District of New Jersey

NEWARK, N.J. – A Certified Public Accountant with an office in Clifton, N.J., and one of his clients were arrested this morning by federal agents for allegedly trying to bribe an IRS revenue agent to reduce the client’s tax liability of more than $900,000, U.S. Attorney Paul J. Fishman announced.

Hamed Aref, 41, of Clifton, N.J., and his client Yousef Zaben, 62, of North Bergen, N.J., are each charged in a criminal complaint with one count of conspiracy to bribe a public official and two counts of bribery of a public official. Both men are variously charged for alleged bribes related to Zaben’s tax liability. One of the bribery charges against Aref also alleges he attempted to pay an IRS revenue agent to reduce the tax liability of another client, Zaben’s son.

The men were arrested this morning at their homes by special agents of the Department of the Treasury’s Office of Inspector General for Tax Administration (TIGTA) and are expected to appear this afternoon before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court.

According to documents filed in this case:

An IRS revenue agent working in the Mountainside, N.J., IRS office – referred to in the complaint as “R.A.” – was assigned to conduct an audit in February 2012 of Zaben’s son, a client of Aref’s. During a meeting with Aref that month, R.A. told him that approximately $90,000 in bank discrepancies for the 2010 tax year would require additional tax payments.

Aref ran his own accounting and tax preparation firm. In a conversation begun in Aref’s office and continued outside the building, per the CPA’s request, Aref asked R.A. to reduce the tax liability by $20,000, offering approximately $2,000 to the agent in exchange. R.A. pretended he would think about the offer and set a date for another meeting with Aref, then immediately reported the bribe attempt to law enforcement officers from TIGTA.

When Aref and R.A. met again in March 2012, R.A. was outfitted with video and audio recording equipment provided by law enforcement. At that meeting, Aref asked for documentation reflecting a reduction in his client’s income of more than $32,000 for tax years 2009 and 2010, and R.A. produced a false audit report reflecting the requested numbers. Aref then asked R.A. to leave the office and placed an envelope with $3,000 cash on R.A.’s chair. When R.A. returned, Aref told the agent the money was from Zaben, and stood guard while R.A. counted the cash out on the desk.

A subsequent IRS audit of Zaben revealed a number of large, unexplained bank deposits in 2009 and 2010, totaling more than $1.6 million, on which Zaben owed the IRS approximately $904,367. During meetings in February and March 2013, Aref and R.A. met at the Clifton office to discuss the liability. Aref provided false figures to R.A. that showed a total tax liability of approximately $1,137.94 for those years, and suggested a meeting between Zaben and R.A.

At that meeting, in April 2013, R.A. showed Zaben both the correct and falsified audit reports, and Zaben paid R.A. the falsely reduced amount of $1,137.94. Zaben then produced $10,000 in cash, which both defendants said was for R.A. Zaben also said he would pay R.A. an additional $5,000, some of which he gave to R.A. at a later meeting.

Each of the meetings in which bribes were paid was recorded by law enforcement.    

The conspiracy count carries a maximum potential penalty of five years in prison, and the bribery counts each carry a maximum potential penalty of 15 years in prison. Each of the counts also carries a maximum $250,000 fine.

U.S. Attorney Fishman praised special agents of TIGTA, under the direction of Special Agent in Charge Robert Geary, for the investigation leading to today’s arrests.

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

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

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Aref, Hamed et al. Complaint

NEWARK, N.J. – One of the owners and operators of a Totowa, N.J., test preparation business, who was extradited from Latvia in October 2012, was ordered to pay $700,000 in restitution for her role in stealing “live” licensing examination questions from the National Board of Medical Examiners, U.S. Attorney Paul J. Fishman announced.

Egija Kuka, 40, who owned and operated Optima University with her former husband, co-defendant Eihab Suliman, 50, previously pleaded guilty before U.S. District Judge Stanley R. Chesler to two counts of an indictment charging her with mail and wire fraud and conspiracy to commit mail and wire fraud. Judge Chesler imposed the sentence, which also included eight months’ time served, in Newark federal court. Suliman remains a fugitive.

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

Optima University was a test preparation business that provided courses designed to prepare students for the U.S. Medical Licensing Examination (USMLE), which is created and administered by the National Board of Medical Examiners (NBME), an independent, not-for-profit organization headquartered in Philadelphia.

The USMLE is used by medical licensing authorities throughout the United States to evaluate physicians seeking an initial license to practice medicine. The test assesses whether international medical school graduates are ready to enter accredited residency or fellowship programs in the United States. Medical school graduates – whether they graduated from a United States medical school or a foreign medical school – generally must complete at least some parts of the USMLE as a prerequisite to enter into residency training or receive a medical license. NBME goes to extensive lengths to keep test questions secure and examinees are advised that the test questions used in the USMLE are copyrighted and not to be distributed or reproduced.

Beginning in December 2007, Kuka and Suliman solicited potential Optima University students by guaranteeing that the students would pass the USMLE, even if the student had previously failed it. Kuka and Suliman also assured potential students that any tuition paid to Optima University would be “risk-free,” and that any student who did not pass the USMLE could retake the Optima course at no additional cost.

On Dec. 2, 2007, Kuka applied via the internet to take the USMLE in Milan, Italy, falsely stating that she had graduated from the University of Oradea, an accredited medical school in Romania, with a doctorate in medicine. On Dec. 18, 2007, Kuka submitted a “Certification of Identification Form” along with a copy of a fabricated diploma from University of Oradea’s medical school to enable her to take the exam and gain access to, steal and reproduce the live test questions.

Kuka took Steps 1 and 2 of the USMLE on April 7, 2008, and April 14, 2008, in Milan. Video surveillance from those test sessions show Kuka using a small digital video recording device to record the live test questions that were displayed on the computer monitor. On May 28, 2008, Kuka sat again for Step 1 of the USMLE examination.

On May 28, 2008, a search was conducted at Optima University and live test questions were found. These live test questions were used by Suliman and Kuka on practice examinations provided to Optima University students.

The indictment was returned in July 2011. Kuka had already fled to Latvia. In September 2011, U.S. authorities requested Kuka’s extradition pursuant to the extradition treaty between the United States and Latvia.

In addition ordering her to pay restitution to the National Board of Medical Examiners and sentencing her to time served, Judge Chesler sentenced Kuka to two years of supervised release.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, with the investigation that led to today’s sentence. He also thanked the Office of International Affairs, Criminal Division, at DOJ and Officials in the Republic of Latvia for their assistance in this matter.

The government is represented by Assistant U.S. Attorney Deborah J. Gannett of the U.S. Attorney’s Office Health Care and Government Fraud Unit.

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Defense counsel: Peter Carter Esq., Assistant Public Defender’s Office, Newark

TRENTON, N.J. – A New York man has admitted his role in leading one of the largest credit card fraud schemes ever charged by the U.S. Department of Justice, U.S. Attorney Paul J. Fishman announced.

Tahir Lodhi, 53, of Hicksville, N.Y., pleaded guilty before U.S. District Judge Anne E. Thompson in Trenton federal court to an information charging him with one count of conspiracy to commit bank fraud.

“Today’s admission of guilt by Tahir Lodhi brings to justice a leader of one of the biggest credit card fraud schemes ever charged by the United States,” U.S. Attorney Fishman said. “This type of fraud increases the costs of doing business for every American consumer, every day. Lodhi hurt not only the credit card issuers, but everyone who pays increased interest rates and fees because of the money sucked out of the system by criminals.”

“The criminal enterprise under Mr. Lodhi’s direction took advantage of the system and the good faith of banks and credit lenders they defrauded to the tune of hundreds of millions of dollars,” Aaron T. Ford, FBI Special Agent in Charge, Newark, said. “In doing so, they took advantage of the American public and legitimate users of the banking industry so that they and their families could live a lavish lifestyle. Today’s plea is the result of the hard work of the men and women of the FBI and our partners at the U.S. Secret Service, U.S. Postal Inspectors and the U.S. Social Security Administration, as well as a significant partnership with the private sector. In today’s world, where more and more individuals seek the fast buck by trying to defraud hard-working Americans, the Newark office of the FBI remains committed and focused on combating fraud at all levels of society.”

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

Lodhi directed the activities of a number of other conspirators in fabricating more than 7,000 false identities to obtain tens of thousands of credit cards. They doctored credit reports to pump up the spending and borrowing power associated with the cards. Lodhi and others then borrowed or spent as much as they could, based on the phony credit history, but did not repay the debts, causing more than $200 million in confirmed losses to businesses and financial institutions.

The scheme involved a three-step process in which the defendants would:

· “Make up” a false identity by creating fraudulent identification documents and a fraudulent credit profile with the major credit bureaus.
· “Pump up” the credit of the false identity by providing false information about that identity’s creditworthiness to the credit bureaus. Believing the furnished information to be accurate, the credit bureaus would incorporate this material into the false identity’s credit report, making it appear that the false identity had excellent credit.
· “Run up” large loans using the false identity. The higher the fraudulent credit score, the larger the loans that the defendants could obtain. These loans were never repaid, and Lodhi and his conspirators reaped the profits.

The Sham Companies

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

They created dozens of sham companies that did little or no legitimate business, obtained credit card terminals for the companies and then ran up charges on the fraudulent cards. To accept payments in the form of credit cards, a business must establish a merchant account with an entity known as a merchant processor. The merchant processor provides the business with equipment to process credit cards, receives payments from credit card companies for credit cards run at the business, and deposits those payments, minus a fee, into the business’ bank account. When the merchant processors shut down accounts operated by the conspirators for fraud, they would apply for new terminals and create new companies.

The sham companies also served as “furnishers,” providing the credit bureaus with false information about the credit history of numerous false identities of people who purportedly worked at or owned the companies.

Tradelines

Lodhi and his conspirators also used sophisticated methods – including a network of black-market businesses called “tradelines” providers – to commit fraud.

Tradelines come in two varieties: primary tradelines and authorized user tradelines. Primary tradelines are lines of credit in a credit history. If a credit card user has primary tradelines in good standing, it can have a significant impact on the user’s credit score, enabling the user to borrow more from credit card issuers. Lodhi and his conspirators, however, trafficked in fraudulent primary tradelines.

A second kind of tradeline is the “authorized user” tradeline, where a credit card holder adds another, so-called “authorized user,” to a credit card account. This raises the credit score of the authorized user, who inherits some of the primary user’s credit history.

Certain of Lodhi’s conspirators created and sold fake lines of credit for false identities made up by Lodhi and others. These fraudulent primary tradelines were then used to increase the credit limits on fraudulent cards, so that the conspirators could reap even larger profits. Lodhi and other conspirators used the authorized user tradelines to create new identities.

Complicit Businesses

Lodhi and his conspirators also relied upon complicit businesses, including several jewelry stores in the Jersey City, N.J., area, to extract money from the fraudulent cards. The complicit businesses would allow certain conspirators to conduct sham transactions on the phony cards and would then receive the proceeds from the credit card companies and split them with the other conspirators. These complicit businesses maintained multiple credit card merchant processing accounts at the same time. By operating dozens of accounts, these businesses furthered the conspiracy by allowing more fraudulent transactions to be processed before the merchant processors shut down the account. The proceeds from these merchant terminals were deposited into various business checking accounts, and the money was paid out to the owners of the complicit businesses, along with other conspirators.

Lavish Spending

The conspiracy generated enormous profits for Lodhi and his conspirators – even though they spent millions of dollars sustaining the elaborate network of drop addresses and running credit reports on the thousands of false identities. Records of the New York and New Jersey Departments of Labor reveal that many of Lodhi’s conspirators had no reported legitimate employment in the last five years. Nonetheless, Lodhi and his conspirators used the proceeds of the criminal enterprise to buy luxury automobiles, electronics, spa treatments, expensive clothing and millions of dollars in gold. They also stockpiled large sums of cash. Law enforcement discovered approximately $70,000 in cash in the oven of one of Lodhi’s conspirators.

Lodhi’s conspirators also moved millions of dollars through accounts under their control, and wired millions of dollars overseas. An analysis of 169 bank accounts of the defendants, sham companies, and complicit businesses has identified $60 million dollars in proceeds that flowed through the accounts, much of it withdrawn in cash. The conspirators wired millions of dollars to Pakistan, India, the United Arab Emirates, Canada, Romania, China and Japan. Due to the massive scope of the conspiracy, which involved more than 25,000 fraudulent credit cards, loss calculations are ongoing. Final figures may grow beyond the present confirmed losses of more than $200 million.

The count to which Lodhi pleaded guilty is punishable by a maximum potential penalty of 30 years in prison and a fine of $1 million, or twice the gain or loss caused by the offense. Sentencing is scheduled for Oct. 1, 2013.

The investigation previously resulted in the arrest of 22 defendants and the seizure of more than $4 million in gold from jewelry stores in Jersey City.

U.S. Attorney Fishman praised special agents of the FBI’s Cyber Division, under the direction of Special Agent in Charge Aaron T. Ford, for the investigation leading to today’s guilty plea. He also thanked postal inspectors under the direction of Postal Inspector in Charge Marie L. Kelokates, the U.S. Secret Service, under the direction of Special Agent in Charge James Mottola, and the U.S. Social Security Administration for their roles in the investigation.

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

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Defense counsel: Howard Simmons Esq., New York

Lodhi Information

NEWARK, N.J. – A Somerset County doctor practicing internal medicine at Newark Community Health Center, where she is the clinical director, today admitted receiving cash kickbacks for diagnostic testing referrals of her patients, U.S. Attorney Paul J. Fishman announced.

Padma Siripurapu, 46, of Belle Mead, N.J., pleaded guilty to an information charging her with one count of soliciting and receiving more than $50,000 in illegal cash kickbacks for patient referrals in violation of the federal health care anti-kickback statute.

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

From 2009 through December 2011, Siripurapu agreed with representatives of the diagnostic center Orange Community MRI LLC (Orange MRI) that Orange MRI would pay her a set amount of cash for every MRI, CAT scan, ultrasound, echocardiogram, and DEXA scan she referred. Siripurapu referred patients for more than a thousand of these tests during that time period and was paid a per-test amount for those referrals.

Siripurapu admitted that on Nov. 2, 2011, she received $3,600 in cash from a government informant at her doctor’s office in Newark in exchange for referrals. On Nov. 17, 2011, again at her office in Newark, Siripurapu received another kickback for patient referrals, this time $3,450 in cash.

The anti-kickback charge carries a maximum potential penalty of five years in prison and a maximum $250,000 fine, or twice the gain or loss caused by the offense. Sentencing is scheduled for Oct. 9, 2013.

Siripurapu is the twelfth person in the government’s investigation of Orange MRI and its corrupt referring doctors to plead guilty. Nine health care providers to have pleaded guilty to receiving kickbacks have agreed to forfeit $325,300 in illegal kickbacks from Orange MRI. The two other defendants, Ashokkumar Babaria, Orange MRI’s former medical director, and Chirag Patel, Orange MRI’s former executive director, have agreed to forfeit their corrupt gains. Babaria agreed to forfeit his revenues traceable to corrupt referrals, which the government has estimated could reach as much as $2 million. Patel has forfeited $89,180. The remaining defendants charged in the investigation are charged by complaints or indictments at this time.

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 investigators with the U.S. Attorney’s Office’s criminal investigator program, for the investigation leading to today’s guilty plea.

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

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Defense counsel: Bruce A. Levy Esq. and Lawrence S. Lustberg Esq., Newark

Siripurapu Information

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

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

The eight defendants are charged together in a criminal complaint with conspiracy to commit wire fraud, conspiracy to commit money laundering and conspiracy to commit identity theft. Allegedly, Oleksiy Sharapka, 33, of Kiev, Ukraine, directed the conspiracy with the help of Leonid Yanovitsky, 38, also of Kiev. Oleg Pidtergerya, 49, of Brooklyn, N.Y.; Robert Dubuc, 40, of Malden, Mass.; and Andrey Yarmolitskiy, 41, of Atlanta, managed crews in their respective cities. Richard Gundersen, 46, of Brooklyn, and Lamar Taylor, 37, of Salem, Mass, worked for Pidtergerya and Dubuc, respectively. Ilya Ostapyuk, 31, of Brooklyn, allegedly facilitated the movement of fraud proceeds.

Pidtergerya, Ostapyuk and Dubuc were arrested this morning at their homes by federal agents, and Yarmolitskiy was arrested yesterday, June 11, 2013, as he arrived at John F. Kennedy International Airport on an overseas flight. He is expected to appear on a date to be determined before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court. Pidtergerya and Ostapyuk are to appear before Judge Waldor this afternoon. Dubuc is scheduled for an initial appearance in federal court in Boston. Taylor and Gundersen are being pursued by law enforcement, and Sharapka and Yanovitsky, Ukrainian nationals, remain at large.

“According to the complaint unsealed today, cybercriminals penetrated some of our most trusted financial institutions as part of a global scheme that stole money and identities from people in the United States,” said U.S. Attorney Fishman. “Today’s charges and arrests take out key members of the organization, including leaders of crews in three states that used those stolen identities to “cash out” hacked accounts in a series of internationally coordinated modern-day bank robberies. We will continue to pursue our investigation into this scheme and our fight against the rising threat of criminals for whom computers are the weapon of choice.”

“The investigation and successful prosecution of suspects involved in organized global fraud directed at electronic payment systems is dependent upon the collaborative efforts of federal law enforcement and private industry to ensure the confidentiality, integrity and availability of these systems as part of our critical financial infrastructure,” said Special Agent in Charge James Mottola of the U.S. Secret Service, Newark Field Office.

“These arrests underscore HSI’s commitment and the joint ongoing efforts across the entire law enforcement spectrum to stop these cybercriminals in their tracks,” said Andrew M. McLees, Special Agent in Charge of Immigration and Customs Enforcement, Homeland Security Investigations (HSI) in Newark. “HSI special agents will use every cutting-edge technological investigative tool at their disposal to dismantle these global criminal enterprises at the source and bring them to justice.”

According to the criminal complaint unsealed today:

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

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

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

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

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

If convicted, each of the defendants face a maximum potential penalty of 20 years in prison on the conspiracy to commit wire fraud count, 20 years in prison on the conspiracy to commit money laundering count and 15 years in prison on the conspiracy to commit identity theft count. The wire fraud and identity theft counts also carry a maximum fine of $250,000, or twice the gross amount of pecuniary gain or loss resulting from the offenses. The money laundering conspiracy count carries a maximum fine of $500,000, or twice the value of the monetary instruments involved.

U.S. Attorney Fishman credited the U.S. Secret Service, under the direction of Special Agent in Charge Mottola; HSI, under the direction of Special Agent in Charge McLees; Defense Criminal Investigative Service, under the direction of Special Agent in Charge Jeffery D. Thorpe; and IRS-Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen with the ongoing investigation. He also thanked the Department of Homeland Security’s Customs and Border Protection for assistance with the Yarmolitskiy arrest.

The government is represented by Assistant U.S. Attorneys Gurbir S. Grewal, of the Computer Hacking and Intellectual Property Section of the U.S. Attorney’s Office Economic Crimes Unit, and Barbara Ward of the office’s Asset Forfeiture and Money Laundering Unit.

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

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

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Sharapka, Oleksiy et al. Complaint
Sharapka, Oleksiy et al. Amended Complaint

CAMDEN, N.J. – A Camden County, N.J., man was sentenced today to 46 months in prison for organizing a plot to sink his fishing boat off the coast of Cape May, N.J., in August 2009 to collect $400,000 from an insurance company, U.S. Attorney Paul J. Fishman announced.

Scott Tran, 40, of Cherry Hill, N.J., previously pleaded guilty before U.S. District Judge Renee Marie Bumb to an Indictment charging him with conspiracy to destroy a vessel on the high seas. Judge Bumb imposed the sentence today in Camden federal court.

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

Tran, Manh Nguyen, 60, of Philadelphia, and others engaged in a scheme to sink the Alexander II so that Tran could collect on an insurance policy with State National Insurance Co. In July 2009, Tran hired a captain for the ship, whom Tran and Nguyen then solicited to sink the Alexander II in return for payment. The captain then recruited a crew to help him sink the boat.

On Aug. 2, 2009, the Alexander II left Cape May. Although the Alexander II had little fuel, ice, food, and other supplies for a lengthy fishing trip, the ship’s log was falsified to read that more than 50 fish, weighing approximately 3,000 pounds, had been caught. Once the Alexander II reached a point 86 miles southeast of Cape May, the captain and his crew worked together in an unsuccessful attempt to sink it. After filling parts of the boat with seawater, they sent a distress signal to the U.S. Coast Guard and abandoned ship together in a life raft.

Tran admitted that he communicated by email with the captain during the voyage, telling him that he should sink the boat. The U.S. Coast Guard rescued the captain and crew. The Coast Guard found no fish aboard the boat or in the hold. Tran admitted that he gave Nguyen several hundred dollars in cash to give to the captain and each member of the crew for their participation in the attempted sinking. Nguyen admitted to making those payments. Tran admitted that he offered to pay the captain $10,000 and each crew member $2,000 to sink the boat.

Tran then submitted a claim to his insurance broker in order to collect $400,000, the limit of the insurance policy. After the claim was denied, Tran filed a lawsuit in New Jersey Superior Court in Camden County, seeking damages of $400,000, including damage to the Alexander II and loss of use of the boat.

In addition to the prison term, Tran was sentenced to three years of supervised release, fined $75,000 and ordered to pay $280,000 in restitution. Nguyen was sentenced June 1, 2012, to two years in prison. Two crew members, Erik James, 41, of Cape May Courthouse, and Christopher Martin, 41, of Cape May County, both were previously sentenced 30 months in prison.

U.S. Attorney Fishman credited special agents of FBI, Atlantic City Resident Agency, Newark Division, under the direction of Special Agent in Charge Aaron T. Ford; and investigators with the Cape May County Prosecutor’s Office, under the direction of Prosecutor Robert L. Taylor, for the investigation leading to today’s sentence. He also thanked the Philadelphia and Cape May office of the U.S. Coast Guard, Investigative Division, for its assistance.

The government is represented by Assistant U.S. Attorney Howard Wiener of the U.S. Attorney’s Office Criminal Division in Camden.

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Defense counsel: Earl Kauffman Esq. of Philadelphia

CAMDEN, N.J. – A Bergen County, N.J., dentist and owner of three dental practices in Bergen and Monmouth counties, was sentenced today to 21 months in prison for evading more than $800,000 in taxes and failing to disclose almost $1.3 million in income in a bankruptcy petition, U.S. Attorney Paul J. Fishman announced.

Stephen A. Beukas, 47, of Mahwah, N.J., previously pleaded guilty before U.S. District Judge Renee Marie Bumb to an information charging him with one count each of tax evasion and bankruptcy fraud. Judge Bumb imposed the sentence today in Camden federal court.

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

From early 2005 through 2008, Beukas was a practicing dentist and the sole owner of Stephen Beukas, DMD, PA (SBPA), New Jersey Mobile Dental Practice PA (MDPA) and Mobile Dental Practice PC (MDPC), which were dental practices located in Wyckoff, N.J, and Colts Neck, N.J. MDPA performed dental services for senior citizens and others who resided in nursing homes throughout New Jersey.

For the years 2005, 2006, 2007 and 2008, Beukas intentionally failed to provide the IRS with accurate information on the $2.6 million income he received as owner of the three practices. On Sept. 12, 2009, Beukas filed a tax return in which he falsely stated that his total income for the calendar year 2006 was $632,945, and that the tax owed was $187,905. Beukas failed to file timely tax returns in 2005, 2007, and 2008. His failure to disclose correct information to the IRS resulted in a tax loss to the U.S. of $800,309.

In 2008, when Beukas filed for Chapter 11 bankruptcy, he also failed to disclose almost $1.3 million in income he received as the sole owner of MDPC.

In addition to his prison term, Judge Bumb sentenced Beukas to two years of supervised release, fined him $50,000 and ordered him to pay $69,883 in restitution to the bankruptcy trustee for distribution to creditors.

U.S. Attorney Fishman credited special agents of IRS – Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen; and Region 3 U.S. Trustee Roberta DeAngelis and the Newark office of the U.S. Trustee, for the investigation leading to today’s sentence.

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

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

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

NEWARK, N.J. – An Essex County, N.J., man was sentenced today to 120 months in prison for robbing the Garden State Community Bank in Newark on two separate occasions, U.S. Attorney Paul J. Fishman announced.

Alfred Ferguson, 55, of Newark, previously pleaded guilty before U.S. District Judge Stanley R. Chesler to two counts of bank robbery. Judge Chesler imposed the sentence today in Newark federal court.

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

Alfred Ferguson committed two bank robberies on Sept. 17, 2012, and October 9, 2012, both of the Garden State Community Bank in Newark. Ferguson used a similar procedure for both robberies: After entering the bank wearing a red bandana over the lower part of his face, Ferguson would verbally threaten the bank teller, vault over the glass partition, and empty money from bank tellers’ drawers. While fleeing on his bicycle from the scene of the second robbery, Ferguson was apprehended by the police.

In addition to the prison term, Judge Chesler sentenced Ferguson to three years of supervised release and ordered him to pay $34,136 in restitution.

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 sentence. He also thanked the Newark Police Department for their contribution to the case.

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

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Defense counsel: John Yauch Esq., Federal Public Defender’s Office, Newark

NEWARK, N.J. – The president of Parsippany, N.J.-based Biodiagnostic Laboratory Services LLC (BLS), three BLS employees and three associates admitted today to a conspiracy in which millions of dollars in bribes were paid to physicians over a number of years in exchange for blood sample referrals worth more than $100 million to the company, U.S. Attorney Paul J. Fishman announced.

Each of the seven defendants – David Nicoll, 39, of Mountain Lakes, N.J.; Scott Nicoll, 32, of Wayne, N.J.; Cliff Antell, 38, of Rumson, N.J.; Luke Chicco, 40, of Garden City, N.Y.; Doug Hurley, 33, of Hillsborough, N.J.; Kevin Kerekes, 47, of Florham Park, N.J.; and Craig Nordman, 34, of Whippany, N.J. – pleaded guilty to an information charging him with one count of conspiracy to violate the Anti-Kickback Statute and the Federal Travel Act and one count of money laundering. The defendants entered their guilty pleas before U.S. District Judge Stanley R. Chesler in Newark federal court.

“Today seven men, including the president of a diagnostic lab, admitted to a conspiracy making more than $100 million in illegal income from business brought through bribes,” said U.S. Attorney Fishman. “Individual greed has no place in a treatment plan, and people seeking medical help deserve to know a doctor’s recommendations are based on professional expertise, not illicit profits. Today is an important step, but we aren’t finished holding criminals responsible for this conspiracy, or who break the law to put profits over patients.”

“Health care fraud is a serious crime which impacts all Americans either directly or indirectly, by inflating costs in the health care system,” said Newark FBI Special Agent in Charge Aaron T. Ford. “In this day and age when health care is a daily topic of discussion, the Newark office of the FBI remains dedicated and committed to combating fraud throughout the health care system. This investigation and these pleas entered today represent a tremendous effort by law enforcement to stem the tide of pay to play in health care in New Jersey.”

“Financial inducements, little more than bribes, must never interfere with proper medical care,” said Tom O’Donnell, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services region including New Jersey. “We will tirelessly pursue criminals greedily manipulating public health care programs serving vulnerable Americans.”

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

On April 9, 2013, federal agents arrested BLS president and part owner, David Nicoll; Scott Nicoll, a senior BLS employee and David Nicoll’s brother; and Nordman, a BLS employee and the CEO of Advantech Sales LLC – an entity used by BLS to make illegal payments. They were then 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 remain pending.

Hurley, also a BLS employee, and associates Antell, Chicco and Kerekes, surrendered today to the FBI.

The conspiracy made millions in illegal profits between 2006 and April of 2013. During their guilty pleas, David and Scott Nicoll admitted that BLS made substantially more than $100 million from Medicare and private insurance companies – just from bills related to blood specimens sent to BLS by bribed doctors.

Statements during today’s pleas also detailed the means through which BLS paid doctors millions of dollars – in cash or under the guise of sham lease, service, and consulting agreements through an elaborate network of shell entities used for that purpose. The defendants also admitted that one component of the bribery scheme was to pay some doctors a fee per test to induce them to increase their ordering of certain tests.

In one text message conversation between Santangelo and David Nicoll detailed in filed documents, Santangelo stated that he and another doctor had “put our heads together and added a significant amount of testing. . .The testing is 90% legit.” The documents allege Santangelo planned to send $1 million per month in blood testing referrals to BLS by increasing the number of blood tests being ordered, including medically unnecessary tests.

Those who pleaded guilty today each face a maximum potential penalty of five years in prison and a $250,000 fine on the bribery conspiracy charge and 20 years in prison and a $500,000 fine on the money laundering charge, or twice the gross gain or loss from the offense. In addition, David and Scott Nicoll have agreed to forfeit $50 million and $25 million to the United States, respectively. The other five defendants will forfeit amounts ranging between $800,000 and $1.3 million. Sentencing for all seven defendants is scheduled for Sept. 11, 2013.

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 Acting Inspector in Charge Maria Kelokates, with the ongoing investigation leading to today’s guilty pleas.

The government is represented by Senior Litigation Counsel Andrew Leven and Deputy Chief Jacob T. Elberg 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.

The charges and allegations against Santangelo and BLS are merely accusations, and the defendants are considered innocent unless and until proven guilty.

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Defense counsel: David Nicoll: John C. Whipple Esq., Chatham, N.J.
Scott Nicoll: Timothy M. Donohue Esq., West Orange, N.J.
Cliff Antell: Robert A. Weir Esq., Red Bank, N.J.
Luke Chicco: Robert J. Anello Esq., New York
Doug Hurley: Michael Baldassare Esq., Newark
Kevin Kerekes: Nace Naumoski Esq., Roseland and Alan Bowman Esq., Newark
Craig Nordman: Timothy R. Anderson Esq., Red Bank

Nicoll, David Information
Nicoll, Scott Information
Antell, Cliff Information
Chicco, Luke Information
Hurley, Doug Information
Kerekes, Kevin Information
Nordman, Craig Information

NEWARK, N.J. – The president of Parsippany, N.J.-based Biodiagnostic Laboratory Services LLC (BLS), three BLS employees and three associates admitted today to a conspiracy in which millions of dollars in bribes were paid to physicians over a number of years in exchange for blood sample referrals worth more than $100 million to the company, U.S. Attorney Paul J. Fishman announced.

Each of the seven defendants – David Nicoll, 39, of Mountain Lakes, N.J.; Scott Nicoll, 32, of Wayne, N.J.; Cliff Antell, 38, of Rumson, N.J.; Luke Chicco, 40, of Garden City, N.Y.; Doug Hurley, 33, of Hillsborough, N.J.; Kevin Kerekes, 47, of Florham Park, N.J.; and Craig Nordman, 34, of Whippany, N.J. – pleaded guilty to an information charging him with one count of conspiracy to violate the Anti-Kickback Statute and the Federal Travel Act and one count of money laundering. The defendants entered their guilty pleas before U.S. District Judge Stanley R. Chesler in Newark federal court.

“Today seven men, including the president of a diagnostic lab, admitted to a conspiracy making more than $100 million in illegal income from business brought through bribes,” said U.S. Attorney Fishman. “Individual greed has no place in a treatment plan, and people seeking medical help deserve to know a doctor’s recommendations are based on professional expertise, not illicit profits. Today is an important step, but we aren’t finished holding criminals responsible for this conspiracy, or who break the law to put profits over patients.”

“Health care fraud is a serious crime which impacts all Americans either directly or indirectly, by inflating costs in the health care system,” said Newark FBI Special Agent in Charge Aaron T. Ford. “In this day and age when health care is a daily topic of discussion, the Newark office of the FBI remains dedicated and committed to combating fraud throughout the health care system. This investigation and these pleas entered today represent a tremendous effort by law enforcement to stem the tide of pay to play in health care in New Jersey.”

“Financial inducements, little more than bribes, must never interfere with proper medical care,” said Tom O’Donnell, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services region including New Jersey. “We will tirelessly pursue criminals greedily manipulating public health care programs serving vulnerable Americans.”

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

On April 9, 2013, federal agents arrested BLS president and part owner, David Nicoll; Scott Nicoll, a senior BLS employee and David Nicoll’s brother; and Nordman, a BLS employee and the CEO of Advantech Sales LLC – an entity used by BLS to make illegal payments. They were then 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 remain pending.

Hurley, also a BLS employee, and associates Antell, Chicco and Kerekes, surrendered today to the FBI.

The conspiracy made millions in illegal profits between 2006 and April of 2013. During their guilty pleas, David and Scott Nicoll admitted that BLS made substantially more than $100 million from Medicare and private insurance companies – just from bills related to blood specimens sent to BLS by bribed doctors.

Statements during today’s pleas also detailed the means through which BLS paid doctors millions of dollars – in cash or under the guise of sham lease, service, and consulting agreements through an elaborate network of shell entities used for that purpose. The defendants also admitted that one component of the bribery scheme was to pay some doctors a fee per test to induce them to increase their ordering of certain tests.

In one text message conversation between Santangelo and David Nicoll detailed in filed documents, Santangelo stated that he and another doctor had “put our heads together and added a significant amount of testing. . .The testing is 90% legit.” The documents allege Santangelo planned to send $1 million per month in blood testing referrals to BLS by increasing the number of blood tests being ordered, including medically unnecessary tests.

Those who pleaded guilty today each face a maximum potential penalty of five years in prison and a $250,000 fine on the bribery conspiracy charge and 20 years in prison and a $500,000 fine on the money laundering charge, or twice the gross gain or loss from the offense. In addition, David and Scott Nicoll have agreed to forfeit $50 million and $25 million to the United States, respectively. The other five defendants will forfeit amounts ranging between $800,000 and $1.3 million. Sentencing for all seven defendants is scheduled for Sept. 11, 2013.

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 Acting Inspector in Charge Maria Kelokates, with the ongoing investigation leading to today’s guilty pleas.

The government is represented by Senior Litigation Counsel Andrew Leven and Deputy Chief Jacob T. Elberg 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.

The charges and allegations against Santangelo and BLS are merely accusations, and the defendants are considered innocent unless and until proven guilty.

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Defense counsel: David Nicoll: John C. Whipple Esq., Chatham, N.J.
Scott Nicoll: Timothy M. Donohue Esq., West Orange, N.J.
Cliff Antell: Robert A. Weir Esq., Red Bank, N.J.
Luke Chicco: Robert J. Anello Esq., New York
Doug Hurley: Michael Baldassare Esq., Newark
Kevin Kerekes: Nace Naumoski Esq., Roseland and Alan Bowman Esq., Newark
Craig Nordman: Timothy R. Anderson Esq., Red Bank

Nicoll, David Information
Nicoll, Scott Information
Antell, Cliff Information
Chicco, Luke Information
Hurley, Doug Information
Kerekes, Kevin Information
Nordman, Craig Information

TRENTON, N.J. – A former executive with global pharmaceuticals giant Bristol-Myers Squibb Co. (BMS) admitted today to trading on inside information regarding a public company that BMS was in the process of acquiring, U.S. Attorney Paul J. Fishman announced.

Robert Ramnarine, 46, of East Brunswick, N.J., pleaded guilty before U.S. District Judge Anne E. Thompson in Trenton federal court to an information charging him with securities fraud.
According to documents filed in this case and statements made in court:

Ramnarine was employed by Bristol-Myers Squibb Co. (BMS) from 1997 to August 2012. From March 2008 on, he held a variety of high-level, executive positions at the company, including director of Pensions and Savings Investments (March 2008-June 2011), executive director of Pensions and Savings Investments (June 2011-July 2012), and assistant treasurer for Capital Markets (July 2012-August 2012). As a result of these positions, Ramnarine was involved in evaluating potential acquisition targets for Bristol Meyers Squibb, including publicly traded companies, and was privy to inside company information concerning such transactions. He was legally banned from disclosing confidential information and material, nonpublic information he learned through his employment or from using such information for his personal benefit or the benefit of others.

During May and June 2012, Ramnarine, traded on material, nonpublic information regarding the company’s anticipated acquisition of Amylin Pharmaceuticals Inc., a publicly traded company. The material, nonpublic information available to Ramnarine enabled him to reap substantial profits by engaging in lucrative trading in stock options of Amylin shortly before BMS announced its plans to acquire Amylin in late June 2012. As part of his plea, Ramnarine admitted today that for purposes of sentencing his relevant criminal conduct includes $311,361 in illicit gains he made from trading in stock options of not only Amylin, but also several other BMS acquisition targets – ZymoGenentics Inc. and Pharmasset Inc., a company for which BMS submitted a bid through a confidential auction process, but which was subsequently acquired by Gilead Sciences.

Ramnarine faces a maximum potential penalty of 20 years in prison and a fine of $5 million. Sentencing is scheduled for Sept. 26, 2013.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, with the investigation leading to today’s guilty plea. He also thanked the U.S. Securities and Exchange Commission’s Market Abuse Unit and Philadelphia Regional Office, under the direction of Daniel M. Hawke, for its assistance, and Bristol-Myers Squibb Co., for its cooperation during the investigation.

The government is represented by Assistant U.S. Attorneys Gurbir S. Grewal and Mala Ahuja Harker of the U.S. Attorney’s Office Economic Crimes Unit in Newark.

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

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Defense Counsel: Douglas R. Jensen Esq., New York

Ramnarine Information

TRENTON, N.J. – Two former employees of a law firm based in Edison, N.J., were sentenced to prison terms today for conspiring to defraud their former employer by improperly diverting more than $788,000 from the law firm, U.S. Attorney Paul J. Fishman announced.

Marla Deptula, 46, of Sayreville, N.J., previously pleaded guilty to an information charging her with one count of conspiracy to commit mail fraud and one count of subscribing to a false tax return. She was sentenced to 20 months in prison. Rose L. Crabbe, 32, of Plainfield, N.J., pleaded guilty to an information charging her with one count of conspiracy to commit mail fraud. She was sentenced to 15 months in prison. Both defendants previously entered their guilty pleas before U.S. District Judge Peter G. Sheridan, who imposed the sentences today in Trenton federal court.

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

Deptula and Crabbe each admitted that between February 2005 and September 2007, they conspired to embezzle, and did, in fact, embezzle, from their former employer, referred to in court documents only as the “Law Firm,” by wrongfully writing checks from the law firm’s trust and business accounts to themselves and their personal creditors to pay for their personal expenses, including credit card bills, real estate taxes and child care expenses. Deptula and Crabbe then mailed some of the checks to their personal creditors. They further admitted to attempting to hide their theft by altering the payee information in the law firm’s accounting records.

Deptula, who had access to the law firm’s bank accounts in order to perform her duties as a secretary in the law firm’s real estate section, used that access to divert more than $788,000 from the attorney trust and business accounts for her and Crabbe’s personal benefit. Deptula received the vast majority of the stolen funds and failed to report any of the income on her federal tax returns.

In addition to the prison terms, Deptula and Crabbe were both sentenced to three years of supervised release. Deptula was ordered to pay $705,093 in restitution and Crabbe was ordered to pay $74,206 in restitution.

U.S. Attorney Fishman credited postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Marie L. Kelokates: IRS-Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen; and the Middlesex County Prosecutor’s Office, under the direction of Acting Prosecutor Andrew C. Carey, for the investigation leading to today’s sentencings.

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

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Defense counsel: Deptula: Andrea Bergman Esq., Assistant Federal Public Defender, Trenton
Crabbe: Michael Armstrong Esq., Willingboro, N.J.

Alleged Gang Leader Charged with Six Gang-Related Killings

NEWARK, N.J. – Three alleged members of a violent Newark street gang were indicted by a federal grand jury today on charges that include murder, racketeering, kidnapping, robbery, weapons offenses and drug dealing, U.S. Attorney Paul J. Fishman announced.

Farad Roland, 28, Mark Williams, 30, and Malik Lowery, 31, all of Newark, were charged in a 27-count second superseding indictment connection with their alleged membership in The South Side Cartel, a subset of the 793 Bloods gang. Roland is charged with six counts of murder in aid of racketeering, while Williams and Lowery are each charged with one count of murder in aid of racketeering, charges which carry a mandatory minimum penalty of life in prison. The charge is a death-eligible offense subject to a decision by the U.S. Attorney General.

“As the indictment spells out, the gang members indicted today used murder and violence as tools of their criminal trade, punishing disloyal associates, intimidating rivals and silencing those they believed were cooperating with law enforcement,” U.S. Attorney Fishman said. “They presided over a reign of terror along Hawthorne Avenue for years. These charges finally assign responsibility for more than half a dozen unsolved homicides and represent the latest efforts in our ongoing pursuit of members of violent street gangs.”

“The primary objective of the FBI's investigation into the criminal enterprise known as South Side Cartel was to disrupt and dismantle one of Newark's most violent street gangs,” FBI Special Agent in Charge Aaron T. Ford said. “In conjunction with the Newark Police Department and Essex County Prosecutor's Office, the FBI and its law enforcement partners were successful in accomplishing this mission.”

Newark Police Director Samuel DeMaio stated, “I am pleased that our partnerships with our fellow law enforcement entities, particularly on the federal level, continue to prove effective tools against violent crime and habitual offenders here in Newark. Today's charges and the severity of the penalties are a testament to our combined resolve to remove these violent predators from our community. I thank all of those gathered today who played a role in today's announcement and look forward to strengthening our partnerships and multiplying our efforts.”

According to documents filed in this case and statements made in court: The South Side Cartel has operated primarily on Hawthorne Avenue in Newark since 2002. Originally a neighborhood-based gang whose main activities were selling drugs and committing violent acts to aid the drug trafficking business, many of the gang’s members were officially brought into the Bloods gang in 2002 and 2003. As early as 2005, the gang was officially named The South Side Cartel. The gang allegedly committed numerous murders, shootings, robberies and other violent acts.

The gang based its criminal activities out of apartments located inside buildings dubbed “the Twin Towers,” located at 496-500 Hawthorne Ave. The Twin Towers were the scene of repeated narcotics and gun arrests by local law enforcement between 2002 and 2010. Many of The South Side Cartel members had tattoos depicting these buildings and the “SSC” logo, representing the gang’s initials.

At its peak, the South Side Cartel had about 20 members or associates, many of whom have since been killed in gang-related murders or who are serving prison sentences in state and federal prisons for gang-related crimes. Defendants Roland, Williams and Lowery represent the last of the leadership of the gang.

South Side Cartel leader Amin Roland, 35, (the brother of defendant Farad Roland) was convicted by a jury in July 2012 of being a felon in possession of a firearm. On Nov. 29, 2012, U.S. District Court Judge Salas sentenced Amin Roland to the statutory maximum prison sentence of 10 years.

“These three defendants posed a clear danger to the people of Essex County,” Acting Essex County Prosecutor Carolyn A. Murray said. “Their brazen use of violence as part of their drug and gang trade is stunning. We are pleased that we were able to work with our federal partners to bring them to justice and now look forward to the final resolution of their cases.”

“Today's indictment should serve as an example of our commitment to the hard-working, law-abiding citizens of this community,” Newark's Chief of Police Sheilah Coley said. “In forming these alliances with other local, county, state, and federal law enforcement agencies the Newark Police Department has transcended all departmental and jurisdictional boundaries in the interest of public safety. We are working together seamlessly to produce positive results in our violent crime reduction efforts and will continue our joint ventures aimed at improving the quality of life here in our City.”

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Ford; the Newark Police Department, under the direction of Police Director DeMaio and Chief Coley; and Acting Essex County Prosecutor Murray, for the investigation leading to the today’s indictment.

The government is represented by Assistant U.S. Attorneys Robert L. Frazer and Andrew J. Bruck of the Organized Crime/Gangs Unit in Newark.

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Defense counsel: Farad Roland: Donna Newman Esq., New York, N.Y.
Williams: James Patton Esq., Livingston, N.J.
Lowery: John Azzarello Esq., Chatham, N.J.

The counts in the indictment carry the following maximum potential penalties:

Count

Offense

Defendant(s)

Maximum Penalties

Racketeering

All three defendants

Life in prison; $250,000 fine

2

Racketeering Conspiracy

All three defendants

Life in prison; $250,000 fine

3

Murder in Aid of Racketeering (Leaks Murder)

Roland

Life in prison or death penalty; $250,000 fine

4

Murder in Aid of Racketeering (Stewart Murder)

Roland

Life in prison or death penalty; $250,000 fine

5

Murder in Aid of Racketeering (“Fu” Murder)

Roland

Life in prison or death penalty; $250,000 fine

6

Murder in Aid of Racketeering (“Dubird” Murder)

All three defendants

Life in prison or death penalty; $250,000 fine

7

Murder in Aid of Racketeering (Silas Murder)

Roland

Life in prison or death penalty; $250,000 fine

8

Murder in Aid of Racketeering (Prince Murder)

Roland

Life in prison or death penalty; $250,000 fine

9

Use of Firearm in Furtherance of Violent Crime (Silas Murder)

Roland

Life in prison; $250,000 fine

10

Use of Firearm in Furtherance of Violent Crime (Prince Murder)

Roland

Life in prison; $250,000 fine

11

Carjacking (Mercedes Benz)

Roland, Williams

15 years in prison; $250,000 fine

12

Use of Firearm in Furtherance of Carjacking

Roland, Williams

Life in prison; $250,000 fine

13

Carjacking (BMW)

Williams, Lowery

15 years in prison; $250,000 fine

14

Use of Firearm in Furtherance of Carjacking

Williams, Lowery

Life in prison; $250,000 fine

15

Hobbs Act Robbery

Roland, Lowery

20 years in prison; $250,000 fine

16

Use of Firearm in Furtherance of Hobbs Act

Roland, Lowery

Life in prison; $250,000 fine

17

Assault with a Deadly Weapon in Aid of Racketeering

Roland

20 years in prison; $250,000 fine

18

Use of Firearm in Furtherance of Violent Crime

Roland

Life in prison; $250,000 fine

19

Assault with a Deadly Weapon in Aid of Racketeering

Williams

20 years in prison; $250,000 fine

20

Kidnapping in Aid of Racketeering

Williams

Life in prison; $250,000 fine

21

Use of Firearm in Furtherance of Violent Crime

Williams

Life in prison; $250,000 fine

22

Use of Firearm in Furtherance of Violent Crime

Williams

Life in prison; $250,000 fine

23

Assault with a Deadly Weapon in Aid of Racketeering

Williams

20 years in prison; $250,000 fine

24

Use of Firearm in Furtherance of Violent Crime

Williams

Life in prison; $250,000 fine

25

Assault with a Deadly Weapon in Aid of Racketeering

Roland

20 years in prison; $250,000 fine

26

Use of Firearm in Furtherance of Violent Crime

Roland

Life in prison; $250,000 fine

27

Conspiracy to Distribute Cocaine & Heroin

All three defendants

Life in prison; $10 million fine

South Side Cartel Superseding Indictment

NEWARK, N.J. – The owner of an Ocean County, N.J., architectural and engineering firm was sentenced today to three months in prison and three months of house arrest for filing fraudulent tax returns on behalf of his firm, U.S. Attorney Paul J. Fishman announced.

Pravin H. Patel, 67, of Toms River, N.J., previously pleaded guilty before U.S. District Judge Stanley R. Chesler to an Information charging him with subscribing to false corporate tax returns on behalf of his firm, Pravin H. Patel Associates Inc., of Toms River, N.J. Judge Chesler imposed the sentence today in Newark federal court.

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

Patel was the owner and operator of Pravin H. Patel Associates Inc. for more than 25 years; in recent years, the firm’s primary clients included the Toms River Board of Education and Ocean County College. Between 2005 and 2009, Patel filed corporate tax returns which falsely passed off personal expenses as legitimate business deductions.

Among the personal expenses which Patel admitted to improperly using to reduce the tax liability owed by his company was $112,650 in payments for renovations on his personal residence in 2006. Patel also admitted that the corporate tax return for the year ending in March 2007 improperly included more than $8,200 in expenses related to a personal country club membership and associated fees, as well as numerous personal expenses paid through a corporate credit card. Patel admitted that the corporate tax return for the year ending in March 2007 included false deductions of more than $145,000 and that the tax loss over a four-year period for which he is criminally liable totaled $63,815.

In addition to the prison term, Judge Chesler sentenced Patel to two years of supervised release, which includes three months of house arrest, and ordered him to pay a $15,000 fine.

U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen, and special agents of the FBI under Special Agent in Charge Aaron T. Ford, with the investigation that resulted in today’s sentence.

The government is represented by Special Litigation Counsel Mark J. McCarren of the U.S. Attorney’s Office Special Prosecutions Division.

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Defense counsel: Lawrence Horn Esq. and Richard Sapinski Esq., Newark

Judge Orders Forfeiture of Nearly $700,000 Scammed from Victims

TRENTON, N.J. – A Somerset County, N.J.-based financial advisor pleaded guilty today to stealing $138,000 from two elderly investors and funding his lavish lifestyle with money he claimed to be investing in conservative securities and his business, U.S. Attorney Paul J. Fishman announced.

Ralph A. Saviano, 72, of Bridgewater, pleaded guilty before U.S. District Judge Freda L. Wolfson in Trenton federal court to an information charging him with wire fraud. Saviano surrendered himself to the FBI this morning before the plea hearing.

According to documents filed in this case and statements made in court: Saviano, an investment advisor who had worked in the financial industry for more than 40 years, targeted clients through his association with Centaurus Financial, Inc., and later through Saviano Financial Group (SFG), from as early as July 2007 through October 2012.

During this time, Saviano had approximately 300 clients, many of whom were unsophisticated investors between the ages of 60 and 85, whom he had known for many years and who trusted his financial experience and advice. Saviano admitted he targeted clients he knew were about to receive significant amounts of cash, such as maturing certificates of deposit (CDs), and proposed that they invest those funds in low-risk investments or in his business, SFG. Saviano said he would use these “business loans” solely for business expenses.

At the plea hearing, Judge Wolfson entered a consent judgment and order of forfeiture in the amount of $699,926.51, which constitutes the proceeds Saviano obtained from his known investor victims as a result of his offense.

Specifically, Saviano admitted that in May 2012, an 85-year-old client gave him approximately $63,000 from a mature CD that she was told would be invested in two investment funds. Saviano accompanied the client to her bank to redeem the CD and instructed her make the proceeds from the CD payable to him.

Also, in June 2012, another of Saviano’s clients – 80 years old and suffering from cancer – gave Saviano approximately $75,000 she inherited from a recently deceased relative, making the check out to cash with the words “financial investment” in the memo field.

Saviano admitted that, to date, has not returned to either woman any of the principals of their investments; nor have they received any interest payments on those funds. Instead of doing as he claimed, Saviano used the funds to repay prior “loans” from other clients in Ponzi-scheme fashion, and to pay for various personal expenses, including: at least $33,000 for granite countertops and other home improvements, $18,000 in cash payments to himself and family members, $10,000 in personal mortgage and rent payments, and thousands more in jewelry, clothing, a family vacation to Aruba and a theater donation.

The wire fraud count to which Saviano pleaded guilty carries a maximum potential penalty of 20 years in prison and a fine of up to $250,000, or twice the gross amount of pecuniary gain or loss resulting from the offense. Sentencing is scheduled for Sept. 11, 2013.

U.S. Attorney Fishman praised special agents of the FBI, under the direction of Aaron T. Ford in Newark, for the investigation leading to today’s guilty plea. He also thanked the U.S. Securities and Exchange Commission’s New York office for its assistance with the investigation.

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

If you believe you are a victim of or otherwise have information concerning this alleged scheme, you are encouraged to contact the FBI at 973-792-3000.

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

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Defense counsel: Eric R. Breslin Esq., Newark, N.J

Saviano Information

TRENTON, N.J. – Maxwell B. Smith, a Monmouth County, N.J.-based financial adviser and broker, was sentenced today to 84 months in prison for defrauding New Jersey investors out of more than $9 million, U.S. Attorney Paul J. Fishman announced.

Smith, 73, of, Red Bank, N.J., previously pleaded guilty to a five-count Information charging him with mail fraud in connection with his creation of a sham entity known as Health Care Financial Partners (HCFP). Smith entered his guilty plea before U.S. District Judge Mary L. Cooper, who imposed the sentence today in Trenton federal court. 

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

HCFP purported to be an investment fund with more than $300 million in assets under management, comprising loans to healthcare facilities such as nursing homes. Using his relationships with his investor clients, Smith sold supposed securities in HCFP through sham bond offerings ranging in price from $25,000 to $300,000 per investment.

Smith induced individual investors by creating an investment prospectus falsely stating that the total value of HCFP’s holdings exceeded $300 million. He also falsely claimed that investors’ money would earn yearly dividend interest of between 7.5 and 9 percent, and that the returns on their investments would be tax-free, similar to municipal bonds.

To lull investors into thinking their investments were legitimate and earning returns, Smith used a portion of investors’ funds to purchase bank checks, which he then sent to investors as purported earnings on their investments.           

At his plea hearing, Smith admitted he did not invest the money as promised, but rather misappropriated the investors’ money for his personal expenses including dining, entertainment, gambling and international travel. Smith admitted defrauding HCFP investors out of more than $9 million.

In addition to the prison term, Judge Cooper sentenced Smith to three years of supervised release. Restitution will be determined at a future hearing.

U.S. Attorney Fishman credited postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates; as well as special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, with the investigation.

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

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

NEWARK, N.J. – A Livingston, N.J., tax return preparer today admitted filing false claims with the IRS using a dead tax return preparer’s identification and preparing false documents for numerous fraudulent loans, U.S. Attorney Paul J. Fishman announced.

Todd P. Halpern, 48, pleaded guilty today before U.S. District Judge William J. Martini to an Information charging him with filing false claims and wire fraud.

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

In late 2008, Halpern purchased A & V Financial (A & V), a tax return preparation business located in Guttenberg, N.J., from the wife of the prior owner, V.R., who had died in March 2008. Halpern received the company’s computers and all of its client records. As part of the agreement to purchase A & V, Halpern was to obtain a new Electronic Filing Identification Number (EFIN) in his own name. Instead, he continued to file tax returns using V.R.’s EFIN number because Halpern’s criminal record prevented him from obtaining an EFIN.

From 2009 through 2010, Halpern prepared and caused to be filed 657 fraudulent federal income tax returns with the IRS using V.R.’s EFIN. Halpern prepared and filed some of these fraudulent tax returns without the knowledge and authorization of the taxpayers identified on the returns. Some of these tax returns contained fraudulent income and deduction amounts, which generated fraudulent refunds that were directly deposited into Halpern’s bank account.

On or about June 24, 2009, in one case, Halpern prepared and filed a fraudulent 2008 Form 1040 U.S. Individual Income Tax Return with the IRS in the name of B.G., which fraudulently claimed an income tax refund in the amount of $13,183. The 2008 Form 1040 prepared by Halpern contained false income and deduction entries for B.G., because B.G. did not have any income for that tax year and did not file an income tax return. The $13,183 tax refund was directly deposited into Halpern’s bank account.

Halpern received a total of $373,938 in fraudulent tax refunds. He used these funds to support his lavish lifestyle, including purchases at Prada, Chanel, Saks Fifth Avenue, and Bloomingdales, to acquire season tickets to the New York Giants, to purchase thousands of dollars in jewelry, gold coins, and silver certificates, to make car payments on multiple luxury vehicles, including a 2007 Cadillac Escalade and a 2008 Lexus GX-470, and to buy car parts for his classic 1957 Chevy Bel Air.

From January 2008 through May 2012, Halpern prepared false documents for numerous fraudulent loans from financial institutions. Halpern prepared tax returns, Forms W-2, and bank statements showing inflated income and asset balances to be used to support loan applications for borrowers, including him, to acquire mortgage loans, primarily involving residential properties in New Jersey, as well as other personal and business loans. Halpern and others caused the fraudulent documents to be submitted to mortgage lenders, other financial institutions, the U.S. Department of Housing and Urban Development, and the Federal Housing Administration (FHA), which were relied upon for the approval of mortgage and other loans.

In November 2009, Halpern served as the buyer for the short sale of 215 Newark Ave., Bloomfield, N.J., from seller B.S. for a purchase price of approximately $185,000. In support of Halpern’s purchase of this property, an FHA-insured mortgage loan for Halpern in the amount of $181,649 was obtained from a N.J.-based mortgage company. Halpern and others submitted numerous fraudulent documents to FHA and to the mortgage company, including false bank statements, pay stubs and 2008 federal income tax returns in Halpern and his wife’s names. As in his tax fraud scheme, the false tax returns that Halpern prepared reflected V.R.’s identification number in an effort to conceal that Halpern had personally prepared the tax returns.

At the plea hearing, the Court also entered a Consent Judgment and Order of Forfeiture for $373,938 and for a classic 1957 Chevy Bel Air, which constitutes the proceeds that Halpern obtained as a result of his frauds.

The wire fraud count to which Halpern pleaded guilty is punishable by a maximum potential penalty of 30 years in prison and a fine of up to $1 million, or twice the gross amount of pecuniary gain or loss resulting from Halpern’s offense. The tax fraud count carries a maximum penalty of five years in prison, and a maximum fine of $250,000. Sentencing is scheduled for Sept. 10, 2013.

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

The government is represented by Assistant U.S. Attorney 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: Marshall J. Wofsy Esq., Jersey City, N.J.

Halpern Information

NEWARK, N.J. – One of the leaders of an international data theft ring has been federally charged in New Jersey for his alleged role in a scheme which caused approximately $200 million in fraudulent charges to credit cards issued in the United States and Europe, New Jersey U.S. Attorney Paul J. Fishman announced.

Duy Hai Truong, 23, of Ho Chi Minh City, Vietnam, is charged by criminal complaint with conspiracy to commit bank fraud. From 2007 until his recent arrest, Truong allegedly defrauded financial institutions as part of the massive scheme, in which personal identifying information relating to more than 1.1 million credit cards was stolen and resold to criminal customers worldwide.

Global law enforcement efforts by the FBI, the United Kingdom’s Serious Organised Crime Agency (SOCA) and Vietnamese authorities have disbanded the ring following a worldwide investigation into Truong and his conspirators. Truong is charged in the United States in conjunction with charges and arrests made over the past week in the United Kingdom, Vietnam, Italy, Germany and elsewhere.

Truong was apprehended by Vietnamese authorities on May 29, 2013, and remains in their custody on a related charge out of the United Kingdom.

According to the complaint filed today in Newark federal court:

The massive conspiracy, based in Vietnam, specialized in obtaining personal identifying information, known as “PII,” that had been provided to retailers who sold goods and services online and received online credit card payments. The conspirators illegally obtained a variety of PII, including purchasers’ names, addresses, credit card information and social security numbers – including from victims in New Jersey.

The conspirators, including Truong, then sold the data on a per-victim basis. The data related to a single, identifiable victim was referred to as a “dump.”

The conspirators used fraudulent e-mail accounts and a website located at www.mattfeuter.biz and www.mattfeuter.com to facilitate their crimes. Individuals seeking to illegally purchase victims’ credit card information either accessed the fraud website or sent the hackers an e-mail at one of the fraud accounts, requesting a certain number of dumps.

Truong and other sellers charged a fee for each dump. Fees varied from approximately $1 to $300 per dump, depending on the victim’s country of origin and the completeness of the information being sold, among other factors. The fees were paid via wire transfer services including Western Union and Liberty Reserve.

Those who bought PII from the conspirators would either incur fraudulent charges on the victims’ credit cards themselves, or resell the dumps to other downstream purchasers. Cumulatively the scheme resulted in $200 million in fraudulent charges.

If convicted, Truong faces a maximum of 30 years in prison and a fine of $1 million or twice the gain derived from the offense or twice the loss caused by the offense, whichever is greatest.

U.S. Attorney Fishman noted that the U.S. charge arose as part of the close, unprecedented coordination between the Newark FBI; the FBI’s International Operations and Cyber Divisions; SOCA; and Vietnam’s Ministry of Public Security, High Tech Crime Department.

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

The charge and allegations against Truong are merely accusations, and the defendant is considered innocent unless and until proven guilty.

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Truong Complaint

TNEWARK, N.J. – A former engineer for global medical technology company Becton, Dickinson and Company (BD) was arrested this morning by special agents of the FBI at a hotel in Ramsey, N.J., disrupting his alleged plan to relocate to India with trade secrets he stole from the Franklin Lakes, N.J.-based company, U.S. Attorney Paul J. Fishman announced.

Ketankumar Maniar, a/k/a “Ketan Maniar,” 36, an Indian national recently of Mahwah, N.J., is charged by complaint with theft of trade secrets for his own economic benefit. He is scheduled to appear this afternoon before U.S. Magistrate Judge Steven C. Mannion in Newark federal court to face the charge.

According to the criminal complaint unsealed today:

Until his resignation from BD on May 24, 2013, Maniar was a staff engineer at BD’s Franklin Lakes headquarters, where he was a member of a group responsible for manufacturing prefillable syringes and pen injectors. In that capacity, Maniar had access to trade secret information related to BD products, including a self-administered disposable pen injector still under development by BD and not yet released for commercial sale.

While still employed by BD in May of 2013, Maniar downloaded approximately 8,000 files – containing, among other things, highly valuable BD trade secret information related to the pen in development – onto multiple computer storage devices, including external hard drives and thumb drives. Most of Maniar’s download activity occurred during the weeks leading up to his resignation.

Maniar also downloaded BD files from home after he had called in sick to work, and forwarded numerous files containing BD confidential information to one of his personal email accounts. The materials Maniar allegedly downloaded essentially comprise a tool kit for mass producing the pen injector.

On June 3, 2013, FBI agents executed court-issued search warrants of Maniar’s hotel room and seized computers and computer storage devices.

The maximum potential penalty for the theft of trade secrets charge is 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 in Newark, with the investigation leading to the arrest. He also credited BD for its cooperation in the matter.

The government is represented by Assistant U.S. Attorney Shirley U. Emehelu of the U.S. Attorney’s Offices 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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Defense counsel: Ryan Blanch Esq., New York (for initial appearance)         

Maniar, Ketankumar Complaint

TRENTON, N.J. – An Essex County, N.J., man was sentenced today to five months in prison for transporting explosive chemicals in a piece of polyvinyl chloride, or PVC, pipe to Pennsylvania without a federal license or permit, U. S. Attorney Paul J. Fishman announced.

Anthony Nicholas Gallo, 20, of North Caldwell, N.J., previously pleaded guilty before U.S. District Judge Anne E. Thompson to an Information charging him with transportation of explosive materials without a license or permit issued by the U.S. Attorney General. Judge Thompson imposed the sentence today in Trenton federal court.

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

On Jan. 8, 2012, Gallo went to Pennsylvania and blew up potassium chlorate and magnesium in a PVC pipe, which provided a contained environment for the chemicals to produce a more powerful explosion. The potassium chlorate mixture is considered to be an explosive by the U. S. Bureau of Alcohol, Tobacco and Firearms.

In addition to the prison term, Judge Thompson sentenced Gallo to three years of supervised release.

U.S. Attorney Fishman credited special agents, detectives and investigators assigned to the FBI Joint Terrorism Task Force, under the direction of Special Agent in Charge Aaron T. Ford, with the investigation leading to today’s sentence. The FBI Joint Terrorism Task Force comprises law enforcement officers from 30 federal, state and local agencies throughout New Jersey. He also thanked the North Caldwell Police Department and the Essex County Prosecutor's Office for their significant contributions to this investigation.

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

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

TRENTON, N.J. – The owner of a window installation company located in Mt.Laurel, N.J., admitted today he converted to cash millions of dollars in the company’s gross receipts and used the money to pay his workers without withholding employment taxes, U.S. Attorney Paul J. Fishman, District of New Jersey, and Assistant Attorney General Kathryn Keneally of the U.S. Department of Justice, Tax Division, announced today.

Fred Marcus, 39, of Camden County, the owner and operator of Vortex Installations Inc., pleaded guilty before U.S. District Judge Mary L. Cooper in Trenton federal court to an Information charging him with one count of tax evasion.

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

From early 2006 through the end of 2009, Marcus cashed approximately $2.8 million in Vortex Installations’ gross receipts at a check casher. Marcus used $1,025,868 of that money to pay cash wages to his workers, which he did not report to the IRS and from which he did not withhold employment taxes. From 2006 through 2008, Marcus failed to file IRS Forms 941 – Employer’s Quarterly Federal Tax Returns – in which he was required to report the wages paid to his employees. In 2009, Marcus filed false Forms 941, in that he failed to report the cash wages that he paid to Vortex employees.

On the count of tax evasion, Marcus faces a maximum potential penalty of five years in prison and a fine of $250,000, along with restitution to the IRS. Sentencing is scheduled for Sept. 19, 2013.

Assistant Attorney General Keneally and 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 guilty plea.

The government is represented by Tax Division Trial Attorney Tino M. Lisella. Additional information about the Tax Division and its enforcement efforts may be found at: www.justice.gov/tax.

13-227                                             

Defense counsel: John Crayton Esq., Moorestown, N.J.

Marcus, Fred Information

Perpetrator of Investment Scheme Also Ordered to Pay More Than $28.6 Million

NEWARK, N.J. – A Somerset County, N.J., man was sentenced today to 108 months in prison for his role in defrauding victims of an investment scheme by misusing their capital contributions and misrepresenting the performance of their investments, U.S. Attorney Paul J. Fishman announced.

David Connolly, 51, of Watchung, N.J., previously pleaded guilty before U.S. District Judge William J. Martini to two counts of a superseding indictment charging him with securities fraud and money laundering. In addition to the prison term, Judge Martini, who imposed the sentence today in Newark federal court, ordered Connolly to pay $18,732,775 in restitution and forfeit $9,920,000.

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

From at least 2006 through October 2009, Connolly orchestrated a real estate investment fraud scheme in which he took in more than $50 million from more than 200 victims, causing losses of at least $18 million.

To induce victims to invest, Connolly made numerous materially false and misleading statements and omissions. He told victims their money would be used to purchase a specific property, and the property would generate rental income that would be used to pay investors monthly distributions. Connolly also told victims their money would be held in escrow until the closing of a purported real estate transaction and each property would be financially independent from all the others. Connolly misrepresented the amount of equity victims had in the properties, the condition of the properties, and the financial performance of the properties. Although the investment properties experienced significant negative cash flow, Connolly told investors they were performing well.

Connolly took significant portions of his victims’ money, which had been provided for specific real estate transactions, and used it for other purposes without victims’ knowledge. He funded unrelated real estate transactions in which he was engaged; paid prior victims; and paid himself. The scheme collapsed in the summer of 2009, after Connolly began defaulting on the mortgage payments for the investment properties.

In addition to the prison term, restitution and forfeiture, Judge Martini sentenced Connolly to serve three years of supervised release.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, for the investigation. He also thanked special agents of IRS – Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen, for their important contributions to the investigation.

The government is represented by Assistant U.S. Attorney Charlton A. Rugg and Senior Litigation Counsel Leslie F. Schwartz of the U.S. Attorney’s Office Criminal Division in Newark.

If you believe you are a victim of or otherwise have information concerning this alleged scheme, you are encouraged to contact the FBI at 973-792-3000.

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: Gerald M. Saluti Esq., Newark

“Senator Lautenberg’s passion for public service and his commitment to making life better for everyone have inspired so many of us. From his service in WWII to his extraordinary tenure as our U.S. Senator, he exemplified everything that is great about this country. He was my friend, and I will miss him.”

NEWARK, N.J. – A Lodi, N.J., man was sentenced today in Newark federal court to 292 months in prison for amassing and sharing an extensive photo and video collection of children being sexually abused, U.S. Attorney Paul J. Fishman announced.

Martin Villalobos, 41, of Lodi, N.J., previously was convicted by a federal jury on all counts of the superseding indictment on which he was tried: two counts of distribution of child pornography, two counts of receipt of child pornography and one count of possession of child pornography. The sentence was imposed by U.S. District Judge Stanley R. Chesler, who also presided over the trial. Villalobos has been in federal custody since his arrest.

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

As part of an undercover investigation, special agents of the U.S. Department of Homeland Security’s Immigration and Customs Enforcement, Homeland Security Investigations (ICE HSI), discovered an individual who was sharing images of child sexual abuse over the Internet. Agents used the IP address of Villalobos’ computer to identify him.

After obtaining a court-ordered search warrant, agents found Villalobos in a locked bedroom with eight computer hard drives, more than 100 DVDs and other electronic media. A forensic analysis of the materials found revealed that he was in possession of 5,442 photographs and 164 videos of children, including prepubescent minors, nude and engaged in sexual acts with one another and with adults. The evidence at trial also proved that Villalobos routinely used the Internet to solicit, receive and distribute such images.

In sentencing Villalobos, Judge Chesler took into account his previous abuse of an unconscious woman with mental disabilities. During sentencing arguments, the government noted that footage of that abuse, which Villalobos recorded, was found in his home, along with writings describing the stalking and abduction of women to subject them to sexual torture; “crush videos,” depicting the killing of animals, such as rabbits and chicks; and multiple videos of bestiality.

In addition to the prison term, Judge Chesler sentenced Villalobos to serve five years of supervised release and ordered him to pay $16,000 in restitution to victims who submitted claims. Villalobos will be required to register as a sex offender.

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

The government is represented by Assistant U.S. Attorneys Joseph B. Shumofsky and Nicholas P. Grippo of the U.S. Attorney’s Office Criminal Division in Newark.

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Defense counsel: pro se

TRENTON, N.J. – A Middlesex County, N.J., lawyer and certified public accountant today admitted that he conspired with a New Jersey mortgage broker to extort and defraud victims by falsely representing to them that they were the subjects of criminal investigations, U.S. Attorney Paul J. Fishman announced.

Thomas G. Frey, 53, of Edison, N.J., pleaded guilty before U.S. District Judge Joel A. Pisano in Trenton federal court to two counts of an indictment charging him with conspiracy to commit extortion under fear of economic harm and to commit wire fraud.

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

Frey, Robert G. Cusic Jr., a Millstone, N.J. mortgage broker, and another conspirator (named “CC-1” in the Indictment) schemed to defraud four victims, including two police officers, by falsely representing to them that they were the subjects of criminal investigations, principally by the IRS, in connection with investment properties that some of them owned. Frey and Cusic falsely represented that while Cusic was at a property formerly owned by one of the victims, Cusic encountered two IRS special agents (SA-1 and SA-2) who questioned him extensively about some of the victims.

Frey falsely told the victims he had ongoing communications with SA-1 about the purported investigation and had a special relationship with SA-1. Frey told the victims if they paid up to $20,000 each, he would call SA-1 and have the investigation converted from a criminal tax investigation to an IRS “desk audit,” a civil matter. Frey and CC-1 falsely stated that if the victims did not retain his services and pay the fee, the investigation would likely result in the arrest of certain of the victims.

The extortion and wire fraud conspiracy charges to which Frey pleaded guilty are each punishable by a maximum potential penalty of 20 years in prison and a fine of up to $250,000.  Frey’s sentencing before Judge Pisano is scheduled for Sept. 5, 2013.

Frey was previously charged by Complaint on April 8, 2011, along with Cusic, with one count of conspiracy to commit extortion and one count of wire fraud. Cusic pleaded guilty Nov. 28, 2011, to conspiring with Frey to extort the victims. He is awaiting sentencing.

U.S. Attorney Fishman credited special agents of the Treasury Inspector General for Tax Administration, under the direction of Special Agent in Charge Robert Geary, Washington Field Division, for the investigation leading to the guilty plea.

The government is represented by Assistant U.S. Attorney Eric W. Moran of the U.S. Attorney’s Office Special Prosecutions Division in Trenton.

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Defense counsel: Charles E. Waldron Esq., Lawrenceville, N.J.

Frey, Thomas Indictment

CAMDEN, N.J. – A former employee of The Vacation Ownership Group LLC of Pleasantville, N.J., admitted to conspiring to defraud owners of timeshare properties by offering phony consulting services, U.S. Attorney Paul J. Fishman announced.
           
Joseph Saxon, 39, of Brigantine, N.J., pleaded guilty today before U.S. District Court Judge Noel L. Hillman in Camden federal court to a superseding information charging him with one count of conspiracy to commit mail and wire fraud. Saxon was previously indicted on this charge.

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

The Vacation Ownership Group, a/k/a VO Group LLC, had offices in Mays Landing, N.J., and Egg Harbor Township, N.J., and claimed to offer to owners of timeshares consulting services that included cancelling, purchasing and upgrading the timeshares.

In 2010, Saxon started working at the VO Group and was trained by VO Group co-owner Adam Lacerda to call customers using prepared scripts. The defendant called customers and gave them the false impression that he was working for a bank or lending institution. After hearing Saxon’s false representations, some customers sent checks to the VO Group. For example, Saxon falsely told one victim that Saxon was working with the bank that held the victim’s timeshare mortgage and that the bank wanted to settle the loan for a fraction of the price. The victim then mailed a check for $5,925 to the VO Group. Saxon admitted causing more than $120,000 in losses.

On Jan. 23, 2013, co-owners Adam Lacerda, Ashley Lacerda and 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, 12 members of the VO Group 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 Saxon 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. Sentencing is scheduled for Sept. 20, 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 the 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: David S. Rudenstein Esq., Philadelphia

Saxon, Joseph Superseding Information

CAMDEN, N.J. – A former bank officer today admitted his role in soliciting and accepting bribes in connection with financial transactions, U.S. Attorney Paul J. Fishman announced.   
                                                                                                                
Jose Dominguez, 46, of Newark, N.J., pleaded guilty to an Information charging him with soliciting and accepting bribes as a bank officer in excess of $1,000. Dominguez solicited and accepted corrupt payments of $55,529, intending to be influenced and rewarded in connection with a bank transaction. He entered his guilty plea before U.S. District Judge Noel L. Hillman in Camden federal court.

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

From January 1988 to February 2007, Dominguez was employed as a loan officer at Spencer Savings Bank in Elmwood Park, New Jersey. In 2003, Dominguez was contacted by a bank customer because the customer wanted to refinance some loans with Spencer Savings Bank and wanted to do so without paying significant prepayment penalty fees. Dominguez advised the customer that if the customer made corrupt payments to Dominguez, as the loan officer, the customer could obtain a lower interest rate without paying a prepayment penalty to Spencer Savings Bank. 

Between August 2003 and December 2003, Dominguez accepted $55,529.57 in corrupt payments from the customer to influence the requested loan modification. Dominguez also admitted to accepting additional bribes from other bank customers in the amounts of $4,500 and $5,000, respectively.

The bank bribery charge to which Dominguez pleaded guilty carries a maximum potential penalty of 30 years in prison and a $1 million fine. Dominguez also previously pleaded guilty on May 23, 2012, to conspiracy to commit bank fraud, bank fraud, and bank bribery as a Spencer Savings loan officer in connection with a separate case. Sentencing related to the charges from both cases is currently scheduled for Sept. 19, 2013.

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

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

13-222                                 

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

Dominguez, Jose Information

NEWARK, N.J. – A Union County, N.J., woman who admitted serving as the getaway driver during the July 12, 2012, bank robbery of Unity Bank located at 1230 Bound Brook Road (Route 28) in Middlesex, N.J., was sentenced today to 54 months in prison, U.S. Attorney Paul J. Fishman announced.

Teresa Webb, 42, of Plainfield, N.J., previously pleaded guilty before U.S. District Court Kevin McNulty to an Information charging her with one count of bank robbery. Judge McNulty imposed the sentence today in Newark federal court.

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

On July 31, 2012, Claude Williams, 61, of Elizabeth, N.J., was charged by Complaint with six counts of bank robbery and two counts of using a firearm in furtherance of a crime of violence. In the course of those robberies, Williams would generally send an accomplice into the bank to case it shortly before he entered to commit the robbery.

Before the July 12, 2012, robbery, Webb entered the Unity Bank twice without doing any banking. A short while later, an unarmed, off-duty police officer allegedly observed Williams leave the bank, get into the rear of the getaway car, and crouch down. After noting the license plate number, the officer followed the car. Webb, who was driving the getaway car, attempted to elude the officer.

After Webb’s unsuccessful attempt to elude the officer, Williams got out of the car and pointed his gun at the officer, forcing her to leave the scene without apprehending Williams and Webb.

In addition to the prison term, Judge McNulty sentenced Webb to five years of supervised release. The charges against Williams are pending.

U.S. Attorney Fishman credited special agents with the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark with the investigation leading to the arrest. He also thanked the Somerset County Prosecutors Office and the Middlesex Borough, Piscataway, Clifton, Metuchen, North Plainfield, and Plainfield police departments for their work in this case.

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

13-221                          

Defense counsel: Bruce S. Rosen Esq., Toms River, N.J.

NEWARK, N.J. -- A New City, N.Y., man and former employee of a New Jersey country club was sentenced today to 37 months in prison for possessing images on his computer of children being sexually abused, U.S. Attorney Paul J. Fishman announced.

John C. Zerega, 55, previously pleaded guilty before U.S. District Judge Kevin McNulty to a one-count Information charging him with possession of child pornography. Judge McNulty imposed the sentence today in Newark federal court.

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

 As early as Oct. 19, 2011, Zerega downloaded videos and images of child pornography on the Internet via peer-to-peer file sharing software. On Dec. 20, 2011, law enforcement officials executed a search warrant at Zerega’s residence and seized his laptop computer, which contained numerous pictures and videos depicting child pornography, including pictures of prepubescent children engaging in sexual activity and being sexually abused.   

In addition to the prison term, Judge McNulty sentenced Zerega to 10 years of supervised release and required him to get mental health testing and treatment. Zerega also must register as a sex offender.

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

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

13-219                                         

Defense counsel: Deborah Loewenberg Esq., New City, N.Y., and Paul Brickfield Esq., River Edge, N.J.

NEWARK, N.J. – Special agents of the FBI arrested an Essex County, N.J., man this morning in connection with the armed robbery of Belleville News and Food, U.S. Attorney Paul J. Fishman announced.

Bobby Dawson, 43, of East Orange, N.J., is charged by Complaint with one count of committing a Hobbs Act robbery and one count of brandishing a firearm during a crime of violence. He is scheduled to appear this afternoon before U.S. Magistrate Judge Madeline Cox Arleo in Newark.

According to the criminal Complaint unsealed today:

On April 17, 2013, Dawson, wearing a mask and brandishing a firearm, allegedly entered the Belleville News and Food store. He told the store clerk not to move or he would shoot. Dawson pointed his firearm at the store clerk’s head and demanded money from the cash registers. The store clerk complied and gave Dawson the money.  

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

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, Maplewood, Newark, Paramus, and Verona police departments, along with the N.J. State Police and the Essex County Prosecutor’s Office for their assistance.

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

13-220                                         

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

Dawson, Bobby Complaint

NEWARK, N.J. – Seven people allegedly involved in an extensive scheme to obtain millions of dollars through fraudulently obtained refund checks issued by the U.S. Treasury were charged today with conspiring to steal government funds, U.S. Attorney Paul J. Fishman announced.

Fausto Bernard, 48, of Newark, N.J., was arrested this morning by special agents of IRS-Criminal Investigation, postal inspectors from the U.S. Postal Inspection Service, and special agents of the U.S. Secret Service. Gloria Rivera, 39, of Bronx, N.Y.; and Lourdes Ortiz, 40, of Ridgewood, N.Y. surrendered to special agents of the USPS-OIG. Luis Pena, 43, of Yonkers, N.Y., was arrested Tuesday night by special agents of the U.S. Postal Service, Office of the Inspector General. They will make their initial appearances before U.S. Magistrate Judge Madeline Cox Arleo this afternoon.

Defendant Raymundo Hernandez, 34, of Bronx, N.Y., is incarcerated in the Southern District of New York on other charges and is scheduled to make his initial court appearance on Friday.

Defendants Wellington Feliz, 30, of Bronx, N.Y., and Isaias Hernandez, 38, of Bronx, N.Y., remain at large. All seven defendants are charged by criminal Complaint with one count of conspiring to steal U.S. Treasury checks.

According to the criminal Complaint unsealed today:

Background on Stolen Identity Refund Fraud

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

• SIRF perpetrators obtain personal identifying information, including Social Security numbers and dates of birth, from unwitting individuals, who often reside in the Commonwealth of Puerto Rico.

• SIRF participants complete 1040 tax return forms using the fraudulently-obtained information and falsifying wages earned, taxes withheld and other data, always ensuring that fraudulent tax return generates a refund.

• They direct the U.S. Treasury Department to mail the refund checks to locations that the perpetrators control or can access. In some cases, SIRF perpetrators bribe mail carriers to remove the refund checks from their mail routes.

• With the fraudulently obtained refund checks in hand, SIRF perpetrators generate cash proceeds by depositing the checks into bank accounts that they control.

The Investigation

From December 2011 through April 2013, the defendants allegedly engaged in a SIRF scheme that resulted in more than $2 million in losses to the U.S. Treasury. The conspirators directed fraudulent treasury checks to addresses along a mail route they controlled. Once the checks had been intercepted, they were passed along to others and deposited into bank accounts controlled by the conspirators. The resulting proceeds were quickly withdrawn from the bank accounts and used for various personal expenses, including gambling in Atlantic City casinos and purchasing cars. 

Rivera and Ortiz were U.S. Postal Service mail carriers who were allegedly bribed to divert checks from their mail route in Queens. After intercepting the checks, Rivera delivered them to Pena for approximately $400 per check. The fraudulently obtained checks ultimately were deposited into straw bank accounts controlled by Feliz, Isaias Hernandez, Raymundo Hernandez, and Bernard.

Feliz, Isaias Hernandez, Raymundo Hernandez, and Bernard incorporated businesses in New York or New Jersey. Within a few days of incorporating each business, they opened up a straw bank account at a Sovereign Bank branch in the business’ name. For the next few months, they deposited hundreds of thousands of dollars in fraudulently obtained checks into the straw bank accounts and quickly withdrew significant sums of cash.

Isaias Hernandez, Feliz, and Raymundo Hernandez used the proceeds of the scheme to purchase vehicles at auction. Raymundo Hernandez spent thousands of dollars at Atlantic City casinos.

The conspiracy charge is punishable by a maximum potential penalty of 10 years in prison and a fine of up to $250,000, or twice the gain or loss caused by the offense.

U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen; postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates; special agents of the U.S. Secret Service, under the direction of Special Agent in Charge James Mottola; and special agents of the U.S. Postal Service-Office of the Inspector General, under the direction of Special Agent in Charge Rafael A. Medina, with the investigation leading to today’s charges.

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

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

13-216                                                       

Pena, Luis et al. Complaint

NEWARK, N.J. – A Newark man was sentenced to 46 months in prison for his role in a scheme to steal personal checks from the U.S. mail, fraudulently endorsed them and deposit them into personal checking accounts, U.S. Attorney Paul J. Fishman announced.

Kurtis Steele, 27, pleaded guilty Feb. 21, 2013 before U.S. District Judge Kevin McNulty to an Information charging him with one count of conspiracy to commit bank fraud. Judge McNulty imposed the sentence today in Newark federal court.

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

Steele and his conspirators gained access to and stole blank checks that were mailed to unsuspecting victims. Steele and his conspirators then fraudulently endorsed the blank checks for a certain sum and deposited those checks into legitimate bank accounts that they and unnamed conspirators opened at a number of banks, including TD Bank, Bank of America, Capital One Bank, Garden State Community Bank, Hudson City Savings Bank, PNC Bank and Valley National Bank.

Before the victims or banks discovered the checks were fraudulent, Steele and his conspirators had withdrawn the funds, either via Automated Teller Machine (ATM) or by entering the victim bank and filling out a withdrawal slip. U.S. Postal Inspection Service and FBI agents were able to obtain bank video surveillance which captured Steele making fraudulent deposits of the stolen checks and withdrawals of the proceeds of those checks.

Steele and his conspirators deposited $1,478,695 in fraudulent checks stolen from 122 victims. The checks were deposited into 258 different bank accounts opened by the defendants and/or unnamed conspirators. Steele and conspirators’ scheme resulted in $648,194 in losses.

In addition to a prison term, Judge McNulty sentenced Steele to three years of supervised release. Restitution will be determined at a later date.

Several of Steele’s conspirators were previously sentenced for their role in the fraudulent scheme: Constance Bowles, 23, of Newark, was sentenced to six months in prison and six months in a halfway house; Garnet Hinton, 24, of Union, N.J., was sentenced to 23 months in prison; Keonnah McLean, 24, of Newark, was sentenced to 23 months in prison; and Martell Arline, 22, if Newark, was sentenced to 36 months in prison. In addition to the prison terms, each of them was sentenced to three years of supervised release.

U.S. Attorney Fishman credited postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates; and special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, with the investigation leading to the sentences.

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

13-218                                                                                                    

Defense Counsel: Stephen A. Turano Esq., Newark

Attorney Charged in New Jersey Allegedly Steered Payments to Company He Owned

NEWARK, N.J. – Federal agents arrested a New York attorney this morning to face a criminal complaint charging him with defrauding two international companies out of hundreds of thousands of dollars by fraudulently billing them for advertising services that were never provided, U.S. Attorney Paul J. Fishman announced.   

Marijan Cvjeticanin, 49, of St. James, N.Y., is charged with one count of mail fraud. He was arrested at his home by special agents with U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and U.S. Department of State Diplomatic Security Service (DSS), and is scheduled to appear this afternoon before U.S. Magistrate Judge Madeline Cox Arleo in Newark federal court.

According to the complaint unsealed today: 

From approximately September 1996 to September 2012, Cvjeticanin was employed by a New York law firm specializing in immigration law, first as a paralegal and then as an attorney.  Among other clients, the firm represented two international companies – with offices in New Jersey – in connection with various immigration law matters. Cvjeticanin was the case manager handling day-to-day tasks such as filing applications for permanent residency for certain foreign workers of those companies employed in the United States on a temporary basis.

The application process required the companies to place job ads, in the geographic location where a relevant position was located, to demonstrate there were no minimally qualified U.S. citizens available to fill that position. To do that, Cvjeticanin caused his firm to retain a supposed advertising agency, Flowerson Holdings, Inc., a/k/a Flowerson Advertising, which allegedly handled all of the advertisement obligations of the companies in connection with permanent residency applications. Neither the firm nor the companies knew Cvjeticanin owned and controlled Flowerson.

From 2010 through September 2012, the companies paid Flowerson approximately $579,000 for advertisements, but Flowerson did not place the majority of those ads. Instead, Cvjeticanin stole the money and used it for his personal benefit.             

If convicted, Cvjeticanin faces a maximum potential penalty of 20 years in prison and a $250,000 fine.

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

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

13-215                                     

Defense counsel: TBD

Cvjeticanin, Marijan Complaint

NEWARK, N.J. – A Morris County, N.J., man was sentenced today to 140 months in prison today for possessing and distributing over the Internet images of child sexual abuse, U.S. Attorney Paul J. Fishman announced.

Khalil Survey, 39, of Lake Hiawatha, N.J., was previously arrested on a Complaint and later pleaded guilty before U.S. District Judge William H. Walls to an Indictment charging him with one count of possession of child pornography and one count of distributing child pornography.

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

Special agents of the Department of Homeland Security and other law enforcement executed a search warrant at Survey’s home on Aug. 4, 2011, and seized a computer, an iPhone, and several electronic storage devices that contained images and videos child pornography. The devices included 46,353 images of child sexual abuse, including 983 images involving infants or toddlers, and 783 images involving sadomasochistic abuse. On the defendant’s iPhone, law enforcement found photographs the defendant had taken of himself downloading child pornography onto his home computer.

In addition to the prison term, Judge Walls sentenced Survey to lifetime supervised release and ordered him to pay $300,000 in restitution to the victims.

U.S. Attorney Fishman credited special agents of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, under the direction of Special Agent in Charge Andrew M. McLees in Newark, with the investigation leading to today’s sentencing. He also thanked the Morris County Prosecutor’s Office for its role in the investigation.

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

13-217                                                    

Defense counsel: Joseph Rotella Esq., Newark

CAMDEN, N.J. – Two men who plotted to rob a drug stash house in order to sell the stolen cocaine were convicted today by a federal jury in New Jersey of crimes related to the scheme, U.S. Attorney Paul J. Fishman announced.

Ralph Dennis, 35, and Terrance Hardee, a/k/a “Fat Cat,” 36, both of Philadelphia, were each convicted of one count of conspiracy to commit robbery and one count of conspiracy to possess more than 5 kilograms of cocaine with intent to distribute. Dennis was also found guilty of using and carrying a firearm during a crime of violence. The jury returned the verdict on the second day of deliberations following an approximately three-week trial before U.S. District Judge Joseph E. Irenas in Camden federal court. 

According to the evidence at trial:

In June and July of 2012, Dennis and Hardee engaged in the planning of a gunpoint drug stash house robbery. They prepared to steal multiple kilograms of cocaine from the drug dealers at the location, then sell it themselves to make a profit.

During the investigation, Dennis was recorded discussing his willingness to kill anyone they found inside the house as they were robbing it. Hardee was recorded talking about his role – tying the house’s occupants up with zip ties.

Special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) arrested the pair when they showed up in Maple Shade, N.J., on July 16, 2012, to head to the robbery location, Dennis carrying a gun. Dennis and Hardee also brought gloves, and zip ties were found in the car they drove to Maple Shade. 

At sentencing, the defendants face a maximum potential penalty of 20 years in prison on the robbery conspiracy charge and a mandatory minimum penalty of 10 years and a maximum of life in prison on the cocaine distribution charge. Additionally, Dennis faces a mandatory minimum of five years in prison – consecutive to the sentence imposed for the robbery conspiracy – and a maximum of life in prison for the gun offense. Each count also carries a maximum $250,000 fine.  A sentencing date has not yet been set.

U.S. Attorney Fishman credited ATF special agents in Cherry Hill, N.J., under the direction of Special Agent in Charge Thomas J. Cannon, with the investigation leading to today’s convictions.

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

13-213                              

Defense counsel:

Ralph Dennis: Assistant Federal Public Defenders Thomas Young & Christopher O’Malley Esqs., Camden
Terrance Hardee: David Rudenstein, Esq., Philadelphia

CAMDEN, N.J. – A Morris County, N.J., man was sentenced today in Camden federal court to 210 months in prison for distributing images and videos of child sexual abuse over the Internet, U.S. Attorney Paul J. Fishman announced.

William Rensing, 46, of Lincoln Park, N.J., previously pleaded guilty to one count of an indictment charging him with distribution of child pornography. Rensing entered his guilty plea before U.S. District Judge Jerome B. Simandle, who also imposed the sentence today. Rensing has been in federal custody since his arrest.

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

Law enforcement executed a search warrant at Rensing’s home on July 27, 2011, and seized a notebook computer that contained images and videos of child sexual abuse, including depictions of children as young as 6 years old. Rensing was arrested the same day. He later admitted in court that on March 25, 2011, he used peer-to-peer file-sharing software to share images and videos of child sexual abuse through the Internet.

The length of Rensing’s sentence is due in part to his prior conviction for sexual assault of a minor. In addition to the prison term, Judge Simandle sentenced Rensing to serve 10 years of supervised release.

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, as well as detectives of the Morris County Prosecutor’s Office.

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

13-212                                            

Defense counsel: Sean McGovern Esq., Newark

CAMDEN, N.J. – A Camden man with prior felony convictions was sentenced today to 84 months in prison for unlawfully possessing a semiautomatic handgun, U.S. Attorney Paul J. Fishman announced.

Bryon Goodman, 28, previously pleaded guilty before U.S. District Judge Robert B. Kugler to an Indictment charging him with being a felon in possession of a firearm. Judge Kugler imposed the sentence today in Camden federal court.

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

On Feb. 7, 2012, Goodman knowingly possessed a loaded Ruger P89 9mm semiautomatic handgun at a Crown Fried Chicken restaurant in Camden. Camden police observed Goodman rolling a marijuana cigarette. Goodman was searched and found with the handgun, as well as various illegal drugs, including crack, heroin, and marijuana.

In addition to the prison term, Judge Kugler sentenced Goodman to three 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 in Newark, with the investigation leading to today’s sentencing. He also thanked the N.J. State Police, the Camden County Prosecutor’s Office, and the Camden Police Department for their roles in the investigation.

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

13-211                                  

Defense counsel: Christopher H. O’Malley Esq., Assistant Federal Public Defender, Camden

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

Michael A. Ingalls, Jr., 35, pleaded guilty before Chief U.S. District Judge Jerome B. Simandle in Camden federal court to an Information charging him with one count of conspiracy to commit bank fraud and one count of possession of stolen mail.

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

Ingalls and others stole checks from curbside U.S. mailboxes in business industrial parks in Burlington, Camden, and Gloucester counties in New Jersey. Ingalls and his co-conspirators (including Ibn Muhammad, 35, of Camden) would then recruit a conspirator to cash the stolen checks.  Once they identified a person to cash the check, Ingalls and Muhammad 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. Ingalls, Muhammad and the check casher would then travel to a bank where the check casher would cash the check.

Ingalls, Muhammad 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 is also charged with possession of mail stolen from business industrial parks in Brookfield, Conn. The stolen mail was found after Ingalls was stopped for speeding by the N.J. State Police in Middlesex County while headed southbound on the N.J. Turnpike in the early morning hours of Feb. 27, 2011.

On the count of conspiracy to commit bank fraud, Ingalls faces a maximum potential penalty of 30 years in prison and a fine of $1 million, or twice the gross gain or loss resulting from the offense.  On the count of possession of stolen mail, Ingalls faces a maximum potential penalty of five years in prison and a fine of $250,000. Sentencing is scheduled for Sept. 5, 2013.

Muhammad pleaded guilty Dec. 3, 2012, before Judge Simandle to bank fraud and theft of mail. He is currently in custody and is scheduled to be sentenced on June 17, 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.

U.S. Attorney Fishman credited special agents from the U.S. Postal Inspection Service, under the direction of Karen V. Higgins, and troopers from the N.J., State Police, under the direction of Col. Rick Fuentes, for the investigation leading to today's guilty plea.

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.

13-214                                                   

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

Ingalls, Michael Information

TRENTON, N.J. – A Somerset County, N.J., man made his initial court appearance today after being arrested for allegedly possessing multiple, sexually suggestive images of children, U.S. Attorney Paul J. Fishman announced.

Patrick T. Deck, 53, of Watchung, N.J., is charged by Complaint with one count of possessing child pornography. He made his initial court appearance this morning before U.S. Magistrate Judge Tonianne J. Bongiovanni in Trenton federal court and was detained without bail.

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

In August 2012, law enforcement agents executed a search warrant at Deck’s residence.  They determined that Deck’s laptop computer contained multiple images of child pornography, which appeared to have been downloaded from the Internet.  

The possession of child pornography count with which Deck is charged is punishable by a maximum potential penalty of 10 years in prison and a fine of $250,000. 

U.S. Attorney Fishman credited special agents of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, under the direction of Special Agent in Charge Andrew M. McLees in Newark, for the investigation leading to the arrest. Fishman also thanked the N.J. State Police and the Warren County Prosecutor’s Office for their assistance with the investigation.

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

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

13-206                                  

Deck, Patrick Complaint

NEWARK, N.J. – A Middlesex County, N.J., man who works as a personal trainer was arrested this morning for conspiring to distribute more than 89,000 units of anabolic steroids in both pill and liquid form, U.S. Attorney Paul Fishman announced.

Richard Gray, 60, of Port Reading, N.J., was arrested this morning by special agents of the Department of Homeland Security, Homeland Security Investigations. He is charged by Complaint with conspiracy to distribute anabolic steroids. He is scheduled to make his initial appearance later today before U.S. Magistrate Judge Mark Falk.

According to the Complaint: On April 23, 2013, agents of Customs and Border Protection (CBP) conducted a routine border inspection of a package that was shipped from China to a package consignment store in Edison, N.J. The package’s mail declaration stated that it contained hardware products and was addressed to a business, Custom Parts, in care of the consignment store. When CBP inspected the package, agents found approximately 110 ampules that were individually labeled as different types of anabolic steroids, including “Mastabol, Dromastanolone Enanthate,” “Testosterone,” “Boldenone Undecylenate,” “Nandrolone Decanoate,” and “Testosterone Enanthate.”

Store employees identified Gray as the person who was supposed to pick up the package and told investigators the store was holding another package for Gray, which was nearly identical to the first package and had been sent by the same shipper. Gray was arrested when he arrived at the store to pick up the second package.

Gray then consented to have his home searched. Investigators found in the storage room in Gray’s basement a substantial amount of anabolic steroids, which were in both liquid and pill form. Some of the steroids were meticulously labeled and organized in boxes and individual trays, which were then placed on metal shelves. Others were stored in large, gallon-sized plastic bags.

U.S. Attorney Fishman credited special agents of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, under the direction of Special Agent in Charge Andrew M. McLees in Newark; special agents of U.S. Customs and Border Protection, under the direction of Robert E. Perez, director of New York Field Operations; and the Middlesex County Prosecutor’s Office, under the direction of Acting Prosecutor Andrew Carey, with the investigation leading to today’s arrest.

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

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

13-205                                                        

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

Gray, Richard Complaint
Attachment A
Attachment B
Attachment C

TNEWARK, N.J. – An internal medicine specialist who wrote illegal prescriptions for oxycodone was convicted today by a federal jury in New Jersey for his role in a conspiracy that put tens of thousands of prescription pills on the streets for resale, U.S. Attorney Paul J. Fishman announced.

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

According to the evidence at trial:

Between 2009 and March 2011, Durante regularly sold prescriptions of oxycodone to several people knowing the drugs would be resold on the street for profit. Two individuals in particular – Andre Domando, 48, of Belleville, N.J., and Dennis Abato, 61, of Lakewood, N.J. – each had a stable of patients they brought to Durante’s medical practice in Nutley, N.J., so he could give them prescriptions for large quantities of oxycodone that would ultimately be sold through the redistribution network. Domando and Abato have each pleaded guilty in connection with the scheme.

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

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

Additionally, Durante falsified medical records in the files of the patients who received  the oxycodone prescriptions he sold to Domando, Abato and others. Typically, Durante would omit from the progress notes for those patients many of the additional prescriptions he had sold. On other occasions, he falsely wrote that prescriptions had been provided to replace lost prescriptions – including noting on one occasion that a dog may have eaten one of the prescriptions he provided to Domando. 

In total, Durante provided prescriptions for more than 70,000 oxycodone pills to be illegally resold by his coconspirators. 

At sentencing, Durante faces a maximum potential penalty of 20 years in prison and a $250,000 fine on each of the 16 counts of which he was convicted. A sentencing date has not yet been set. A hearing has been scheduled for tomorrow, May 23, 2013, to discuss the forfeiture of nearly $300,000 in cash found in Durante’s home.   

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

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

13-210                           

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

TNEWARK, N.J. – An internal medicine specialist who wrote illegal prescriptions for oxycodone was convicted today by a federal jury in New Jersey for his role in a conspiracy that put tens of thousands of prescription pills on the streets for resale, U.S. Attorney Paul J. Fishman announced.

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

According to the evidence at trial:

Between 2009 and March 2011, Durante regularly sold prescriptions of oxycodone to several people knowing the drugs would be resold on the street for profit. Two individuals in particular – Andre Domando, 48, of Belleville, N.J., and Dennis Abato, 61, of Lakewood, N.J. – each had a stable of patients they brought to Durante’s medical practice in Nutley, N.J., so he could give them prescriptions for large quantities of oxycodone that would ultimately be sold through the redistribution network. Domando and Abato have each pleaded guilty in connection with the scheme.

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

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

Additionally, Durante falsified medical records in the files of the patients who received  the oxycodone prescriptions he sold to Domando, Abato and others. Typically, Durante would omit from the progress notes for those patients many of the additional prescriptions he had sold. On other occasions, he falsely wrote that prescriptions had been provided to replace lost prescriptions – including noting on one occasion that a dog may have eaten one of the prescriptions he provided to Domando. 

In total, Durante provided prescriptions for more than 70,000 oxycodone pills to be illegally resold by his coconspirators. 

At sentencing, Durante faces a maximum potential penalty of 20 years in prison and a $250,000 fine on each of the 16 counts of which he was convicted. A sentencing date has not yet been set. A hearing has been scheduled for tomorrow, May 23, 2013, to discuss the forfeiture of nearly $300,000 in cash found in Durante’s home.   

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

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

13-210                           

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

Some Customers of Illegal Ring Worked off Debts in Newark Strip Clubs

CAMDEN, N.J. – A manager and supervisor of an international scheme responsible for smuggling into the United States hundreds of illegal aliens from Brazil, India and elsewhere was sentenced today to 51 months in prison, U.S. Attorney Paul J. Fishman announced.

Sanderlei Alves DaCruz, a/k/a “Kauan,” a/k/a “Kauan Santana,” a/k/a “Sidney Gomes Figueredo,” 33, of Houston, previously pleaded guilty before U.S. District Judge Joseph H. Rodriguez to an indictment charging him with one count of participating in a conspiracy to bring aliens into the United States illegally. Judge Rodriguez imposed the sentence today in Camden federal court.

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

From January 2008 through June 2011, DaCruz conspired with others in New Jersey, Massachusetts, Texas and elsewhere to bring aliens into the United States illegally from a number of other countries as part of an elaborate for-profit alien smuggling scheme. The conspirators arranged, facilitated and monitored the travel of customers along two primary smuggling routes – the first of which included travel through Central America and across the international border between Mexico and the United States. The second route included travel through St. Maarten and the Bahamas, followed by a series of boat trips to either Puerto Rico or the Florida coast.

Through the interception of the conspirators’ cell phone calls, the use of confidential sources of information and other means, law enforcement agents learned that the defendants charged customers of the alien smuggling scheme from $13,000 to more than $25,000 – depending on the route used and whether the customer paid in advance or in installments after arriving in the United States. 

Many of the customers of the scheme were young women from Brazil, most of whom agreed to repay part of their smuggling debt after arriving in the United States by working as dancers in strip clubs in Newark and elsewhere.

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

On Dec. 21, 2011, other members of the conspiracy including Nacip Teotonio Pires, a/k/a “Ze Maria,” a/k/a “Baraso,” 49, of Newark; Rubens DaSilva, a/k/a “Diogo Oliveira,” 41, of Haverhill, Mass.; and Claudinei Pereira Mota, 35, of Newark, each pleaded guilty before Judge Rodriguez to an information charging them with conspiring to bring aliens into the country illegally. A fifth member of the smuggling ring, Francismar Da Conceicao, a/k/a “Alex,” 38, of Hillside, N.J., pleaded guilty to a similar charge a few days earlier. Priscilla (last name unknown), a/k/a “Clema Aparacida Lopes,” of Long Branch, N.J., remains at large.  

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

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

13-208                             

Defense counsel: Paulette Pitt Esq., Woodbridge, N.J.

CAMDEN, N.J. – A former employee of The Vacation Ownership Group LLC admitted to conspiring to defraud owners of timeshare properties by offering phony consulting services, U.S. Attorney Paul J. Fishman announced. She also admitted to illegally collecting unemployment benefits.

Catherine Bannigan, 58, of Ventnor, N.J., pleaded guilty today before U.S. District Court Judge Noel L. Hillman in Camden federal court to an Information charging her 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, had offices in Mays Landing, N.J., and Egg Harbor Township, N.J., and claimed to offer consulting services to owners of timeshares, including cancelling, purchasing and upgrading the timeshares.

In 2010, Bannigan started working at the VO Group and was trained by VO Group co-owner Adam Lacerda to call customers using prepared scripts. The defendant called customers and gave them the false impression that they were working for a bank or lending institution. After hearing the Bannigan’s false representations, some customers sent checks to the VO Group. For example, Bannigan falsely told victim “JL” that a committee at the VO Group was meeting, that Bannigan had scheduled JL’s case to be heard by the committee, and that she needed to mark her complaint resolved or unresolved, to induce JL to send the VO Group money. Bannigan admitted causing more than $70,000 in losses.

Bannigan 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. Bannigan admitted to applying for and being awarded $4,914 in unemployment compensation benefits to which she was not entitled.

On Jan. 23, 2013, co-owners Adam Lacerda and Ashley Lacerda and 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, 11 members of the VO Group 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 Bannigan 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 charge is also 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. Sentencing is scheduled for Oct. 4, 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 the 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.

13-209                                                   

Defense counsel: Rocco C. Cipparone Jr., Esq., Haddon Heights, NJ

Bannigan, Catherine Information

NEWARK, N.J. – FBI special agents arrested a Roslyn Heights, N.Y., man near his home this morning to face an indictment charging him and three other men with various offenses in connection with two armed robberies of T-Mobile stores in Linden and Woodbridge, N.J., U.S. Attorney Paul J. Fishman announced.

Leonard Arrington, 27, is charged in the indictment – along with Carl Williams, 29, and Eric Williams, 32, of Brooklyn, N.Y. – with one count of conspiracy to commit Hobbs Act robberies, one count of committing a Hobbs Act robbery and one count of using a firearm during a crime of violence. Terrell McQueen, 29, of Elizabeth, N.J., is charged in the indictment with the same offenses, as well as an additional count each of Hobbs Act robbery and using a firearm during a crime of violence.

McQueen, Carl Williams and Eric Williams (no relation) were initially arrested and charged by criminal complaint with the conspiracy and firearms counts on Feb. 14, 2013.  They appeared that day before U.S. Magistrate Judge Mark Falk, who remanded them to federal custody pending trial.

Arrington is expected to appear today before Judge Falk in Newark federal court.

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

On Sept. 20, 2012, Carl Williams and another man, brandishing a firearm, walked into a T-Mobile store in Linden. They then tied up the employees in the back of the store, stole approximately 50 to 60 cell phones, and fled in a Land Rover.

McQueen, Eric Williams and other conspirators then delivered the stolen phones to a cell phone store in Brooklyn.

On Oct. 2, 2012, Arrington entered a T-Mobile store in Woodbridge, carrying a gun, along with another man. After locking the front door, the men took the employees to the back of the store and tied them up, then stole approximately 40 cell phones. One of the robbers then called the getaway driver, who drove them away in a Land Rover. McQueen, Eric Williams, and others delivered the stolen phones to the same Brooklyn store.

The charges of Hobbs Act conspiracy and robbery (Counts One, Two and Four) carry a maximum potential penalty of 20 years in prison. The charge of brandishing a firearm during a crime of violence (Counts Three and Five) carries a maximum potential penalty of life in prison and a mandatory minimum sentence of seven years for the first count of conviction, and 25 years for the second count of conviction, each of which must run consecutively to one another and to any other prison term. Each of the five 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 Linden and Woodbridge Police Departments in New Jersey, as well as the New York City and Nassau County Police Departments and the Kings County District Attorney’s Office in New York for their excellent work in this case.

The government is represented by Assistant U.S. Attorneys Osmar J. Benvenuto and 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.

13-207                              

Defense counsel:

Terrell McQueen: Anthony J. Pope Esq., Newark
Carl Williams: Mark A. Berman Esq., River Edge, N.J.
Eric Williams: Aaron M. Goldsmith Esq., New York
Leonard Arrington: TBD

McQueen, Terrell et al. Indictment

CAMDEN, N.J. – A former Atlantic County man who has allegedly been a fugitive since being charged in 2010 with multiple crimes in connection with a large-scale heroin distribution conspiracy was arrested last night in Atlantic City, U.S. Attorney Paul J. Fishman announced.

Edward Brown Jr., a/k/a “Edward Brown,” a/k/a “Eddie Brown,” a/k/a “Eddie Cane,” a/k/a “Cane,” 24, was arrested without incident at 9:30 p.m. last night by Task Force Officers of the FBI, along with members of the Atlantic City Police Department. He will be arraigned before U.S. Magistrate Judge Joel Schneider in Camden federal court later today. Brown was charged by local law enforcement in 2010 in connection with the drug trafficking organization. He was indicted by a federal grand jury in July 2012 and charged with conspiracy to distribute heroin.

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

Beginning in March 2010, FBI special agents and members of the Atlantic County Prosecutor’s Office used wiretaps to intercept telephone conversations among Brown; Jamal Reid, 28, of Mays Landing, N.J., the alleged leader of the organization; and others. The monitored calls and other information revealed that Reid, Brown, and others were distributing large amounts of heroin. During the calls, agents overheard Reid arranging for the delivery of heroin from northern New Jersey to Sicklerville, where it would be accepted by Brown and other conspirators.  Agents overheard Reid arrange the collection of money from other members of his organization to pay for the heroin, and they overheard Reid direct the sale and distribution of heroin to others.  Agents observed Brown meeting with Reid and his conspirators on numerous occasions.

Reid pleaded guilty May 13, 2013, to a Superseding Indictment charging him with knowingly and intentionally conspiring to distribute one kilogram or more of heroin, and possession of a firearm by a previously convicted felon. He is scheduled to be sentenced Aug. 14, 2013.

Brown was charged by criminal complaint in January 2012. On July 10, 2012, a federal grand jury returned a Superseding Indictment charging Brown with conspiracy to distribute one kilogram or more of heroin. The charge is punishable by a minimum of 10 years in prison and a maximum of life in prison and a $10 million fine.

Ten people were charged for their roles in this heroin distribution conspiracy. To date, six individuals have pleaded guilty to conspiracy to distribute heroin, two remain incarcerated pending trial, and one individual – Matthew Palmer, a/k/a “Matt,” a/k/a “White Boy Matt,” a/k/a “White Boy – remains a fugitive.

U.S. Attorney Fishman credited FBI’s Atlantic City Resident Agency Safe Streets Task Force, which during the Reid investigation consisted of task force officers from the Atlantic County Prosecutor’s Office, the Atlantic City Police Department, the Northfield Police Department, and the Pleasantville Police Department, and special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark; and special agents from the Bureau of Alcohol, Tobacco, Firearms & Explosives, under the direction of Special Agent in Charge Thomas J. Cannon in Newark.

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

13-204                               

Brown, Eddie Superseding Indictment

NEWARK, N.J. – A registered sex offender employed at a law office in Paterson, N.J., was indicted today by a federal grand jury in Newark for allegedly possessing and distributing images of child sex abuse over the Internet, U.S. Attorney Paul J. Fishman announced.

Kevin Rease, 33, of Hackettstown, N.J., was charged by complaint in April 2013 with one count of distributing images of child sex abuse over the Internet and has been held in federal custody since that time. Today’s indictment charges two counts of distribution and one count of possession of the images. Rease will be arraigned on the indictment on a date to be determined.

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

On March 12, 2013, an undercover FBI agent downloaded images depicting child sexual abuse from an individual using an assumed name on a public Internet-based peer-to-peer file sharing network. The investigation revealed that the individual was logged on to the network using an Internet Protocol, or “IP,” address belonging to the law office where he worked.

The FBI executed a search warrant in April 2013 at the Paterson law office, seizing digital images depicting child sexual abuse, including material involving prepubescent minors. Rease’s work computer was logged onto the peer-to-peer network at the time, under the same assumed name which had offered illegal images for download on March 12.

As a previously convicted sex offender, Rease faces a mandatory minimum penalty of 15 years in prison, a maximum potential penalty of 40 years in prison, and a $250,000 fine per count if convicted of the distribution offenses. He also faces a mandatory minimum penalty of 10 years in prison, a maximum penalty of 20 years in prison, and a $250,000 fine if convicted of the possession count.

U.S. Attorney Fishman credited special agents of the FBI, Newark Division’s Child Exploitation Task Force, under the direction of Special Agent in Charge Aaron T. Ford in Newark, with the investigation.

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

13-203

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

Rease Indictment

TRENTON, N.J. – A Princeton, N.J., youth soccer coach was arrested today after law enforcement officers searching his home allegedly discovered compromising, sexual movies of minor boys, U.S. Attorney Paul J. Fishman announced.

Jorge A. Roman, 48, is charged by criminal complaint with one count of possessing images of child pornography. Roman appeared this afternoon before U.S. Magistrate Judge Douglas E. Arpert in Trenton federal court and was detained pending satisfaction of his bail conditions.

According to the criminal complaint filed today:

During a period lasting approximately five years, Roman ordered – on more than 40 occasions – films exploiting nude, minor boys that were marketed as “naturist films from around the world.” The orders included DVDs, photo CDs and downloadable links.

The count with which Roman is charged carries a maximum potential penalty of 10 years in prison and a $250,000 fine.

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

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

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

13-202

Defense counsel: Assistant Federal Public Defender Lisa Van Hoeck

Roman Complaint

CAMDEN, N.J. – A Camden man who allegedly stole more than $1 million dollars from the U.S. Government through a food stamps scheme was arrested by federal agents this morning, U.S. Attorney Paul J. Fishman announced.

Alexander D. Vargas, 34, was charged in connection with a scheme in which he allegedly purchased Supplemental Nutrition and Assistance Program (SNAP) benefits (formerly known as food stamps) for 50 cents on the dollar at the local grocery store he was managing in Camden. He is charged by Complaint with one count of stealing monies from the United States. Vargas was arrested by agents of the Department of Agriculture, Office of Inspector General, Homeland Security Investigations and the IRS. He is scheduled to appear this afternoon before U.S. Magistrate Judge Joel Schneider in Camden federal court.

According to documents filed in this case:

From February 2012 through December 2012 Vargas managed Eddies Grocery, a small grocery store in Camden that was authorized to accept SNAP benefits. The program is administered by the U.S. Department of Agriculture. Retail food stores that have been approved for participation in SNAP may sell food in exchange for food stamp benefits. They may not, however, exchange food stamp benefits for cash.

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

Eddies Grocery designated a bank account at Sovereign Bank to receive the reimbursements for SNAP benefits. Bank records listed Vargas as the manager of Eddies Grocery, and another individual as the owner of the store.

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

   Month / Year

SNAP Redemptions

Reported expected monthly redemptions

Difference

$330,525.81

$23,333.00

$307,192.81

10/2012  

$344,134.75

$23,333.00

$320,801.75

09/2012  

$338,930.30

$23,333.00

$315,597.30

08/2012  

$320,269.62

$23,333.00

$296,936.62

07/2012  

$331,932.59

$23,333.00

$308,599.59

06/2012  

$315,867.62

$23,333.00

$292,534.62

05/2012  

$289,723.15

$23,333.00

$266,390.15

04/2012  

$292,545.28

$23,333.00

$269,212.28

03/2012  

$293,100.57

$23,333.00

$269,767.57

02/2012  

$245,968.65

$23,333.00

$222,635.65

Total:

$3,102,998.34

$233,330.00

$2,869,668.34

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

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

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

U.S. Attorney Fishman credited special agents of the U.S. Department of Agriculture, Office of Inspector General, under the direction of Special Agent in Charge William G. Squires Jr. in New York; the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Andrew McLees; and IRS – Criminal Investigations, under the direction of Special Agent in Charge Shantelle P. Kitchen, with the investigation leading to today’s arrest.

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

13-201                                                          

Vargas, Alexander Complaint

NEWARK, N.J. – A Brooklyn, N.Y., man who was arrested in April in connection with a Bergen County bank robbery will make his initial court appearance today, U.S. Attorney Paul J. Fishman announced.

John Edward Stevens, 59, is charged by Complaint with one count of bank robbery and is scheduled to make his initial appearance before U.S. Magistrate Judge Madeline Cox Arleo in Newark federal court today. Stevens was on the FBI’s 10 Most Wanted Fugitives List in 1988 in connection with unrelated robberies.

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

On April 15, 2013, Stevens allegedly robbed the TD Bank, located in Oakland, N.J. According to bank employees and video surveillance, a male wearing a blue jacket and a baseball hat entered the bank and approached one of the bank tellers. The robber was carrying a zipper pouch, which he opened and showed the teller. Inside was what appeared to be a black handgun. The robber fled after the teller gave him money.

Approximately 20 minutes after the robbery, law enforcement stopped a vehicle that was reported stolen. The driver of the stolen vehicle was identified as Stevens. Law enforcement arrested Stevens and located a TD Bank bag filled with money in the vehicle.

If convicted of the bank robbery charge, Stevens faces 20 years imprisonment 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. He also thanked the Waldwick Police Department and the Oakland Police Department for their contribution to the case.

The government is represented by Assistant U.S. Attorney Danielle M. Corcione 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.

13-199

Stevens Complaint