District of New Jersey

Husband Who Was Charged With Her Sentenced Last Month

NEWARK, N.J. – A former U.S. Postal Service employee was sentenced today to 46 months in prison for her role in a scheme to intercept cocaine-laden packages mailed from Puerto Rico to New Jersey, U.S. Attorney Paul J. Fishman announced.

Christina Nunez, 30, of Lyndhurst, N.J., previously pleaded guilty before U.S. District Judge Esther Salas to an information charging her with one count of conspiracy to possess with intent to distribute and distribution of 500 grams or more of cocaine and one count of mail theft. Judge Salas imposed the sentence today in Newark federal court.

Last month, her husband, Luis A. Vega, 37, was sentenced to 37 months in prison for his role in distributing the cocaine-laden packages. Vega previously pleaded guilty before Judge Salas to an information charging him with conspiracy to possess with intent to distribute and distribution of 500 grams or more of cocaine.

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

Since December 2010, Nunez had been receiving packages of cocaine, which were mailed from Puerto Rico to delivery addresses along her mail route. Nunez intercepted the packages, scanned them as delivered despite never delivering the packages to their actual delivery addresses, and ultimately transported them to conspirators in Camden, N.J.

Law enforcement seized approximately two kilograms of cocaine during the investigation. On Feb. 1, 2011, inspectors with the U.S. Postal Inspection Service lawfully seized approximately 1,300 grams of cocaine from an express mail package that was supposed to be delivered by Nunez. After this seizure, the drug trafficking organization ceased sending packages until December 2011, when, once again, packages sent from Puerto Rico were mailed to addresses assigned to Nunez’s mail route.

Another suspicious package was sent from Dorado, Puerto Rico, on August 22, 2012.  Once the package arrived in Kearny, N.J., law enforcement noted that the delivery address on the package would be assigned to Nunez’s mail route. Subsequent laboratory analysis confirmed that the package contained approximately 500 grams of cocaine. The cocaine was seized and replaced with a substance similar in appearance to the contents of the package. The package was placed back into circulation for delivery. On August 24, 2012, Nunez failed to deliver the package to its delivery address. At the end of her shift, Nunez returned to her residence in Lyndhurst, N.J., with the package, where she and Vega were arrested.
                                      
In addition to intercepting the cocaine-filled packages on her mail route, both Nunez and Vega received packages of narcotics at her residence in Lyndhurst and Vega’s former residence in Jersey City, N.J.  In total, it is estimated that Nunez, Vega and their conspirators distributed more than 18 kilograms of cocaine between October 2010 and August 24, 2012. 

In addition to the prison term, Judge Salas sentenced Nunez to two years of supervised release. Judge Salas also imposed a two-year period of supervised release on Vega. 

U.S. Attorney Fishman credited inspectors with the U.S. Postal Inspection Service, under the direction of Postal Inspector in Charge Maria L. Kelokates; special agents of the Office of Inspector General for the U.S. Postal Service, under the direction of Special Agent in Charge Rafael Medina; and special agents with the Drug Enforcement Administration, under the direction of Special Agent in Charge Carl J. Kotowski, with the investigation leading to today’s sentence.

The Government is represented by Assistant U.S. Attorney Mary E. Toscano of the U.S. Attorney’s Criminal Division in Newark.

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Defense counsel: Nunez: Charles Alvarez Esq., Jersey City
Vega: Paul Casteleiro Esq., Hoboken, N.J.

NEWARK, N.J. – Three New Jersey doctors admitted today they accepted tens of thousands of dollars in bribes from Parsippany, N.J.-based Biodiagnostic Laboratory Services LLC (BLS) as part of a long-running scheme operated by the lab, its president, and numerous associates, U.S. Attorney Paul J. Fishman announced.

Dennis Aponte, 46, of Cedar Grove, N.J.; Claudio Dicovsky, 51, of Fort Lee, N.J.; and Franklin Dana Fortunato, 63, of Montville, N.J., each pleaded guilty to violating the Federal Travel Act. Fortunato also pleaded guilty to filing a false tax return, admitting that from 2004 to 2008, he failed to disclose and report as income more than $640,000 in bribe money and patient co-pays and failed to pay more than $160,000 in taxes he owed as a result of that unreported income. The defendants entered their guilty pleas today before U.S. District Judge Stanley R. Chesler in Newark federal court.

“Decisions about medical care should not be influenced by doctors and providers who are more interested in lining their pockets than in providing quality healthcare,” U.S. Attorney Fishman said. “The doctors who pleaded guilty today admitted making decisions about the care they provided based on being paid in return for their referrals. We will continue to seek out and punish those doctors and other medical professionals who put profit before patient care.”

Newark FBI Special Agent in Charge Aaron T. Ford said: “Patients have every right to insist that their physician is making medical referrals based on what is best for the patient. However, these three physicians decided to accept bribes in exchange for referrals. These types of kickback arrangements cripple the healthcare industry and severely impact patient care. The FBI remains committed to investing its resources to combat these types of schemes.”

“Today’s pleas should send a loud and clear message that kickbacks and unnecessary billing have no place in our Federal healthcare system,” Thomas O’Donnell, Special Agent in Charge of the Office of Inspector General of the U.S. Department of Health and Human Region covering New Jersey, said. “We will aggressively investigate those suspected of defrauding taxpayers and the Medicare program.”

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

On April 9, 2013, federal agents arrested BLS president and part owner, David Nicoll, 39, of Mountain Lakes, N.J.; Scott Nicoll, 32, of Wayne, N.J., a senior BLS employee and David Nicoll’s brother; and Craig Nordman, 34, of Whippany, N.J., a BLS employee and the CEO of Advantech Sales LLC – an entity used by BLS to make illegal payments. They were charged by federal complaint with the bribery conspiracy, along with the BLS company and New Jersey physician Frank Santangelo, 43, of Boonton, N.J. The charges against BLS and Santangelo are pending.

Dicovsky

Dicovsky admitted he agreed with David Nicoll to accept bribes from BLS in exchange for his referral of blood specimens. To disguise those bribes, Dicovsky and BLS entered into a sham lease agreement and a sham service agreement in which the monthly bribe payments of more than $5,000 were characterized as “lease” and “service” payments. While the lease agreement purported to be for 1,000 square feet of space, little or no space was allocated to BLS in Dicovsky’s medical office in Paterson, N.J. Between November 2006 and August 2009, Dicovsky received more than $224,000 in bribe payments from BLS, and BLS made more than $800,000 through testing on blood specimens referred by Dicovsky.

Fortunato

On May 2, 2013, two former sales representatives of BLS, Peter Breihof, 42, of Nutley, N.J., and William Dailey, 41, of Wall, N.J., pleaded guilty to an information charging them with conspiracy to violate the Anti-Kickback Statute and the Federal Travel Act. They admitted using phony lease and service agreements to bribe physicians to send their patients’ blood samples to BLS. Breihof and Dailey also admitted that individuals acting on behalf of BLS paid various physicians a fee per test on behalf of BLS in order to induce those physicians to order more of the blood tests than they otherwise would have.

Fortunato admitted entering into bribe arrangements with BLS through Breihof, with David Nicoll’s knowledge and approval, for the referral of blood specimens of patients of Fortunato’s Montclair, N.J., practice. Fortunato received more than $100,000 in bribe payments – often more than $5,000 per month – from BLS disguised through sham lease and sham service agreements between 2006 and 2009, and BLS made more than $430,000 through testing on blood specimens referred by Fortunato.

Aponte

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

The count to which Aponte, Dicovsky and Fortunato each pleaded guilty is punishable by a maximum potential penalty of five years in prison and a $250,000 fine. Fortunato also faces a maximum potential penalty of five years in prison and a $250,000 fine on the filing a false tax return charge. Sentencing for all three defendants is scheduled for Oct. 22, 2013.

Aponte has agreed to forfeit $235,000, Dicovsky has agreed to forfeit more than $220,000, and Fortunato has agreed to forfeit more than $635,000. The investigation has so far recovered more than $2 million through forfeiture.

On June 10, 2013, David Nicoll, Scott Nicoll, Nordman, and four other associates of BLS pleaded guilty to informations charging them with one count of conspiracy to violate the Anti-Kickback Statute and the Federal Travel Act and one count of money laundering. The charges and allegations against Santangelo and BLS are merely accusations, and the defendants are considered innocent unless and until proven guilty.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Ford; U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge O’Donnell; IRS–Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen, and the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, with the ongoing investigation leading to today’s 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.

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Defense counsel: Aponte: John Vazquez Esq. & Michael Critchley Esq., Roseland, N.J.
Dicovsky: Gerald Miller Esq., Jersey City, N.J.
Fortunato: Ricardo Solano Esq., Newark, N.J.

Aponte Information
Dicovsky Information
Fortunato Information

NEWARK, N.J. – Five men will appear in Newark federal court today to face federal charges for a string of gunpoint carjackings and attempted carjackings in Essex County, N.J., U.S. Attorney Paul J. Fishman announced.

As part of an ongoing joint anti-carjacking initiative involving investigators and prosecutors at the federal, state and local levels, the U.S. Attorney’s Office works with the Essex County Prosecutor’s Office and other law enforcement partners to select cases appropriate to adopt from the state for federal prosecution. Federal charges typically carry longer potential prison terms and there is no parole in the federal system.

The five defendants, who have been in state custody since their respective arrests, are expected to appear today before U.S. Magistrate Judge Mark Falk.

“The wave of carjackings in Essex County is unacceptable to all who live, work and visit here,” said U.S. Attorney Fishman. “As long as carjackers target the area, law enforcement will continue to work together to fight back. Federally prosecuted carjackers face decades in prison, with no parole, far from home.”

“As part of our ongoing effort to combat carjacking in Essex County, we are encouraged by this partnership with the U.S. Attorney’s Office to bring more stringent penalties to individuals who commit the violent crime of carjacking on our streets,” said Acting Essex County Prosecutor Carolyn A. Murray.

According to the federal complaints unsealed today:

Corey Thermitus, 21, of Newark, is charged with one count of theft of a motor vehicle by force, violence and intimidation and one count of attempting the same crime. He is also charged with discharging a firearm in furtherance of a crime of violence.

On Dec. 28, 2012, Thermitus approached a gray Honda Accord in the driveway of a Newark home, opened the door and put a gun to the head of the person in the driver’s seat, threatening to shoot. Thermitus and accomplices drove away in the car, leaving the victim sitting on the ground. Later that night, Thermitus took the Accord to another Newark residence and tried to carjack a red Pathfinder from a victim with a young child in the car, shooting at someone who came out of the residence. Newark police officers apprehended Thermitus shortly after midnight after his accomplice rammed a police car with the Accord and the suspects fled on foot.

Edwin Ayala, 37, and Walder Morales, 21, both of Newark, are each charged with one count of attempted theft of a motor vehicle by force, violence and intimidation and one count of use of a firearm in furtherance of a crime of violence.

On Dec. 15, 2012, Ayala, wearing a ski mask, pointed a gun at the head of an individual sitting in a Chevrolet Equinox and demanded the keys to the vehicle. After the victim dropped the keys, Morales came over to retrieve them and the pair fled with the victim’s car keys, money and phone. Newark police officers were able to track the phone to apprehend the defendants.

Lee Caraballo, 27, of Newark, is charged with one count of theft of a motor vehicle by force, violence and intimidation and one count of use of a firearm in furtherance of a crime of violence.

On Nov. 30, 2012, Caraballo approached a silver Toyota Corolla parked in the victim’s driveway, pointed a gun at the driver’s head and ordered the driver out of the car. After also stealing the victim’s wallet and cell phone, Caraballo left the area with the car.

A Roselle Park police officer caught Caraballo later that day in a traffic stop. Caraballo was driving a black Mercedes for which he couldn’t produce the necessary papers. Police found a cell phone and keys in the vehicle Caraballo was driving.

Nathaniel Tullies, 19, of East Orange, N.J., is charged with one count of theft of a motor vehicle by force, violence and intimidation and one count of use of a firearm in furtherance of a crime of violence.

On Nov. 8, 2012, when an individual got out of a Chevrolet Impala to open a garage door, Tullies and an accomplice got on either side of the car, took it from the victim at gunpoint and drove away. The victim called police, who responded within minutes.

A Newark police detective spotted the vehicle and a high-speed chase ensued, ending when the Impala crashed on the shoulder of Route 1/9, the suspects fled on foot and the detective chased and captured Tullies.

The federal charge of carjacking or attempted carjacking carries a maximum potential penalty of 15 years in prison; 25 years in prison if serious bodily injury results; and life in prison or the federal death penalty if death results. The charge of use of a firearm in furtherance of a crime of violence carries a minimum consecutive term of five years in prison if a firearm is possessed, seven years in prison if a firearm is brandished, 10 years in prison if a firearm is discharged and a maximum of life in prison. Each of these charges also carries a maximum $250,000 fine.

Defendants prosecuted by the U.S. Attorney’s Office as a result of the anti-carjacking initiative have been sentenced to significant prison terms. Recent examples include:

Defendant

Age

Charges

Sentencing Date

Sentence

23

conspiracy; theft of a motor vehicle by force, violence and intimidation; and use of a firearm in furtherance of a crime of violence
 

2/20/13

130 months

Jermaine May

29

conspiracy; theft of a motor vehicle by force, violence and intimidation; and use of a firearm in furtherance of a crime of violence
 

2/15/13

118 months

Jirrod Parker

25

theft of a motor vehicle by force, violence and intimidation; use of a firearm in furtherance of a crime of violence; and being a felon in possession of a firearm
 

1/9/13

150 months

Taj Elliott

24

conspiracy; theft of a motor vehicle by force, violence and intimidation; and use of a firearm in furtherance of a crime of violence
 

10/22/12

147 months

Jerome Conover

21

conspiracy; theft of a motor vehicle by force, violence and intimidation; and use of a firearm in furtherance of a crime of violence
 

8/16/12

181 months

Jahlil Thomas

23

conspiracy; theft of a motor vehicle by force, violence and intimidation; and use of a firearm in furtherance of a crime of violence
 

6/1/12

262 months

Amonra Jackson

30

theft of a motor vehicle by force, violence and intimidation and one count of being a convicted felon in possession of a firearm

3/28/12

120 months

U.S. Attorney Fishman praised the Essex County Prosecutor’s Office, under the Direction of Acting Prosecutor Murray; the FBI, under the direction of Special Agent in Charge Aaron T. Ford; the Newark Police Department, under the direction of Director Samuel A. DeMaio and Chief Sheilah A. Coley; and the Roselle Park Police Department, under the direction of Chief Paul Morrison; as well as investigators in the U.S. Attorney’s Office for the investigation that led to the new charges announced today.

Fishman also lauded the other members of the carjacking task force – the New Jersey Attorney General’s Office; New Jersey State Police; Essex County Sheriff’s Office; Bureau of Alcohol, Tobacco, Firearms and Explosives; DEA, United States Marshals Service; and U.S. Immigration and Customs Enforcement, Homeland Security Investigations – for their continued commitment to addressing the carjacking problem in Essex County.

Regarding the federal cases with charges unsealed today, the government is represented by Assistant U.S. Attorneys Dara Govan, Elizabeth Harris and Courtney Oliva of the U.S. Attorney’s Office Criminal Division 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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Defense counsel: Corey Thermitus, Edwin Ayala, Lee Caraballo, Nathaniel Tullies: Assistant Federal Public Defender Peter Carter Esq., Newark
Walder Morales: Joseph Rubino Esq., West Orange, N.J.

Caraballo Complaint
Ayala and Morales Complaint
Thermitus Complaint
Tullies Complaint

NEWARK, N.J. – A Pennsylvania man was sentenced today to 24 months in prison for illegally selling firearms and ammunition on multiple occasions for thousands of dollars in cash, U.S. Attorney Paul J. Fishman announced.

Eduardo Velasquez, 63, of Reading, Pa., previously pleaded guilty before U.S. District Judge William H. Walls to an information charging him with one count of illegally dealing in firearms. Judge Walls imposed the sentence today in Newark federal court.

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

Velasquez admitted that he traveled from Pennsylvania to Jersey City, N.J., on five separate occasions, between July 5, 2012, and Oct. 18, 2012, for the purpose of selling firearms. Velasquez sold 11 firearms to a New Jersey resident for more than $9,000. The firearms sold by Velasquez included: (1) two SKS 39 mm rifles; (2) a Mossberg Model 88 shotgun; (3) a Winchester Model 1300 12-gauge shotgun; (4) a Mossberg Model 190 16-gauge shotgun; (5) a stolen Ruger 9 mm semi-automatic handgun; (7) a Smith & Wesson .41 caliber revolver; (8) a Taurus PT917 9 mm semi-automatic pistol; (9) a Desert Eagle .44 caliber semi-automatic pistol; and (10) a Smith & Wesson SW99 .40 caliber handgun.  

Velasquez sold multiple high-capacity magazines and more than 80 rounds of ammunition, including several hollow-point bullets. Velasquez indicated to the buyer that he often shipped firearms to the Dominican Republic, and could procure additional long guns, such as double-barrel shotguns and military rifles. 

In addition to the prison term, Judge Walls sentenced Velasquez to three years of supervised release.

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

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

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Defense counsel: Tomas Espinosa Esq. Union City, N.J.

NEWARK, N.J. – A Passaic County, N.J., man was sentenced today to 15 months in prison for importing and selling counterfeit merchandise, U.S. Attorney Paul J. Fishman announced.

Wesam Abedrabbo, 29, of Clifton, N.J., previously pleaded guilty before U.S. District Judge Katharine S. Hayden to an information charging him with trafficking in counterfeit goods. Judge Hayden imposed sentence today in Newark federal court.

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

Abedrabbo admitted that from March 2010 through May 2012, he imported counterfeit merchandise from Asian locations, including China, Taiwan, and Japan, for resale in the United States. The counterfeit merchandise purported to be from companies including the North Face and UGG, and professional sports associations, such as the NFL, NHL, and MLB. Abedrabbo advertised the counterfeit merchandise on the Web site tophotnamebrands.com and sold the counterfeit merchandise on eBay. Abedrabbo also paid other individuals a commission to sell the counterfeit merchandise for him over the Internet. In connection with his illicit efforts, Abedrabbo sold more than $350,000 worth of counterfeit goods.

In addition to the prison term, Judge Hayden sentenced Abedrabbo to one year of supervised release. She also ordered Abedrabbo to forfeit $387,516, representing the gross proceeds of his sale of counterfeit merchandise.

U.S. Attorney Fishman praised special agents of Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge Andrew M. McLees in Newark, for the investigation leading to today’s sentence. 

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

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Defense counsel: Jay V. Surgent Esq., Lyndhurst, N.J.

TRENTON, N.J. – An Ocean County, N.J., school bus driver was sentenced today to 120 months in prison for distributing images of child sexual abuse over the internet through his home computer, U.S. Attorney Paul J. Fishman announced.

Frank J. Bognar, 31, of Jackson, N.J., pleaded guilty before U.S. District Judge Joel A. Pisano in Trenton federal court to an information charging him with one count of distribution of child pornography.
                                                                       
According to documents filed in this case and statements made in court:             As early as Oct. 27, 2011, Bognar downloaded and distributed videos and images of child pornography on the Internet via a peer-to-peer file sharing network, through which others had access to the material on a shared drive. The FBI seized a computer containing videos and photographs of child sexual abuse, including images of sadistic and masochistic conduct against children, during a search of his residence on Feb. 9, 2012. He was arrested later that day.
                                                           
As part of his plea, Bognar agreed to surrender six firearms and assorted ammunition that were seized on the day of his arrest. 

In addition to the prison term, Judge Pisano sentenced Bognar to 10 years of supervised release and ordered to pay $2,000 in restitution.

U.S. Attorney Fishman credited the FBI Cyber Crimes Task Force in New Jersey, under the direction of Special Agent in Charge Aaron T. Ford in Newark, with the investigation leading to today’s sentencing. He also thanked the Ocean County Prosecutor’s Office, under the direction of Prosecutor Joseph D. Coronato; the Jackson Township Police Department, under the direction of Chief of Police Matthew D. Kunz; and the Essex County Prosecutor’s Office task force officers, under the direction of Acting Prosecutor Carolyn Murray, for their assistance.

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

Cache Included Military-Style Assault Rifles, Handguns and Shotgun

NEWARK, N.J. – A South Carolina man was sentenced today to 75 months in prison for his role in transporting into New Jersey 22 firearms that were stolen from gun shops in Tennessee and North Carolina, U.S. Attorney Paul J. Fishman announced.

Bassir Baxter, 40, of Columbia, S.C., previously pleaded guilty before U.S. District Judge Susan D. Wigenton to an information charging him with one count of transporting stolen firearms in interstate commerce. Judge Wigenton imposed the sentence today in Newark federal court.

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

On March 7, 2012, Baxter, Cedric Reddick, 20, and, Reddick’s father, Bevan Holston, 41, of Columbia, S.C., drove from South Carolina to the apartment of Terrell James, 23, of Newark, to illegally sell firearms. All four were charged by Complaint with transporting stolen firearms in interstate commerce.

Baxter, Reddick and Holston entered the apartment, where there were approximately 10 other individuals, and displayed firearms on the floor for the potential buyers. In total, 22 guns were recovered, including semi-automatic handguns and military-style assault rifles. Twenty had been stolen March 1, 2012, from a gun shop in Bristol, Tenn. Two of the guns had been stolen Feb.16, 2012, from a gun shop in Boone, N.C. Police arrested James and Baxter inside the apartment. Reddick and Holston were arrested after jumping to a rooftop from the kitchen window. Holston was sentenced in May 2013 to 10 years in prison. James was sentenced last week to six months in prison. Reddick is scheduled to be sentenced July 23, 2013.

In addition to the prison term, Judge Wigenton sentenced Baxter to two years of supervised release.

U.S. Attorney Fishman credited special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Thomas J. Cannon; special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark; the Essex County Prosecutor's Office, under the direction of Acting Prosecutor Carolyn A. Murray; and the Newark Police Department, under the direction of Director Samuel DeMaio and Police Chief Sheilah Coley, with the investigation leading to today’s sentence.

The government is represented by Assistant U.S. Attorney José R. Almonte of the U.S. Attorney's Office Narcotics/OCDETF Unit.

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Defense counsel: Thomas Ashley Esq., Newark

TRENTON, N.J. – An Ocean County, N.J., man was sentenced today to 78 months in prison for possessing child pornography on his computer and an external hard drive, including images of children being sexually abused, U.S. Attorney Paul J. Fishman announced.

William A. Burrows, 60, of Lacey, N.J., previously pleaded guilty before U.S. District Judge Michael A. Shipp to an information charging him with possession of child pornography. Judge Shipp imposed the sentence today in Trenton federal court.

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

Burrows admitted that from March 2011 to April 2012, he downloaded videos and images of child pornography. On or about April 12, 2012, law enforcement officers executed a search warrant at Burrows’ home and seized a desktop computer and external hard drive, which contained more than 600 images of child pornography, including images of prepubescent minors and sadistic or violent conduct involving minors.

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

In addition to the prison term, Judge Shipp sentenced Burrows to five years of supervised release, fined him $12,500, and ordered payment of $10,000 in restitution. He also ordered restricted contact with minors, computer-use monitoring and required Burrows to register as a sex offender.

The government is represented by Special Assistant U.S. Attorney Joseph Muoio of the U.S. Attorney's Trenton Office.

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Defense counsel: John S. Furlong Esq. West Trenton, N.J.

Financial Advisor Also Sentenced to Prison for His Role in the Scheme

PHILADELPHIA – A member of the Scripps Media family was sentenced today to 108 months in prison for embezzling $3.6 million from members of his family to fund his lavish lifestyle, New Jersey U.S. Attorney Paul J. Fishman announced.

Michael Scripps, 36, of Detroit, was convicted by a jury on April 12, 2013, following a one and a half week trial before U.S. District Judge Legrome D. Davis. Scripps was convicted of all seven counts of wire fraud charged in the indictment on which he was tried. Also sentenced today was Richard Gleeson, 37, formerly a Merrill Lynch financial advisor in Media, Pa., who previously pleaded guilty to two counts of wire fraud for his participation in the scheme and testified at the Scripps trial. Judge Davis sentenced Gleeson to a year and a day in prison.

The case was prosecuted in Philadelphia by Assistant U.S. Attorneys from the U.S. Attorney’s Office for the Eastern District of Pennsylvania, supervised by the U.S. Attorney’s Office for the District of New Jersey as the former office was recused from the case. Judge Davis imposed the sentence today in Philadelphia federal court.

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

From November 2001 through October 2006, Michael Scripps persuaded his uncle and mother to transfer millions of dollars in trust funds to the Merrill Lynch Trust Co. and brokerage firm. With the assistance of Gleeson, Scripps used fraudulent authorizations to transfer his uncle’s and mother’s money to his own account at Merrill Lynch, resulting in $2.9 million in losses. Scripps also fraudulently transferred $727,500 from the refinancing of the victims’ Michigan home to another bank account belonging to Scripps.

The jury heard testimony that Scripps used some of the ill-gotten gains to lead a playboy lifestyle, including by purchasing expensive jewelry. He bought Tiffany earrings, a diamond ring and a Cartier necklace. He also used some of the stolen money to purchase a car for his girlfriend, four properties in New Orleans and for luxury travel across the U.S.

In addition to the prison term, Judge Davis sentenced Scripps to serve three years of supervised release and ordered him to pay $3,634,019 in restitution. Judge Davis also sentenced Gleeson to serve three years of supervised release.

U.S. Attorney Fishman credited special agents of the Philadelphia FBI, Newtown Square Resident Agency, under the direction of Special Agent in Charge Edward J. Hanko, with the investigation leading to today’s sentence.

The government is represented by Assistant U.S. Attorneys Terri Marinari and L.C. Wright of the U.S. Attorney’s Office for the Eastern District of Pennsylvania.

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Defense counsel: Mark Durant Esq., Philadelphia; Paul W. Broschay Esq. and Michael R. Dezsi Esq., Detroit

CAMDEN, N.J. – A Camden man was sentenced today to 135 months in prison for his role in a scheme in which he and others stole business checks from the U.S. Mail in New Jersey and Connecticut, altered them, and cashed them, U.S. Attorney Paul J. Fishman announced.

Ibn Muhammad, 35, previously pleaded guilty before U.S. District Judge Jerome B. Simandle to an information charging him with one count of bank fraud and one count of theft of mail. Judge Simandle imposed the sentence today in Camden federal court.

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

Muhammad and others stole checks from curbside U.S. mailboxes in business industrial parks in Burlington, Camden, and Gloucester counties in New Jersey. Muhammad and his conspirators (including Michael A. Ingalls Jr., 35, of Camden) would then recruit a conspirator to cash the stolen checks. Once they identified a person to cash the check, Muhammad and Ingalls would then alter the stolen checks so that the name of the “payee” of the check would match the name of the recruited check casher. Muhammad, Ingalls and the check casher would then travel to a bank where the check casher would cash the check.

Muhammad, Ingalls and their conspirators cashed or attempted to cash more than 100 stolen and altered business checks worth more than $600,000. The scheme resulted in a total loss of more than $300,000 to the victim banks.

Ingalls pleaded guilty May 23, 2013, before Judge Simandle to conspiracy to commit bank fraud and possession of stolen mail. He is scheduled to be sentenced on Sept. 5, 2013. One of Ingalls’ and Muhammad’s conspirators, Andrew Fortune, 62, of Camden, was arrested March 11, 2013, on a criminal complaint and charged with conspiracy to commit bank fraud for his role in the fraudulent scheme. His case is pending.

In addition to the prison term, Judge Simandle sentenced Muhammad to five years of supervised release. Restitution will be determined at a hearing on Sept. 16, 2013.

U.S. Attorney Fishman credited inspectors from the U.S. Postal Inspection Service, Philadelphia Division, under the direction of Acting Inspector in Charge Jean Wright, and troopers from the N.J., State Police, under the direction of Col. Rick Fuentes, for the investigation leading to today's sentence.

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

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Defense counsel: Lisa Evans Lewis Esq., Assistant Federal Public Defender, Camden

CAMDEN, N.J. – GB Check Cashing LLC, a check cashing company licensed in New Jersey, pleaded guilty today and was ordered to forfeit over $1 million for failing to file Currency Transaction Reports as required by law, U.S. Attorney Paul J. Fishman announced.

The co-owners of GB Check Cashing LLC, Dalwinder S. Ghuman, 45, and Talvinder S. Ghuman, 53, both of Mt. Laurel, N.J., entered the plea on behalf of GB Check Cashing before U.S. District Judge Robert B. Kluger in Camden federal court. Following the guilty plea, Judge Kluger sentenced GB Check Cashing to one year of probation and ordered the company to forfeit $1,086,894.

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

GB Check Cashing is a money service business the Ghumans, brothers, have co-owned and operated since 2003. The business has four storefronts, all of which are located in New Jersey: in Pennsauken, Delran, Carteret and East Windsor. Under federal law, such companies are obligated to file a Currency Transaction Report (CTR) whenever they are involved in a transaction for the payment, receipt or transfer of more than $10,000.

From September 2010 through June 2011, an individual referred to in court documents as “CC,” who operated a check cashing business in New Jersey without the appropriate license, brought several checks from customers of that business to GB Check Cashing and exchanged them for cash, less a one percent fee. Because the value of those checks was usually greater than $10,000, so was the amount of cash CC received. GB Check Cashing documented each transaction to make it appear as though CC’s customers went directly to GB Check Cashing to cash their checks.

In all, GB Check Cashing cashed approximately $1,148,247.63 of CC’s customers’ checks, paying approximately $1,086,894.33 to CC in increments greater than $10,000. GB Check Cashing did not file a CTR for any of those transactions.

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

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: Lawrence S. Lustberg Esq., Newark, N.J.
                                    Henry Klingeman Esq., Newark

GB Check Cashing Information

NEWARK, N.J. – An Edison, N.J., cardiologist was sentenced today to 30 months in prison for referring patients for diagnostic testing in exchange for cash kickbacks as part of a cash-for-patients scheme with a diagnostic facility in Orange, N.J., U.S. Attorney Paul J. Fishman announced.

Shashi Agarwal, 61, who had his own cardiology practice in East Orange, N.J., previously pleaded guilty before U.S. District Judge Claire C. Cecchi to an information charging him with one count of soliciting and receiving more than $100,000 in cash kickbacks in violation of the federal health care anti-kickback statute. Judge Cecchi imposed the sentence today in Newark federal court.

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

From early 2009 through December, 2011, Orange MRI paid Agarwal for each MRI and CAT scan he referred. According to Agarwal, Orange MRI gave him $100 cash for each Medicare or Medicaid patient he referred for an MRI. Agarwal also received $50 for each CAT scan referral.  Agarwal admitted that he agreed to refer as many as 20 MRIs to Orange MRI each month. 

During his plea proceeding, Agarwal identified two occasions on which he was paid kickbacks. On Oct. 11, 2011, Agarwal received $2,600 in cash from a government informant at Salvadoreño restaurant in Elizabeth, N. J., in exchange for MRI and CAT scan referrals. On Nov. 10, 2011, at his office in East Orange, N.J., Agarwal received another kickback for patient referrals of $2,500 in cash.

Agarwal was one of 12 doctors and one nurse practitioner arrested Dec. 13, 2011, and charged with accepting cash kickback payments.     

In addition to the prison term, Judge Cecchi sentenced Agarwal to two years of supervised release and ordered him to perform 100 hours of community service. At his plea hearing, Agarwal also agreed to forfeit $101,750 in bribe money.

The investigation ultimately led to the arrest of and charges against 15 individuals, including those arrested in December 2011. Of those charged, 12 have pleaded guilty to date. 

Daisy Deguzman, a doctor practicing in Newark, was sentenced to six months in prison and six months of home confinement on Jan. 31, 2013. Dov Rand, a doctor practicing in West Orange, N.J., was sentenced to five months in prison and five months of home confinement on Feb.13, 2013. Rameshcha Kania, an East Orange, N.J., doctor, was sentenced to three months in prison and three months of home confinement on June 24, 2013. Lucio Cardoso, a North Arlington, N.J., doctor, was sentenced to four months in prison and four months of home confinement on June 25, 2013. The defendants were also ordered to forfeit their illegal gains. 

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

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

As for the defendants with charges pending as a result of this investigation, they are considered innocent unless and until proven guilty.

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Defense counsel: William R. Lundsten Esq., Teaneck, N.J.

NEWARK, N.J. – An Irvington, N.J., woman was arrested at her home this morning by members of the FBI Joint Terrorism Task Force (JTTF) for allegedly mailing letters threatening bodily harm to the U.S. Supreme Court and recipients throughout New Jersey, U.S. Attorney Paul J. Fishman announced.

Karen Waller, 50, is charged in a federal criminal complaint with one count of mailing threatening communications. She is expected to appear to face the charge this afternoon before U.S. Magistrate Judge Mark Falk in Newark federal court.

According to the criminal complaint unsealed today, Waller mailed more than 50 threatening letters in May and June 2013 to multiple entities and individuals, including a number in New Jersey. The recipients of those letters included the U.S. Supreme Court; the town hall in Woodbridge Township, N.J.; Rutgers University; an insurance company; and the Millburn Township, N.J., Police Department. The letters threatened to injure and kill unspecified individuals.

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

U.S. Attorney Fishman credited special agents, detectives and investigators assigned to the JTTF, under the direction of FBI Special Agent in Charge Aaron T. Ford in Newark, with the investigation. The JTTF comprises law enforcement officers from numerous federal, state and local agencies throughout New Jersey.

The government is represented by Andrew Kogan, chief of the U.S. Attorney’s Office National Security Unit. 

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

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Waller, Karen Complaint

NEWARK, N.J. – Seven men with access to two VA medical centers in New Jersey were arrested this morning by special agents of the U.S. Department of Veterans Affairs, Office of Inspector General and the FBI on federal charges alleging they sold illegal drugs to veterans being treated at the centers, U.S. Attorney Paul J. Fishman announced.

The seven defendants were each charged in separate criminal complaints with various counts of distributing controlled substances – including heroin, crack and hydromorphone – at the VA medical centers in East Orange and Lyons, N.J. Five of the men were arrested this morning at the Lyons facility, one was arrested at the East Orange facility and one was arrested at his home. All are expected to make their initial appearances this afternoon before U.S. Magistrate Judge Mark Falk in Newark federal court.

“According to our charges, these seven men abused their access to VA medical facilities to peddle dangerous drugs to other veterans undergoing treatment,” said U.S. Attorney Fishman. “It is tragic that those who have served their country would exploit their fellow veterans.”

“This investigation was initiated by VA OIG two years ago in response to the fatal heroin overdose of a veteran at the VA medical center in Lyons, New Jersey,” said Jeffrey G. Hughes, Special Agent in Charge, U.S. Veterans Affairs, Officer of Inspector General, Northeast Field Office. “Subsequently, the FBI and VA OIG jointly launched an operation which focused on combating the sale of heroin and crack cocaine to patients at Lyons. VA management at Lyons, including VA Police, provided invaluable support during the course of this investigation. We hope anyone selling drugs at VA treatment facilities will realize that we will vigorously pursue them to protect veterans seeking treatment.”

“The Federal Bureau of Investigation, Newark Division and the Department of Veterans Affairs Office of Inspector General conducted a joint investigation targeting the distribution of narcotics on the grounds of VA Hospitals in New Jersey,” said FBI Special Agent in Charge Aaron T. Ford. “As a result of this joint investigation, the FBI and VA OIG have been successful in disrupting the criminal activity occurring on the VA grounds. The Newark Division will continue to work in conjunction with our federal, state and local partners to combat the drug problem.”

The VA medical centers provide a wide range of medical and rehabilitation treatment services to veterans, including drug abuse and additional rehabilitation services, along with vocational training and other social services. According to the complaints, the defendants, each of whom is a veteran with privileged access to the buildings and grounds of the medical centers, sold controlled substances to other veterans receiving services from the centers. 

Each count with which the defendants are charged carries a maximum potential penalty of 20 years in prison and a fine of $1 million, or twice the gross gain or loss from the offense. The defendants and counts with which they are charged are as follows:

Defendant

Charges

Count One – heroin distribution

Count Two – cocaine base distribution

Robin Merritt, 55, of Hackensack, N.J.

Count One - heroin distribution

Count Two - cocaine base distribution

Count Three – hydromorphone distribution

Abdul Kareem Muhammad, 50, of Boundbrook, N.J.

Count One – heroin distribution

Count Two – cocaine base distribution

Yusef Muhammad, 59, of North Plainfield, N.J.

Count One – heroin distribution

Thomas Pearson, 66, of Dover, N.J.

Count One – heroin distribution

Christopher Shalaby, 31, of Somerville, N.J.

Count One – heroin distribution

John Stuckey, 49, of Newark

Count One – heroin distribution

U.S. Attorney Fishman praised special agents of the Veterans Administration, Office of Inspector General, under the direction of Special Agent in Charge Hughes in Newark, and the FBI, under the direction of Special Agent in Charge Ford in Newark, with the investigation leading to the charges. He also thanked the VA Police for their assistance.   

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

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

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Johnson, Phillip Complaint
Merritt, Robin Complaint
Muhammad, Abdul Kareem Complaint
Muhammad, Yusuf Complaint
Pearson, Thomas Complaint
Shalaby, Christopher Complaint
Stuckey, John Complaint

Targeted Dozens of Investors Across the Country

CAMDEN, N.J. – The president of an investment and financial services firm today admitted defrauding dozens of investors New Jersey, Pennsylvania, Texas and elsewhere of $5 million and evading taxes, U.S. Attorney Paul J. Fishman announced.

Everett C. Miller, 43, of Marlton, N.J., pleaded guilty before U.S. District Judge Renee Marie Bumb in Camden federal court to an information charging him with one count of securities fraud and one count of tax evasion.

The defendant in this case has admitted responsibility in a financial scheme that was both widespread and long-running,” U.S. Attorney Fishman said. “By preying on trusting investors around the country over a period of years, he was able to rob them of millions of dollars. He defrauded the public as well, by failing to pay taxes on his illegal proceeds. He will now face the punishment he deserves for his greed.”  

Aaron T. Ford, special agent in charge of the FBI office in Newark, said, “Investment schemes such as that perpetrated by Mr. Miller prey on innocent investors and compromise our free market economy. Mr. Miller put his investors’ resources, pensions, and life savings at risk for his own gain. The FBI, together with its law enforcement and regulatory agency partners, will vigorously investigate these financial crimes and hold those responsible accountable.”

“Remember the old cliché: if it sounds too good to be true it probably is,” Shantelle P. Kitchen, Special Agent in Charge, IRS Criminal Investigation, Newark Field Office, said. “Mr. Miller preyed upon trusting investors and then stole their hard-earned money. Today’s plea should be a reminder for investors to exercise caution when pitched with an investment opportunity that promises unbelievable returns.”

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

Miller was the founder, chief executive officer, president, principal and sole owner of Carr Miller Capital LLC (CMC), an investment and financial services firm based in Marlton. Miller and others solicited investments through the firm from individuals located in New Jersey, Pennsylvania, North Carolina, Arkansas, Texas and elsewhere. CMC had more than 30 affiliates and related entities, and more than 75 related bank accounts. Miller controlled the firm’s finances and established himself as synonymous with CMC. Prior to founding CMC in June 2006, Miller was a registered financial advisor at several financial institutions.

Miller admitted that from June 2006 through December 2010, he and others issued promissory notes to more than 190 investors across the United States, and Miller and CMC received $41.2 million from these investors. The notes were provided as “securities,” but Miller and CMC never registered the notes as securities with any federal or state agency, nor were the notes exempt from such registration requirements. The notes had a term of nine months and promised the investors returns of 7 to 20 percent per year, and a return of the principal investment at the end of the nine-month period.

Miller and others falsely represented to the investors that their money would be invested in certain ways, but the investors were not provided with material information about their investments or were misled about the risks of their investments. Miller commingled and pooled the investors’ monies into one of CMC’s 75 related bank accounts. Unbeknown to the investors, Miller used some of the monies in the following ways: (1) to repay prior investors, most in Ponzi scheme fashion, (2) to pay CMC and its related entities’ payrolls and operating expenses, and (3) to support Miller’s lifestyle. Miller’s purchases included luxury automobiles; home furnishings and electronic equipment; tickets to entertainment and sporting events; travel, lodging, and vacations; meals, entertainment, retail shopping; and groceries.

On Aug. 11, 2009, the Arkansas Securities Department (ASD) initiated an investigation of Miller, CMC, and others for selling unregistered securities to investors in the form of the promissory notes. Following the investigation, the ASD issued a cease-and-desist order against Miller, CMC, and others from selling the notes.

From August 2009 through December 2010, despite knowing about the ASD’s investigation of the promissory notes and CMC’s inability to pay either the interest or the principal on them, Miller and others continued to sell the notes as unregistered securities to investors. They issued notes to approximately 50 new investors, but never returned any of the principal to the new investors.

Miller admitted that for calendar years 2007, 2008, and 2009, he intentionally failed to provide the IRS with any information regarding the proceeds that he personally received in connection with his fraudulent scheme. Miller failed to disclose $218,770, $244,879 and $199,507 for 2007, 2008 and 2009, respectively. In total, Miller admitted failing to report $663,156 in taxable income to the IRS, resulting in a tax loss to the government of $47,342.

At today’s plea proceeding, Judge Bumb entered a consent judgment and order of forfeiture in the amount of $4,999,400, which constitutes the proceeds Miller obtained as a result of the securities fraud.

The securities fraud count to which Miller pleaded guilty is punishable by a maximum potential penalty of 20 years in prison and a fine of $5 million. The tax fraud count is punishable by a maximum potential penalty of five years in prison and a fine of up to $250,000.  Sentencing is scheduled for Oct. 18, 2013.

U.S. Attorney Fishman credited special agents with the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark; IRS-Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen; and the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, for the investigation leading to today’s guilty plea. He also thanked the Financial Industry Regulatory Authority – Criminal Prosecution Assistance Group, and the U.S. Securities and Exchange Commission’s Philadelphia Office for its assistance with this investigation. And thanked the N.J. Securities Fraud Prosecution Section, the Arkansas Securities Department and the Texas State Securities Board for their roles in the investigation.

The government is represented by Assistant U.S. Attorneys Aaron Mendelsohn of the Economic Crimes Unit and Evan Weitz of the Asset Forfeiture and Money Laundering Unit of the U.S. Attorney’s Office 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: John A. Azzarello Esq., Chatham, N.J

Miller, Everett Information

NEWARK, N.J. – A Middlesex County, N.J., man who co-owns and operates a wholesale merchandise business in New York selling adult paraphernalia was sentenced today to 19 months in prison for concealing more than $1.2 million in income in various domestic and foreign bank accounts, New Jersey U.S. Attorney Paul J. Fishman and Assistant Attorney General Kathryn Keneally of the Justice Department’s Tax Division announced.

Sameer Gupta, 33, of Edison, N.J., pleaded guilty before U.S. Magistrate Judge Patty Shwartz on Feb. 26, 2013, to one count of tax evasion in connection with his diverting funds from the wholesale merchandise business, J.S. Marketers Inc., to undisclosed foreign accounts at HSBC in India, among other places. 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:

Gupta is the 50 percent owner of J.S. Marketers Inc., which sells adult paraphernalia to large adult store chains and smaller retail video stores and bodegas. From 2006 through 2009, Gupta diverted $822,916 of the business’ receipts into 17 different personal bank accounts held in the names of various individuals, including himself and family members. He directed more than $250,000 of those diverted funds into six different accounts held offshore at a branch of HSBC in India. From 2007 through 2009, Gupta caused 22 J.S. Marketers corporate checks to be made payable to himself and family members in amounts identical to invoices from the business’ suppliers. Gupta endorsed those checks, which totaled $375,138, and deposited them into bank accounts that he controlled. Gupta filed individual income tax returns for the years 2006 through 2009 that did not report his income from the diverted funds.  

As a result, Gupta evaded taxes on $1,198,054 in income for 2006 through 2009. He also failed to file Reports of Foreign Bank and Financial Accounts, (FBARs), for 2006 through 2008. The tax loss resulting from Gupta's conduct, not including interest and penalties, is $383,475.

In addition to the prison term, Judge Hochberg sentenced Gupta to serve two years of supervised release. As part of his plea agreement, Gupta has paid to the United States Treasury a one-time FBAR penalty of $259,045 and has cooperated with the IRS in the investigation of his outstanding taxes due and owed for 2006 through 2009. Judge Hochberg also ordered Gupta to pay an additional $20,000 fine.

U.S. Attorney Fishman and Assistant Attorney General Keneally credited special agents with IRS-Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen in Newark, with the investigation leading to today’s sentence.

The government is represented by Assistant U.S. Attorney Joseph Mack of the U.S. Attorney’s Health Care and Government Fraud Unit and Trial Attorney Michael C. Vasiliadis of the Department of Justice Tax Division.

13-280                                                      

Defense counsel: Kevin H. Marino Esq., Chatham, N.J.

CAMDEN, N.J. – Four members of an international arms trafficking organization were sentenced to prison today in New Jersey for conspiring to smuggle substantial quantities of firearms and ammunition from the United States to Greece, U.S. Attorney Paul J. Fishman announced.

Dennis Meleshes, 46, and Vladimir Polivka, 58, of Las Vegas and Nick Somos, 71, of Queens, N.Y., each previously pleaded guilty before U.S. District Judge Joseph E. Irenas to informations charging them with conspiracy to smuggle weapons. Vasileios Angelakis, 36, also of Queens, previously pleaded guilty to misprision of a felony.

Judge Irenas sentenced Meleshes to serve six months in prison and six months of home confinement; and Polivka, Somos and Angelakis to 24, 18 and 15 months in prison, respectively.

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

Beginning in December 2011, Meleshes, Polivka and Somos orchestrated a plan to acquire a large quantity of weapons and ammunition in the United States that they intended to ship to Greece for sale on the black market. Meleshes and Polivka purchased a number of weapons – some of the money for which was provided by Angelakis – at various locations in Nevada and surrounding areas.

Meleshes and Polivka ultimately created a weapons cache that included 65 revolvers and semi-automatic pistols, an UZI machine gun, one AK-47 assault rifle and approximately 10,540 assorted rounds of ammunition. Meleshes and Polivka packed the weapons in two vehicles – an Audi A6 and a Chevrolet Caprice – one of which contained an improvised lock system, or “trap,” which was intended to prevent law enforcement from finding the cache. Polivka and another individual then drove the vehicles to a freight forwarding service in Brooklyn, N.Y., where Somos had arranged for the cars to be loaded onto cargo containers and placed on a commercial shipping line bound for Greece via Port Naples, Italy. Meleshes and Angelakis traveled to Italy in order to personally receive the shipment.

Customs officials issued a recall on the shipment and the cargo container was returned to the Port of New York/Newark in New Jersey. The weapons cache was seized on April 3, 2012. Law enforcement confirmed it contained items listed as U.S. Munitions List defense articles, which require a license to be exported out of the United States. No such license accompanied any of the firearms recovered and a search of law enforcement databases revealed that no licenses had been obtained by any of the defendants for the items.
In fact, the export documents filed in connection with the shipment did not list any of the weapons or ammunition.

In all, the seized weapons and ammunition were worth more than $250,000 on the secondary market in Greece.

In addition to the prison terms, Judge Irenas sentenced Meleshes, Polivka and Somos to serve three years of supervised release and Angelakis to serve a year of supervised release.

U.S. Attorney Fishman credited special agents of the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Andrew M. McLees; the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Thomas J. Cannon; U.S. Customs and Border Protection, led by Robert E. Perez, director of New York Field Operations; as well as detectives from the Las Vegas Metropolitan Police Department, with the investigation.

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

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Defense counsel: Dennis Meleshes: Ryan Clark Esq., Freehold, N.J.
Vladimir Polivka: Susan C. Cassell Esq., Ridgewood, N.J.
Nick Somos: Louis Rosenthal Esq., Brooklyn
Vasileios Angelakis: Joseph Rubino Esq., West Orange, N.J.

Concealed Nearly $4m in Business Receipts

NEWARK, N.J. – A Union County, N.J., man who owns and operates a medical supply company that he runs out of his home admitted today to concealing $3,984,508 in business receipts and pleaded guilty to one count of tax evasion, U.S. Attorney Paul J. Fishman announced.

Yuxin Xie, 59, of Mountainside, N.J., pleaded guilty before U.S. District Judge Kevin McNulty in Newark federal court to an information charging one count of tax evasion for failing to report business receipts from his company, YX Enterprises.

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

During the tax years in question – 2006 through 2010 – Xie purchased diabetic test strips from numerous suppliers. He re-packaged and sold them to wholesale pharmaceutical and medical products distribution companies. Customer payments that Xie received were deposited into 11 different bank accounts at three different financial institutions. YX Enterprises was not a registered corporation and any income received by YX Enterprises should have been reported on Xie’s tax returns.

Xie’s tax returns for the five years in question failed to report millions of dollars in gross receipts received by YX Enterprises. For each of the tax years 2006, 2007 and 2008, Xie’s tax returns reported that YX Enterprises had gross receipts of less than $10,000; Xie’s 2009 and 2010 tax returns contained no reference at all to YX Enterprises. YX Enterprises had in fact received nearly $4 million in business receipts during this five-year period.

Although Xie pleaded guilty to only one count of tax evasion for the 2009 tax year, the plea agreement requires that Xie admit to evading income taxes for all five years, and the court will take into account at sentencing the tax loss for all five years. The tax loss is $200,000 to $400,000.
Xie faces a maximum potential penalty of five years in prison and a fine of $250,000 or twice his gain from the offense, together with the costs of prosecution. Xie also agreed to file true and accurate tax returns and to pay to the IRS all taxes and penalties owed. Sentencing is scheduled for Oct. 23, 2013.

U.S. Attorney Fishman credited special agents with IRS-Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen, in Newark; special agents with the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark; and inspectors with the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Joseph Mack of the U.S. Attorney’s Health Care and Government Fraud Unit.

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Defense counsel: Robert J. DeGroot Esq., Newark

Xie Information

NEWARK, N.J. – A former claims manager for the N.J. Turnpike Authority was arrested today for allegedly stealing more than $120,000 from the authority, U.S. Attorney Paul J. Fishman announced.

Gerardo Blasi, 54, of Clifton, N.J., was arrested by special agents of the FBI and charged by complaint with mail fraud and defrauding a state agency that receives federal funds. He is scheduled to make his initial appearance later today before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court.

According to the complaint:

Blasi was a claims manager at the N.J. Turnpike Authority, responsible for negotiating and collecting payments from insurance companies whose insured drivers caused damage to the Turnpike. From April 2011 to June 2013, Blasi allegedly stole more than $120,000 from the authority in several ways, including instructing insurance companies to issue checks payable to fraudulent repair companies. When the checks were mailed to Blasi at the authority, he would arrange to have them cashed and keep a portion of the money for himself.

The fraud count with which Blasi is charged carries a maximum potential penalty of up to 20 years in prison and a $250,000 fine. The theft from a state agency count is punishable by a maximum potential penalty of up to 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, with the investigation leading to today’s charges. He also thanked the N.J. Turnpike Authority for its cooperation in the investigation.

The government is represented by Assistant U.S. Attorney David L. Foster of the office’s Special Prosecutions Division in Newark.

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

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Blasi Complaint

NEWARK, N.J. – An Essex County, N.J., man, charged in connection with a year-long investigation by the FBI Safe Streets Task Force that led to the confiscation of 45 guns from the streets of Newark, East Orange and Irvington, was convicted on weapons charges, U.S. Attorney Paul J. Fishman announced today.

Randy Andrew, 36, of Irvington, N.J., was convicted by a federal jury of one count each of trafficking firearms and conspiracy to traffic firearms and three counts of possession of a firearm by a convicted felon after a one-week trial before U.S. District Judge William Walls in Newark federal court.

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

Andrew and seven others (all of whom have since pleaded guilty) were arrested in 2011 on charges of trafficking in firearms without a license. For more than one year the FBI Safe Streets Task Force led an operation to recover firearms in an effort to stem gun violence and take weapons off the streets of Newark and surrounding areas. Agents directed and supervised a “sting operation,” using a confidential informant to purchase firearms from illegal gun brokers and dealers. The operation yielded 45 illicit firearms, including several assault rifles, machine pistols, shotguns and semi-automatic handguns.

Andrew was selling firearms out of a laundromat in Irvington. On five separate occasions between May and July 2010, he met with the informant to discuss the purchase of assault weapons. On May 10, May 19 and June 9, 2010, Andrew sold firearms to the informant. On June 1 and July 12, 2010, he attempted to sell assault weapons to the informant, but his supplier could not provide the guns.

Andrew represented himself pro se after the first day of trial, assisted by defense counsel. The trafficking and conspiracy charges on which Andrew was convicted are punishable by a maximum potential penalty of five years in prison and the felon in possession charges are punishable by up to 10 years in prison. Sentencing is scheduled for Sept. 3, 2013.

U.S. Attorney Fishman credited the FBI special agents and local detectives and investigators from the FBI’s Safe Streets Task Force, which operates under the direction of FBI Special Agent in Charge Aaron T. Ford in Newark, with the investigation that led to the guilty verdict. The Safe Streets Task Force comprises the FBI, the Essex County Prosecutor’s Office, the Essex County Sheriff’s Office, the Essex County Corrections Department, and the Newark, East Orange and Jersey City Police Departments.

The government is represented by Assistant U.S. Attorneys Adam N. Subervi and Amy D. Luria of the U.S. Attorney’s Office Criminal Division.

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Defense counsel: Paul Casteleiro Esq., Hoboken, N.J.

NEWARK, N.J. – An Essex County, N.J., man, charged in connection with a year-long investigation by the FBI Safe Streets Task Force that led to the confiscation of 45 guns from the streets of Newark, East Orange and Irvington, was convicted on weapons charges, U.S. Attorney Paul J. Fishman announced today.

Randy Andrew, 36, of Irvington, N.J., was convicted by a federal jury of one count each of trafficking firearms and conspiracy to traffic firearms and three counts of possession of a firearm by a convicted felon after a one-week trial before U.S. District Judge William Walls in Newark federal court.

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

Andrew and seven others (all of whom have since pleaded guilty) were arrested in 2011 on charges of trafficking in firearms without a license. For more than one year the FBI Safe Streets Task Force led an operation to recover firearms in an effort to stem gun violence and take weapons off the streets of Newark and surrounding areas. Agents directed and supervised a “sting operation,” using a confidential informant to purchase firearms from illegal gun brokers and dealers. The operation yielded 45 illicit firearms, including several assault rifles, machine pistols, shotguns and semi-automatic handguns.

Andrew was selling firearms out of a laundromat in Irvington. On five separate occasions between May and July 2010, he met with the informant to discuss the purchase of assault weapons. On May 10, May 19 and June 9, 2010, Andrew sold firearms to the informant. On June 1 and July 12, 2010, he attempted to sell assault weapons to the informant, but his supplier could not provide the guns.

Andrew represented himself pro se after the first day of trial, assisted by defense counsel. The trafficking and conspiracy charges on which Andrew was convicted are punishable by a maximum potential penalty of five years in prison and the felon in possession charges are punishable by up to 10 years in prison. Sentencing is scheduled for Sept. 3, 2013.

U.S. Attorney Fishman credited the FBI special agents and local detectives and investigators from the FBI’s Safe Streets Task Force, which operates under the direction of FBI Special Agent in Charge Aaron T. Ford in Newark, with the investigation that led to the guilty verdict. The Safe Streets Task Force comprises the FBI, the Essex County Prosecutor’s Office, the Essex County Sheriff’s Office, the Essex County Corrections Department, and the Newark, East Orange and Jersey City Police Departments.

The government is represented by Assistant U.S. Attorneys Adam N. Subervi and Amy D. Luria of the U.S. Attorney’s Office Criminal Division.

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Defense counsel: Paul Casteleiro Esq., Hoboken, N.J.

NEWARK, N.J. – Aleksi Kolarov, 30, will appear in Newark federal court today after being extradited from Paraguay to face U.S. charges he participated in the Shadowcrew forum, an online marketplace for hacking and identity theft that was the largest of its kind when dismantled by the Department of Justice and the U.S. Secret Service in 2004, New Jersey U.S. Attorney Paul J. Fishman announced.

A Bulgarian national, Kolarov evaded capture until June 14, 2011, when Paraguayan law enforcement authorities arrested him at a hotel in Asunción, Paraguay. He was found in possession of hundreds of thousands of dollars in various currencies, counterfeit payment cards and electronic implements to re-encode cards. He has been incarcerated by Paraguayan authorities since that time relating to that conduct.

The U.S. indictment charges Kolarov with one count each of conspiracy, transferring false identification documents and offering access devices without authorization. He arrived in the United States on Friday, June 28, 2013, escorted by U.S. Marshals, and was held in federal custody over the weekend. He is scheduled to appear later today before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court.

“Aleksi Kolorov is charged with conspiring in the most notorious online cybercrime marketplace of its time, selling the means to steal money and identities to other criminals,” U.S. Attorney Fishman said. “This extradition shows that hiding behind computers and borders does not deter us. It is vital that law enforcement work internationally to bring cybercriminals to justice, no matter how long it takes.”

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

According to the indictment:

Shadowcrew.com was an illegal online marketplace that trafficked in at least 1.5 million stolen credit and bank card numbers and caused more than $4 million in losses to the institutions issuing the cards.

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

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

If convicted, Kolarov faces a maximum potential penalty of five years in prison on the conspiracy count, 15 years in prison on the identification documents count and 10 years in prison on the access device count. Each count also carries a maximum $250,000 fine, or twice the gross amount of pecuniary gain or loss resulting from the offense.

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

The government is represented by Assistant U.S. Attorney Erez Liebermann, Deputy Chief of the U.S. Attorney’s Office Criminal Division.

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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Kolarov Indictment

CAMDEN, N.J. – The owner of a meat distribution company was sentenced today to four months in prison and four months of house arrest for evading taxes related to income diverted from his companies for his personal use, U.S. Attorney Paul J. Fishman announced.

Nicholas Papanier Sr., 57, of Sewell, N.J., previously pleaded guilty before U.S. District Judge Noel L. Hillman to an information charging him with one count of tax evasion. Judge Hillman imposed the sentence today in Camden federal court.

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

Between 2006 and 2009, Papanier owned Nellie’s Provisions, a meat distribution company that provided all of the meat for Primo Hoagies franchises and other independent restaurants. In 2006, 2007 and 2008, Papanier persuaded Primo Hoagies franchise owners to buy Thumann’s deli products from Nellie’s Provisions, often paying for them in cash. He took a significant amount of the cash paid to Nellie’s Provisions and deposited it into his personal bank accounts. He then used the money from his personal accounts to pay personal expenditures. He diverted a total of $556,664 for the calendar years 2006, 2007 and 2008 in the amounts of $56,395, $349,264, and $151,005, respectively.

Papanier admitted that he did not report the diverted cash to the IRS and only reported Form W-2 wages, interest and dividend income, and property tax information. By omitting all of the diverted cash, he failed to disclose and report a significant portion of this income on his tax returns, causing those tax returns to substantially understate the amount of income he received.

He admitted that for 2006, 2007 and 2008, had he reported the additional cash on his income tax returns he would have owed the government $189,656.

As part of the plea and in addition to the restitution, Papanier agreed to forfeit $484,010 to the United States. On Oct. 14, 2009, the United States filed a Verified Complaint for Forfeiture In Rem to forfeit and condemn to the use and benefit of the United States $372,042.54 in United States currency that was seized from Papanier’s bank accounts. On Sept. 16, 2010, the United States filed another Verified Complaint for Forfeiture In Rem to forfeit and condemn to the use and benefit of the United States an additional $111,967.50 in United States currency that was seized from Papanier’s bank accounts. The Complaints alleged that the subject funds were subject to forfeiture to the United States because they were involved in and were traceable to Structuring of Currency to Avoid a Reporting Requirement.

In addition to the prison term, Judge Hillman sentenced Papanier to two years of supervised release – which includes four months of house arrest – and fined him $10,000.

U.S. Attorney Fishman credited special agents of IRS – Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen, for the investigation leading to today’s sentence.

The government is represented by Assistant U.S. Attorneys Jason M. Richardson of the U.S. Attorney’s Office Criminal Division in Camden in the criminal case, and Jordan Anger of the U.S. Attorney’s Office Asset Forfeiture Unit in Newark in the civil action.

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Defense counsel: Ronald Warren Esq., Haddonfield, N.J.

CAMDEN, N.J. – The owner of a meat distribution company was sentenced today to four months in prison and four months of house arrest for evading taxes related to income diverted from his companies for his personal use, U.S. Attorney Paul J. Fishman announced.

Nicholas Papanier Sr., 57, of Sewell, N.J., previously pleaded guilty before U.S. District Judge Noel L. Hillman to an information charging him with one count of tax evasion. Judge Hillman imposed the sentence today in Camden federal court.

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

Between 2006 and 2009, Papanier owned Nellie’s Provisions, a meat distribution company that provided all of the meat for Primo Hoagies franchises and other independent restaurants. In 2006, 2007 and 2008, Papanier persuaded Primo Hoagies franchise owners to buy Thumann’s deli products from Nellie’s Provisions, often paying for them in cash. He took a significant amount of the cash paid to Nellie’s Provisions and deposited it into his personal bank accounts. He then used the money from his personal accounts to pay personal expenditures. He diverted a total of $556,664 for the calendar years 2006, 2007 and 2008 in the amounts of $56,395, $349,264, and $151,005, respectively.

Papanier admitted that he did not report the diverted cash to the IRS and only reported Form W-2 wages, interest and dividend income, and property tax information. By omitting all of the diverted cash, he failed to disclose and report a significant portion of this income on his tax returns, causing those tax returns to substantially understate the amount of income he received.

He admitted that for 2006, 2007 and 2008, had he reported the additional cash on his income tax returns he would have owed the government $189,656.

As part of the plea and in addition to the restitution, Papanier agreed to forfeit $484,010 to the United States. On Oct. 14, 2009, the United States filed a Verified Complaint for Forfeiture In Rem to forfeit and condemn to the use and benefit of the United States $372,042.54 in United States currency that was seized from Papanier’s bank accounts. On Sept. 16, 2010, the United States filed another Verified Complaint for Forfeiture In Rem to forfeit and condemn to the use and benefit of the United States an additional $111,967.50 in United States currency that was seized from Papanier’s bank accounts. The Complaints alleged that the subject funds were subject to forfeiture to the United States because they were involved in and were traceable to Structuring of Currency to Avoid a Reporting Requirement.

In addition to the prison term, Judge Hillman sentenced Papanier to two years of supervised release – which includes four months of house arrest – and fined him $10,000.

U.S. Attorney Fishman credited special agents of IRS – Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen, for the investigation leading to today’s sentence.

The government is represented by Assistant U.S. Attorneys Jason M. Richardson of the U.S. Attorney’s Office Criminal Division in Camden in the criminal case, and Jordan Anger of the U.S. Attorney’s Office Asset Forfeiture Unit in Newark in the civil action.

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Defense counsel: Ronald Warren Esq., Haddonfield, N.J.

NEWARK, N.J. – A Jersey City, N.J. contractor admitted today that he bribed a Department of Veterans Affairs (VA) official so that two companies with which he was affiliated could obtain favorable treatment from the VA , U.S. Attorney Paul Fishman announced.

Hitesh Desai, 42, of Jersey City, pleaded guilty before U.S. District Judge Mary L. Cooper to an information charging him with one count of bribing a federal public official by promising to make $5,000 in corrupt payments in exchange for official action.

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

Desai was a contractor who worked on various construction projects for the VA. In 2012, Desai became affiliated with two businesses that were applying to be placed on a VA list known as the Multiple Award Task Order Contract (MATOC). Certain lucrative VA construction projects were available only to contractors who were placed on the MATOC list. Between October 2012 and February 2013, Desai offered and promised to make a $5,000 bribe payment to an official who worked at the VA, who Desai understood to be responsible for serving on a committee that would determine which contractors were placed on the MATOC list, in exchange for the official’s official assistance in placing the two businesses with which Desai was affiliated on the list. On Oct. 18, 2012, and Dec. 6, 2012, Desai made two cash payments, totaling $1,000, to the aforementioned official in exchange for the official’s official assistance in placing the two businesses with which he was affiliated on the VA’s MATOC list.

The count to which Desai pleaded guilty carries a maximum potential penalty of 15 years in prison, a $250,000 fine, twice the aggregate loss to victims or gain to the defendant, or three times the amount of the bribe payments. Sentencing is scheduled for Oct. 2, 2013.

U.S. Attorney Fishman credited special agents of the Department of Veterans Affairs, Office of Inspector General, under the direction of Special Agent in Charge Jeffrey Hughes, and special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford for the investigation in this case.

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

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Defense counsel: Theodore Margolis, Bridgewater, N.J.

Desai Information

NEWARK, N.J. – A Jersey City, N.J. contractor admitted today that he bribed a Department of Veterans Affairs (VA) official so that two companies with which he was affiliated could obtain favorable treatment from the VA , U.S. Attorney Paul Fishman announced.

Hitesh Desai, 42, of Jersey City, pleaded guilty before U.S. District Judge Mary L. Cooper to an information charging him with one count of bribing a federal public official by promising to make $5,000 in corrupt payments in exchange for official action.

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

Desai was a contractor who worked on various construction projects for the VA. In 2012, Desai became affiliated with two businesses that were applying to be placed on a VA list known as the Multiple Award Task Order Contract (MATOC). Certain lucrative VA construction projects were available only to contractors who were placed on the MATOC list. Between October 2012 and February 2013, Desai offered and promised to make a $5,000 bribe payment to an official who worked at the VA, who Desai understood to be responsible for serving on a committee that would determine which contractors were placed on the MATOC list, in exchange for the official’s official assistance in placing the two businesses with which Desai was affiliated on the list. On Oct. 18, 2012, and Dec. 6, 2012, Desai made two cash payments, totaling $1,000, to the aforementioned official in exchange for the official’s official assistance in placing the two businesses with which he was affiliated on the VA’s MATOC list.

The count to which Desai pleaded guilty carries a maximum potential penalty of 15 years in prison, a $250,000 fine, twice the aggregate loss to victims or gain to the defendant, or three times the amount of the bribe payments. Sentencing is scheduled for Oct. 2, 2013.

U.S. Attorney Fishman credited special agents of the Department of Veterans Affairs, Office of Inspector General, under the direction of Special Agent in Charge Jeffrey Hughes, and special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford for the investigation in this case.

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

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Defense counsel: Theodore Margolis, Bridgewater, N.J.

Desai Information

CAMDEN, N.J. – A federal jury convicted Hope K. Kantete today for her role as the leader of a ring that was responsible for shipping dozens of stolen and carjacked luxury cars and SUVs worth more than $1 million from New Jersey to Africa.

Kantete, 43, of Brooklyn, was convicted of 10 counts of transportation of stolen vehicles in interstate or foreign commerce and a single count of conspiracy to transport stolen vehicles in interstate or foreign commerce. Kantete was convicted after a three-week trial before U.S. District Judge Robert J. Kugler in Camden federal court.

After the jury returned its verdict, Kantete’s bail was revoked in anticipation of her sentencing date on Oct. 3, 2012. As a result of the conviction, Kantete faces up to 15 years in prison.

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

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

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

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

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

TRENTON, N.J. – A former partner of a law firm based in Freehold, N.J., was sentenced today to 33 months in prison for defrauding the firm and its clients by improperly diverting more than $885,000 from the law firm, U.S. Attorney Paul J. Fishman announced.

Timothy Provost, 58, of Millstone Township, N.J., previously pleaded guilty before U.S. District Judge Michael A. Shipp to an information charging him with one count of mail fraud. Judge Shipp imposed the sentence today in Trenton federal court.

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

Provost admitted that between April 2004 and January 2011, he embezzled from the law firm, which was not identified in court documents, by wrongfully writing checks from its attorney trust and business accounts to himself and his personal creditors to pay for his and his family’s personal expenses, including his mortgage, his children’s tuition and horse stable expenses. Provost then mailed some of the checks to his personal creditors. He further admitted to attempting to hide his theft by using the stolen funds to purchase cashier’s checks payable to his creditors or to himself.

Provost, who was a partner at the firm, had access to the law firm’s bank accounts in order to conduct real estate transactions on behalf of clients, including closings and refinancings. Provost’s embezzlement left several clients with double mortgages, which insurance then stepped in to cover. In total, Provost stole more than $885,000 from the attorney trust and business accounts for his personal benefit.

In addition to the prison term, Judge Shipp sentenced Provost to three years of supervised release and ordered him to pay $887,134 in restitution.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; and the Monmouth County Prosecutor’s Office, under the direction of Acting Prosecutor Christopher Gramiccioni, for the investigation leading to today’s sentence.

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

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Defense counsel: Nicholas Caliendo Esq., Freehold, N.J.

TRENTON, N.J. – An Essex County, N.J., woman who admitted using stolen credit card numbers to purchase $133,000 worth of high-end merchandise was sentenced today to 84 months in prison, U.S. Attorney Paul J. Fishman announced.

Melody Macken, 50, of Irvington, N.J., previously pleaded guilty before U.S. District Judge Joel A. Pisano to an indictment charging her with unlawfully using credit card numbers issued to others without their authorization. Judge Pisano imposed the sentence today in Trenton federal court.

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

From February 2010 through November 2011, Macken acquired stolen credit card account numbers by calling retailers and store customers and claiming to be a store employee. Using the stolen credit card numbers and other personal identification information, she purchased items such as mattresses, appliances, electronics, luxury apparel, accessories and shoes – with a total value of more than $133,000.

In calculating Macken’s sentence, the court took into account a previous conviction and Macken’s alleged activities since her guilty plea in this case. While out on bail, Macken allegedly violated the conditions of her federal pretrial release by committing a new crime, following the same scheme, just months after entering her guilty plea. As a result, her bail was revoked and she was remanded into the custody of the U.S. Marshals pending today’s sentencing. She remains in federal custody.

In addition to the prison term, Judge Pisano sentenced Macken to serve three years of supervised release and ordered her to pay $147,592 to victim retailers.

U.S. Attorney Fishman credited postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, with the investigation.

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

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Defense counsel: David Oakley and Mark Anderl Esqs., Perth Amboy, N.J.

NEWARK, N.J. – Joseph Cartagena, the rapper popularly known as “Fat Joe,” was sentenced to four months in prison for failing to file tax returns with the IRS, U.S. Attorney Paul J. Fishman announced.

Cartagena, 42, of Miami Beach, Fla., previously pleaded guilty before U.S. Magistrate Judge Cathy L. Waldor to Counts One and Two of a four-count information charging him with failing to file a tax return for tax years 2007 to 2010. Those two counts correlate to tax years 2007 and 2008. Under the terms of the plea agreement, however, the tax loss for all four years, including 2009 and 2010, was taken into account for sentencing.

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

Cartagena received income for his musical performances as well as royalties on the sales of his music. These monies came from three different sources: Terror Squad Production Inc. (Terror Squad), Miramar Music Touring Inc. (Miramar), and FJTS Corp. Cartagena owned Terror Squad and Miramar, both of which are corporations based in Somerville, N.J.

Cartagena admitted he received gross income in excess of $1.18 million in 2007, in excess of $1.28 million in 2008, in excess of $265,000 in 2009, and in excess of $630,000 in 2010. The total tax loss to the government was $718,038.

In addition to the prison term, Judge Waldor sentenced Cartagena to one year of supervised release and fined him $15,000. He must report by Aug. 26, 2013, to begin serving his sentence.

U.S. Attorney Fishman credited special agents with IRS-Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen, with the investigation leading to today’s sentence.

The case is being prosecuted by Assistant U.S. Attorney Joseph Mack of the U.S. Attorney’s Healthcare and Government Fraud Unit.

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Defense counsel: Jeffrey Lichtman Esq., New York

NEWARK, N.J. – A Monmouth County, N.J., man admitted today to conspiring to collect a debt using extortionate means, U.S. Attorney Paul J. Fishman announced.

John Balsamo, 49, of West Long Branch, N.J., pleaded guilty before U.S. District Judge Katharine S. Hayden to an indictment charging him with using threats of violence and economic harm to collect a debt from the victim, an Ocean County, N.J., construction contractor.

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

Balsamo and conspirators Timothy Kelly, 37, of Jersey City, N.J., and Robert C. Bantang, Jr., 44, of Oceanport, N.J., used extortionate means in order to collect $50,000 the contractor owed to Kelly from 2009. The conspirators made the victim believe that the money he had borrowed from Kelly was owed to the “Old Man,” a member of organized crime who would cause physical harm to the victim if the debt was not paid. Balsamo also displayed a key to a construction site where the victim was working in Brick, N.J., and warned that the key could be used to gain access to, and cause damage to the site, due to the victim’s failure to fully repay the debt. Balsamo and Kelly sent Bantang to the construction site on three occasions to deliver threats purportedly on behalf of the “Old Man.”

On March 24, 2011, Balsamo and Kelly went to the Brick construction site, which was now a completed restaurant, to confront the victim. Kelly told the victim that if he had brought his “boys” that it would have gotten “done right in here, right in this place, right like this, in front of everybody . . . and your wife gets it too.” Kelly also told the victim that he deserved “a beatin’ just out of f- - kin’ principle.” Balsamo warned that the “Old Man” wanted to “beat the shit” out of the restaurant owner due to the victim’s failure to repay the debt, which Balsamo and Kelly now stated had grown to $70,000. Balsamo also advised the victim that the “Old Man” has been “promoted,” implying that the “Old Man” now possessed a higher position in organized crime.

During the course of the conspiracy, Balsamo received a Rolex watch and $2,500 in cash from the victim towards payment of the debt.

Kelly and Bantang previously pleaded guilty in February 2012 to conspiring to collect a debt from the victim using extortionate means, before U.S. District Judge Katharine S. Hayden.

The two men are scheduled for sentencing on Sept. 10, 2013.

Balsamo faces a maximum potential penalty per count of 20 years in prison and a fine of $250,000. Sentencing is scheduled for Oct. 8, 2013.

Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, and special agents of the N.J., State Commission of Investigation, under the direction of Executive Director Philip James Degnan, for the investigation leading to today’s guilty plea.

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

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

Balsamo Indictment

NEWARK, N.J. – A Morris County, N.J., man today admitted evading personal income taxes on more than $300,000 in income over four years, U.S. Attorney Paul J. Fishman announced.

Robert Schaefer, 63, of Montville, N.J., pleaded guilty before U.S. District Judge Claire C. Cecchi in Newark federal court to an information charging him with tax evasion.

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

Schaefer owned and operated Asphalt Maintenance and Stripping Inc. (Asphalt Maintenance), an asphalt installation, maintenance, and snow removal company, also located in Montville. Schaefer was required to include income earned by Asphalt Maintenance on his individual IRS 1040 form. During the calendar years 2007 through 2011, Schaefer diverted approximately $303,000 in income earned by Asphalt Maintenance to himself and his personal accounts. He did this by arranging for Asphalt’s customers to pay for service by cash and by checks payable to “cash” or to “Robert Schaefer.” Schaefer then cashed these checks, retained the proceeds for his personal use, and failed to include the proceeds on individual income tax form 1040 that he signed and filed with the IRS.

Tax Year

Approximate Date
Tax Return Filed

Approximate
Unreported Income

Approximate
Tax Due and Owing

April 15, 2008

$ 44,651

$ 11,665
 

2008

April 15, 2009

  74,754

  22,618
 

2009

April 15, 2010

  77,180

  23,236
 

2010

April 15, 2011

  54,508

   8,495
 

2011

April 15, 2012

  51,866

  12,555

The count of tax evasion to which Schaefer pleaded guilty is punishable by a maximum potential penalty of five years in prison and a fine of $250,000. Sentencing is scheduled for Oct. 10, 2013.

U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen, with the investigation leading to today’s guilty plea.

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

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Defense counsel: Alan Zegas Esq., Chatham, N.J.

Schaefer Information

NEWARK, N.J. – FBI special agents arrested a Newark man at his home this morning in connection with an armed robbery of a Subway restaurant in Verona, N.J., U.S. Attorney Paul J. Fishman announced.

Jamar Darby, 26, is charged by criminal complaint with one count of committing a Hobbs Act robbery and one count of using a firearm during a crime of violence. He appeared this afternoon before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court and was held without bail.

According to the criminal complaint filed today:

Between December 2012 and May 2013, Darby participated in a number of armed robberies of New Jersey commercial establishments throughout Essex and Union counties.

For example, on May 20, 2013, Darby brandished a handgun as he and two other men entered the Verona Subway. Darby and another robber restrained a Subway employee by tying the employee’s hands and feet with plastic zip ties and stole money from the cash register before fleeing.

The Hobbs Act charge carries a maximum potential penalty of 20 years in prison. The gun charge carries a maximum potential penalty of life in prison and a mandatory minimum of seven years in prison, which must run consecutively to any other prison term. Each count also carries a maximum $250,000 fine, or twice the gross gain or loss from the offense.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, with the investigation leading to today’s arrest. He also thanked the Belleville, Bloomfield, Kearny, Linden, Maplewood, Newark, Paramus and Verona Police Departments, along with the New Jersey 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 General Crimes Unit in Newark.

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

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Defense counsel: Carl Herman Esq., West Orange, N.J.

Darby Complaint

NEWARK, N.J. – FBI special agents arrested a Newark man at his home this morning in connection with an armed robbery of a Subway restaurant in Verona, N.J., U.S. Attorney Paul J. Fishman announced.

Jamar Darby, 26, is charged by criminal complaint with one count of committing a Hobbs Act robbery and one count of using a firearm during a crime of violence. He appeared this afternoon before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court and was held without bail.

According to the criminal complaint filed today:

Between December 2012 and May 2013, Darby participated in a number of armed robberies of New Jersey commercial establishments throughout Essex and Union counties.

For example, on May 20, 2013, Darby brandished a handgun as he and two other men entered the Verona Subway. Darby and another robber restrained a Subway employee by tying the employee’s hands and feet with plastic zip ties and stole money from the cash register before fleeing.

The Hobbs Act charge carries a maximum potential penalty of 20 years in prison. The gun charge carries a maximum potential penalty of life in prison and a mandatory minimum of seven years in prison, which must run consecutively to any other prison term. Each count also carries a maximum $250,000 fine, or twice the gross gain or loss from the offense.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, with the investigation leading to today’s arrest. He also thanked the Belleville, Bloomfield, Kearny, Linden, Maplewood, Newark, Paramus and Verona Police Departments, along with the New Jersey 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 General Crimes Unit in Newark.

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

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Defense counsel: Carl Herman Esq., West Orange, N.J.

Darby Complaint

CAMDEN, N.J. – The chairman of the Woodland Park, N.J., Democratic Committee admitted today that he bribed two individuals he thought were IRS officials so that he could eliminate his tax debt, U.S. Attorney Fishman announced.

Michael Kazmark, 60, of Woodland Park pleaded guilty before U.S. District Judge Jerome B. Simandle in Camden federal court to an information charging him with one count of bribing a federal public official in exchange for official action. He admitted making $18,500 in corrupt payments.

According to documents filed in this case and statements made during Kazmark’s guilty plea proceeding:

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

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

The count to which Kazmark pleaded guilty is punishable by a maximum potential penalty of 15 years in prison, a $250,000 fine, twice the aggregate loss to victims or gain to the defendant, or three times the amount of the bribe payments. Sentencing is scheduled for Sept. 28, 2013.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, and special agents of the U.S. Treasury Inspector General for Tax Administration, under the direction of Special Agent in Charge Robert Geary, for the investigation leading to today’s guilty plea.

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

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

Kazmark Information

NEWARK, N.J. – An Oklahoma man who was previously employed as a textbook salesman at Hoboken-based John Wiley & Sons will appear in court today on charges he stole more than $2.8 million in textbooks from his former employer through an elaborate scheme that involved diverting free educational samples intended for professors, U.S. Attorney Paul J. Fishman announced.

Christopher J. Brock, 44, of Yukon, Okla., was arrested in Tampa, Fla., today by FBI special agents on a criminal Complaint charging him with wire fraud. The defendant is scheduled to have his initial appearance and bail hearing this afternoon before U.S. Magistrate Judge Anthony E. Porcelli in Tampa, Fla., federal court.

According to the Complaint unsealed today in Newark federal court:

Christopher J. Brock executed a scheme to defraud his former employer, John Wiley & Sons (Wiley), out of more than $2.8 million worth of textbooks.

Wiley is based in Hoboken, N.J., and is one of the largest publishers of technical writing in the world, with an estimated market value of approximately $3 billion. A portion of Wiley’s publications are collegiate textbooks, which are distributed to schools and universities that accept them into their curricula. Co-existing with Wiley’s retailers are resellers of used or unwanted books that buy and sell directly to students.

Brock lived in Oklahoma and was employed by Wiley, first as a higher education publishing representative, and most recently as a district sales supervisor based in Oklahoma.

Brock accessed the corporate systems of Wiley – including computers located in New Jersey – and diverted to himself more than 16,000 textbooks and other items he fraudulently designated as free educational samples.

To avoid detection in an internal review of his employee records, Brock designated both actual and fabricated professors as the purported recipients of the items and listed his own home address and other addresses that he controlled as alternate shipping addresses for those professors, directing that the books be shipped to those addresses. This made it appear in the records of Wiley that the free education samples were legitimately going to professors when, in reality, they were being sent to Brock.

Once Brock received the diverted textbooks he sold them to resellers and received payment through PayPal accounts that he controlled. PayPal, in turn, would deposit the funds into bank accounts that Brock controlled. Brock caused an approximate loss to Wiley of more than $2.8 million. The money that Brock earned as a result of the scheme was largely used for personal expenditures, including, among other things, high-end home furnishings and scuba diving equipment.

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

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, for the investigation. U.S. Attorney Fishman also thanked John Wiley & Sons for its cooperation and assistance with the investigation.

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

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

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Brock, Christopher Complaint

NEWARK, N.J. – A Bayonne, N.J., man was sentenced today to 18 months in prison for lying to officials investigating Mohamed Alessa and Carlos E. Almonte – who were subsequently convicted of a conspiracy to travel from New Jersey to kill on behalf of a terrorist group in Somalia – U.S. Attorney Paul J. Fishman announced.

Mohamed Osman, 21, previously pleaded guilty before U.S. District Judge Dickinson R. Debevoise to making materially false statements to investigators in a matter involving international terrorism.

According to documents filed and statements made in Newark federal court:

During a June 2010 interview with members of the FBI’s Joint Terrorism Task Force (JTTF), Osman falsely denied knowing about Alessa and Almonte’s plans to travel to Somalia to fight against government and multinational peacekeeping forces there.

Among other things, Osman specifically admitted that he had learned about Alessa and Almonte’s ideology and beliefs during their interactions, and that he had heard Alessa say he would start killing in the United States if he was unable to do it abroad. Osman also admitted that he willfully lied to investigators after being informed that they were conducting an international terrorism investigation and that it was against the law to make false statements during the interview.

In addition to the prison term, Judge Debevoise ordered Osman to serve three years of supervised release.

U.S. Attorney Fishman praised the outstanding work of the FBI; members of the Newark JTTF, including the New Jersey State Police; and the New York City Police Department in the investigation.

The government is represented by Andrew Kogan, Chief, and Assistant U.S. Attorney L. Judson Welle of the United States Attorney’s Office National Security Unit in Newark.

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Defense counsel: Stacy Ann Biancamano Esq., West Orange, N.J.

NEWARK, N.J. – A tax preparer was arrested this morning at her Union, N.J., home for allegedly teaming up with her tax preparer husband to get unearned tax refunds for their clients to make extra money for themselves, U.S. Attorney Paul J. Fishman announced.

Special agents of IRS-Criminal Investigation (IRS-CI) arrested Carol Johnson, 42, on an indictment charging her and her husband, Courtney Johnson, 43, each with one count of conspiracy to defraud the United States and six counts of assisting in the preparation of fraudulent tax returns. Courtney Johnson remains at large. The pair operated tax preparation businesses in South Orange and Jersey City, N.J., through which they allegedly committed crimes resulting in tax losses of nearly $400,000.

Carol Johnson is expected to appear this afternoonbefore U.S. Magistrate Judge Cathy L. Waldor in Newark federal court.

According to the indictment unsealed today:

From tax years 2005 through 2007, the Johnsons sought to generate increased referrals, enhance their business and enrich themselves by preparing and filing income tax returns that were based on false information for the purpose of generating tax refunds.

To do this, the Johnsons routinely used a number of fraudulent practices, including falsely claiming a filer was a “head of household”; inventing and inflating deductions; creating fictitious businesses with bogus incomes and losses; and creating false credits for education, childcare and moving expenses.

Although taxpayers generally met with one of the defendants to provide information to prepare their tax returns, it was routinely the other defendant whose name appeared as preparer of the return.

On several occasions, the defendants stole part of the refunds by issuing Santa Barbara Bank cashier’s checks payable to their clients, forging the client’s signatures and depositing the checks into a bank account they controlled.

On at least one occasion, the Johnsons filed two federal income tax returns for the same year for the same client, providing a copy of the return with a several-hundred-dollar refund to the taxpayer and a copy with a several-thousand-dollar refund to the IRS.

The bogus returns resulted in a tax loss of nearly $400,000.

The conspiracy charge carries a maximum potential penalty of five years in prison. Each false tax return count carries a maximum potential penalty of three years in prison and a $250,000 fine.

U.S. Attorney Fishman credited special agents of IRS-CI, under the direction of Special Agent in Charge Shantelle P. Kitchen, with the investigation.

The government is represented by Assistant U.S. Attorney Lorraine Gerson of the U.S. Attorney’s Office Economic Crimes Unit 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: 

Carol Johnson: Leslie Sinemus Esq., South Orange

Johnson, Courtney and Carol Indictment

Revenue share fraud cost companies millions in losses

NEWARK, N.J. – A German citizen today admitted his role in an international conspiracy that hacked into the telephone systems of large corporations and entities in the United States and around the world to make telephone calls, causing tens of millions of dollars in losses, U.S. Attorney Paul J. Fishman announced.

Wolfgang Uelpenich, 44, of Zug, Switzerland, pleaded guilty before U.S. District Judge Katharine Hayden in Newark federal court to an information charging him with conspiracy to commit wire fraud. Uelpenich was arrested by FBI agents at a Key West, Fla., on Jan. 9, 2012.

According to documents filed in this case and statements made in court: Uelpenich, who owned telecommunications companies in Germany, conspired with others to profit by causing unauthorized telephone calls to be placed to Revenue Share Numbers (RSNs).

Also known as international premium numbers, RSNs offer such services as adult entertainment, chat lines, and psychic hotlines on a cost-per-minute basis. Telephone companies that carry calls to overseas RSNs (known as Revenue Share Providers [RSPs]) are typically paid an internationally-regulated fee for connecting such calls.

To increase profits by increasing call traffic, some RSPs and others illegally use stolen telephones to make unauthorized calls, generating additional revenue, which the RSPs shared with the people or entities (known as “dialers” or “callers”) making the unauthorized calls. A recent telecommunications industry association report estimated $3.84 billion annually in revenue share fraud.

The scheme involved the theft of long distance telephone service, either through the theft of cell phone service or through a process known as “PBX hacking.” Hackers targeted PBX (Private Branch Exchange) telephone systems of corporations and placed calls to those systems in an attempt to identify telephone extensions that are not in use. Once an unused extension was identified, hackers illegally reprogrammed the telephone system. The hacked telephone system could then be used by the hackers and others to make long distance telephone calls that are charged back to the victim corporation, creating virtually free telephone lines through which they could make calls. These “free” telephone lines were then used to call RSNs controlled by defendant Uelpenich and others.

Noor Aziz, 50, a fugitive last known to have resided in Pakistan, and others obtained access to hacked PBX systems or cell phones that had been activated with fraudulent information and used those phone lines to originate telephone calls to RSNs controlled by a conspirator and Uelpenich in Slovenia, Liechtenstein, Austria and elsewhere.

The RSNs that Uelpenich controlled and provided to Aziz frequently contained no actual content – they did not have adult entertainment or chat rooms – and could never generate legitimate fees for the RSPs.  Telephone company representatives who suspected fraudulent activity on these phony RSNs found they frequently had recordings of fake rings, fake password prompts, fake voicemail messages, music, or dead air on continuous loops, all to make it appear they were legitimate sites.  

As a result of the conspiracy, telephone companies and the hacked entities lost tens of millions of dollars due to more than 13 million minutes of telephone calls over 4,800 hacked PBX systems. Uelpenich’s conduct between 2010 and 2012 was responsible for approximately $1 million in losses. The case was charged in New Jersey, where AT&T has a major operating center in Somerset County and a fraud detection center in Middlesex County.

The count to which Uelpenich pleaded guilty is punishable by a maximum potential penalty of five years in prison and a fine of up to $250,000 or twice the gain or loss. Sentencing is scheduled for July 15, 2013.

U.S. Attorney Fishman credited the special agents of the FBI Newark Division, under the direction of Special Agent in Charge Aaron T. Ford, and special agents of the FBI Miami Division, under the direction of Special Agent in Charge Michael B. Steinbach, for the investigation leading to today’s guilty plea. The investigation, which relates to conduct ranging from November 2008 through January 2012, is ongoing.

The government is represented by Assistant U.S. Attorney Erez Liebermann, Deputy Chief of the office’s Criminal Division.

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Defense Counsel: Alan Kaufman Esq., New York

Uelpenich, Wolfgang Information

CAMDEN, N.J. – A Newark, N.J., man who was convicted earlier this year on drug and weapons charges was sentenced today to 200 months in prison, U.S. Attorney Paul J. Fishman announced.

Jimmil Henderson, 30, was convicted by a federal jury on Jan. 29, 2013, on all three counts of a superseding indictment: possession of cocaine and marijuana with intent to distribute, possession of a firearm in furtherance of a drug trafficking offense and unlawful possession of a loaded handgun by a convicted felon. Henderson was convicted following a five-day trial before U.S. District Judge Joseph H. Rodriguez, who imposed the sentence today in Camden federal court.

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

On Feb. 18, 2011, Newark Police Department officers were patrolling the area of Lincoln Park in Newark and saw Henderson engaging in a hand-to-hand drug transaction. Upon seeing the officers, Henderson ran through Lincoln Park, tossing a 9mm firearm loaded with 11 rounds of ammunition into the park. When the officers apprehended him at the corner of Broad and Pennington streets, they recovered quantities of cocaine and marijuana.

In addition to the prison term, Judge Rodriguez sentenced Henderson to five years of supervised release.

U.S. Attorney Fishman credited special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Acting Special Agent in Charge Thomas J. Cannon; and the Newark Police Department, under the direction of Police Director Samuel A. DeMaio and Chief Sheilah A. Coley, for the investigation leading to today’s sentence.

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

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Defense counsel: Michael Huff Esq., Philadelphia                       

NEWARK, N.J. – FBI special agents and Union Police Department detectives arrested four New Jersey men this morning in connection with the armed robbery last November of a Target Store in Union, N.J., on “Black Friday,” U.S. Attorney Paul J. Fishman announced.

Darrell A. Carter, 23, of Irvington, Daquaan Vaughn, 35, of Newark, Lavell Jones, 27, of East Orange, and Maryland Liggins, III, 28, of Newark, are charged in a criminal complaint with one count of committing a Hobbs Act robbery. Carter and Vaughn are each charged with an additional count of using a firearm in furtherance of a crime of violence.

All four defendants are scheduled to appear this afternoon before U.S. Magistrate Judge Michael Hammer in Newark federal court.

According to the complaint unsealed today:

On Nov. 23, 2012, Carter, Vaughn, Jones and Liggins allegedly carried out an armed robbery of the Target store located on Springfield Avenue in Union on Black Friday – the day after Thanksgiving – which is considered to be one of the busiest shopping days of the year. The defendants each allegedly played different roles in the robbery: Carter and Vaughn entered the store and robbed the store’s employees at gunpoint; Liggins served as the getaway driver; and Jones posed as a shopper in the store and acted as a lookout.

Carter and Vaughn entered the store at 9:47 p.m. and hid in an employee bathroom. An employee eventually attempted to enter the bathroom and Carter and Vaughn physically grabbed the employee, brandishing handguns. Carter and Vaughn restrained the employee’s hands with zip-ties and then demanded the security code to access the store’s cash room. Carter and Vaughn obtained the code from the employee and used it to access a secure hallway that leads to the cash room, where they waited for employees to transport a cash cart from the store’s cash registers to the cash room when the store closed. Carter and Vaughn then rushed into the cash room brandishing guns, ordered the employees to lie on the ground, and stole more than $50,000 from a safe in the cash room before exiting the store and running out to a vehicle driven by Liggins that was parked on the shoulder of nearby Route 78.

The charge of Hobbs Act robbery is punishable by a maximum potential penalty of 20 years in prison. The charge of using a firearm in furtherance of a crime of violence carries a maximum potential penalty of life in prison and a mandatory minimum sentence of seven years, which must run consecutively to any other prison term. Each of these counts also carries a maximum fine of $250,000.

U.S. Attorney Fishman praised special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, with the investigation leading to the arrest and charges. He also thanked the Union Police Department for its role in the investigation and Target corporate security for its cooperation.

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

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

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Carter, Darrell A. Et Al. Complaint

CAMDEN, N.J. – An Atlantic City, N.J., woman was sentenced today to 27 months in prison for stealing benefit money from FEMA through fraud relating to a presidential disaster declaration for the state of New Jersey after the nor’easter in 2010, U.S. Attorney Paul J. Fishman announced.

Debbie Hicks, 52, previously pleaded guilty to an information charging her with disaster benefits fraud and making false statements to the U.S. Department of Housing and Urban Development. She entered her guilty plea before U.S. District Judge Joseph E. Irenas, who imposed the sentence today in Camden federal court.

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

Due to FEMA’s size and the large number of victims typically resulting from a disaster, FEMA frequently has been targeted in disaster fraud schemes by individuals or groups seeking FEMA monetary assistance for benefits to which they were not entitled.

 On April 12, 2010, Hicks filed an application with FEMA seeking federal rental assistance under FEMA’s Individual Assistance Program, claiming that her apartment in Atlantic City was damaged as a result of the severe storm and was unfit for occupancy.

On April 13, 2010, a FEMA inspector confirmed Hicks’ occupancy and the damage to her rental unit, and declared her apartment uninhabitable. FEMA then awarded Hicks $923 per month in rental assistance. In her application to FEMA Hicks failed to disclose that her rent was being paid by the Atlantic County Department of Family and Community Development.

During the plea hearing, Hicks admitted that she lied on various forms that were sent to FEMA in order to continue receiving money. As a result of the fraud, Hicks received $15,691 in FEMA emergency rental assistance funds to which she was not entitled.

Hicks also admitted that, while she was defrauding FEMA, she lied to the Housing Authority and Urban Redevelopment Agency of the City of Atlantic City, which administers housing funds on behalf of U.S. Department of Housing and Urban Development (HUD). Hicks admitted that, when she applied for Section 8 housing, she failed to tell the housing authority that she was receiving funds from both FEMA and the Atlantic County Department of Family and Community Development. Hicks also admitted she lied about her prior criminal record and the fact that she had used other names and Social Security numbers.

In addition to the prison term, Judge Irenas sentenced Hicks to serve three years of supervised release and ordered her to pay $15,691 in restitution to FEMA and $7,200 to HUD.

U.S. Attorney Fishman credited special agents of the Department of Homeland Security, Office of Inspector General, under the direction of Special Agent in Charge Gregory Null, and special agents of HUD, Office of Inspector General, under the direction of Special Agent in Charge Joseph W. Clarke, for the investigation leading to today’s sentence.

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

TRENTON, N.J. – An Ocean County, N.J., man today admitted sexually abusing a 15-month-old boy 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., pleaded guilty before U.S. District Judge Joel A. Pisano in Trenton federal court to an information charging him with one count of sexual exploitation of a child.

According to documents filed in this case and statements made in court: Brindley engaged in online chats with someone who he believed to be a parent living in Ohio, but who was, in fact, a law enforcement officer in Ohio. On one occasion, Brindley engaged in sexually explicit conduct with an approximately 15-month-old child, whom he had in his care at his Toms River home, and streamed live video of that conduct over the Internet to Ohio undercover law enforcement officers.

The charge of child sexual exploitation is punishable by a mandatory minimum penalty of 15 years in prison and a maximum potential penalty of 30 years in prison and a $250,000 fine. Sentencing is scheduled for Sept. 26, 2013.

U.S. Attorney Fishman thanked the Franklin County Sheriff’s Department in Ohio, the Ocean County Prosecutor’s Office, under the direction of Prosecutor Joseph D. Coronato; and 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.

The government is represented by Special Assistant U.S. Attorney Joseph Muoio of the U.S. Attorney’s Trenton Office.

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

Brindley, Rodford Information

NEWARK, N.J– An extradited British national today admitted his role in an organization that smuggled cocaine aboard commercial airlines from the West Indies to England via the United States, U.S. Attorney Paul J. Fishman announced.

Prine George Alfonso Jones, a/k/a “Prince,” 47, of Birmingham, Great Britain, pleaded guilty to an information charging him with conspiracy to import and to export cocaine. Jones was arrested on Feb. 4, 2009, in Great Britain, for allegedly transporting narcotics directly from St. Lucia to Great Britain. Jones was extradited from Great Britain and had his initial appearance on narcotics conspiracy charges in December 2012.

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

Jones was involved in an organization whose members included Nigel Roberts, a/k/a “Skang,” another British national who previously pleaded guilty to related charges. The organization acquired cocaine in Jamaica and St. Lucia, concealed it in luggage, and provided that cocaine-filled luggage to drug couriers, who transported it by commercial airlines to Great Britain after making intermediate stops in the United States. Jones admitted to his role as a British operative of the organization who would provide transport to drug couriers and the narcotics that they smuggled.

Today’s guilty plea stems from a multi-jurisdictional and international investigation into narcotics trafficking that has resulted in multiple narcotics seizures and the charging of 14 individuals to date. Jones is the 14th member of this international cocaine trafficking ring to have pleaded guilty in the District of New Jersey.

The conspiracy charge to which Jones pleaded guilty is punishable by a maximum potential penalty of 20 years in prison and $1 million fine. Sentencing is scheduled for July 8, 2013.

U.S. Attorney Fishman credited special agents of the U.S. Department of Homeland Security, Homeland Security Investigations (HSI), under the direction of Special Agent in Charge Andrew M. McLees; and the Drug Enforcement Administration’s New Jersey Division under the direction of Acting Special Agent in Charge Robert G. Koval, in coordination with police officers of the West Midlands Police Complex Casework Unit in Birmingham, England, for the investigation leading to today’s plea. U.S. Attorney Fishman also thanked the Department of Justice’s Office of International Affairs for its assistance in obtaining Jones’s extradition.

The case is being prosecuted by Assistant U.S. Attorney Eric W. Moran of the U.S. Attorney’s Office in Trenton.

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

Jones, Prine Supersedimg Information

NEWARK, N.J. – The former part-owner and underwriter for New York-based litigation funding company The Law Funder LLC, admitted today in Newark federal court to participating in a secret kickback scheme that defrauded his former business partners of approximately $869,492, U.S. Attorney Paul J. Fishman announced.

Mathew Sheldon, 39, of New York, pleaded guilty today before U.S. District Judge Dennis M. Cavanaugh to a superseding information charging him with conspiracy to commit wire fraud through the deprivation of honest services.

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

The Law Funder, which extends loans to plaintiffs in pending civil litigation, did business with Montclair Funding Group LLC (“MFG”) – at one time headquartered in Union City, N.J. – and its owner Rory Donadio, 43, of New York. MFG was a broker between plaintiffs seeking advances against potential recoveries in pending litigation and private entities such as Law Funder. In exchange for a broker’s fee, MFG would, among other things, gather necessary information and documents in support of funding opportunities so Law Funder could evaluate whether to fund a case and for how much. Sheldon was a 25 percent owner in Law Funder and supervised the underwriting process for the company.

Sheldon admitted that from approximately February 2005 through July 2009, he conspired with Donadio to design and execute a secret kickback scheme. Sheldon would offer certain of Law Funder’s investment opportunities to MFG in exchange for personally receiving a portion of each broker’s commission Law Funder paid MFG. Sheldon and Donadio agreed to conceal their fee-splitting arrangement from Law Funder and Sheldon’s three partners. The kickback scheme resulted in approximately $869,492 in fraudulent payments to Sheldon, which were paid by wire transfer and other means.

Sheldon also admitted that he and Donadio concealed the scheme by, among other methods, using code such as “Giants” or the letter “G” in records referring to related transactions. He acknowledged he regularly communicated with Donadio to identify the coded transactions and calculate the amount payable to Sheldon pursuant to the kickback scheme.

The conspiracy count to which Sheldon pleaded guilty carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross amount of pecuniary gain or loss resulting from the offense. Sentencing is scheduled for Oct. 7, 2013.

Donadio also has pleaded guilty in connection with the scheme and awaits sentencing.

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

The government is represented by Assistant U.S. Attorneys Joseph B. Shumofsky, Mala Ahuja Harker and Jenny Kramer of the U.S. Attorney’s Office Economic Crimes Unit, and Evan Weitz of the office’s Asset Forfeiture and Money Laundering Unit.

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

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Defense counsel: Assistant Federal Public Defender Patrick N. McMahon Esq.

Sheldon Superseding Information

CAMDEN, N.J. – A former employee of The Vacation Ownership Group LLC admitted today to conspiring to defraud owners of timeshare properties, U.S. Attorney Paul J. Fishman announced.

Ryan E. Bird, a/k/a “Chris Jackson,” a/k/a “Matthew Bross,” 35, of Clementon, N.J., pleaded guilty before U.S. District Court Judge Noel L. Hillman in Camden federal court to an information charging him with one count of conspiracy to commit mail and wire fraud and one count of wire fraud.

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

The Vacation Ownership Group, a/k/a VO Group LLC (VO Group), purported to offer consulting services to owners of timeshares, including timeshare cancellation services. In April 2010, Bird started working at the VO Group and was trained by Adam Lacerda and VO Group managers to call customers using prepared scripts. Bird would call customers and give them the false impression that he was working for a bank or lending institution. Bird then would falsely represent that the VO Group could pay off the customers’ timeshares or have their timeshares cancelled. After hearing Bird’s false representations, some customers sent checks to the VO Group. Bird admitted to causing more than $200,000 in losses.

Bird also admitted to devising a separate scheme to defraud the N.J. Department of Labor by collecting unemployment compensation benefits while working at the VO Group. Bird pleaded guilty to a count charging him with applying for and collecting $18,104 in unemployment compensation benefits to which he was not entitled.

On Jan. 23, 2013, other members of the VO Group were charged in a Superseding Indictment with conspiracy to commit mail and wire fraud and other charges. Additional members of the VO Group were also charged by criminal complaint in April 2012. To date, 13 members of the VO Group, including Bird, have pleaded guilty to conspiring to commit mail fraud and wire fraud. As for the Lacerdas and other defendants who have not been convicted in this case, the charges and allegations against them are merely accusations and they are considered innocent unless and until proven guilty.

The mail and wire fraud conspiracy charge to which Bird pleaded guilty is punishable by a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gain or loss caused by the offense. The wire fraud charged is punishable by a maximum of 20 years in prison and a $250,000 fine, or twice the gain or loss caused by the offense. Sentencing is scheduled for Oct. 3, 2013.

U.S. Attorney Fishman credited special agents from the FBI’s Atlantic City Resident
Agency, under the direction of Special Agent in Charge Aaron T. Ford in Newark; and special agents from the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, under the direction of Special Agent in Charge Robert Panella, New York Region, for their roles in the investigation leading to these guilty pleas. He also thanked the N.J. Department of Labor, Benefit Payment Control Unit, for its assistance.

The government is represented by Assistant U.S. Attorneys Alyson M. Oswald and R. David Walk, Jr. of the U.S. Attorney’s Office Criminal Division in Camden.

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Defense counsel: Richard Coughlin Esq., Assistant Federal Public Defender, Camden, N.J.

Bird Information

NEWARK, N.J. – A Bergen County, N.J., man admitted today that he agreed to give a $10,000 corrupt payment to personnel at the Passaic County Prosecutor’s Office to dismiss criminal charges that were pending against him, U.S. Attorney Paul J. Fishman announced.

Mahmud Hammad, 36, of Rutherford, N.J., pleaded guilty before U.S. District Judge Dennis M. Cavanaugh to an information charging him with knowingly and corruptly offering, giving and agreeing to give a corrupt payment to influence and reward Passaic County Prosecutor’s Office personnel.

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

From May 2012 to August 2012, Hammad was a defendant in a criminal case that was pending before the Passaic County Superior Court and was being prosecuted by the Passaic County Prosecutor’s Office. On July 27, 2012, and August 8, 2012, Hammad met with an FBI undercover agent who purported to have access to authorities at the Passaic County Prosecutor’s Office. During these meetings, which were recorded by the undercover agent, Hammad agreed to pay $10,000 to personnel at the Passaic County Prosecutor’s office to have his pending criminal case dismissed. No one at the Passaic County Prosecutor’s Office was involved in the corrupt activity discussed during these meetings. During the meetings, Hammad also gave the undercover agent $1,500 cash as a “good faith” payment.

The count to which Hammad pleaded guilty is punishable by a maximum potential penalty of 10 years in prison and a $250,000 fine. Sentencing is scheduled for Oct. 7, 2013.

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

The Government is represented by Assistant U.S. Attorney Barbara Llanes of the Special Prosecutions Division in Newark.

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Hammad Information

NEWARK, N.J. – A Union County man surrendered to law enforcement officers today for allegedly defrauding hundreds of sellers of foreign and antique banknotes on the eBay online auction site, U.S. Attorney Paul J. Fishman said.

David D’Aries, 49, of Summit, N.J., is charged by complaint with one count of mail fraud.  D’Aries is expected to make his initial appearance today before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court.

According to the criminal Complaint:

From June 2007 through October 2012, D’Aries devised a scheme to defraud individuals from around the world by posing as a buyer interested in purchasing rare and antique foreign banknotes for bid on eBay. D’Aries, as the winning bidder in approximately 400 eBay transactions, made payment for the auctioned item via PayPal or credit card, received the item from the eBay seller via the United States mail or other commercial interstate carrier, and then falsely claimed to various credit card companies that the item was never received from the seller or was an unauthorized charge. D’Aries posed as three different individuals, including his deceased father, in his fraudulent eBay transactions.

Losses to eBay/PayPal and the various eBay sellers as a result of D’Aries’ fraudulent transactions total approximately $122,000. A search of D’Aries’ home by law enforcement on June 30, 2011, revealed several thousand foreign banknotes and 165 pieces of mail from around the world that were addressed to D’Aries and the other identities he allegedly used.

D’Aries faces a maximum potential penalty of 20 years in prison and a $250,000 fine.

U.S. Attorney Fishman credited inspectors of the U.S. Postal Inspection Service, under the direction of Postal Inspector in Charge Maria L. Kelokates in Newark with the investigation leading to today’s arrest. He also thanked the Summit Police Department and the Union County Prosecutor’s Office for their roles in the case.

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

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

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Defense counsel: Alan Zegas Esq., Chatham, N.J.

D'Aries, David Complaint

TRENTON, N.J. – The owner of several auto parts stores in northern New Jersey admitted today to underreporting on his tax returns more than $1.1 million in cash income that he kept for his personal benefit, U.S. Attorney Paul J. Fishman announced.

Emanuel Marques, of Whippany, N.J., pleaded guilty to an information charging him with one count of subscribing to false personal federal income tax returns. He entered his guilty plea before U.S. District Judge Freda L. Wolfson in Trenton federal court.

According to documents filed in this case and statements made during Marques’s guilty plea proceeding:

Marques admitted that for the tax years 2009 through 2011 he filed U.S. individual income tax returns in which he claimed to report all of his income from his auto parts stores, but which omitted the approximately $1,153,579 in cash he had diverted from the businesses for his personal use. Marques’ intentional failure to disclose true, correct and complete information to the IRS resulted in a tax loss to the United States of approximately $375,869.

As part of his guilty plea, Marques has agreed to make full restitution to the IRS for all losses resulting from his filing of false tax returns. He has also agreed to forfeit $1 million in a related civil case with the U.S. Attorney’s office.

The subscribing to false tax returns charge carries a maximum potential penalty of three years in prison and a $250,000 fine. Sentencing is currently scheduled for Sept. 18, 2013.

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

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

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Defense counsel: George Schneider Esq., Newark

Marques, Emanuel Information

NEWARK, N.J. – A father and son who ran a mortgage loan fraud scheme that succeeded in obtaining $4.4 million in mortgage loans while masquerading as a foreclosure rescue operation were both sentenced to prison today, U.S. Attorney Paul J. Fishman announced.

Vito C. Grippo, 58, of Jackson, N.J., the president of Morgan Financial Equity Shares and Vanick Holdings, LLC, based in Holmdel, N.J., was sentenced to 96 months in prison. He previously pleaded guilty before U.S. District Judge Kevin McNulty to an Indictment charging him with one count of conspiracy to commit wire fraud, two counts of filing a false tax return for the years 2006 and 2007, and one count of aiding and procuring the filing of a false tax return for the year 2008.

Frederick “Freddie” Grippo, 32, of Old Bridge, N.J., formerly a loan officer at Worldwide Financial Resources and an officer of Vanick Holdings, was sentenced to 41 months in prison. He previously pleaded guilty before Judge McNulty to an information charging him with one count of conspiracy to commit wire fraud. Judge McNulty imposed both sentences today in Newark federal court.

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

Between January 2008 and February 2010, Vito Grippo held Morgan Financial out to the public as a company that could help homeowners who faced foreclosure on their homes through something Grippo called the “Equity Share Program.” As described by Grippo and his associates, the Equity Share Program involved creating a limited liability company (LLC) in the name of the homeowner’s house, in which the homeowner would supposedly own a 90 percent interest with the rest to be owned by one or two private investors.

In reality, the so-called investors invested nothing and were instead straw buyers recruited by Vito Grippo or his son, Frederick Grippo, because they had good credit. The Grippos and their associates then applied for mortgages in the names of the “investors” for the purchase of the properties owned by the homeowners in distress.

A homeowner in distress would come to a closing in Vito Grippo’s office in Holmdel and be given a stack of documents to sign to prevent foreclosure. The homeowners frequently did not understand that they would be transferring title to their homes to the “investor.” 

The new mortgage loan applications filled out by the Grippos or their associates in the name of one of the investors contained materially false information about the loan applicant’s monthly income, his assets and whether the residence to be bought would be applicant’s primary residence.

Once the new loan application was filled out, it would be submitted to Worldwide Financial Resources for processing, where Freddie Grippo, a loan officer at Worldwide, would see to it that the loan was approved. Once the loan was approved and the loan money was wired to the settlement agent for a given transaction, Vito Grippo would direct the settlement agent to forward a portion of those loan proceeds to bank accounts that Vito Grippo controlled.

Properties that lost money through the Equity Share Program were found throughout the metropolitan area, including homes in Rutherford, N.J., Monroe, N.J. and Brooklyn, N.Y.

For the year 2006, Vito Grippo did not report $289,780 in gross income from the activities of Vanick Holdings LLC. For the year 2007, he did not report $213,261; and for the year 2008, he did not report $1,366,261.

In addition to the prison terms, Judge McNulty sentenced Vito Grippo to five years of supervised release and Frederick Grippo to three years of supervised release. Restitution will be determined at a hearing on July 17, 2013.

U.S. Attorney Fishman credited special agents from the FBI’s Red Bank Resident Agency, under the direction of Special Agent in Charge Aaron T. Ford in Newark; special agents from IRS—Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen, and postal inspectors in the Newark Division, under the direction of Inspector in Charge Maria L. Kelokates, for the investigation leading to today’s sentences.

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

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Defense counsel: Vito Grippo: Patrick N. McMahon Esq., Assistant Federal Public Defender, Newark
Frederick Grippo: Stacy A. Biancamano Esq., West Orange, N.J.