA.

Despite a NJTA policy of not attempting to recover on damages caused by motorists who died from accidents on the Turnpike, Blasi continued to process those claims. Because the NJTA was unaware that Blasi had processed the claims, he was able to share the entire payment sent by the insurance company between himself and one of his conspirators. Blasi and others defrauded the NJTA and various insurance companies of at least $1.5 million.

The charge to which Blasi pleaded guilty is punishable by a maximum potential penalty of 20 years in prison and a $250,000 fine.  Sentencing is scheduled for March 19, 2014.

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

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

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Defense counsel: Anthony Iacullo Esq., Clifton

Blasi Information

CAMDEN, N.J. – A Camden man today admitted his role in a scheme in which he and others stole business checks from the U.S. Mail in New Jersey, Pennsylvania, and Delaware, altered them, and cashed them at banks using a series of conspirators, U.S. Attorney Paul J. Fishman announced.

Derrick Warner, 29, pleaded guilty before U.S. District Judge Jerome B. Simandle in Camden federal court to an information charging him with one count of conspiracy to commit bank fraud and one count of possession of a firearm by a previously convicted felon: Warner admitted to illegally possessing the weapon (a Smith and Wesson .44 Magnum handgun) after purchasing it for a conspirator.

According to documents filed in this case and statements made in court: Warner and others stole checks from curbside U.S. mailboxes in business industrial parks in Burlington and Camden counties in New Jersey and in Pennsylvania and Delaware. Warner and his conspirators would then recruit a conspirator to cash the stolen checks. Once they identified a person to cash the check, Warner and others would alter the stolen checks so that the name of the “payee” of the check would match the name of the recruited check casher. Warner, the check casher, and often a conspirator would then travel to a bank where the check casher would cash the check.

Warner and his 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.

Warner is also charged with being a felon in possession of a handgun in late March 2013.  He admitted that he purchased the firearm in Camden on behalf of one of his conspirators.

The conspiracy to commit bank fraud to which Warner pleaded guilty is punishable by 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. The felon in possession of a firearm count is punishable by a maximum potential penalty of 10 years in prison and a fine of $250,000. Sentencing is scheduled for April 4, 2014.

U.S. Attorney Fishman credited special agents from the U.S. Postal Inspection Service, under the direction of Inspector in Charge David Bosch; and the FBI, under the direction of Special Agent in Charge Edward J. Hanko in Philadelphia, for the investigation leading to today's guilty plea.

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

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Defense counsel: Richard Sparaco Esq., Cherry Hill, N.J.

Warner Information

TRENTON, N.J. – A Brooklyn, N.Y., man was sentenced today to 65 months in prison for his involvement in a plot to burglarize a pharmacy in Marlboro Township, N.J., and sell the stolen narcotics for cash, U.S. Attorney Paul J. Fishman announced.

David Mordukhaev, 22, previously pleaded guilty before U.S. District Judge Freda L. Wolfson to an information charging him with one count of conspiracy to distribute and possess with intent to distribute oxycodone. Judge Wolfson imposed the sentence today in Trenton federal court.

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

The Union Hill-Supremo Pharmacy in Marlboro Township was burglarized shortly after 4:00 a.m. on June 17, 2012. Mordukhaev and his fellow conspirators filled 17 garbage bags and two cardboard boxes with merchandise from the pharmacy, including 1,988 dosage units of methylphenidate, 500 dosage units of hydromorphone, 300 dosage units of Opana (a trade name for oxymorphone) and 3,800 dosage units of oxycodone – all Schedule II controlled substances. 

The stock lost by the pharmacy was valued at approximately $335,000.

Mordukhaev admitted that he stole the drugs, and that he did so knowing they would be sold for profit.

In addition to the prison term, Judge Wolfson sentenced Mordukhaev to three years of supervised release and ordered him to pay $334,722 in restitution.

Two of Mordukhaev’s conspirators, James Zarbailov, 23, and Dzheykhun Avshalumov, 24, both of Brooklyn, have previously pleaded guilty to the same charge. Zarbailov was sentenced to 63 months’ imprisonment on Nov. 18, 2013.  Avshalumov’s sentencing is scheduled for Dec. 19, 2013.

U.S. Attorney Fishman credited special agents of the FBI’s Red Bank Resident Agency, under the direction of Special Agent in Charge Aaron T. Ford in Newark, and law enforcement officers from the Marlboro Township Police Department, under the direction of Police Chief Bruce E. Hall, for the investigation leading to today’s sentence.

The government is represented by Assistant U.S. Attorney John E. Clabby of the U.S. Attorney’s Office Criminal Division in Trenton.

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Defense counsel: Lance Lazzaro Esq., Brooklyn, N.Y.

NEWARK, N.J. – A Pennsylvania woman was indicted by a federal grand jury today for her role in a long-running, large-scale scheme involving the fraudulent sale of telecommunications equipment belonging to a company she worked for as a consultant, U.S. Attorney Paul J. Fishman announced.
 
Juanita L. Berry, 45, of Philadelphia, Pa., was charged in an indictment with three counts of wire fraud that allegedly caused losses of at least $3.5 million.

According to the indictment and other documents filed in this case:

From 2008 to 2011, Berry worked as a consultant for an Indiana company that installed and removed telecommunications systems, first as a sales representative and later as the company’s vice president for major accounts. Initially, Berry worked out of the company’s Levittown, Pa., facility and, later, out of its Dayton, N.J., facility. The “brains” of the telecommunications systems the company installed and removed were the electronic circuit boards of varying complexity that range in price between several hundred to tens of thousands of dollars.

Berry owned a company named J. Starr Communications Inc., (J. Starr) through which she arranged her consulting agreement and allegedly operated her fraudulent scheme.

Without the knowledge or authorization of the telecommunications company’s management, Berry sold both used cards and new cards with other telecommunications equipment owned by the company as though such equipment belonged to her or J. Starr. She then pocketed the proceeds from such fraudulent sales. Berry deceived employees at the Levittown and Dayton facilities into thinking that the shipments of used cards were part of the telecommunications company’s normal course of business.

Berry allegedly deceived the company’s management in Indiana and other company employees on site about her activities by altering internal project reports and blaming others for the missing cards. Berry deceived a company in Florida that purchased the equipment into thinking that she or her company J. Starr had title to that equipment. Between 2008 and 2011, the Florida company that purchased the cards from Berry or J. Starr wired in excess of $3.5 million in payment to J. Starr’s bank account.

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

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

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

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Defense counsel: Paul D. Petrus Esq., New York

Berry, Juanita Indictment

NEWARK, N.J. – A physician practicing gastroenterology and internal medicine in West Orange, N.J., pleaded guilty today to receiving cash kickbacks for diagnostic testing referrals, becoming the 13th health care provider and 14th defendant to be convicted in connection with the government’s investigation of illegal payments made by an Orange, N.J., diagnostic testing facility, U.S. Attorney Paul J. Fishman announced.

John Green, M.D., 60, of Basking Ridge, N.J., pleaded guilty before U.S. District Judge Claire C. Cecchi to an information charging him with soliciting and receiving more than $14,000 in illegal cash kickbacks for patient referrals in violation of the federal health care anti-kickback statute.

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

Green was a licensed and board-eligible gastroenterologist who operated his own medical practice in West Orange. From January 2009 through December 2011, Green agreed to take cash payments from Orange Community MRI LLC (“Orange MRI”) in exchange for MRIs and CAT scans he referred to the diagnostic testing facility. During his guilty plea proceeding, Green admitted to receiving cash on a per-patient basis for approximately three years.

Green met with an Orange MRI representative nicknamed “Kenny” on Oct. 6, 2011, and Nov. 10, 2011, at Green’s medical office in West Orange. On each occasion Green received an envelope with more than $800 in cash for referring patients.     

The anti-kickback charge carries a maximum potential penalty of five years in prison and a maximum $250,000 fine, or twice the gain or loss caused by the offense. Sentencing is scheduled for March 25, 2014.

In addition to the 14 individuals convicted as a result of the investigation, 11 health care providers, including Green, have agreed to forfeit a total of $353,910 in illegal cash kickbacks. Additionally, Ashokkumar Babaria, 63, of Moorestown, N.J., Orange MRI’s former medical director, agreed to forfeit his revenue from corrupt referrals, which the government estimates is in excess of $2 million. Chirag Patel, 38, of Warren, N.J., Orange MRI’s former executive director, also agreed to forfeit $89,180 in corrupt gains.

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

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

U.S. Attorney Paul J. Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $500 million in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.
 

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Defense counsel: Kevin A. Buchan Esq. and James A. Plaisted Esq., Roseland, N.J.
 

Green, John Information

NEWARK, N.J. – A Bergen County, N.J., woman was sentenced today to 120 months in prison for trying to hire a hitman to kill a romantic rival by shooting her in the head, U.S. Attorney Paul J. Fishman announced.

Nicole Faccenda, 44, of Lyndhurst, N.J., previously had pleaded guilty on Aug. 8, 2012 before U.S. Magistrate Judge Patty Shwartz to an information charging her with one count of using the mail and facilities of commerce with the intent of carrying out a murder-for-hire plan.  Faccenda was charged in October 2011 with offering to pay someone to kill her ex-boyfriend’s new girlfriend. U.S. District Judge Faith S. Hochberg imposed the sentence today in Newark federal court.

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

Faccenda had been in a long-term relationship with a man who had fathered her child. The relationship ended when the man began seeing with another woman, with whom he also had a child.  On Oct. 19, 2011, Faccenda contacted a person she knew and trusted in Florida and asked for help in finding someone to carry out a hit on her ex-boyfriend’s new girlfriend. She said she had a black dress ready to wear to the intended victim’s funeral and would “spit on the casket.” 

The acquaintance contacted federal authorities, and the next day, spoke again with Faccenda – a conversation that was recorded by agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives. The acquaintance told Faccenda he had found someone to do the murder. The acquaintance and an undercover ATF task force officer posing as a hitman then met with Faccenda at a Mahwah, N.J., supermarket parking lot to arrange the killing.

Faccenda agreed to pay the undercover hitman $5,000 in advance and $5,000 after the girlfriend was killed. In a number of recorded conversations, Faccenda said she wanted the new girlfriend to be gone, and her boyfriend to be miserable. She said she wanted the girlfriend shot in the head and that the boyfriend could be shot in the foot. If something happened to the girlfriend’s children, she said, “Oh, well, I’m sorry.”

On Oct. 24, 2011, Faccenda met with her acquaintance from Florida in a Secaucus, N.J., gas station parking lot and gave him an envelope with $2,000 for the purported hitman. Over the next few hours, she provided information, including a name, photo, work schedule and license plate number of the intended victim. Two days later, on Oct. 26, 2011, the friend called Faccenda and told her the victim had been shot in the head in what appeared to be a robbery. Faccenda was arrested at work by ATF agents a short time later.

In addition to the prison term, Judge Hochberg sentenced Faccenda to three years of supervised release and ordered her to pay restitution of $19,292.

U.S. Attorney Fishman credited special agents of the ATF under the direction of Acting Special Agent in Charge George Belsky with the investigation leading to today’s sentencing.

The government is represented by Special Litigation Counsel Serina M. Vash of the U.S. Attorney’s Office Criminal Division in Newark.            

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Defense Counsel: Peter Willis Esq., Jersey City, N.J.

NEWARK, N.J. – A Bergen County, N.J., woman was sentenced today to 120 months in prison for trying to hire a hitman to kill a romantic rival by shooting her in the head, U.S. Attorney Paul J. Fishman announced.

Nicole Faccenda, 44, of Lyndhurst, N.J., previously had pleaded guilty on Aug. 8, 2012 before U.S. Magistrate Judge Patty Shwartz to an information charging her with one count of using the mail and facilities of commerce with the intent of carrying out a murder-for-hire plan.  Faccenda was charged in October 2011 with offering to pay someone to kill her ex-boyfriend’s new girlfriend. U.S. District Judge Faith S. Hochberg imposed the sentence today in Newark federal court.

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

Faccenda had been in a long-term relationship with a man who had fathered her child. The relationship ended when the man began seeing with another woman, with whom he also had a child.  On Oct. 19, 2011, Faccenda contacted a person she knew and trusted in Florida and asked for help in finding someone to carry out a hit on her ex-boyfriend’s new girlfriend. She said she had a black dress ready to wear to the intended victim’s funeral and would “spit on the casket.” 

The acquaintance contacted federal authorities, and the next day, spoke again with Faccenda – a conversation that was recorded by agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives. The acquaintance told Faccenda he had found someone to do the murder. The acquaintance and an undercover ATF task force officer posing as a hitman then met with Faccenda at a Mahwah, N.J., supermarket parking lot to arrange the killing.

Faccenda agreed to pay the undercover hitman $5,000 in advance and $5,000 after the girlfriend was killed. In a number of recorded conversations, Faccenda said she wanted the new girlfriend to be gone, and her boyfriend to be miserable. She said she wanted the girlfriend shot in the head and that the boyfriend could be shot in the foot. If something happened to the girlfriend’s children, she said, “Oh, well, I’m sorry.”

On Oct. 24, 2011, Faccenda met with her acquaintance from Florida in a Secaucus, N.J., gas station parking lot and gave him an envelope with $2,000 for the purported hitman. Over the next few hours, she provided information, including a name, photo, work schedule and license plate number of the intended victim. Two days later, on Oct. 26, 2011, the friend called Faccenda and told her the victim had been shot in the head in what appeared to be a robbery. Faccenda was arrested at work by ATF agents a short time later.

In addition to the prison term, Judge Hochberg sentenced Faccenda to three years of supervised release and ordered her to pay restitution of $19,292.

U.S. Attorney Fishman credited special agents of the ATF under the direction of Acting Special Agent in Charge George Belsky with the investigation leading to today’s sentencing.

The government is represented by Special Litigation Counsel Serina M. Vash of the U.S. Attorney’s Office Criminal Division in Newark.            

13-454                                       

Defense Counsel: Peter Willis Esq., Jersey City, N.J.

CAMDEN, N.J. — A federal jury convicted a Camden County, N.J., man today for allegedly defrauding an investor out of approximately $1.2 million he claimed would be invested in a pizza shop, then laundering that money, failing to report it to the IRS and threatening the victim to keep quiet about his crimes, U.S. Attorney Paul J. Fishman announced.

Giovanni Arena, 58, of Laurel Springs, N.J., was found guilty of 15 counts of mail fraud, eight counts of money laundering, three counts of failure to file income tax returns and one count of tampering with witnesses following a seven-day trial before Chief U.S. District Judge Jerome B. Simandle in Camden federal court. The jury deliberated less than four hours before delivering the guilty verdicts. Arena was acquitted on seven counts of mail fraud and one count of money laundering.

According to documents filed in this case and the evidence at trial: Arena’s scheme defrauded a single investor of approximately $1.2 million from 2004 through 2008. Arena, who had operated pizza restaurants in the past, enticed the victim to send checks and cash through the U.S. mail to invest in the purchase of a pizza shop in southern New Jersey. Rather than using the money to buy a restaurant, Arena purchased luxury automobiles – including a Maserati Coupe and Chevrolet Camaro – gambled at Atlantic City Casinos and paid his living expenses.

The jury reviewed casino records that showed the defendant spent many hours at the gaming tables, losing more than $700,000 in four years of Atlantic City gambling. During the trial, the jury watched surveillance video of the defendant buy in at a black jack table using $81,000 in cash he brought to the table in a shopping bag.

In addition, Arena willfully did not file his individual tax returns for tax years 2006, 2007 and 2008, failing to report hundreds of thousands of dollars in income to the IRS. After federal agents served search warrants on Arena’s property during the course of the investigation, Arena instructed the victim investor to lie to federal investigators and made threatening statements, saying, “you better not put me in trouble because if you put me in trouble, I’ll put you in trouble.”

Each mail fraud count carries a maximum potential penalty of 20 years in prison and a $500,000 fine. Each money laundering count carries a maximum potential penalty of 10 years in prison and a $250,000 fine or twice the value of the property involved in the transaction. Each failure to file tax returns count carries a maximum potential of one year in prison and a $100,000 fine or twice the gain resulting from the offense or twice the loss to any victim. The tampering with a witness or victim count carries a maximum potential penalty of 20 years in prison and a $250,000 fine. Sentencing is currently scheduled for March 18, 2014.

U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen in Newark, and inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge David W. Bosch, Philadelphia Division, with the investigation leading to today’s verdict.

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

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

NEWARK, N.J. - A Union County, N.J., man was sentenced today to 33 months in prison for pretending to be an Immigration and Customs Enforcement officer to defraud illegal aliens seeking to apply for legal status in the United States, U.S. Attorney Paul J. Fishman announced.

Ruben Alvarado, 28, of Elizabeth, N.J. previously pleaded guilty before U.S. District Judge Katharine S. Hayden to an information charging him with impersonation of a federal officer and identity fraud. Judge Hayden imposed the sentence today in Newark federal court.

According to documents filed in this case and statements made in court: From September 2009 through May 2011, and again from February 2013 through March 2013, Alvarado pretended to be an employee and officer of the Department of Homeland Security, Immigration and Customs Enforcement (DHS-ICE), and the Transportation Safety Administration (TSA).  Alvarado demanded and obtained money from his victims after promising to help them, through his purported government employment at DHS-ICE, to obtain legal, or more permanent, status in the United States.  He wore clothing bearing the letters “I.C.E.,” carried handcuffs, what appeared to be a holstered gun, a false photo identification card identifying him as a “TSA Air Marshall” and a badge that read, “Official Court Officer.” Alvarado recruited victims in New Jersey through in-person contact and victims in Florida via Facebook.

When Alvarado’s “customers” realized he was a fraud and demanded their money back, he would threaten and intimidate them, claiming to have the power to have them and their children deported. After his initial appearance on these charges in October 2012, Alvarado was released on bail. During a routine vehicle stop in March 2013, the Elizabeth Police Department found Alvarado again to be in possession of false immigration applications, a fingerprinting kit, clothing bearing the letters “I.C.E.,” a holster and blank pistol, and a fake “I.C.E.” badge.
 
Alvarado admitted in court that he has never been employed by any federal agency, but had produced false identification badges for himself and worn clothing and accessories suggestive of employment at ICE in order to solicit payments from illegal aliens for immigration assistance. He also admitted to having defrauded 33 victims in both New Jersey and Florida out of a total of $33,459, both before his federal arrest and while on pretrial release for these charges.

In addition to the prison term, Judge Hayden sentenced Alvarado to serve three years of supervised release and ordered him to pay $33,459 in restitution to his victims.

U.S. Attorney Fishman credited special agents of the Department of Homeland Security, Office of Professional Responsibility, under the direction of Special Agent in Charge Terence S. Opiola; the Department of Homeland Security, Office of Inspector General in Miami, Fla., under the direction of Special Agent in Charge David Nieland; the Union County Prosecutor’s Office, under the direction of Acting Prosecutor Grace H. Park; and the Elizabeth Police Department, under the direction of  Police Director James Cosgrove, for the investigation leading to today’s sentence.

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

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Defense counsel: Kevin Carlucci Esq., Assistant Federal Public Defender, Newark

NEWARK, N.J. - A former union officer from Local 164 of the International Brotherhood of Electrical Workers (IBEW) was convicted today of embezzling funds by ensuring his then-girlfriend got paid by the union for unauthorized and unnecessary work, U.S. Attorney Paul J. Fishman announced.

Richard “Buzzy” Dressel, 64, of Montvale, N.J., was convicted of one count each of conspiracy to embezzle and embezzlement from the union, the first two counts of the indictment against him. He was acquitted on other substantive embezzlement counts. The jury returned the verdict after nearly three days of deliberation following a nine-day trial before U.S. District Judge William J. Martini in Newark federal court.

According to documents filed in this case and the evidence at trial: While the principal officer of the Local 164 IBEW, Dressel put his girlfriend on the payroll from March 2008 to March 2010, when her work provided no genuine benefit to the union or its members. He created an unnecessary position as an in-house caterer for her. Additionally, he padded her income – and indirectly his own – by giving her an office job she didn’t perform, providing her with an additional salary and a fringe benefit package. In all, Dressel embezzled $221,530 in this way.

Each count carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is currently scheduled for March 12, 2014.

U.S. Attorney Fishman credited special agents of the U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, under the direction of Acting Special Agent in Charge Cheryl Garcia, New York Regional Office; and special agents of the U.S. Department of Labor, Employee Benefits Security Administration, under the direction of Jonathan Kay, Director for the New York Regional Office, with the investigation leading to today’s guilty verdict.

The government is represented by Assistant United States Attorney Grady O’Malley of the U.S. Attorney’s Office Organized Crime/Gangs Unit and Special Assistant U.S. Attorney Thomas Kearney of the office’s Criminal Division in Newark.

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Defense counsel: Jeffrey Smith Esq.; Alice Penna Esq., Teaneck, N.J.

TRENTON, N.J. – A former Monmouth County, N.J., man was arrested today on a charge that he operated an $18 million Ponzi scheme involving victims from New Jersey, U.S. Attorney Paul J. Fishman announced.

Louis J. Spina, 56, formerly of Colts Neck, N.J., and now living in Miami, Fla., was charged by complaint with one count of wire fraud. He is scheduled to appear this afternoon before U.S. Magistrate Judge Lois H. Goodman in Trenton federal court for an initial appearance.

According to the complaint:

Between August 2010 and November 2013, Spina collected $18 million from 28 investors. Spina allegedly represented to the investors that he would invest their funds through his business, LJS Trading LLC, using algorithmic computer software, and that the investors would receive guaranteed monthly rates of return ranging from 9 to 14 percent. Spina commingled all of the investor funds together in one bank account. He only transferred $8 million of the investor funds to a trading account, which he then lost in unsuccessful trading. He allegedly used the remaining $10 million to pay the investors’ monthly interest payments, to return portions of some investors’ principals, and to pay for his own personal expenses, including car purchases/payments, luxury apartment rental payments, and a $400,000 donation to a private university.

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

U.S. Attorney Fishman credited the FBI, under the direction of Special Agent in Charge Aaron T. Ford, and U.S. Secret Service, under the direction of Special Agent in Charge James Mottola, for the investigation leading to today’s arrest.

The government is represented by Assistant U.S. Attorney Sarah M. Wolfe of the U.S. Attorney’s Office Criminal Division in Trenton.

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Spina Complaint

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

Richard Goldberg, 60, of Weston, Conn., and Gary Leeds, 60, of Greenwich, Conn., each pleaded guilty today before U.S. District Judge Stanley R. Chesler in Newark federal court to one count of accepting bribes.

Including Goldberg and Leeds, 20 people have now pleaded guilty in connection with the bribery scheme, which its organizers have admitted involved millions of dollars in bribes and resulted in more than $100 million in payments to BLS from Medicare and various private insurance companies.

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

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

As part of their guilty pleas, Goldberg and Leeds each agreed to forfeit $108,000.

On April 9, 2013, federal agents arrested David Nicoll, 39, of Mountain Lakes, N.J., Scott Nicoll, 33, of Wayne, N.J., a senior BLS employee and David Nicoll’s brother, and Craig Nordman, 35, of Whippany, N.J., a BLS employee and the CEO of Advantech Sales LLC – one of several entities used by BLS to make illegal payments. They were charged by federal complaint with the bribery conspiracy, along with the BLS company and Frank Santangelo, 44, of Boonton, N.J. In June 2013, David and Scott Nicoll, Nordman and four other associates of BLS pleaded guilty to charges related to their involvement. Santangelo, a doctor, pleaded guilty in August 2013 to charges relating to his role in the scheme.

So far, 11 employees or associates of BLS, and 9 physicians have pleaded guilty to their roles in the bribery scheme. The investigation has recovered more than $6.5 million to date through forfeiture.

The bribery count to which Goldberg and Leeds pleaded guilty is punishable by a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing for both defendants is scheduled for April 1, 2014.

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

U.S. Attorney 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 $500 million in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.

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Defense counsel:      

Richard Goldberg: Aidan P. O’Connor Esq., Hackensack, N.J.
Gary Leeds: E. Scott Morvillo Esq., New York

Goldberg, Richard Information
Leeds, Gary Information

NEWARK, N.J. – Two defendants have admitted their roles in one of the nation’s largest and longest running stolen identity refund fraud schemes ever identified, U.S. Attorney Paul J. Fishman announced today.

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

Michael Senatore, 43, of Moscow, Pa., and David Pinski, 75, of Fort Lee, N.J., both pleaded guilty before U.S. District Judge Claire C. Cecchi to informations charging them with conspiracy to defraud the United States and theft of government property. Senatore entered his plea today, Pinkski entered his plea Nov. 20, 2013.

The conspiracy count is punishable by a maximum potential penalty of five years in prison and up to a $250,000 fine. The substantive count of theft of government property carries a maximum potential penalty of 10 years in prison and up to a $250,000 fine.

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

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

• • SIRF perpetrators obtain personal identifying information, including Social Security numbers and dates of birth, from unwitting individuals, who often reside in the Commonwealth of Puerto Rico.
     
  • SIRF perpetrators complete Individual Income Tax Return Form 1040s using the fraudulently-obtained information, and falsifying wages earned, taxes withheld and other data. Perpetrators use data to make it appear that the “taxpayers” listed on the fraudulent 1040 forms are entitled to tax refunds – when in fact, the various tax withholdings indicated on the fraudulent 1040s have not been paid by the listed “taxpayers,” and no refunds are due.

• • Perpetrators direct the U.S. Treasury Department to issue the refunds through checks (Tax Refund Treasury Checks) generated by the fraudulent 1049 forms to locations they control or can access, in various ways.

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

The Investigation

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

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

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

Conspirators purchased mail routes, that is, lists of addresses covered by a single mail carrier. Conspirators applied for refunds, inserted addresses along the mail route as the purported home addresses of the “taxpayers,” and obtained the refund checks sent to the addresses. They also applied for checks using addresses otherwise controlled by, or accessible by, certain conspirators, and collected the checks after they were delivered to those addresses. During the course of the scheme, hundreds of refund checks were mailed to just a few different addresses in a few different towns, including Nutley, Somerset and Newark, N.J., and Shirley, N.Y.

After receiving the refund checks, Pinski, Senatore and others caused the checks to be cashed at check cashing institutions, and then causing the proceeds to be divided among the conspirators.
During the course of the investigation, members of the task force identified certain “hot spots” of activity and intercepted more than $22 million in refund checks – that had been applied for fraudulently – before they were delivered to members of the conspiracy.

Sentencing for Pinski is scheduled for March 3, 2014, and sentencing for Senatore is scheduled for March 5, 2014.

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

The government is represented by Assistant U.S. Attorneys Mala Ahuja Harker, Lakshmi Srinivasan Herman, Zach Intrater, and Danielle Walsman of the U.S. Attorney’s Office Criminal Division in Newark.
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Defense Counsel: David Pinski: Samuel DeLuca Esq., Jersey City, N.J.
Michael Senatore: Christopher Patella Esq., Bayonne, N.J.

Pinski, David Information
Senatore, Michael Information

NEWARK, N.J. – A Newark, N.J. man today admitted committing 17 armed robberies of commercial establishments throughout Union, Essex, and Bergen counties, U.S. Attorney Paul J. Fishman announced.

Bobby Dawson, 30, pleaded guilty before U.S. District Judge William H. Walls to a three-count Information charging him with committing an armed carjacking, conspiring to commit Hobbs Act robberies and discharging a firearm during the commission of one of those robberies.

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

Dawson 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

MS&K Confectionery

Maplewood

April 1, 2013

Belleville News and Food

Belleville

April 17, 2013

South Wood Discount Liquor

Linden

April 17, 2013

Krauszers

West Orange

April 24, 2013

Newark Community Pharmacy

Newark

May 1, 2013

Subway Restaurant

Verona

May 20, 2013

Dawson and his conspirators robbed each of these establishments at gunpoint, stealing cash, cigarettes, and other items. In 15 of the 17 robberies, Dawson and his conspirators used zip ties or duct tape to restrain their victims.

In the MS&K robbery on April 1, 2013, Dawson threatened the clerk of the store with a .380 caliber semi-automatic handgun. When the clerk resisted, Dawson fired his gun at the clerk, ordered the clerk to lie down and then stole $9,000 from the cash register.

In the robbery of Krauszers in West Orange on April 24, 2013, Dawson and his conspirator tied up three individuals in the store with zip-ties before stealing approximately $600 and several cartons of cigarettes. Dawson injured a store employee by hitting the victim in the head with his firearm.

The armed carjacking to which Dawson pleaded guilty is punishable by a maximum potential penalty of 15 years in prison. The Hobbs Act conspiracy to which Dawson pleaded guilty is punishable by a maximum potential penalty of 20 years in prison. The charge of discharging a firearm during a crime of violence is punishable by a maximum penalty of life in prison and a mandatory minimum sentence of 10 years in prison, which must run consecutively to any other prison term. Each count also carries a maximum fine of $250,000 or twice the gross gain or loss arising out of the offense. Sentencing is scheduled for March 11, 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: Candace Hom Esq., Assistant Federal Public Defender, Newark

Dawson Information

NEWARK, N.J. – A former New Jersey Transit official appeared in court today on charges she agreed to accept an $8,000 bribe in connection with a snow removal contract, U.S. Attorney Paul J. Fishman announced.

Donna Schiereck, 56, of Jackson, N.J., is charged by complaint with one count of agreeing to accept a bribe. Schiereck appeared this afternoon before U.S. Magistrate Judge James B. Clark III in Newark federal court for an initial appearance.

According to the complaint unsealed today:

From September 2012 to December 2012, Schiereck was a supervisor at NJ Transit.  During that same time period, Schiereck agreed to accept $8,000 in exchange for her assistance with securing a snow removal contract for a Lakewood, N.J., company.

The charge is punishable by a maximum potential penalty of 10 years in prison and a $250,000 fine.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; and the N.J. State Police, under the direction of Col. Joseph R. Fuentes, superintendent, for the investigation leading to today’s charge. He thanked the N.J. Attorney General’s Office, under the direction of Acting Attorney General John Hoffman, and Elie Honig, director of the N.J. Division of Criminal Justice, for their roles in this investigation.

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

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Defense counsel: David A. Schwartz, Eatontown, N.J., for Donna Schiereck.

Schiereck, Donna Complaint

TTRENTON, N.J. – The former chief financial officer of the Manhattan-based brokerage firm Needham & Co. today admitted stealing $1 million from his former employer through an elaborate false invoicing scheme, U.S. Attorney Paul J. Fishman announced.

Glen W. Albanese, 42, of Manalapan, N.J., pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton federal court to an information charging him with conspiring to steal $1 million from Needham & Co.  Two of Albanese’s conspirators, Vincent Sarubbi, 43, of Manalapan, N.J., and Eric Siegel, 38, of New York, previously pleaded guilty in connection with their roles in the scheme.

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

From 2000 through 2010, while he was employed as the CFO of Needham & Co., a broker-dealer with headquarters in New York, Albanese stole $1 million from the company through a false invoicing scheme.  Albanese induced several vendors of Needham – including Data Source Partners, an information technology services company owned by Sarubbi, and S&R Graphic Company, a printing company where Siegel worked – to submit fraudulent invoices to Needham. Some of the fraudulent invoices charged for services that were never provided, while others inflated the amount due for services that were provided. Albanese approved the fraudulent invoices on behalf of Needham and then directed the vendors to send him the bulk of the illicit proceeds.

The vendors funneled the illicit proceeds to Albanese in a variety of ways. Albanese admitted that he directed Siegel to meet him at predetermined locations in Manhattan with envelopes containing thousands of dollars in cash. He directed both Siegel and Sarubbi to pay his personal expenses directly. Siegel and Sarubbi used the proceeds from the scheme to pay for landscaping and interior decorating at Albanese’s residence, a designer-breed dog and “canine fence,” equestrian equipment, thousands of dollars’ worth of wine and more than $40,000 in flights, hotels and travel expenses.

The conspiracy count to which Albanese pleaded guilty is punishable by a maximum potential penalty of 20 years in prison and a $250,000 fine.  As part of the plea, Albanese agreed to pay restitution of $1 million to Needham. Sentencing is scheduled for Feb. 25, 2014.

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

The government is represented by Christopher J. Kelly, Chief of the U.S. Attorney’s Office Economic Crimes Unit in Newark.

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:  Joseph R. Benfante Esq, New York

Albanese, Glen Information

NEWARK, N.J. — A husband and wife from Bergen County, N.J., were both convicted today of one count each of bank fraud and conspiracy to commit wire fraud, U.S. Attorney Paul J. Fishman announced.

Linda Yarleque, 44, and her husband, Fabio Moreno Vargas, 46, of Westwood, N.J., were convicted following a one-week trial before U.S. District Judge William H. Walls in Newark federal court. The jury deliberated two hours before returning the guilty verdicts.

According to documents filed in this case and the evidence at trial: Yarleque and Moreno obtained 10 fraudulent loans over a period of three years. They falsified their employment and income, failed to disclose their debts and other properties that they owned, and lied about where they lived. They fraudulently obtained a total of $3.4 million in mortgages this way and personally pocketed approximately $269,000, through “cash out” refinancings that they directed to their own bank accounts. They then spent that money on vacations, cars, and to buy more properties.

 The defendants made up a phony business where Moreno was supposedly employed (My Limousine).  They then obtained a phone line in the name of My Limousine and had it forwarded to their personal cell phones. When mortgage lenders called to verify Moreno’s employment, the defendants lied, posing as fictitious employees, using names such as “Janet Alvarez” and “Casandra Sterling.”  

Each count upon which the defendants were convicted is punishable by a maximum potential penalty of 30 years in prison and a $1 million fine. Sentencing is scheduled for March 11, 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 convictions. He also thanked IRS-Criminal Investigation for its role in the case.

The government is represented by Assistant U.S. Attorney J. Jamari Buxton of the general crimes unit and Rachael A. Honig, counsel to the U.S. Attorney.

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Defense counsel: Yarleque: Peter Willis Esq., of Jersey City, N.J., Moreno: Chester Keller Esq. and Carol Gillen Esq., Assistant Federal Public Defenders, Newark

Yarleque, Linda and Moreno, Fabio Indictment

Dr. Jose Katz Also Ordered to Pay $19 Million in Restitution

NEWARK, N.J. – A well-known cardiologist and the founder, CEO and sole owner of two large medical services companies in New Jersey and New York was sentenced today to 78 months in prison and ordered to pay $19 million in restitutionfor conspiring in a multimillion-dollar health care fraud scheme that subjected thousands of patients to unnecessary tests and potentially life-threatening, unneeded treatment, as well as treatment by unlicensed or untrained personnel. The sentence was announced today by New Jersey U.S. Attorney Paul J. Fishman.

Jose Katz, 69, of Closter, N.J., previously pleaded guilty before U.S. District Judge Jose L. Linares to an information charging him with one count of conspiracy to commit health care fraud and one count of Social Security fraud arising from a separate scheme to give his wife a “no show” job and make her eligible for Social Security benefits. Judge Linares imposed the sentence today in Newark federal court.

“Katz prized illegal profits over patients to a staggering degree, committing record-breaking fraud and compromising care,” said U.S. Attorney Fishman. “Prison is an appropriate consequence for ripping off the government and insurance companies through the shocking exposure of patients to unneeded or untrained treatment.”

As part of his plea agreement with the government, Katz agreed that the loss amount sustained by Medicare, Medicaid and other insurers victimized by the fraudulent billings was $19 million. U.S. Department of Health and Human Services, Office of Inspector General and FBI records indicate the loss amount suffered by the victims is the largest recorded in New Jersey, New York and Connecticut for an individual practitioner convicted of health care fraud.

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

Katz was the founder, CEO and sole equity-holder of Cardio-Med Services LLC (Cardio-Med), and Comprehensive Healthcare & Medical Services LLC (Comprehensive Healthcare). From 2004 through 2012, Cardio-Med had offices in Union City, Paterson and West New York, N.J., and Comprehensive Healthcare had offices in Manhattan and Queens, N.Y. Both Cardio-Med and Comprehensive Healthcare provided cardiology, internal medicine and other medical services to individual patients. During that time period, Katz conspired to bill Medicare Part B, Medicaid, Empire BCBS, Aetna and others for unnecessary tests and unnecessary procedures based on false diagnoses and for medical services rendered by unlicensed practitioners.

Between July 2006 and February, 2009, Katz spent more than $6 million for advertising on Spanish-language television and radio stations. The ads attracted hundreds of patients to Cardio-Med and Comprehensive Healthcare every day. Overall, Katz was able to bill Medicare and Medicaid more than $75 million for his services from 2005 through 2012.

Over the course of the conspiracy, Katz ordered and performed essentially the same battery of diagnostic tests for nearly all the patients he treated, regardless of their symptoms. Katz also instructed his non-physician employees to order and perform diagnostic tests for patients of other doctors working at his offices, even though he had not examined those patients and the other physicians had not ordered the tests.

Most significantly, Katz admitted that he falsified patient charts with fictitious and boilerplate symptoms and falsely diagnosed a majority of his Medicare and Medicaid patients with coronary artery disease and debilitating and inoperable angina. He also admitted to making the diagnoses to justify prescribing and administering an unnecessary treatment for those patients called enhanced external counter pulsation, or EECP. Katz even prescribed EECP treatments for some patients with contraindications for the treatment, therefore subjecting those patients to a substantial risk of serious injury or death.

From 2005 through 2012, Medicare and Medicaid paid Katz more than $15.6 million just for his EECP treatments, most of which were fraudulent.

In addition, Katz ordered conspirator Mario Roncal, 62, of Woodland Park, N.J. – who had a medical degree from San Juan Bautista School of Medicine in San Juan, Puerto Rico, but did not have a license to practice medicine in any of the 50 states – to treat patients, knowing he was not licensed. At Katz’s direction, Roncal held himself out to fellow employees and to patients as “Dr. Roncal,” examined new patients as well as Katz’s follow-up patients, ordered diagnostic tests, diagnosed patients with medical conditions and diseases and recommended and prescribed courses of treatment and surgery – including falsely diagnosing patients with angina and prescribing EECP treatments for those patients.

To conceal this illegal and unlicensed practice of medicine, Roncal forged Katz’s signature on paperwork associated with Roncal’s unlawful medical services, including on patient charts. During the conspiracy, Katz used his own billing numbers to bill Medicare Part B and Medicaid for the illegal services Roncal provided as though they were provided by Katz.

Roncal was indicted on March 2, 2012, for conspiracy to commit health care fraud. He entered a guilty plea on Jan. 4, 2013 and awaits sentencing.

Katz also admitted to a Social Security fraud scheme in which, from 2005 through 2012, he kept his wife on Cardio-Med’s payroll though she performed little or no work. During the course of the scheme, Katz sent false W-2 forms for calendar years 2005 through 2011 to the U.S. Social Security Administration purportedly reflecting $1,251,604 in earnings for his wife, making her eligible for an estimated $263,000 in Social Security benefits to which she was not entitled.

In addition to the prison term and restitution, Judge Linares sentenced Katz 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; the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Thomas O’Donnell; the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria Kelokates; the Social Security Administration, Office of the Inspector General, under the direction of Special Agent in Charge Edward J. Ryan; IRS-Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen; and criminal and civil investigators with the U.S. Attorney’s Office for the investigation leading to today’s sentence. He also thanked the Medicaid Fraud Division of the Office of the New Jersey State Comptroller for its assistance.

The government is represented by Assistant U.S. Attorney Scott B. McBride of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark.

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Defense counsel: Blair R. Zwillman Esq., Parsippany, N.J.

Combatting Health Care Fraud in NJ

NEWARK, N.J. – The owner of a company that sold maintenance and cleaning supplies today admitted paying bribes to a Union County official and to defrauding the county of more than $120,000 in connection with the purchases, U.S. Attorney Paul J. Fishman announced.

Richard Greer, 54, of Marlboro, N.J., pleaded guilty to an information charging one count of conspiracy to commit mail fraud. Greer entered his guilty plea before U.S. District Judge William H. Walls in Newark federal court.

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

From 2006 to 2011, Greer owned and operated Positive Attitude LLC, a commercial vendor that sold, among other products, maintenance and cleaning supplies to Union County. Aniello Palmieri, 57, of Toms River, N.J., was the director of the Division of Facilities Management for Union County, and oversaw the purchasing of building materials, tools, hardware, janitorial supplies and other supplies used by the various bureaus of the division.

Greer made cash bribe payments to Palmieri of $500 per month in exchange for ensuring continued Union County business for Positive Attitude. Greer generated fictitious invoices to Union County for many industrial cleaning products to cover the monies paid to Palmieri, often including a profit for himself above the kickback he paid to Palmieri. Positive Attitude received $120,000 to $200,000 in fraudulent proceeds from the fictitious invoices. Greer used the mails to facilitate this scheme by having Union County send the checks in payment for these purchases to his company in Marlboro.

The conspiracy to commit mail fraud charge to which Greer pleaded guilty is punishable by a maximum potential penalty of 20 years in prison and a $250,000 fine. The plea agreement requires that Greer pay restitution of $185,000. Greer is scheduled to be sentenced on March 11, 2014.

On Oct. 2, 2013, Palmieri and Frank Donald Vicendes III, 48, of Berkeley Heights, a Union County vendor, also admitted to engaging in a similar bribery scheme and to defrauding Union County of more than $120,000 in connection with sale of supplies to Union County. Palmieri and Vicendes entered their guilty pleas to mail fraud before Judge Walls in Newark federal court. Palmieri and Vicendes face the same penalties as Greer and are scheduled to be sentenced on Jan. 8, 2014, and Jan. 7, 2014, respectively.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; and the N.J. State Police, under the direction of Col. Joseph R. Fuentes, superintendent of the state police, for the investigation leading to the guilty pleas. He also thanked the N.J. Attorney General’s Office under the direction of Acting Attorney General John Hoffman and Elie Honig, director of the N.J. Division of Criminal Justice, for their work in this investigation.

The government is represented by Assistant U.S. Attorney Amy Luria of the U.S. Attorney’s Office Special Prosecutions Division in Newark, and Special Assistant U.S. Attorney Michael A. Monahan, the deputy chief of the Corruption Bureau, Division of Criminal Justice, in the N.J. Office of the Attorney General. 

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Defense counsel: Marc A. Agnifilo Esq., New York

Greer Information
Palmieri Information
Vicendes Information

Company Worked Extensively on Palmer Square Project in Princeton, N.J.

NEWARK, N.J. – The owner of three Parsippany, N.J.-based construction companies surrendered to federal agents this morning on charges that he failed to collect and turnover federal and state payroll taxes totaling more than $1 million, evaded personal income taxes on more than $1.4 million in income, and falsified reports with respect to union benefit fund contributions, U.S. Attorney Paul J. Fishman announced.

Also, three employees of the construction companies were arrested on charges including filing false income tax returns, bankruptcy fraud, and a mail fraud scheme to defraud the state of New Jersey with respect to unemployment compensation benefits. All four defendants are scheduled to make their initial appearances later today before U.S. Magistrate Judge James B. Clark III in Newark federal court.

According to the three complaints filed in this case:

First Complaint: Frank Chimento, Jr., 67, of West Caldwell, N.J., was the owner of Chimento Construction, Chimento Construction Services, and FAC Construction, three interrelated and commingled companies specializing in commercial masonry and concrete work (the “Chimento Companies”).  From 2008 through 2011, the Chimento Companies’ primary construction job was the Palmer Square project located in Princeton, N.J. 
 
Chimento Companies allegedly operated a cash payroll for a significant portion of the wages paid to employees during the period 2006 through 2011. Allegedly at Chimento Jr.’s direction, a conspirator (CC-1) who is not named in the complaints conducted structured cash transactions at several separate financial institutions to obtain cash to fund the payroll and in an attempt to avoid currency transaction reports from being filed. CC-1 would then purportedly prepare envelopes containing cash payroll based on the hours and wage rate information provided by Chimento Jr., who, as owner, was responsible for collecting, accounting for and paying over to the IRS withholdings from employees for Social Security, Medicare, and income taxes (collectively referred to as “payroll taxes”).

The complaint also alleges that as early as August 2009, the Chimento Companies have been parties to a collective bargaining agreement (CBA) with the International Union of Bricklayers and Allied Craftworkers, Administrative District Council of New Jersey, consisting of Local Unions 2, 4, and 5 (BAC/ADC), located in Bordentown, N.J. Among other things, the CBA provided that the Chimento Companies must make specified contributions to various BAC benefits funds for each hour of covered work performed by employees of the Chimento Companies. Chimento Jr. was required to complete remittance reports identifying the employees that had performed covered work under the CBA and the number of hours that they worked. According to the complaint, from August 14, 2009, through April 30, 2012, Chimento Jr. failed to make required contributions and caused false statements and representations to be made in remittance reports.

Joseph Carsillo, 45, of East Hanover, N.J., was the project superintendent for the Chimento Companies at Palmer Square. He has worked for the Chimento Companies since 2007. According to the Complaint, Carsillo conspired with Chimento Jr. to defraud the United States with respect to payroll taxes due and owing for the companies’ employees. Carsillo was responsible for keeping track of employees’ hours and would furnish that information to CC-1, which was used to determine the cash wages due to each employee. 

According to the complaint, Carsillo received total cash wages from the Chimento Companies of approximately $167,466 during the years 2009 through 2011, which he failed to include on his personal tax returns for those years.

Second Complaint:

Frank Chimento III, 45, of Verona, N.J., has worked for the Chimento Companies for more than 10 years and was one of the employees that received cash wages.

In 2007, Chimento III briefly operated his own excavation business. An analysis of his bank accounts showed payments in 2007 from the Chimento Companies totaling $85,860. Chimento III filed with the IRS a 2007 Individual Income Tax Return that was not correct as it did not include $45,860 he received from his employment with the Chimento Companies.

He also allegedly willfully did not file individual income tax returns from 2008 through 2011 although he received a Form 1099 for $100,000 in cash wages in 2008, and a total of $351,788 in cash wages during the years 2009 through 2011.

Third Complaint:

Carl J. Corso, 58, of Hamilton Township, N.J., started working for the Chimento Companies on August 12, 2009.

In addition to payroll checks, Corso requested and received cash wages from the Chimento Companies with regard to his employment in 2009 through 2011. Corso disclosed to his return preparer only the wages he received by payroll check and deliberately omitted the cash payments from his personal tax returns despite knowing that the cash should have been included on these returns. 

Corso is also charged with a scheme to defraud the N.J. Department of Labor and Workforce Development (NJDOL-WD) with respect to unemployment compensation benefits.  On Nov. 1, 2009, Corso advised the NJDOL-WD that he was no longer working and reactivated an earlier application for unemployment benefits and was awarded a weekly benefit of $526. He collected a total of $19,988 through the U.S. mail.

The three complaints charge the following offenses:

U.S. v. Frank Chimento Jr. and Joseph Carsillo

Defendant

Counts

Maximum Potential Penalty per Count

Count 1: Conspiracy to defraud the United States

Five years in prison; $250,000 fine or twice the gross gain or loss from the offense

 

Counts 2-15: Failure to collect and pay over payroll taxes

Five years in prison; $250,000 fine or twice the gross gain or loss from the offense

 

Counts 16-19: Mail fraud

20 years in prison; $250,000 fine or twice the gross gain or loss from the offense

 

Counts 20-29: False statements in ERISA documents

Five years in prison; $250,000 fine or twice the gross gain or loss from the offense

 

Counts 30-34: Individual Income Tax Evasion

Five years in prison; $250,000 fine or twice the gross gain or loss from the offense

Joseph Carsillo

Count 1: Conspiracy to defraud the United States

Five years in prison; $250,000 fine or twice the gross gain or loss from the offense

 

Counts 35-37: Filing False Individual Income Tax Returns

Three years in prison; $250,00 fine or twice the gross gain or loss from the offense

 

Count 38: Bankruptcy Fraud

Five years in prison; $250,000 fine or twice the gross gain or loss from the offense

U.S. v. Frank Chimento III

Counts

Maximum Potential Penalty per Count

Count 1: Filing False Individual Income Tax Return

Three years in prison; $250,000 fine or twice the gross gain or loss from the offense

Counts 2-5: Willful Failure to File an Individual Tax Return

One year in prison; $100,000 fine

U.S. v. Carl J. Corso

Counts

Maximum Potential Penalty per Count

Count 1: Mail Fraud

20 years in prison; $250,000 fine or twice the gross gain or loss from the offense

Counts 2-9: Filing a False Individual Tax Return

Three years in prison; $250,000 fine or twice the gross gain or loss from the offense

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

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

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

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Chimento, Frank Jr., and Carsillo, Joseph Complaint
Chimento, Frank III Complaint
Corso, Carl Complaint

NEWARK, N.J. – Two of the stars of the Bravo television show “The Real Housewives of New Jersey” were indicted today on additional charges of bank fraud and loan application fraud, U.S. Attorney Paul J. Fishman announced.

The 41-count superseding indictment returned by a federal grand jury against Teresa Giudice, 41, and her husband, Giuseppe “Joe” Giudice, 43, both of Towaco, N.J., adds two new counts charging both defendants: one count of bank fraud and one count of loan application fraud. The original 39 counts on which they were indicted on July 29, 2013, which include conspiracy to commit mail and wire fraud, bank fraud, making false statements on loan applications and bankruptcy fraud, as well as charges against Giuseppe Giudice for failure to file tax returns from 2004 through 2008, remain in place.

An arraignment on the new charges has been scheduled for 10:30 a.m., Nov. 20, 2013, before U.S. District Judge Esther Salas in Newark federal court.

According to the superseding indictment:

The two additional counts stem from a $361,250 mortgage loan that Teresa Giudice obtained in July 2005. In the course of obtaining the loan, she and Giuseppe Giudice prepared a loan application which falsely stated that Teresa Giudice was employed as a realtor and that she had a monthly salary of $15,000. Teresa Giudice was not employed outside the home at the time.

The bank fraud and loan application fraud counts each carry a maximum potential penalty of 30 years in prison and a $1 million fine.

U.S. Attorney Fishman credited special agents of the Federal Deposit Insurance Corporation, Office of Inspector General, New York Region, under the direction of Special Agent in Charge A. Derek Evans; special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen; and Region 3 U.S. Trustee Roberta DeAngelis and the Newark office of the U.S. Trustee, with the investigation which led to today’s indictment.

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

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

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Defense counsel: Giuseppe Giudice: Miles Feinstein Esq., Paterson
Teresa Giudice: Henry E. Klingeman Esq., Newark

Giudice, Giuseppe and Teresa Superseding Indictment

NEWARK, N.J. – Two of the stars of the Bravo television show “The Real Housewives of New Jersey” were indicted today on additional charges of bank fraud and loan application fraud, U.S. Attorney Paul J. Fishman announced.

The 41-count superseding indictment returned by a federal grand jury against Teresa Giudice, 41, and her husband, Giuseppe “Joe” Giudice, 43, both of Towaco, N.J., adds two new counts charging both defendants: one count of bank fraud and one count of loan application fraud. The original 39 counts on which they were indicted on July 29, 2013, which include conspiracy to commit mail and wire fraud, bank fraud, making false statements on loan applications and bankruptcy fraud, as well as charges against Giuseppe Giudice for failure to file tax returns from 2004 through 2008, remain in place.

An arraignment on the new charges has been scheduled for 10:30 a.m., Nov. 20, 2013, before U.S. District Judge Esther Salas in Newark federal court.

According to the superseding indictment:

The two additional counts stem from a $361,250 mortgage loan that Teresa Giudice obtained in July 2005. In the course of obtaining the loan, she and Giuseppe Giudice prepared a loan application which falsely stated that Teresa Giudice was employed as a realtor and that she had a monthly salary of $15,000. Teresa Giudice was not employed outside the home at the time.

The bank fraud and loan application fraud counts each carry a maximum potential penalty of 30 years in prison and a $1 million fine.

U.S. Attorney Fishman credited special agents of the Federal Deposit Insurance Corporation, Office of Inspector General, New York Region, under the direction of Special Agent in Charge A. Derek Evans; special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen; and Region 3 U.S. Trustee Roberta DeAngelis and the Newark office of the U.S. Trustee, with the investigation which led to today’s indictment.

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

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

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Defense counsel: Giuseppe Giudice: Miles Feinstein Esq., Paterson
Teresa Giudice: Henry E. Klingeman Esq., Newark

Giudice, Giuseppe And Teresa Superseding Indictment

TRENTON, N.J.– A Brooklyn, N.Y., man was sentenced today to 63 months in prison for his involvement in a plot to burglarize a pharmacy in Englishtown, N.J., and sell the stolen narcotics for cash, U.S. Attorney Paul J. Fishman announced.

James Zarbailov, 23, previously pleaded guilty before U.S. District Judge Freda L. Wolfson to an information charging him with one count of conspiracy to distribute and possess with intent to distribute oxycodone. Judge Wolfson imposed the sentence today in Trenton federal court.

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

The Union Hill-Supremo Pharmacy in Englishtown was burglarized shortly after 4:00 a.m. on June 17, 2012. Zarbailov and his fellow conspirators filled 17 garbage bags and two cardboard boxes with merchandise from the pharmacy, including approximately 1,988 dosage units of methylphenidate, 500 dosage units of hydromorphone, 300 dosage units of Opana (a trade name for oxymorphone) and 3,800 dosage units of oxycodone – all Schedule II controlled substances. 

The stock lost by the pharmacy was valued at approximately $350,000.

Zarbailov admitted that he stole the drugs, and that he did so knowing they would be sold for profit.

In addition to the prison term, Judge Wolfson sentenced Zarbailov to serve three years of supervised release and ordered him to pay $334,722.12 in restitution.

Two of Zarbailov’s conspirators, David Mordukhaev, 22, and Dzheykhun Avshalumov, 24, both of Brooklyn, have previously pleaded guilty to the same charge. Mordukhaev’s sentencing is scheduled for Dec.3, 2013, and Avshalumov’s sentencing is scheduled for Dec. 19, 2013.

U.S. Attorney Fishman credited special agents of the FBI’s Red Bank Resident Agency, under the direction of Special Agent in Charge Aaron T. Ford in Newark, and law enforcement officers from the Marlboro Township Police Department, under the direction of Police Chief Bruce E. Hall, for the investigation leading to today’s sentence.

The government is represented by Assistant U.S. Attorney John E. Clabby of the U.S. Attorney’s Office Criminal Division in Trenton.

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Defense counsel: Sanford Talkin Esq., New York