District of New Jersey

NEWARK N.J. – Two men were arrested this morning and charged with engaging in a real estate investment fraud conspiracy that defrauded more than fifteen victims of approximately $5 million from 2009 to the present, U.S. Attorney Paul J. Fishman announced.

Paul Mancuso, 46, of Glen Rock, N.J., and Pasquale Stiso, a/k/a “Pat Stiso,” 52, of West Harrison, N.Y., are charged by Complaint with one count of conspiracy to commit wire fraud. They made their initial court appearances this afternoon before U.S. Magistrate Judge Madeline Cox Arleo in Newark federal Court. Stiso was released on bail. Mancuso was ordered detained, pending a bail hearing tomorrow.

According to the Complaint: From 2009 through the present, Mancuso held himself out as a real estate investor, broker, and/or developer, as well as a “hard money” lender and broker of other various purported investments. Mancuso obtained from his victims substantial investments for various projects that, in fact, either did not exist at all, or in which Mancuso had no actual involvement. Stiso, a disbarred attorney, held himself out as an individual who was working with Mancuso on various purported projects. Some of the purported projects touted by Mancuso, Stiso, and/or their co-conspirators included investments in a phony ticket scam, the development of a pizzeria at a resort in the Bahamas, the development of a casino in Atlantic City, the development of a commercial shopping center, and the “flipping” of a piece of real estate in Matawan. Most, if not all, of Mancuso’s victims lost all or substantially all of the money they invested with him and his co-conspirators. Many of Mancuso’s victims have lost all or substantially all of their life savings in his various schemes to defraud.

The Complaint also alleges that Mancuso and Stiso were heavily involved in illegal gambling pursuits, and that they both owe substantial sums of money to one of their bookmakers or “bookies” (referred to in the Complaint as “the Bookie”). Indeed, Mancuso paid the Bookie in excess of $600,000 from gambling losses in or around 2012, and defendant Mancuso still owes the Bookie approximately $500,000 from gambling losses.

The charge of wire fraud conspiracy carries a maximum potential penalty of 20 years in prison and a maximum fine of $250,000 or twice the gross gain or loss associated with the offense, whichever is greatest.

U.S. Attorney Fishman credited special agents of the Federal Bureau of Investigation, under the direction of Acting Special Agent in Charge David Velazquez; Special Agents of the Internal Revenue Service-Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen; as well as Criminal Investigators of the U.S. Attorney’s Office for the investigation leading to today’s arrests.

The government is represented by Assistant U.S. Attorney Lisa M. Colone of the U.S. Attorney’s Office Criminal Division in Newark.

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

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Defense counsel: Mancuso: Mary Frances Palisano, Esq., Newark, NJ (standing in for Lawrence Lustberg, Esq.)
Stiso: Max Di Fabio, Esq. White Plains, NY

Mancuso, Paul and Stiso, Pasquale Criminal Complaint

CAMDEN, N.J. – Three individuals today admitted to disaster benefits fraud relating to a presidential disaster declaration for the state of New Jersey after the nor’easter in 2010 and Hurricane Irene in 2011, U.S. Attorney Paul J. Fishman announced.

Debbie Hicks, 51, of Atlantic City, N.J., pleaded guilty to a two-count Information charging her with disaster benefits fraud and making false statements to the U.S. Department of Housing and Urban Development.

Dwana Wright, 40, and Ryan Stevens, 38, both of Camden each pleaded guilty to separate Informations charging them with disaster benefits fraud. All three defendants entered their guilty pleas during separate appearances before Senior U.S. District Judge Joseph E. Irenas.

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

Due to FEMA's vast size and the typically large number of victims resulting from a disaster, FEMA has been frequently targeted in disaster fraud schemes by individuals or groups seeking FEMA monetary assistance for benefits to which they were not entitled. These individuals accomplished their schemes by submitting fraudulent applications to FEMA for, among other things, repairs and rental assistance.

Defendant Debbie Hicks

As a result of the nor’easter, Hicks’ apartment in Atlantic City was damaged. On or about April 12, 2010, Hicks filed an application with FEMA seeking federal rental assistance under FEMA’s Individual Assistance Program, claiming that her apartment in Atlantic City was damaged as a result of the severe storm and was unfit for occupancy.

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

During the plea hearing, Hicks admitted that to continue receiving money from FEMA she lied on various forms which were sent to FEMA. Hicks also admitted that she falsely stated that her rent was not being paid by another source. As a result of the fraud, Hicks received $15,691 in FEMA emergency rental assistance funds to which she was not entitled.

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

The charges to which Hicks pleaded guilty carry a maximum potential penalty of 35 years in prison and a fine of $500,000. Hicks’ sentencing is scheduled for June 14, 2013.

Defendant Dwana Wright

Wright admitted that she applied for FEMA benefits on Sept. 27, 2011. After FEMA awarded her temporary rental assistance, Wright admitted that she submitted fraudulent documents to FEMA to secure continued disaster assistance through FEMA’s rental assistance program. As a result of her fraud, Wright received $15,763 from FEMA’s emergency rental assistance funds to which she was not entitled.

Defendant Ryan Stevens

Stevens admitted that he applied for FEMA benefits on Sept. 13, 2011. After FEMA awarded him assistance for property damage and temporary rental assistance, Stevens admitted that he submitted fraudulent documents to FEMA to secure additional disaster assistance through FEMA’s rental assistance program. Stevens admitted that he received $15,487 from FEMA’s emergency rental assistance fund to which he was not entitled.

The charges to which Wright and Stevens pleaded guilty carry a maximum potential penalty of 30 years in prison and a fine of $250,000. Wright’s sentencing is scheduled for June 21, 2013. Stevens’ sentencing is scheduled for June 21, 2013.

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

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

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Defense counsel: Hicks: Maggie Moy, Esq., Assistant Federal Public Defender, Camden
Wright: Lori Koch, Esq., Assistant Federal Public Defender, Camden
Stevens: Lori Koch, Esq., Assistant Federal Public Defender, Camden

Hicks, Debbie Information
Wright, Dwana Information
Stevens, Ryan Information

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

Aimee Allen, 27, of Myrtle Beach, S.C., pleaded guilty to a one-count criminal Information charging her with conspiracy to commit mail and wire fraud. Allen entered her guilty plea before U.S. District Court Judge Noel L. Hillman in Camden federal court.

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

The Vacation Ownership Group, a/k/a VO Group LLC (the “VO Group”), purported to offer owners of timeshares consulting services, including timeshare cancellation services. In June 2010, Allen started working at the VO Group and was trained by VO Group managers to call customers using prepared scripts. Allen would call customers and give them the false impression that she was working for a bank or lending institution. Allen then would falsely represent that the VO Group could pay off the customers’ timeshares or have their timeshares cancelled. Allen also served as a “reference” for other VO Group employees by posing as a satisfied customer to persuade a new customer to send the VO Group money. After hearing Allen’s false representations, some customers sent checks to the VO Group. Allen admitted to causing over $200,000 in losses.

On Jan. 23, 2013, 10 other individuals who worked at the VO Group were charged in a Superseding Indictment with conspiracy to commit mail and wire fraud and other charges. Those charges are pending before Judge Hillman.

The mail and wire fraud conspiracy charge to which Allen pleaded guilty carries 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 currently scheduled for June 14, 2013.

U.S. Attorney Fishman credited special agents from the FBI’s Atlantic City Resident Agency, under the direction of Acting Special Agent in Charge David Velazquez 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.

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: Edward F. Borden, Jr., Esq., Cherry Hill, N.J.

Allen, Aimee Information

TRENTON, N.J. – A Union County, N.J., man today was sentenced to 105 months in prison for robbing seven branch locations of TD Bank throughout New Jersey from September 2011 to December 2011, U.S. Attorney Paul J. Fishman announced.

Julio Ferrer, 29, of Elizabeth, N.J., previously pleaded guilty before U.S. District Judge Joel A. Pisano in Trenton federal court to an Information charging him with seven counts of bank robbery. He was sentenced by Judge Pisano today in Trenton federal court.

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

Ferrer admitted robbing the following TD Bank branches:

Count

Date

TD Bank Location

Sept. 11, 2011

560 North Avenue East
Westfield, N.J.

2

Oct. 19, 2011

37 Saint George Avenue
Roselle, N.J.

3

Nov. 19, 2011

1071 St. Georges Avenue
Rahway, N.J. 

4

Dec. 1, 2011

70 Middlesex Avenue
Metuchen, N.J.

5

Dec. 11, 2011

1906 Lincoln Highway
Edison, N.J.

6

Dec. 16, 2011

570 Chestnut Street
Union, N.J.

7

Dec. 22, 2011

883 State Road
Princeton, N.J.

In every robbery, Ferrer passed handwritten demand notes to bank tellers. He admitted using a fake gun in the robbery of the TD Bank in Edison. Ferrer was on supervised release from a prior federal bank robbery conviction when he began his robbery spree.

In addition to a prison term, Judge Pisano sentenced Ferrer to three years of supervised release and $33,840 in restitution.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Charge David Velazquez in Newark, and the police departments of Westfield, Roselle, Rahway, Metuchen, Edison, Union and Princeton, with the investigation that resulted in today’s sentencing.

The government is represented by Assistant U.S. Attorney Jane H. Yoon of the U.S. Attorney’s Office in Newark.

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

Agrees to Pay $45M to Resolve Criminal and Civil Investigations

NEWARK, N.J. – New Jersey-based Par Pharmaceutical Companies Inc. (“Par”) pleaded guilty in federal court today and agreed to pay $45 million to resolve its criminal and civil liability in the company’s promotion of its prescription drug Megace® ES for uses not approved as safe and effective by the Food and Drug Administration (FDA) and not covered by federal health care programs, the Justice Department announced.

Chief Executive Officer Paul V. Campanelli pleaded guilty on behalf of Par before U.S. Magistrate Judge Madeline Cox Arleo earlier today in Newark federal court. Judge Arleo imposed sentence today, fining Par $18 million and ordering $4.5 million in criminal forfeiture. Par also agreed to pay $22.5 million to resolve its civil liability.

“The FDA requires drug makers to go through a stringent approval process before new drugs – or new uses for existing drugs – are made available to doctors and their patients,” U.S. Attorney Paul J. Fishman said. “Today, Par admitted that it chose to ignore that process in pursuit of more sales and greater profits. It is paying the price for its choice.”

“Today’s resolution emphasizes the importance of the U.S. government’s coordinated efforts to combat health care fraud. We expect companies to make honest, lawful claims about the drugs they sell. We will be vigorous in our enforcement efforts when they break the law, to ensure that they are held accountable,” said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Justice Department’s Civil Division.

“Individual accountability of Par's board and executives is required under the comprehensive five-year integrity agreement OIG has with the company,” said Daniel R. Levinson, Inspector General of the U.S. Department of Health and Human Services.  “For example, company executives may have to forfeit annual bonuses if they or their subordinates engage in significant misconduct, and sales representatives may not be paid incentive compensation for the drug involved in the case, or successor branded versions of that drug.”

“The public has been well served by this investigation and the FDA commends the efforts of the U.S. Attorney's Office in New Jersey, the Department of Justice and the other law enforcement agencies that worked with us to vigorously pursue this matter,” said Mark Dragonetti, Special Agent In Charge of the FDA's Office of Criminal Investigation's New York Field Office. “Today's settlement demonstrates the FDA's continued commitment to target companies that disregard the safeguards of the drug approval process and promote drugs for uses before they have been proven to be safe and effective.”

Par pleaded guilty to an Information charging it with a criminal misdemeanor for misbranding Megace® ES in violation of the Federal Food, Drug, and Cosmetic Act (“FDCA”). Megace® ES, a megestrol acetate drug product, was approved by the FDA to treat anorexia, cachexia, or other significant weight loss suffered by patients with AIDS (the “AIDS Indication”). The Megace® ES distributed nationwide by Par was criminally misbranded because its FDA-approved labeling lacked adequate directions for use in the treatment of non-AIDS-related geriatric wasting, a use that was intended by Par but never approved by the FDA. The FDCA requires companies such as Par to specify the intended uses of a product in an application to the FDA. Once approved, a drug may not be distributed in interstate commerce for unapproved or “off-label” uses until the company receives FDA approval for the new intended uses. In addition to the criminal fine and forfeiture, the plea agreement mandates that Par implement several compliance measures and annually provide the U.S. Attorney’s Office with a sworn certification from its chief executive officer that the company has not unlawfully marketed any of its pharmaceutical products.

The civil settlement agreement requires Par to pay $22.5 million to the federal government and various states to resolve claims arising from its off-label marketing. The civil settlement resolves allegations that Par, by promoting the sale and use of Megace® ES for uses that were not FDA-approved and not covered by Federal health care programs, caused false claims to be submitted to these programs. The United States further alleged that Par deliberately and improperly targeted sales to elderly nursing home residents with weight loss, whether or not such patients suffered from AIDS, and launched a long-term care sales force to market to this population. During this marketing campaign, Par was allegedly aware of adverse side effects associated with the use of megestrol acetate in elderly patients, including an increased risk of deep vein thrombosis, toxic reactions in elderly patients with impaired renal function, and mortality. The United States alleged that Par made unsubstantiated and misleading representations about the superiority of Megace® ES over generic megestrol acetate for elderly patients to encourage providers to switch patients from generic megestrol acetate to Megace® ES, despite having conducted no well-controlled studies to support a claim of greater efficacy for Megace® ES. Except as admitted in the plea agreement, the claims settled by the civil settlement agreement are allegations only, and there has been no determination of liability as to those claims.

In addition to the criminal and civil resolutions, Par also agreed to enter into a five-year Corporate Integrity Agreement with the Office of the Inspector General of the Department of Health and Human Services (“HHS-OIG”) that requires enhanced accountability, increased transparency, and wide-ranging monitoring activities conducted by both internal and independent external reviewers.

The plea agreement and CIA include provisions that require Par to implement changes to the way it does business.  The plea agreement and CIA prohibit Par from providing compensation to sales representatives or their managers based on the volume of sale of Megace ES, and in the CIA, based on the volume of Megace ES and any branded successor megestrol acetate drug.  Under the CIA, Par is also required to change its executive compensation program to permit the company to recoup annual bonuses from covered executives if they, or their subordinates, engage in significant misconduct.

The settlement resolves three lawsuits filed under the whistleblower provisions of the False Claims Act, which permit private parties to file suit on behalf of the United States and obtain a portion of the government’s recovery. The civil lawsuits were filed in the District of New Jersey and are captioned U.S. ex rel. McKeen and Combs v. Par Pharmaceutical, et al., U.S. ex rel. Thompson v. Par Pharmaceutical, et al., and U.S. ex rel. Elliott & Lundstrom v. Bristol-Myers Squibb, Par Pharmaceutical, et al. As part of today’s resolution, relators McKeen and Combs will receive $4.4 million.

This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover more than $10.2 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $14.1 billion.

History of Megace® ES and Par’s Failed Attempts to Obtain FDA Approval of a Geriatric Wasting Indication for Megace® ES

According to the Information, a drug named Megace® OS – a predecessor to Megace® ES – was approved by the FDA in 1993 for the AIDS Indication. Between 2002 and 2005, Par’s market research showed that practitioners prescribed Megace® OS 1 for uses that were inconsistent with the approved labeling, including geriatric weight loss, and that the overwhelming majority of Megace® OS prescriptions were written for such off-label uses.  

In 2002, Par first approached the FDA and discussed the company’s plan to seek approval of a new formulation of Megace® OS as a treatment option for geriatric patients with malnutrition. Par did not thereafter seek approval for that patient population. Instead, in June 2004, Par relied on the Megace® OS safety and effectiveness data in seeking approval for Megace® ES for the AIDS indication, i.e., the same indication as Megace® OS. Less than two months after the FDA approved Megace® ES for the AIDS indication, Par requested a meeting with the FDA to discuss Par’s intent to seek approval of Megace® ES for certain non-AIDS geriatric patients. Par never sought approval for that patient population, nor did Par ever conduct drug trials in the geriatric population.

Par’s “Conversion” Strategy, False Superiority Claims, and Promotion of
Megace® ES for Geriatric Wasting

Despite knowing that Megace® ES had a limited market for its approved use, Par set aggressive sales goals for the product launch. After failing to attain these goals, Par adopted and implemented a marketing strategy designed to promote Megace® ES to geriatric wasting patients – the same population Par had twice discussed with the FDA. Par devised sales call panels which required Par sales representatives to market Megace® ES in nursing homes, as well as to practitioners who treated geriatric patients. These call panels identified physicians with the highest number of Megace® OS prescriptions as the top targets to “convert” from the old Megace® OS to Par’s Megace® ES product. Some Par sales managers required that their subordinates visit 10 to15 nursing homes a week to promote Megace® ES, and told them there would be possible employment consequences, including termination, if they did not promote Megace® ES in nursing homes.

While targeting an audience of health care practitioners that treated the elderly or geriatric population, Par promoted Megace® ES by making false and/or misleading claims that Megace® ES was superior to Megace® OS, including:

1. Despite having no clinical support for the claim, Par sales representatives promoted Megace® ES as more effective than Megace® OS;
2. Despite having no clinical support for the claim, Par sales representatives claimed that Megace® ES worked faster and was more effective than other products, and used the phrase “speed and ease” to promote Megace® ES;
3. Par sales representatives were taught to try and “flip” a nursing home by asking the homes to convert all Megace® OS patients in the nursing home to Megace® ES, despite knowing that the nursing homes contained very few, if any, AIDS patients and the requested patients would therefore be using the product for off-label purposes;
4. Par trained and directed its sales force to minimize or eliminate mentioning altogether the FDA-approved indication for Megace® ES during promotional sales calls, so as to draw as little attention as possible to the fact that Megace® ES was not approved for geriatric wasting; and
5. Par managers trained, directed, and encouraged their sales representatives to ask health care practitioners for patient information protected by the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), so that the representatives could request that certain patients who were using Megace® OS be switched to Megace® ES.

U.S. Attorney Fishman said the corporate guilty plea, the civil settlement, and the corporate integrity agreement are the culmination of a multi-year investigation conducted jointly by special agents from HHS-OIG, under the direction of Special Agent in Charge Tom O’Donnell, special agents from FDA-OIG, under the direction of Special Agent in Charge Mark Dragonetti, and criminal investigators and paralegals with the U.S. Attorney’s Office.

U.S. Attorney Fishman thanked the Defense Criminal Investigative Service; the Office of Personnel Management-Office of Inspector General; the Department of Veterans’ Affairs Office of Inspector General; and TRICARE Program Integrity for assisting in the investigation. He also thanked the National Association of Medicaid Fraud Control Units (NAMFCU), with assistance from the Medicaid Fraud Control Unit of the Ohio Attorney General’s Office for their help in coordinating the settlements with the various states.

The government is represented in the prosecution of the criminal case by Assistant U.S. Attorney Joseph Mack of the U.S. Attorney’s Office Health Care and Government Fraud Unit and Special Assistant U.S. Attorney Shannon M. Singleton from the FDA's Office of Chief Counsel.  Paralegals Jeffrey Skonieczny and Doug Minotti with the U.S. Attorney’s Office and Trial Attorney David Frank of the Department of Justice’s Consumer Protection Branch assisted on the criminal side of the case. The government is represented in the civil settlement by Assistant U.S. Attorney David Dauenheimer and Trial Attorney Eva Gunasekera from the Department of Justice’s Commercial Litigation Branch. The corporate integrity agreement was negotiated by Christina McGarvey and Gregory Lindquist from the Department of Health and Human Service’s Office of Inspector General.

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

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Defense counsel: John N. Nassikas Esq., Washington, D.C.

1 The original Megace® OS product was sold by Bristol Myers Squibb (“BMS”) from approximately 1993 until 2001.  Since on or about July 25, 2001, the FDA approved five different generic versions of BMS’s Megace® OS product.  As used herein, the term “Megace® ® OS” refers not only to BMS’s branded Megace® OS product, but also to the five generic versions approved by the FDA.

Par Pharmaceutical Information
Par Pharmaceutical Plea Agreement

TRENTON, N.J. – Newark, N.J., businessman Sonnie Cooper was sentenced today to two years of probation, including eight months of home confinement, for his part in an extortion conspiracy in which a former Newark deputy mayor official used his official position to steer demolition work to Cooper’s trucking company, U.S. Attorney Paul J. Fishman announced.

U.S. District Judge Freda L.Wolfson imposed the sentence today in Trenton federal court. A jury returned a guilty verdict against Cooper, 70, and former Newark Deputy Mayor for Public Safety Ronald Salahuddin, 62, following a trial in October 2011. Salahuddin and Cooper were both convicted of one count of conspiracy to extort under the color of official right. They were each acquitted of one count of attempted extortion under the color of official right, and two counts of bribery. Salahuddin also was acquitted of an additional count of bribery.

On Feb. 11, 2013, Judge Wolfson sentenced Salahuddin to one year and one day in prison.

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

Shortly after Salahuddin became deputy mayor in July 2006 and through December 2007, Salahuddin and Cooper conspired to use Salahuddin’s official position to steer City of Newark and Prudential Center demolition work to a cooperating witness who, in exchange for Salahuddin’s official action and influence, had to give a portion of that work to Cooper, the owner of S. Cooper Brothers Trucking, Inc. (“Cooper Trucking”).

While deputy mayor, Salahuddin maintained a concealed financial interest in Cooper Trucking. Salahuddin mortgaged approximately $900,000 worth of property as collateral for Cooper Trucking, as well as lent money to Cooper for payroll and received money from Cooper related to the company’s operations.

In addition to probation, Judge Wolfson fined him $3,000.

U.S. Attorney Fishman credited special agents of the FBI’s Trenton and Newark Field Offices, under the direction of Acting Special Agent in Charge David Velazquez; and IRS – Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen, for the investigation leading to today’s sentence.

The government is represented by Assistant U.S. Attorney Harvey Bartle of the U.S. Attorney’s Office in Trenton, Assistant U.S. Attorneys and Zahid N. Quraishi of the U.S. Attorney’s Office Special Prosecutions Division in Newark, and James B. Nobile, chief of the Special Prosecutions Division.

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

NEWARK, N.J. – Scott Kupersmith, formerly of Alpine, N.J., and now living in Marco Island, Fla., was sentenced to 33 months in prison for engaging in a sophisticated securities and investment fraud scheme, U.S. Attorney Paul J. Fishman announced.

Kupersmith, 46, previously pleaded guilty before U.S. Magistrate Judge Patty Shwartz in Newark federal court to an Information charging him with securities fraud. U.S. District Judge Katharine S. Hayden imposed the sentence in Newark federal court.

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

Kupersmith engaged in a securities fraud scheme commonly referred to as “free-riding,” in which a customer buys or sells securities in a brokerage account without the cash or securities to cover the trades. Kupersmith and his associates opened more than half-a-dozen brokerage accounts at brokerage firms located in New Jersey and across the country. To induce the brokerage firms to open these accounts, Kupersmith falsely represented that he had a personal net worth of approximately $5 million and that he controlled a hedge fund in Manhattan with assets worth more than $10 million. Once these accounts were opened, Kupersmith used them to make millions of dollars’ worth of securities trades. When the trades were successful, Kupersmith kept the profits. When the trades were not profitable, Kupersmith would walk away from the trades, leaving the brokerage firms to settle the trades on Kupersmith’s behalf. The brokerage firms collectively sustained $1 million in losses.

Kupersmith funded the scheme, in part, with money that he solicited from investors. He falsely represented to them that he ran a successful Manhattan hedge fund that had an annual return of about 30 percent and promised investors grossly unrealistic returns.

In addition to a prison term, Judge Shwartz sentenced Kupersmith to three years of supervised release and fined him $1.8 million.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Charge David Velazquez in Newark, for the investigation leading to today’s sentence. He also thanked the U.S. Securities and Exchange Commission’s Division of Enforcement in New York for its assistance.

The government is represented by Assistant U.S. Attorney Christopher J. Kelly 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. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

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Defense counsel: Lisa Mack Esq., Assistant Federal Public Defender, Newark

NEWARK, N.J. – A former management information systems specialist for the city of Hoboken pleaded guilty today for intercepting communications meant for the mayor of Hoboken and top city officials and passing some of those communications on to other officials, U.S. Attorney Paul J. Fishman announced.

Patrick Ricciardi, 46, of Hoboken, entered a guilty plea – before U.S. District Judge Esther Salas in Newark federal court – to an Information charging him with accessing a computer without authorization, interception of wire and electronic communications and disclosure of intercepted wire and electronic communications.

According to the documents filed in this case and statements made in court: Ricciardi was a longstanding employee of the city of Hoboken and worked as the chief information technology officer for the mayor’s office. As part of his job duties, Ricciardi was responsible for keeping the city’s network running and had access to email accounts within the city’s computer system and other aspects of the city’s computer network.

In early 2010, Ricciardi created an archive file on his work computer to intercept and store all emails sent to and from the mayor and certain of the mayor’s employees. Neither the mayor nor any other city employee authorized the storage of the emails or the creation of the file.

During his guilty plea proceeding, Ricciardi admitted he used his access to set up the email accounts of the mayor and two of the mayor’s top lieutenants so all of their incoming and sent emails would be sent to the archive folder.

He also admitted that he read some of the emails in order to spy on the mayor and her assistants, and forwarded them to other current and former city officials.

Ricciardi is scheduled to be sentenced on July 1, 2013, before Judge Salas. Each of the three counts carries a maximum potential penalty of five years in prison and a $250,000 fine.

U.S. Attorney Fishman praised special agents of the FBI’s Cyber Crimes Task Force, under the direction of Acting Special Agent in Charge David Velazquez, for the investigation leading to today’s guilty plea.

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

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Defense counsel: Assistant Federal Public Defender Donald McCauley, Esq.

Ricciardi Information

NEWARK, N.J. – The United States has filed a civil asset forfeiture Complaint seeking a collection of artwork containing more than 2,200 pieces and valued at more than $15 million, U.S. Attorney Paul J. Fishman announced today.

The Complaint alleges that the artwork – bought with money from the sale of fraudulent credits for renewable fuel – was transported in interstate commerce knowing that it was the proceeds of fraud and was utilized in laundering the proceeds of fraud.

According to the Complaint:

Federal law requires gasoline and diesel refiners and importers to introduce renewable, non-fossil fuel into the national fuel mix. To ensure this, the Environmental Protection Agency created a system of credits known as “Renewable Identification Numbers” – or “RINs” – to track and boost renewable fuel production. The RINs can be obtained by:

· producing renewable fuel; · importing renewable fuel produced by approved foreign producers; · purchasing renewable fuel, with associated RINs, from approved domestic producers; and
· purchasing RINs without the underlying renewable fuel.

A market for RINs has developed, and thousands of RIN transactions are electronically recorded with EPA every week. Hundreds of millions of dollars’ worth of RINs are exchanged every year.

A company known as Green Diesel held itself out as operating a facility in Houston, Texas, that generated biomass-based diesel fuel. It did not, however, actually generate any such biodiesel. From November 2007 through at October 2011, Green Diesel sold RINs to companies such as Shell Oil, BP, CITGO, and Exxon that were invalid because they did not, in fact, represent the production of any biodiesel at all. Purchasers of invalid RINs from Green Diesel have reported losses exceeding $78 million.

The owner of Green Diesel, Philip J. Rivkin, used part of the proceeds of the fraud to purchase at least $18 million worth of artwork, chiefly photographs. On Jan. 30, 2012, Rivkin caused 396 packages of artwork to be transported to a warehouse on Frelinghuysen Avenue in Newark. The artwork was stored there until late June 2012, when it was moved to a warehouse in New York on its way to Spain. On July 12, 2012, it was seized for forfeiture pursuant to a warrant issued by a U.S. Magistrate Judge Mark Falk in Newark.

The seized artwork has been appraised by New York Fine Art Appraisers, which concluded that it has a total fair market value of $15,773,128. Among the works sought by the Complaint are:

a. Gelatin silver print titled “Distortion no. 6, Paris” by artist Andre Kertesz. The photograph was purchased by Rivkin from Philips De Prury & Company as part of a group of photographs. Rivkin paid $42,500 for the piece and wired $60,000 as payment for the group of photographs on Nov. 9, 2010.

b. Gelatin silver print titled “Dunes, Oceano” by artist Edward Weston. The photograph was purchased by Rivkin from Sotheby’s as part of a group of photographs. Rivkin paid $134,500 for the piece and wired $424,750 as payment for the group of photographs on Nov. 11, 2010.
c. Gelatin silver print titled “Death Valley” by artist Edward Weston. The photograph was purchased by Rivkin from Sotheby’s as part of a group of photographs. Rivkin paid $16,250 for the piece and wired $424,750 as payment for the group of photographs on Nov. 16, 2010.

d. Albumen print titled “Notre Dame” by artist Eugene Atget. The photograph was purchased by Rivkin from Camera Lucida, LLC as part of a group of photographs. Rivkin paid $130,000 for the piece and wired $1,267,000 as payment for the group of photographs on Feb. 8, 2011.

e. A 1907 platinum print titled “Nude Study, Miss Mabel Cramer” by artist Clarence Hudson White. The photograph was purchased by Rivkin from Camera Lucida, LLC as part of a group of photographs. Rivkin paid $35,000 for the piece and wired $1,267,000 as payment for the group of photographs on Feb. 8, 2011.

f. A 1930 silver print titled “Equivalent” by artist Alfred Stieglitz. The photograph was purchased by Rivkin from Lee Gallery for $33,000. Rivkin wired $33,000 as payment for the photograph on February 28, 2011.

g. Gelatin silver print titled “Poplars, Lake George” by artist Alfred Stieglitz. The photograph was purchased by Rivkin from Joel Soroko Gallery for $51,000. Rivkin wired $51,000 as payment for the photograph on March 7, 2011.

h. Vintage warm-toned matte-surface gelatin silver print titled “Vortograph 1917” by artist Alvin Langdon Coburn. The photograph was purchased by Rivkin from Camera Lucida, LLC as part of a group of photographs. Rivkin paid $175,000 for the piece and wired $1,400,000 as payment for the group of photographs on March 10, 2011.

i. Vintage gelatin silver contact print titled “From the Shelton, West” by artist Alfred Stieglitz. The photograph was purchased by Rivkin from Camera Lucida for $150,000. Rivkin wired $150,000 as payment for the photograph on March 31, 2011.

j. Vintage matte gelatin silver print titled “Knees (fragment)” by artist Edward Weston. The photograph was purchased by Rivkin from Camera Lucida, LLC as part of a group of photographs. Rivkin paid $165,000 for the piece and wired $1,400,000 as payment for the group of photographs on March 31, 2011.

k. An 1894 platinum print titled “The Letterbox” by artist Alfred Stieglitz. The photograph was purchased by Rivkin from Lee Gallery for $35,700. Rivkin wired the $35,700 payment for the photograph on April 5, 2011.

l. Vintage gelatin silver print titled “Greta Garbo for Vanity Fair Hollywood” by artist Edward Steichen. The photograph was purchased by Rivkin from Paul Hertzman, Inc. Vintage Photographs for $75,000. Rivkin wired $75,000 as payment for the photograph on April 11, 2011.

m. Waxed palladium print titled “Georgia O’Keeffe” by artist Alfred Stieglitz. The photograph was purchased by Rivkin from Camera Lucida, LLC for $675,000. Rivkin wired $675,000 as payment for the photograph on April 12, 2011.

n. Gelatin silver print titled “Equivalent, 1925” by artist Alfred Stieglitz. The photograph was purchased by Rivkin from Bruce Silverstein Gallery, LLC as part of a group of photographs. Rivkin paid $55,000 for the piece and wired $150,000 as payment for the group of photographs on April 12, 2011.

Civil forfeiture cases are “in rem” proceedings—proceedings against “things.” In this case, the Complaint is against the seized artwork, not against the persons who committed the underlying unlawful acts or anyone else. The law permits persons claiming an interest in the property an opportunity to appear and present their cases that they are innocent owners of the property and the property should not be forfeited. Whether the United States is entitled to forfeit the property will be determined conclusively. When property is forfeited to the United States, the law allows the U.S. Department of Justice to utilize the property to reimburse victims of the underlying unlawful activity for their losses.

U.S. Attorney Fishman credited special agents from the EPA-Criminal Investigation Division, under the direction of Special Agent in Charge Ivan J. Vikin, Area Office in Dallas, Texas; and special agents from the U.S. Secret Service under the direction of Special Agent in Charge Cynthia Marble in Houston, Texas, and Special Agent in Charge James Mottola in New Jersey, for the investigation that led to the seizure of the artwork.

The government is represented by Assistant U.S. Attorney Marion Percell, Chief of the U.S. Attorney’s Office’s Asset Forfeiture and Money Laundering Unit, in Newark.

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Green Diesel Complaint

TRENTON, N.J. – A Burlington County, N.J., woman was sentenced today to 12 months of home confinement and five years of probation for making cash deposits totaling more than $700,000 in amounts of less than $10,000 each in order to avoid having banks file a report on her deposits, U.S. Attorney Paul J. Fishman announced.

Sandra Mastoris, 58, of Chesterfield, N.J., previously pleaded guilty before U.S. District Judge Joel A. Pisano to an Indictment that charged her with structuring more than $700,000 in cash deposits from 2008 to 2009. Judge Pisano imposed the sentence today in Trenton federal court.

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

By the beginning of 2008, Mastoris had accumulated a cash hoard of more than $700,000. Beginning in May 2008 and continuing in 2009, Mastoris deposited that cash hoard in amounts of less than $10,000 because she was aware that banks were required to report cash transactions that involved amounts of more than $10,000, and she wanted to avoid having the banks file such reports. Making deposits of cash in amounts of less than $10,000 in order to avoid having banks file Currency Transaction Reports constitutes the criminal offense of “structuring.”

Mastoris made cash deposits into 13 different accounts at five different banks. Between May 1, 2008, and Dec. 31, 2009, Mastoris made more than 200 cash deposits of less than $10,000 into accounts at JPMorganChase, Bank of America, PNC Bank, Sovereign Bank and Grand Bank. On Aug. 29, 2008, for example, Mastoris made cash deposits of $9,900 into an account at the Bank of America, $5,000 into one account at JPMorganChase, $4,500 into a second account at JPMorganChase, and $8,500 into an account at PNC Bank.

In addition to the home confinement and probation, Judge Pisano ordered Mastoris to forfeit $70,000.

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

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

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Defense Counsel: Vincent P. Sarubbi Esq., Haddonfield, N.J.

Ran Multi-Million Dollar Ponzi Scheme, Swindled Elderly, Disabled Widow

NEWARK, N.J. – A Bergen County, N.J., man who claimed to run New Jersey-based hedge funds using a secret computer program to invest in foreign currency admitted today he defrauded victims out of millions of dollars, defrauded an elderly, disabled widow out of her life savings, and evaded payment of taxes, U.S. Attorney Paul J. Fishman announced.

George Sepero, 40, of Glen Rock, N.J., pleaded guilty to a Superseding Information charging him with wire fraud conspiracy, wire fraud, and tax evasion before U.S. District Judge Jerome B. Simandle in Camden federal court. Two conspirators, Carmelo Provenzano and Daniel Dragan, previously pleaded guilty before Judge Simandle.

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

Beginning in 2009, Sepero, Dragan and Provenzano claimed to run a series of hedge funds in New Jersey, luring investors with the prospect of extraordinary profits in foreign currency trading. The defendants made numerous misrepresentations and omissions to induce their victims to invest in “Caxton Capital Management” and “CCP Pro Consulting Inc.” Sepero claimed that he and his conspirators owned and controlled a proprietary computer algorithm for trading foreign currencies; that they had used the algorithm to achieve returns of more than 170 percent in the prior two years; and that any investment funds would be highly liquid and could be withdrawn on days’ notice.

Investors sent the defendants a total of more than $3.5 million. Sepero and the others invested little or no money in foreign currency or any other investment vehicle, instead diverting the vast majority of victims’ investments to pay prior victims in Ponzi-scheme style and to finance extravagant personal expenditures.

Sepero and his co-conspirators spent investor money on credit card bills averaging $25,000 per month; bar tabs of $18,241, including a $4,000 tip; $14,034 on separate nights at “Drai’s Hollywood” nightclub in Los Angeles; and flights to Paris and elsewhere. Sepero bought a custom Ford pickup truck costing more than $80,000.

The defendants e-mailed victims fake statements showing their principal had been invested in the foreign currency markets and was achieving substantial results. Many of these e-mails were purportedly sent by an individual named “Mel Tannenbaum,” a fictional character of Provenzano’s invention.

The defendants also e-mailed to several investors “screen shots” of a computer-based trading program, which they claimed represented the investors’ funds being traded in the currency markets. In reality, the shots reflected trading in fictional accounts set up by the conspirators to dupe investors.

The wire fraud conspiracy count to which Sepero pleaded is punishable by a maximum potential penalty of 20 years in prison and a fine of $250,000 or twice the gain or loss from the offense. Sentencing is scheduled for June 14, 2013.

Sepero also pleaded guilty to conducting a wholly separate fraud scheme:

Sepero worked as a financial planner at a financial institution for several years, but was fired in 2006 because of investigations into his churning of clients’ accounts. One of his clients was an elderly, demented, paraplegic woman with the initials M.V. Sepero took control of M.V.’s annuity account, which was the sole means that M.V. had to provide for her retirement and nursing expenses.

Notwithstanding his termination from the financial institution, Sepero lied to M.V. and her family, and told them that he was still authorized to manage the annuity account. When M.V. had money to add to the annuity account, M.V. – at Sepero's direction – handed it over to Sepero, with checks made payable not to the administrator of the account, but rather to Sepero’s company, “Casa Nostra Enterprises.” Instead of transferring the money to the annuity account, however, Sepero spent it on his own expenses: credit card and other bills, mortgage payments, and car payments, among other things.

To hide the fraud, Sepero fabricated a bogus account statement, showing that the annuity account was worth more than $700,000, when, for the period covered by the bogus statement, the annuity account actually contained $16.57.

Sepero placed recorded phone calls to the administrator of the annuity account, during which he impersonated both M.V.’s son and her husband, who had been dead for more than three years at the time Sepero made the calls.

Sepero also pleaded guilty to tax evasion for the tax year 2010, as he derived income from his fraudulent activities, but did not file a tax return and deposited his victims’ money into his companies’ accounts.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Charge David Velazquez in Newark, and special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen, for the investigation leading to today’s guilty plea. He also thanked the Commodity Futures Trading Commission’s New York Regional Office, under the direction of David Meister.

The government is represented by Assistant U.S. Attorneys Christopher Kelly and Zach Intrater of the U.S. Attorney’s Office Economic Crimes Unit and Evan Weitz of the Office’s Asset Forfeiture Unit in Newark.

This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

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Defense counsel: John Weischel Esq., Hackensack, N.J.

Sepero Superseding Information

TRENTON, N.J. - A Mercer County, N.J., man was sentenced today to 30 years in prison for robbing a bank and returning nine months later to rob the same bank, carjacking a vehicle and shooting two people in the course of that conduct, U.S. Attorney Paul J. Fishman announced.

Jeffrey Garrett, 36, of Trenton, previously pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton federal court to Counts One, Three, Five and Six of an Indictment charging him with two armed bank robberies, carjacking, and discharging a firearm during a crime of violence. Judge Sheridan imposed the sentence today in Trenton federal court.

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

Garrett robbed the Chase Bank, in Hamilton, N.J., on Nov. 10, 2010. He handed the teller a note that stated: “I have a gun, give me all the fifty and hundred dollar bills.” He displayed a black handgun before fleeing with the cash. Surveillance cameras revealed clear images of Garrett, and FBI agents determined that Garrett used his own Visa card at the Chase Bank’s ATM just moments before the robbery. Federal authorities charged Garrett by Complaint two days later and obtained an arrest warrant, but Garrett remained at large.

Nine months later, on Aug. 23, 2011, Garrett robbed the same bank. To get to the bank, he carjacked a car at 5:30 a.m. He pistol-whipped the victim, and the gun discharged, causing the victim a serious head wound. Garrett locked the bleeding victim in the trunk of the car and shortly thereafter bound his hands with cable and threatened his life.

Garrett arrived at the same Chase Bank in Hamilton in the stolen vehicle around 10 a.m., after driving around for hours. He wore a dark baseball cap and sunglasses when he entered the bank. Showing a chrome revolver, he demanded that the teller give him all the money. When she complied, he asked for more money and threatened to shoot her if she turned any keys at her station. The handgun discharged and the teller was shot in the abdomen.

Garrett drove off in the stolen car and later abandoned it in a shopping mall parking lot in Moorestown, N.J., with the bound carjacking victim still locked in the trunk. Both victims survived.

Garrett was arrested in Florida on Oct. 17, 2011.        

In addition to the prison term, Judge Sheridan sentenced Garrett to five years of supervised release.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Charge David Velazquez; officers of the Hamilton Township Police Department, under the direction of Police Chief James W. Collins; officers of the Trenton Police Department, under the direction of Police Director Joseph S. Juniak; and the U.S. Marshals Service, with the investigation leading to today’s sentencing.

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

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Defense counsel: David E. Schafer Esq., Assistant Federal Public Defender, Trenton

TRENTON, N.J. – An Essex County, N.J., man today admitted 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., pleaded guilty before U.S. District Court Judge Anne E. Thompson in Trenton federal court to an Information charging him with transportation of explosive materials without a license or permit issued by the U.S. Attorney General.

According to the Information to which Gallo pleaded guilty 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.

The charge to which Gallo pleaded guilty carries a maximum penalty of 10 years in prison and a fine of $250,000. Sentencing is scheduled for June 5, 2013.

U.S. Attorney Fishman credited special agents, detectives and investigators assigned to the FBI Joint Terrorism Task Force, under the direction of Acting Special Agent in Charge David Velazquez, with the investigation leading to today’s guilty plea. 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.         

Gallo, Anthony Information

NEWARK, N.J. - An Essex County, N.J., man today admitted robbing the Garden State Community Bank in Newark, N.J., on two separate occasions, U.S. Attorney Paul J. Fishman announced.

Alfred Ferguson, 55, of Newark, pleaded guilty before U.S. District Judge Stanley R. Chesler in Newark federal court to an Information charging him with two counts of bank robbery. On Oct. 9, 2012, Ferguson was arrested fleeing the scene of his most recent bank robbery on a bicycle.

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

Alfred Ferguson committed two bank robberies – both of the Garden State Community Bank in Newark – on Sept. 17, 2012, and Oct. 9, 2012. Ferguson used a similar procedure for each robbery: 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’ cash drawers.

Each charge of bank robbery is punishable by a maximum potential penalty of 20 years in prison and a fine of $250,000, or twice the gross gain or loss from the offense. Sentencing is scheduled for June 5, 2013.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Charge David Velasquez, with the investigation leading to charges. 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

Ferguson Information

CAMDEN, N.J. – A former property manager admitted today to conspiring to defraud financial institutions and launder stolen funds as part of a $15 million mortgage fraud scam that used phony documents and “straw buyers” to make illegal profits on overbuilt condos, U.S. Attorney Paul J. Fishman announced.

Last week, a Georgia man also admitted to conspiring to defraud financial institutions and launder stolen funds as part of the same scam.

Timothy Ricks, 45, of East Orange, N.J., pleaded guilty today to a Superseding Indictment charging him with one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering. Orlando Allen, 47, of Fayetteville, Ga., pleaded guilty to the same crimes on Feb. 20, 2013. Both Ricks and Allen entered their guilty pleas before U.S. District Judge Jerome B. Simandle in Camden federal court.

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

Ricks and Allen were among 11 defendants arrested in July 2012 and charged with conspiracy to commit wire fraud and conspiracy to commit money laundering. Ricks and his conspirators located oceanfront condominiums overbuilt by financially distressed developers and negotiated a buyout price with the sellers. They then caused the sales prices for the properties – located in Wildwood Crest and North Wildwood, N.J., other locations in New Jersey and in Naples, Fla. – to be much higher than the buyout price to ensure large proceeds. Other defendants helped conceal the true sales prices of certain properties through inflated sales contracts and sale and finder’s fee agreements.

Ricks and Allen recruited straw buyers to purchase those properties at the inflated rates. The straw buyers had good credit scores but lacked the financial resources to qualify for mortgage loans. The conspirators created false documents, such as fake W-2 forms, pay stubs, bank statements and investment statements, to make the straw buyers appear more creditworthy than they actually were in order to induce the lenders to make the loans.

Ricks and his conspirators caused fraudulent mortgage loan applications in the name of the straw buyers, including the supporting documents, to be submitted to mortgage brokers that the brokers knew were false. Once the loans were approved and the mortgage lenders sent the loan proceeds in connection with real estate closings, Ricks and his conspirators took a portion of the proceeds, having funds wired or checks deposited into various accounts they controlled. They also distributed a portion of the proceeds to other members of the conspiracy for their respective roles.

The wire fraud conspiracy charge carries a maximum potential penalty of 30 years in prison and a $1 million fine. The money laundering conspiracy charge carries a maximum potential penalty of 10 years in prison and a $250,000 fine. Ricks’ sentencing is scheduled for Nov. 8, 2013. Allen is scheduled to be sentenced Aug. 8, 2013.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Charge David Velazquez in Newark; and IRS–Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen, Newark field office, for their roles in the ongoing investigation.

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

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Defense counsel: Ricks: Joshua Markowitz Esq., Princeton, N.J.
Allen: Nace Naumoski Esq., Roseland, N.J.

Ricks, Timothy et al. Superseding Indictment

TRENTON, N.J. – A Philadelphia man was sentenced today to one year and one day in prison for his role in a conspiracy to forge U.S. Postal Service money orders, U.S. Attorney Paul J. Fishman announced.

Yacouba Magadji, 36, previously pleaded guilty before U.S. District Judge Mary L. Cooper to an Information charging him with one count of conspiracy to falsely and materially alter money orders. Judge Cooper imposed the sentence today in Trenton federal court.

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

Magadji and others allegedly agreed to buy U.S. Postal Service money orders for small amounts and then alter them to show a higher face value. Magadji met three times with buyers who were actually confidential informants. At each meeting, Magadji sold the confidential informant 10 money orders with an apparent face value of $1,000. Each of the money orders had been purchased for a much smaller amount, and then altered.

In addition to the prison term, Judge Cooper sentenced Magadji to three years of supervised release and ordered him to pay restitution of $392,646.

Fishman credited inspectors of the U.S. Postal Inspection Service, Newark, under the direction of Acting Inspector in Charge Maria Kelokates,n with the investigation leading to today’s sentence.

The government is represented by Assistant U.S. Attorney Charlton A. Rugg of the Economic Crimes Unit in Newark.

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

NEWARK, N.J. – A Middlesex County, N.J. man was charged today with trafficking in counterfeit male enhancement supplements imported from China and with laundering proceeds of more than $1 million, U.S. Attorney Paul J. Fishman announced.

Shuja Ali Syed, 52, originally from Pakistan and now a resident of Iselin, N.J., was arrested this morning by U.S. Department of Homeland Security-Homeland Security Investigations special agents. He was charged in a two-count Complaint and is scheduled for an initial appearance this afternoon before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court.

According to the Complaint filed in Newark federal court:

From February 2012 through January 2013, Syed trafficked in counterfeit, purportedly all-natural male enhancement products, namely Libigrow, Blue Diamond, Nite Rider, and ExtenZe. Syed imported counterfeit Libigrow, Blue Diamond, Nite Rider, and ExtenZe from China, and sold the products to undercover law enforcement agents and other individuals in New Jersey and New York. Syed represented that the products were “all natural,” when, in fact, laboratory analyses of the counterfeit products indicated that they contained either sildenafil, commonly known as Viagra, or tadalafil, commonly known as Cialis. Both Viagra and Cialis are prescription drugs approved by the Food and Drug Administration and used to treat, among other things, erectile dysfunction.

From December 2011 through November 2012, Syed deposited more than $600,000 into New Jersey bank accounts and wired more than $1 million to China, all of which were proceeds from the illegal importation and sale of the counterfeit products.

The criminal Complaint charges Syed with one count of trafficking in counterfeit goods, which carries a maximum potential penalty of 10 years in prison and a fine of $2 million, and one count of money laundering, which is punishable by a maximum potential penalty of 20 years in prison and a fine of $500,000 or twice the value of the property involved in Syed’s financial transactions.

U.S. Attorney Fishman credited law enforcement agents of the U.S. Department of Homeland Security-Homeland Security Investigations, under the direction of Special Agent in Charge Andrew McLees, and postal inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Maria Kelokates, for the investigation leading to today’s charges.

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

This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

The charges and allegations contained in the Complaint against Syed are merely accusations, and he is considered innocent unless and until proven guilty.

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

Syed Complaint

TRENTON, N.J. – A former Trenton city employee today admitted his participation in a bribery scheme involving Trenton Mayor Tony F. Mack, the mayor’s brother, Ralphiel Mack, and close associate, Joseph A. “JoJo” Giorgianni, U.S. Attorney Paul J. Fishman announced.

Charles Hall III, 49, of Trenton, pleaded guilty before U.S. District Judge Michael A. Shipp in Trenton federal court to an Information charging him with one count of conspiracy to obstruct commerce by extortion under color of official right. He also pleaded guilty to one count of conspiracy to distribute oxycodone in a separate conspiracy with Giorgianni and others.

According to documents filed in this case and statements made in court: From September 2010 through June 2012, Hall, Tony Mack, and Ralphiel Mack agreed to accept corrupt cash payments and other things of value from two cooperating witnesses in exchange for the mayor’s official assistance with the cooperating witnesses’ efforts to acquire a city owned lot (the “East State Street Lot”) to develop an automated parking garage. Hall admitted that he, Giorgianni, and Tony Mack agreed that Mack would take official action to fix the sale price of the East State Street Lot at $100,000 in exchange for a $100,000 bribe payment. Hall admitted that he met with a Trenton city official and caused that official to issue a letter offering to sell the East State Street Lot for $100,000, which was substantially lower than what the cooperating witness was willing to pay. Hall further admitted that he, Giorgianni, and Tony Mack agreed to split among themselves the $100,000 bribe payment.

Hall said Tony Mack instituted a system of “buffers,” or intermediaries, to receive bribe payments on his behalf. He admitted that Giorgianni and Ralphiel Mack served as Tony Mack’s intermediaries. Hall said that when talking over the telephone, he, Tony Mack, Giorgianni, and Ralphiel Mack limited their conversations to hide the illegal nature of the scheme in case law enforcement was tapping their phones. Hall admitted that “Uncle Remus” was a code word used by Hall, Tony Mack, and Giorgianni to signal that a bribe payment was available for pickup from Giorgianni. On Dec. 6, 2012, the Mack brothers and Giorgianni were charged in an eight-count Indictment with extortion, bribery and mail and wire fraud.

In addition to the parking garage project-related bribe and extortion payments, Hall also admitted his involvement in a narcotics distribution conspiracy involving Giorgianni and others. Hall said he obtained, in coordination with Giorgianni, oxycodone-based pain medication, for the purpose of distribution. Jojo’s Steakhouse, a restaurant operated by Giorgianni and Mary Manfredo, 65, of Lawrenceville, N.J., served as a front where oxycodone pills and drug proceeds were received and distributed. Also charged by Complaint on Sept. 4, 2012, along with Giorgianni and Manfredo in the drug conspiracy are:

Name

            Age

Town

                31

Trenton

Ralph Dimatteo Sr.

                63

Trenton

Giuseppe A. Scordato

                47

Hamilton, NJ

Carol Kounitz

                57

Hamilton, NJ

Stephanie Lima

                41

Yardville, NJ

Mark Bethea

                45

Trenton

Eugene Brown

                70

Atlantic City, NJ

The investigation did not reveal evidence that either Tony Mack or Ralphiel Mack were involved in the narcotics conspiracy.

The extortion conspiracy count to which Hall pleaded guilty is punishable by a maximum potential penalty of 20 years in prison and a fine of $250,000 or twice the gross gain or loss from the offense. The narcotics conspiracy count is punishable by a maximum penalty of 20 years in prison and a $1 million fine. Sentencing is scheduled for June 5, 2013.

U.S. Attorney Fishman credited special agents of the FBI’s Trenton Resident Agency, Newark Field Office, under the direction of Acting Special Agent in Charge David Velazquez with the investigation leading to today’s guilty plea.

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

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

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Defense counsel for Charles Hall III: Alan D. Bowman Esq., Newark

Hall Information

NEWARK, N.J. – The owner of an Ocean County, N.J. architectural and engineering firm today admitted 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., 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.

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.

The count to which Patel pleaded guilty is punishable by a maximum potential penalty of three years in prison and a maximum fine of $250,000. Sentencing is scheduled for June 4, 2013.

U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen, and special agents of the FBI under Acting Special Agent in Charge David Velazquez, with the investigation that resulted in today’s plea.

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.       

Patel Information

NEWARK, N.J. – A Middlesex County, N.J., man who co-owns and operates a wholesale adult paraphernalia business in New York City today admitted concealing more than a million dollars in income in various domestic and foreign bank accounts, U.S. Attorney Paul J. Fishman announced.

Sameer Gupta, 33, of Edison, N.J., pleaded guilty before U.S. Magistrate Judge Patty Shwartz in Newark to an Information charging him with one count of tax evasion in connection with his diverting funds from the wholesale merchandise business, J.S. Marketers Inc. Some of the diverted funds were deposited and held in undisclosed foreign accounts at HSBC in India.

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

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

Gupta evaded taxes on $1,198,054 in income for 2006 through 2009. He also failed to file Reports of Foreign Bank and Financial Accounts, (FBARs), for 2005 through 2008. As part of his plea agreement, Gupta has agreed to pay a one-time FBAR penalty of $259,045. The tax loss resulting from Gupta’s conduct is greater than $200,000 but less than $400,000.

Gupta faces a maximum sentence of five years in prison and a fine of $250,000 or twice his gain from the offense, together with the costs of prosecution. Gupta agreed to file true and accurate tax returns and to pay to the IRS all taxes and penalties owed, in addition to the $259,045 penalty imposed for his failure to disclose the foreign accounts. Judge Shwartz scheduled sentencing for June 13, 2013, before U.S. District Court Judge Faith Hochberg.

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

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

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

Gupta Information

TRENTON, N.J. – A Middlesex County, N.J., man who was in custody awaiting a hearing for allegedly violating conditions of his federal supervised release was sentenced today to 18 months in prison for attempting to flee from a Trenton hospital, U.S. Attorney Paul J. Fishman announced.

Joseph Vitale, 59, of Milltown, N.J., pleaded guilty on Nov. 8, 2012, before U.S. District Judge Freda L. Wolfson in Trenton federal court to an Information charging him with attempted escape. 

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

On March 12, 2008, Vitale was convicted in U.S. District Court of bank fraud. He was sentenced to prison and released in April 2009, when he began serving five years of supervised release. In January 2012, Vitale was charged with violating several conditions of his supervised release and was taken into custody by the U.S. Marshal’s Service on Feb. 7, 2012. After making an appearance in court, Vitale complained of chest pains and was taken to St. Francis Medical Center in Trenton, where he was placed in the custody of a private security service that has a contract with the U.S. Marshal’s Service to provide security for federal prisoners being treated at the hospital. Vitale remained under 24-hour armed guard.

On Feb. 13, 2012, as one of the security guards was adjusting Vitale’s leg restraints, Vitale ran out of his room, evaded the two security guards, and ran down the hallway in an attempt to escape. The two security guards ran down the hallway after Vitale and yelled at him to stop. At one point, Vitale screamed, “I’m getting the (expletive) out of here.” The two security guards caught up to Vitale and while attempting to subdue him, one of the security guards struck his knees on the floor. Vitale continued to struggle with the security guards and made several attempts to grab one of their guns, but he was unable to remove it from its holster. With the assistance of at least one other individual, the security guards were able to subdue Vitale and handcuff him.

In addition to the prison term, Judge Wolfson sentenced Vitale to three years of supervised release.

U.S. Attorney Fishman credited deputy marshals of the U.S. Marshal’s Service, under the direction of U.S. Marshal Juan Mattos Jr., with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorney Jonathan W. Romankow of the U.S. Attorney’s Office Organized Crime/Gangs Unit.

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Defense counsel: David Schafer Esq., Assistant Federal Public Defender, Trenton

NEWARK, N.J. –A Middlesex County, N.J., man was arrested today for allegedly producing and distributing numerous images of child pornography, some taken in his own bedroom, U.S. Attorney Paul J. Fishman announced.

Kenneth Christensen, 44, of Edison, N. J., is charged by Complaint with one count of distribution of child pornography and one count of sexual exploitation of a child. He appeared before U. S. Magistrate Judge Patty Schwartz in Newark federal court this afternoon.

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

On May 14, 2012, Christensen, who works as a school crossing guard at a middle school in Metuchen, emailed from his personal computer 240 images depicting child pornography. Among them were three images of a boy who appeared to be about 5 years old. During a search conducted Feb. 21, 2013, at Christensen’s residence, the FBI discovered on his computer the three images from the emails, as well as several hundred more images depicting child pornography.

Since as early as 2002, Christensen has produced photographs of a young boy, who at the time was approximately 12 years old, engaged in sexually explicit conduct. In several of the photos discovered by law enforcement at Christensen’s residence, the boy was naked and his hands and feet were bound with handcuffs, duct tape, plastic ties, or cloth ties. Most of the photos were taken in Christensen’s bedroom.

On the distribution count, the maximum potential penalty is 20 years in prison, with a mandatory minimum sentence of five years in prison, and a fine of $250,000. On the exploitation charge, the maximum penalty Christensen faces is 30 years in prison, with a mandatory minimum sentence of 15 years in prison and a fine of $250,000.

U.S. Attorney Fishman praised special agents with the FBI-Innocent Images Unit, under the direction of Special Agent James Tareco, and Acting Special Agent in Charge David Velasquez, for the investigation leading to today’s arrest.

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

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

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

Christensen Complaint

Deposited Hundreds of Thousands of Dollars into Personal Accounts

NEWARK, N.J. – A Newark man today admitted his role in a scheme to gain access to personal checks from the U.S. mail, fraudulently endorse and deposit them into personal checking accounts, U.S. Paul J. Fishman announced.

Kurtis Steele, 26, pleaded guilty before U.S. District Judge Kevin McNulty in Newark federal court to an Information charging him with one count of conspiracy to commit bank fraud.

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

Steele and his conspirators gained access to blank checks that were sent via U.S. Mail and stolen from unsuspecting victims. Steele and his co-conspirators then fraudulently endorsed the blank checks for a certain sum and deposited those checks into legitimate bank accounts that defendants and unnamed conspirators opened at the 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 and banks discovered the checks were fraudulent, Steele and his conspirators had withdrawn the funds either via Automated Teller Machine (ATM) or by entering the banks and filling out a withdrawal slip. During the investigation, 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 $1.5 million in fraudulent checks stolen from 122 victims, which were deposited into 258 different banks. Steele and his conspirators’ conduct resulted in approximately $625,000 in loss.

Steele faces a maximum potential penalty of 30 years in prison on the conspiracy charge and a maximum fine of $1 million or twice the gross gain or loss resulting from the offense. Sentencing is scheduled for May 29, 2013.

U.S. Attorney Fishman credited special agents of the U.S. Postal Inspection Service, under the direction of Philip Bartlett; and special agents of the FBI, under the direction of Acting Special Agent in Charge David Velazquez.

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

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Defense Counsel: Stephen A. Turano Esq., Newark

Steele, Kurtis Information

TRENTON, N.J. – The director of operations at a warehouse for a non-profit organization was sentenced today to 18 months in prison for defrauding the charity of $101,927, U.S. Attorney Paul J. Fishman announced.

Sean J. Smith, 38, of Mount Holly, N.J., pleaded guilty Nov. 15, 2012, before U.S. District Judge Michael A. Shipp to an Information charging him with one count of mail fraud. Judge Shipp imposed the sentence today in Trenton federal court. 

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

Smith admitting to stealing money from Clothes for Kids Sake Inc., (Clothes for Kids) by making it appear as though employees were working for Clothes for Kids and entitled to wages even though those employees had either left or never worked there. Smith caused Clothes for Kids to electronically deposit their wages into bank accounts he controlled and spent the funds on various personal expenses. Between May 2011 and August 2012, Smith made it appear that two employees were entitled to compensation of $59,361, all of which was directly deposited into his own bank accounts

Smith admitted to stealing money from Clothes for Kids by causing Clothes for Kids to pay wages to at least seven employees who had recently stopped working for Clothes for Kids and directing that those wages be deposited into his own bank accounts. Beginning in January 2012, Smith manually changed the direct deposit information for approximately seven employees who recently stopped working for him at the Mount Laurel warehouse. After changing the direct deposit information to his own bank accounts, Smith would make it appear as though the former employees were continuing to do work for Clothes for Kids, which would continue to pay them wages. Smith stole approximately $42,566 from Clothes for Kids as wages for employees who no longer worked at his warehouse.

In addition to the prison term, Judge Shipp also sentenced Smith to three years of supervised release, and ordered him to pay $117,615 in restitution to victims of his offense.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Charge David Velazquez, for the investigation leading to today’s sentencing.

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

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Defense Counsel: David Bahuriak Esq., Philadelphia

NEWARK, N.J. – An Essex County man was sentenced today to 130 months in prison for his role in an armed carjacking in Elizabeth, N.J., on Jan. 25, 2011, U.S. Attorney Paul J. Fishman announced.

Alhakim Young, 23, of Newark, N.J., previously pleaded guilty before U.S. District Judge Claire C. Cecchi in Newark federal court to a Superseding Information charging him with conspiracy, theft of a motor vehicle by force, violence and intimidation, and use of a firearm in furtherance of a crime of violence.

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

Young conspired with Jermaine May, David Jones and Maurice Williams to carjack a vehicle. On Jan. 25, 2011, Young, May, Jones and Williams traveled to Elizabeth in a white Jeep Cherokee to carjack a vehicle. Young and May approached two victims who were standing near a 2004 Infiniti G-35 that was parked and warming up on Britton Street in Elizabeth, and at gunpoint, ordered the two victims to the ground. Williams and Jones fled in the Infiniti, while Young and May fled in the white Jeep Cherokee. May, Jones and Williams previously pleaded guilty to conspiracy to commit carjacking, carjacking, and use of a firearm in furtherance of a crime of violence.

Judge Cecchi sentenced Young to concurrent 70-month prison terms on the counts of carjacking and conspiracy and a consecutive 60-month sentence on the firearms count. In addition to the prison term, Judge Cecchi sentenced Young to five years of supervised release. Restitution will be determined at a hearing on May 19, 2013.

U.S. Attorney Fishman credited special agents with the FBI, under the direction of Acting Special Agent in Charge David Velazquez in Newark, with the investigation leading to today’s sentencing.

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

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Defense counsel: Sean McGovern Esq., Newark

TRENTON, N.J. – A former South Plainfield, N.J., police captain is charged with the sexual exploitation of a minor female after enticing the girl to live-stream sexually explicit acts via the Internet, U.S. Attorney Paul J. Fishman announced.

Michael Grennier, 50, of South Plainfield, N.J., is charged by Complaint with one count of sexual exploitation of a child. Grennier appeared today before U.S. Magistrate Judge Tonianne J. Bongiovanni and was detained.

According to the Complaint:

Special agents of the FBI executed a consent search of the New Jersey home of “Jane Doe,” a minor female, on Feb. 15, 2013. Jane Doe stated in an interview that day that for several years Grennier paid her for photographs and video of herself naked and partially clothed. Grennier had also paid Jane Doe and another minor female, “Mary Roe,” to engage in sexually explicit conduct in hotel rooms, which Grennier videotaped. Grennier paid Jane Doe to perform sexually explicit acts while Grennier watched via webcam from another computer. The last time Grennier enticed Jane Doe to do this was at approximately 10:30 p.m. on February 14, 2013, according to Jane Doe. This was confirmed by text-messages between Grennier and Jane Doe on February 14, 2013, at approximately that time. As payment for those acts, Grennier was going to purchase approximately $175 worth of merchandise for Jane Doe.

The charge of sexual exploitation of children carries a mandatory minimum penalty of
15 years in prison, a maximum potential penalty of 30 years in prison and a $250,000 fine.

U.S. Attorney Fishman credited the FBI Child Exploitation Task Force, under the direction of Acting Special Agent in Charge David Velazquez in Newark, with the investigation leading to the federal charges. Fishman also thanked the South Plainfield Borough Police Department, under the direction of Chief of Police James Parker, and the Middlesex County Prosecutor’s Office, under the direction of Prosecutor Bruce J. Kaplan, for their assistance with the investigation.

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Child Exploitation and
Obscenity Section (CEOS) in the Justice Department’s Criminal Division, Project Safe
Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

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

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

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Grennier Complaint

TRENTON, N.J. – A former South Plainfield, N.J., police captain is charged with the sexual exploitation of a minor female after enticing the girl to live-stream sexually explicit acts via the Internet, U.S. Attorney Paul J. Fishman announced.

Michael Grennier, 50, of South Plainfield, N.J., is charged by Complaint with one count of sexual exploitation of a child. Grennier appeared today before U.S. Magistrate Judge Tonianne J. Bongiovanni and was detained.

According to the Complaint:

Special agents of the FBI executed a consent search of the New Jersey home of “Jane Doe,” a minor female, on Feb. 15, 2013. Jane Doe stated in an interview that day that for several years Grennier paid her for photographs and video of herself naked and partially clothed. Grennier had also paid Jane Doe and another minor female, “Mary Roe,” to engage in sexually explicit conduct in hotel rooms, which Grennier videotaped. Grennier paid Jane Doe to perform sexually explicit acts while Grennier watched via webcam from another computer. The last time Grennier enticed Jane Doe to do this was at approximately 10:30 p.m. on February 14, 2013, according to Jane Doe. This was confirmed by text-messages between Grennier and Jane Doe on February 14, 2013, at approximately that time. As payment for those acts, Grennier was going to purchase approximately $175 worth of merchandise for Jane Doe.

The charge of sexual exploitation of children carries a mandatory minimum penalty of
15 years in prison, a maximum potential penalty of 30 years in prison and a $250,000 fine.

U.S. Attorney Fishman credited the FBI Child Exploitation Task Force, under the direction of Acting Special Agent in Charge David Velazquez in Newark, with the investigation leading to the federal charges. Fishman also thanked the South Plainfield Borough Police Department, under the direction of Chief of Police James Parker, and the Middlesex County Prosecutor’s Office, under the direction of Prosecutor Bruce J. Kaplan, for their assistance with the investigation.

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Child Exploitation and
Obscenity Section (CEOS) in the Justice Department’s Criminal Division, Project Safe
Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

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

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

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Grennier Complaint

TRENTON, N.J. – A former South Plainfield, N.J., police captain is charged with the sexual exploitation of a minor female after enticing the girl to live-stream sexually explicit acts via the Internet, U.S. Attorney Paul J. Fishman announced.

Michael Grennier, 50, of South Plainfield, N.J., is charged by Complaint with one count of sexual exploitation of a child. Grennier appeared today before U.S. Magistrate Judge Tonianne J. Bongiovanni and was detained.

According to the Complaint:

Special agents of the FBI executed a consent search of the New Jersey home of “Jane Doe,” a minor female, on Feb. 15, 2013. Jane Doe stated in an interview that day that for several years Grennier paid her for photographs and video of herself naked and partially clothed. Grennier had also paid Jane Doe and another minor female, “Mary Roe,” to engage in sexually explicit conduct in hotel rooms, which Grennier videotaped. Grennier paid Jane Doe to perform sexually explicit acts while Grennier watched via webcam from another computer. The last time Grennier enticed Jane Doe to do this was at approximately 10:30 p.m. on February 14, 2013, according to Jane Doe. This was confirmed by text-messages between Grennier and Jane Doe on February 14, 2013, at approximately that time. As payment for those acts, Grennier was going to purchase approximately $175 worth of merchandise for Jane Doe.

The charge of sexual exploitation of children carries a mandatory minimum penalty of 15 years in prison, a maximum potential penalty of 30 years in prison and a $250,000 fine.

U.S. Attorney Fishman credited the FBI Child Exploitation Task Force, under the direction of Acting Special Agent in Charge David Velazquez in Newark, with the investigation leading to the federal charges. Fishman also thanked the South Plainfield Borough Police Department, under the direction of Chief of Police James Parker, and the Middlesex County Prosecutor’s Office, under the direction of Prosecutor Bruce J. Kaplan, for their assistance with the investigation.

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Child Exploitation and Obscenity Section (CEOS) in the Justice Department’s Criminal Division, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

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

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

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Grennier, Michael Complaint

NEWARK., N.J, - An Essex County man was sentenced today to 118 months in prison for his role in an armed carjacking in Elizabeth, N.J., on Jan. 25, 2011, U.S. Attorney Paul J. Fishman announced.

Jermaine May, 29, of Newark, previously pleaded guilty before U.S. District Judge Claire C. Cecchi in Newark federal court to a Superseding Information charging him with conspiracy to commit carjacking, theft of a motor vehicle by force, violence and intimidation, and use of a firearm in furtherance of a crime of violence.

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

May conspired with Alhakim Young, David Jones and Maurice Williams to carjack a vehicle. On Jan. 25, 2011, May, Young, Jones and Williams traveled to Elizabeth, N.J., in a white Jeep Cherokee to look for a vehicle to carjack. May and Young approached two victims who were standing near a 2004 Infiniti G-35 that was parked and warming up on Britton Street in Elizabeth, and at gunpoint, ordered the two victims to the ground. Williams and Jones fled in the Infiniti, while May and Young fled in the white Jeep Cherokee. Young, Jones and Williams previously pleaded guilty to conspiracy to commit carjacking, carjacking, and use of a firearm in furtherance of a crime of violence.

May was sentenced to concurrent 58-months prison terms on the conspiracy and carjacking counts and a consecutive 60-month prison term on the count of using a firearm in furtherance of a crime of violence, for a total sentence of 118 months in prison. Judge Cecchi also sentenced May to five years of supervised release. Restitution will be determined at a later date.

U.S. Attorney Fishman credited special agents with the FBI, under the direction of Acting Special Agent in Charge David Velazquez B. Ward in Newark, with the investigation leading to today’s plea.

The government is represented by Assistant U.S. Attorneys Dara Aquila Govan of the General Crimes Unit and Gurbir Grewal of the Economic Crimes Unit in Newark.

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Defense counsel: Lisa Mack Esq., Assistant Federal Public Defender, Newark

NEWARK, N.J. – Three Brooklyn, N.Y, men were arrested today by agents of the FBI in connection with two armed robberies of T-Mobile stores in Linden, N.J., and Woodbridge, N.J., U.S. Attorney Paul J. Fishman announced.

Terrell McQueen, 29, is charged by Complaint with conspiracy to commit Hobbs Act robbery and two counts of using a firearm in furtherance of a crime of violence. Carl Williams, 29, and Eric Williams, 32, are each charged with one count of conspiracy to commit Hobbs Act robbery and one count of using a firearm in furtherance of a crime of violence. All three defendants are scheduled to appear today before U.S. Magistrate Judge Mark Falk in Newark federal court.

According to the Complaint:

On Sept. 20, 2012, Carl Williams and a conspirator walked into a T-Mobile store in Linden. The conspirator brandished a firearm, and the men then tied up the employees in the back of the store. After taking 50 to 60 cell phones, the men fled in a Land Rover. Terrell McQueen, Carl Williams, Eric Williams, and other conspirators then delivered the stolen cell phones to a cell phone store in Brooklyn.

On Oct. 2, 2012, two men, one of whom was armed with a firearm, entered a T-Mobile store in Woodbridge. After locking the front door, the men took the employees to the back of the store and tied them up. The men took approximately 40 cell phones. One of the men then used his own cell phone to contact a third individual, who drove the other two men away in a Land Rover. Terrell McQueen, Eric Williams, and other conspirators later delivered the stolen cell phones to the same cell phone store in Brooklyn.

If convicted of the Hobbs Act conspiracy charges, McQueen, Carl Williams, and Eric Williams face a maximum penalty of 20 years in prison and a fine of $250,000. If convicted of the two counts of using a firearm in furtherance of a crime of violence, McQueen faces a mandatory minimum of 32 years in prison to run consecutively to any sentence that he receives for the Hobbs Act conspiracy charge and a maximum of life in prison, as well as a fine of up to $250,000. If convicted of the one count of using a firearm in furtherance of a crime of violence, Carl Williams and Eric Williams each face a mandatory minimum of seven years in prison to run consecutively to any sentence that they receive for the Hobbs Act robbery charge and a maximum of life in prison and a fine of up to $250,000.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Charge David Velazquez, with the investigation leading to the arrests 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 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.

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

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McQueen, Terrell et al., Complaint

TRENTON, N.J. – A Morris County, N.J., man was sentenced today to 41months in prison for possessing child pornography on two laptop computers at his residence, U.S. Attorney Paul J. Fishman announced.

Steve Goni, 37, of Mine Hill, N.J., previously pleaded guilty before U.S. District Judge Michael A. Shipp in Trenton federal court to an Information charging him with possession of child pornography. Judge Shipp imposed the sentence today in Trenton federal court.

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

In June 2011, law enforcement agents executed a search warrant for Goni’s residence. They determined that Goni’s laptop computers contained multiple images of child pornography, which appeared to have been downloaded from the Internet. Goni possessed more than 600 images and multiple videos depicting the sexual abuse of children. When interviewed by law enforcement, Goni admitted accessing websites offering child pornography, observing child pornography on those websites, and admitted that child pornography was downloaded onto his computer.

In addition to the prison term, Judge Shipp also sentenced Goni to five years of supervised release, and ordered him to pay $4,000 in restitution to victims of his offense. Goni also must register as a sex offender.

U.S. Attorney Fishman credited special agents of ICE Homeland Security Investigations, under the direction of Special Agent in Charge Andrew M. McLees in Newark, for the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorney Shirley U. Emehelu of the U.S. Attorney’s Office criminal division in Newark.

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Defense counsel: John C. Whipple Esq., Chatham, N.J.

NEWARK, N.J. – An Irvington, N.J. tax preparer was arraigned today for allegedly preparing false tax returns designed to get her clients larger returns than they were entitled to, U.S. Attorney Paul J. Fishman announced.

Alicia Jones, 46, appeared today in federal court in Newark, N.J. after being charged in a 25-count Indictment. A federal grand jury in Newark, N.J., indicted her on charges of willfully aiding and assisting in the preparation and presentation of false tax returns. Jones surrendered this morning to special agents of the IRS - Criminal Investigation. She appeared before U.S. Magistrate Judge Mark Falk.

According to the Indictment:

Jones, the owner of Rightchoice Financial and Insurance Services, prepared tax returns for her clients that included fabricated and inflated itemized deductions, education expenses, and false filing statuses. From 2006 through 2009, Jones prepared and filed the fraudulent tax returns for her clients in order to obtain greater refunds for her clients than those to which they were entitled.

Each count of the Indictment carries a maximum potential penalty of three years in prison and a $250,000 fine.

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

The government is represented by Assistant U.S. Attorney Barbara R. Llanes of the U.S. Attorney’s Office in Newark.

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

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Defense counsel: Thomas Ashley Esq., Newark

Jones Indictment

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

Shashi Agarwal, 60, of Edison, N.J., who has his own cardiology practice in East Orange, N.J., pleaded guilty before U.S. District Judge Claire C. Cecchi in Newark federal court to an Information charging him with one count of soliciting and receiving more than $100,000 in cash kickbacks in violation of the federal health care anti-kickback statute.

Agarwal is the 10th person to plead guilty in the government’s investigation into the scheme to pay cash to health care providers who referred patients to Orange Community MRI, LLC (Orange MRI) in Orange N.J., for diagnostic testing.

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

From early 2009 through December, 2011, Orange MRI paid Agarwal for each MRI and CAT scan he referred. According to Agarwal, Orange MRI gave him $100 cash for each Medicare or Medicaid patient he referred for an MRI. Agarwal also received $50 for each CAT scan referral.  Agarwal also admitted that he agreed to refer as many as 20 MRIs to Orange MRI each month.  Agarwal agreed to forfeit $101,750 in bribe money. 

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

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

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 June 6, 2013.

Eight of those who pleaded guilty have agreed to forfeit $279,690 in illegal cash 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 gains. Babaria agreed to forfeit revenues traceable to corrupt referrals, which the government estimates could reach as much as $2 million. Patel agreed to forfeit $89,180.  

With respect to the other defendants charged in the investigation:

• Jose Castaneda, a nurse practitioner formerly practicing in Newark, N.J., pleaded guilty before Judge Cecchi on April 3, 2012, and is scheduled to be sentenced on June 18, 2013.

• Ash Khanna, M.D., a doctor practicing in East Orange, N.J., was indicted on May 4, 2012, by a federal grand jury on one count of accepting kickbacks. Judge Cecchi has not yet set a trial date.           

• Dov Rand, M.D., a doctor practicing in West Orange, N.J., pleaded guilty before Judge Cecchi on May 18, 2012, and was sentenced to five months in prison and five months of home confinement on Feb.13, 2013.

• Daisy Deguzman, M.D., a doctor practicing in Newark, N.J., pleaded guilty before Judge Cecchi on June 4, 2012, and was sentenced to six months in prison and six months of home confinement on Jan. 31, 2013.

• William Lagrada, M.D., another Newark, N.J., doctor, pleaded guilty before Judge Cecchi on July 11, 2012, and is scheduled to be sentenced on June 4, 2013.

• Maryam Jafari, M.D., another Newark, N.J, doctor, was indicted July 13, 2012, by a federal grand jury on one count of accepting kickbacks. On Sept. 14, 2012, the same grand jury handed up a superseding indictment against Dr. Jafari, charging her with one count of conspiracy and two counts of accepting kickbacks. The trial of Dr. Jafari ended with a hung jury and mistrial on Dec. 6, 2012.  Judge Cecchi has set the retrial date for March 1, 2013.

• Chikezie Onyenso, M.D., an Irvington, N.J., doctor, was indicted Sept. 7, 2012, by a federal grand jury on one count of accepting kickbacks. Judge Cecchi has not yet set a trial date.     

• Dinesh Patel, M.D., another Newark doctor, pleaded guilty before Judge Cecchi on September 19, 2012, and is scheduled to be sentenced on Feb. 26, 2013.

• Ashokkumar Babaria, M.D., a Moorestown, N.J., radiologist and Orange MRI’s former medical director and owner-in-fact, pleaded guilty before Judge Cecchi on Sept. 27, 2012, and is scheduled to be sentenced on March 21, 2013.

• Lucio Cardoso, M.D., a North Arlington, N.J., physician, pleaded guilty before Judge Cecchi on October 10, 2012, and is scheduled to be sentenced on March 27, 2013.

• Rameshcha Kania, M.D., an East Orange, N.J., doctor, pleaded guilty before Judge Cecchi on Oct. 12, 2012, and is awaiting sentencing.

• Chirag Patel, Orange MRI’s former executive director, pleaded guilty before Judge Cecchi on Oct. 16, 2012, and is scheduled to be sentenced on July 15, 2013.

The remaining defendants are charged in criminal complaints at this time.

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

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

13-081                                       

Defense counsel: William R. Lundsten Esq.; Teaneck, NJ

Agarwal, Shashi Information

TRENTON, N.J. – A Union County, N.J., man employed by the Westfield, N.J., branch of TD Bank was sentenced today to 37 months in prison for his role in a plan to rob the bank, U.S. Attorney Paul J. Fishman announced.

Jelani Bustamonte, 23, of Elizabeth, N.J., previously pleaded guilty before U.S. District Judge Joel A. Pisano to an Information charging him with two counts of criminal conspiracy. On Jan. 26, 2012, Bustamonte was arrested at his home and charged by Complaint. Judge Pisano imposed the sentence today in Trenton federal court.

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

The first conspiracy involved a scheme to rob the TD bank tellers in Westfield. The second conspiracy was a plot to rob the vault inside the same bank. The bank was, in fact, robbed Sept. 11, 2011, although the vault was never robbed. Bustamonte admitted that he provided information about the bank’s layout, security and business operations, information he had gained through his employment, to conspirator Julio Ferrer. Ferrer previously pleaded guilty to robbing the Westfield branch of TD Bank on Sept. 11, 2011, and to six other branches of TD Bank in New Jersey between October 2011 and December 2011. He is scheduled to be sentenced by Judge Pisano on March 5, 2013.

At 2:21 p.m. on Sept. 11, 2011, an individual entered the TD Bank located at 560 North Avenue East, Westfield, and passed a deposit slip across the counter to a bank teller. The bank teller, who was in the process of counting cash at the counter, did not see the handwriting on the note or any monetary amount listed, and attempted to return the slip back to the person. The individual pushed the paper slip back across the counter and ordered the teller to “read it.” The teller read the handwritten note, which stated, “I want all the money lose (sic) bills.”

The teller stepped back upon reading the demand note. The bank robber then reached over the counter and took the cash that the teller had been counting. The bank’s video surveillance camera recorded the entire incident and captured images of the bank robber.

Bustamonte told law enforcement he had discussed robbing the vault with the alleged bank robber and others. He said he advised the bank robber to go with one other person to rob the vault, and that the robber agreed to give Bustamonte up to $50,000 of the money from the vault. Bustamonte said he discussed with the robber the layout of the Westfield branch, and other information, including that he should ask for “loose bills” and not strapped money. He also said he was working at the bank the day it was robbed and recognized the bank robber, but did not disclose his identity to bank personnel or law enforcement.

In addition to the prison term, Judge Pisano sentenced Bustamonte to two years of supervised release and ordered him to pay $5,721 in restitution.

U.S. Attorney Fishman credited special agents of the FBI under the direction of Acting Special Agent in Charge David Velazquez; the Westfield Police Department, under the direction of Police Chief David Wayman; and the Union County Prosecutor’s Office, under the direction of Prosecutor Theodore J. Romankow, with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorney Jane H. Yoon of the U.S. Attorney’s Office in Newark.

13-076

Defense counsel: James P. Nolan Esq., Woodbridge, N.J.

TRENTON, N.J. – A Union County, N.J., man employed by the Westfield, N.J., branch of TD Bank was sentenced today to 37 months in prison for his role in a plan to rob the bank, U.S. Attorney Paul J. Fishman announced.

Jelani Bustamonte, 23, of Elizabeth, N.J., previously pleaded guilty before U.S. District Judge Joel A. Pisano to an Information charging him with two counts of criminal conspiracy. On Jan. 26, 2012, Bustamonte was arrested at his home and charged by Complaint. Judge Pisano imposed the sentence today in Trenton federal court.

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

The first conspiracy involved a scheme to rob the TD bank tellers in Westfield. The second conspiracy was a plot to rob the vault inside the same bank. The bank was, in fact, robbed Sept. 11, 2011, although the vault was never robbed. Bustamonte admitted that he provided information about the bank’s layout, security and business operations, information he had gained through his employment, to conspirator Julio Ferrer. Ferrer previously pleaded guilty to robbing the Westfield branch of TD Bank on Sept. 11, 2011, and to six other branches of TD Bank in New Jersey between October 2011 and December 2011. He is scheduled to be sentenced by Judge Pisano on March 5, 2013.

At 2:21 p.m. on Sept. 11, 2011, an individual entered the TD Bank located at 560 North Avenue East, Westfield, and passed a deposit slip across the counter to a bank teller. The bank teller, who was in the process of counting cash at the counter, did not see the handwriting on the note or any monetary amount listed, and attempted to return the slip back to the person. The individual pushed the paper slip back across the counter and ordered the teller to “read it.” The teller read the handwritten note, which stated, “I want all the money lose (sic) bills.”

The teller stepped back upon reading the demand note. The bank robber then reached over the counter and took the cash that the teller had been counting. The bank’s video surveillance camera recorded the entire incident and captured images of the bank robber.

Bustamonte told law enforcement he had discussed robbing the vault with the alleged bank robber and others. He said he advised the bank robber to go with one other person to rob the vault, and that the robber agreed to give Bustamonte up to $50,000 of the money from the vault. Bustamonte said he discussed with the robber the layout of the Westfield branch, and other information, including that he should ask for “loose bills” and not strapped money. He also said he was working at the bank the day it was robbed and recognized the bank robber, but did not disclose his identity to bank personnel or law enforcement.

In addition to the prison term, Judge Pisano sentenced Bustamonte to two years of supervised release and ordered him to pay $5,721 in restitution.

U.S. Attorney Fishman credited special agents of the FBI under the direction of Acting Special Agent in Charge David Velazquez; the Westfield Police Department, under the direction of Police Chief David Wayman; and the Union County Prosecutor’s Office, under the direction of Prosecutor Theodore J. Romankow, with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorney Jane H. Yoon of the U.S. Attorney’s Office in Newark.

13-076

Defense counsel: James P. Nolan Esq., Woodbridge, N.J.

NEWARK, N.J. – An Ocean County man today admitted his role in a mortgage loan fraud scheme that succeeded in obtaining $4.4 million in mortgage loans while masquerading as a foreclosure rescue operation based in Holmdel, N.J., U.S. Attorney Paul J. Fishman announced.

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

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

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

In reality, the so-called investors invested nothing and were instead straw buyers recruited by Vito Grippo or his son, Frederick “Freddie” Grippo, because they had good credit. The Grippos and their associates then applied for mortgages in the names of the “investors” for the purchase of the properties owned by the homeowners in distress. Freddie Grippo pleaded guilty to conspiracy to commit wire fraud before Judge McNulty on Nov. 28, 2013.

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

The so-called investor was in reality a straw buyer of the homeowner’s house. The new mortgage loan applications filled out by the Grippos or their associates in the name of one of the investors contained materially false information about the loan applicant’s monthly income, his assets and whether the residence to be bought would be applicant’s primary residence.

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

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

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

The conspiracy charge to which Vito Grippo pleaded guilty is punishable by a maximum potential penalty of 30 years in prison and a fine of $1 million. Each of the three tax charges to which Vito Grippo pleaded carries a maximum penalty of three years and a maximum fine of $100,000. Sentencing is scheduled for May 29, 2013.

U.S. Attorney Fishman credited special agents from the FBI’s Red Bank Resident Agency, under the direction of Acting Special Agent in Charge David Velazquez in Newark; special agents from IRS—Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen, and postal inspectors in the Newark Division, under the direction of Acting Inspector in Charge Maria Kelokates, for the investigation leading to today’s guilty plea.

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

13-079

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

Grippo Indictment

Also Sentenced to Five Months of Home Confinement, Fined $30,000.

NEWARK, N.J. – A New Jersey doctor practicing in West Orange was sentenced today to five months in prison and five months of home confinement for his role in a payment-for-patients scheme in which he took envelopes of cash in exchange for making patient referrals, U.S. Attorney Paul J. Fishman announced.

Dov Rand, 48, of Franklin Lakes, N.J., previously pleaded guilty before U.S. District Judge Claire C. Cecchi to one count of violating the federal healthcare program anti-kickback statute. Judge Cecchi imposed the sentence today in Newark federal court.

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

On Dec. 13, 2011, Rand was arrested – along with 12 other New Jersey doctors and one nurse practitioner – and charged with accepting cash kickback payments from Orange Community MRI (“Orange MRI”), an Orange, N.J., diagnostic facility, in exchange for his referral of Medicare and Medicaid patients. During the course of the investigation, Rand and others were recorded taking envelopes of cash in exchange for their patient referrals. Orange MRI’s executive director, Chirag Patel, 37, of Warren, N.J., was arrested on Dec. 8, 2011, in connection with the scheme.

Starting in 2010, Orange MRI made monthly cash kickback payments to Rand in exchange for his referral of patients to Orange MRI for diagnostic tests. At the end of each month, individuals at Orange MRI printed patient reports that detailed how many tests Rand referred and used them to calculate the kickback payment owed to Rand. Pursuant to Rand’s agreement with Orange MRI, he was paid kickbacks for each MRI test on a Medicare or Medicaid beneficiary referred to the facility.

Rand admitted receiving cash payments on more than one occasion in October and November 2011 in exchange for his referral of patients.

In addition to the prison term and home confinement, Judge Cecchi sentenced Rand to two years of supervised release and fined him $30,000.

U.S. Attorney Fishman credited special agents of U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Tom O’Donnell, with the investigation leading to today’s sentence. He also thanked the Centers for Medicare and Medicaid Services for its vital role at the investigation’s inception.

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

13-077

Defense counsel: Anthony Pope Esq., Newark

Chinese Business Executive Arrested After Allegedly Offering Bribe

WASHINGTON – Three people have been charged this week in Newark, Miami and New York City with wildlife smuggling and related charges for their alleged roles in an international rhino horn smuggling ring, the Department of Justice announced today. The arrests and charges are the result of “Operation Crash,” a nationwide effort led by the U.S. Fish & Wildlife Service (FWS) and the Justice Department to investigate and prosecute those involved in the black market trade of endangered rhinoceros horns.

A federal grand jury in Newark, N.J., indicted Zhifei Li for international smuggling of rhinoceros horns, U.S. Attorney for the District of New Jersey Paul J. Fishman said. Li was also indicted by a federal grand jury in Miami on the same charge. Shusen Wei, a 44-year old Chinese business executive and an associate of Li, has also been charged with offering to bribe a federal agent in the Li case. Qing Wang was charged today in a related criminal complaint in federal court in the Southern District of New York for his role in smuggling libation cups carved from rhinoceros horns from New York to Li via Hong Kong.

According to the indictment filed in Newark:

Li, a 28 year-old Chinese national, conspired to smuggle more than 20 raw rhinoceros horns from the United States to Hong Kong in 2011 and 2012. Li wired hundreds of thousands of dollars over at least a year to a co-conspirator in the United States to fund purchases of rhinoceros horns. Li’s co-conspirator smuggled the rhino horns in porcelain vases and mailed them to Hong Kong and China to a person other than Li, in an effort to evade detection by U.S. officials. Li and his co-conspirator bought many of the horns in New Jersey from other members of the conspiracy. Li was arrested in January on charges previously filed in New Jersey.

Li also was indicted on Feb. 12, 2013, in Miami on wildlife trafficking and smuggling charges. According to court records and government statements made in court, shortly after arriving in Florida in January 2013 for the Original Miami Beach Antique Show, Li purchased two endangered black rhinoceros horns from an undercover U.S. Fish & Wildlife Service agent in a Miami Beach hotel room for $59,000. Li asked if the undercover officer could procure additional rhinoceros horns and mail them to his company in Hong Kong.

Also arrested on a related criminal complaint filed in Miami was Shusen Wei, a Chinese business executive, who also was attending the antique show and sharing a hotel room with Li. According to documents filed in court in Miami, Wei was interviewed by agents after Li’s arrest and admitted to knowing about Li’s smuggling activities and to purchasing rhinoceros carvings from Li that apparently had been purchased in and smuggled from the United States. After being served with a grand jury subpoena to appear in New Jersey, Wei left Miami for New York en route to China. Prior to leaving Miami, Wei allegedly asked an undercover informant to invite a FWS special agent out to dinner in Miami and offer her money to assist Li. After a series of recorded phone calls and text messages, Wei was arrested as he attempted to board a flight bound for China at JFK International Airport in New York on Saturday, Feb. 3, 2013, on charges of bribing a federal official. According to documents filed in court, Wei proposed that the undercover informant offer the agent as much as $10,000.

Qing Wang is scheduled to appear in court today to face charges in a criminal complaint in the Southern District of New York for his role in smuggling libation cups carved from rhinoceros horns from New York to Li in Hong Kong. According to documents unsealed today, Wang was one of several that purchased items in the United States for Li. In China, there is a tradition dating back centuries of intricately carved rhinoceros horn cups . Drinking from such a cup was believed to bring good health and such carvings are highly prized by collectors. Wang is alleged to have been smuggling rhinoceros horn cups as well as ivory carvings to Li in Hong Kong.

An indictment or criminal complaint contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty.

Rhinoceros are an herbivore species of prehistoric origin and one of the largest remaining mega-fauna on earth. They have no known predators other than humans. All species of rhinoceros are protected under United States and international law, and all black rhinoceros species are endangered. Since 1976, trade in rhinoceros horn has been regulated under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), a treaty signed by more than 175 countries around the world to protect fish, wildlife and plants that are or may become imperiled due to the demands of international markets. Nevertheless, the demand for rhinoceros horn and black market prices have skyrocketed in recent years due to the value that some cultures have placed on ornamental carvings, good luck charms or alleged medicinal purposes, leading to a decimation of the global rhinoceros population. As a result, rhino populations have declined by more than 90 percent since 1970. South Africa, for example, has witnessed a rapid escalation in poaching of live animals, rising from 13 in 2007 to more than 618 in 2012.

Operation Crash (named for the term used to describe a herd of rhinoceros) is an ongoing multi-agency effort to detect, deter and prosecute those engaged in the illegal killing of rhinoceros and the unlawful trafficking of rhinoceros horns. The investigation resulting in the charges announced today has been conducted by the Special Investigations Unit of the FWS Office of Law Enforcement, with assistance from the Department of Homeland Security.

The Li case is being prosecuted by the U.S. Attorney’s Office of the District of New Jersey by Assistant U.S. Attorney Kathleen O’Leary. The Wei case is being prosecuted by Assistant U.S. Attorney Tom Watts-FitzGerald in the Southern District of Florida. The Wang case is being prosecuted by Assistant U.S. Attorney Janis Echenberg in the U.S. Attorney’s Office of the Southern District of New York. Senior Trial Attorney Richard A. Udell of the Environmental Crimes Section of the U.S. Department of Justice is assisting in and coordinating all of the prosecutions. Additional support has been provided by the U.S. Attorney’s Office in the Eastern District of New York.

13-078

Li Indictment

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

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

Bennie Haynes, 53, of Dayton, N.J., a former U.S. Postal Service carrier, and Manuel Rodriguez, 50, of New Brunswick, N.J., both pleaded guilty before U.S. District Judge Claire C. Cecchi. Haynes pleaded guilty to an Information charging him with conspiracy to defraud the United States, theft of government property, and theft of mail by a postal employee. Rodriguez pleaded guilty to an Information charging him with conspiracy to defraud the United States, theft of government property and aggravated identity theft.

The conspiracy counts are punishable by a maximum potential penalty of five years in prison and up to a $250,000 fine. The substantive counts of theft of government property carry a maximum potential penalty of 10 years in prison and up to a $250,000 fine. The theft of mail by a postal employee carries a maximum potential penalty of five years in prison and up to a $250,000 fine. The aggravated identity theft count is punishable by a statutory mandatory minimum sentence of two years in prison, which must run consecutively to any other sentence.

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

Stolen Identity Refund Fraud

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

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

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

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

The Investigation

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

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

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

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

Rodriguez and others then gained control of the refund checks, in various ways, which followed the pattern of a classic SIRF scheme. Sometimes, conspirators obtained Tax Refund Treasury Checks by bribing mail carriers, including defendant Benny Haynes, to intercept checks and deliver them to other conspirators. In exchange for cash payments, Haynes gave Tax Refund Treasury Checks to conspirators. In turn, these conspirators then sold these checks to yet other conspirators. Tax Refund Treasury Checks mailed to addresses along Haynes’ mail route in Somerset, N.J., were deposited into accounts controlled by Rodriguez and other conspirators.

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

Certain conspirators then sold Tax Refund Treasury Checks to Rodriguez and others. After buying the Tax Refund Treasury Checks, Rodriguez and others deposited and cashed the checks. The conspirators used third parties (the “Straw Account Holders”), to open bank accounts at various banks in New Jersey and elsewhere. Once the Tax Refund Treasury Checks were deposited into the Straw Account Holders’ accounts or accounts controlled by conspirators, Rodriguez and others withdrew the funds.

Rodriguez and others also obtained proceeds from Tax Refund Treasury Checks by causing checks to be cashed at check cashing institutions, and then causing the proceeds to be deposited into bank accounts controlled by conspirators.

During the course of the investigation, members of the New Jersey Task Force identified certain “hot spots” of activity related to the Scheme – that is, Conspirators were directing millions of dollars of Tax Refund Treasury Checks to just a few towns and cities in and around New Jersey. New Jersey Task Force members then interacted with U.S. Postal Service employees in these hot spots, and identified the characteristics of Tax Refund Treasury Checks connected to the scheme. As a result of these efforts, more than $22 million in fraudulently applied for Tax Refund Treasury Checks that had been issued by the U.S. Treasury were not delivered to the conspirators or others, but were interdicted by law enforcement officers.

Sentencing for both defendants is scheduled for June 5, 2013.

U.S. Attorney Fishman praised special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen; and inspectors of the U.S. Postal Inspection Service, under the direction of Phillip R. Bartlett, with the investigation leading to today’s guilty pleas. He also thanked the special agents of the U.S. Secret Service, under the direction of Special Agent in Charge James Mottola; the Drug Enforcement Administration, under the direction of Acting Special Agent in Charge Robert G. Koval; and HSI-ICE, under the direction of Special Agent in Charge Andrew M. McLees, for their roles.

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

13-073

Defense Counsel: Manuel Rodriguez: Mark A. Berman, River Edge, NJ
Benny Haynes: David Holman Esq., Assistant Federal Public Defender, Newark

Haynes Information
Rodriguez Information

TRENTON, N.J. – Former Newark, N.J., Deputy Mayor for Public Safety Ronald Salahuddin was sentenced today to one year and one day in prison for conspiring to commit extortion by using his official position to steer demolition work to co-defendant Sonnie L. Cooper, a Newark businessman, and obtain contributions to organizations favored by Newark officials, U.S. Attorney Paul J. Fishman announced.

U.S. District Judge Freda L. Wolfson imposed the sentence today in Trenton federal court. A jury returned a guilty verdict against Salahuddin, 61, and Cooper, 69, following a five-week trial in October 2011. Salahuddin and Cooper were both convicted of one count of conspiracy to extort under the color of official right. They were each acquitted of one count of attempted extortion under the color of official right, and two counts of bribery. Salahuddin also was acquitted of an additional count of bribery.

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

Shortly after Salahuddin became deputy mayor in July 2006 and through December 2007, Salahuddin and Cooper conspired to use Salahuddin’s official position to steer City of Newark and Prudential Center demolition work to a cooperating witness who, in exchange for Salahuddin’s official action and influence, had to give a portion of that work to Cooper, the owner of S. Cooper Brothers Trucking Inc. (“Cooper Trucking”).

Salahuddin solicited and accepted contributions from the cooperating witness to organizations favored by Newark officials in exchange for his official action and influence. While deputy mayor, Salahuddin maintained a concealed financial interest in Cooper Trucking. Salahuddin mortgaged approximately $900,000 worth of property as collateral for Cooper Trucking, loaned money to Cooper for payroll and received money from Cooper related to the company’s operations.

In addition to the prison term, Judge Wolfson sentenced Salahuddin to two years of supervised release and a $5,000 fine.

U.S. Attorney Fishman credited special agents of the FBI’s Trenton and Newark Field Offices, under the direction of Acting Special Agent in Charge David Velazquez; and IRS – Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen, for the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorney Harvey Bartle of the U.S. Attorney’s Office in Trenton, and Assistant U.S. Attorneys James B. Nobile, chief of the U.S. Attorney’s Office Special Prosecutions Division, and Zahid N. Quraishi of the U.S. Attorney’s Office Special Prosecutions Division, in Newark.

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Defense counsel: Thomas Ashley Esq., Newark

Judge Also Orders Defendant to Pay $4.7 Million in Restitution

TRENTON, N.J. – An Oklahoma woman who formerly lived in Ridgewood, N.J., was sentenced today to 48 months in prison for a scheme to defraud two New Jersey families relating to the purchase, financing, and improvement of real estate in Oklahoma, U.S. Attorney Paul J. Fishman announced.

Taya Romano, (a/k/a “Taya Waldon”), 36, previously pleaded guilty before U.S. District Judge Peter G. Sheridan to an Information charging her with conspiracy to commit wire fraud. Judge Sheridan imposed the sentence today in Trenton federal court.

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

In 2008 and 2009, Taya Romano conspired with her then-husband to solicit and obtain money from two sets of family friends in New Jersey for investments in what Romano represented to be purchases of apartment complexes and undeveloped land in Oklahoma. Romano solicited a series of investments from each of the two sets of family friends, obtaining a total of $1,032,750 from one couple and $890,000 from the other couple. Romano and her husband did not use these funds for the purposes for which they had represented.

In addition to the prison term, Judge Sheridan sentenced Romano to three years of supervised release and ordered her to pay $4.7 million in restitution.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Charge David Velazquez, with the investigation leading to today’s sentence.

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

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

NEWARK, N.J. – A former Passaic police officer and organized crime associate from Morris County, N.J., appeared in Newark federal court today on charges he attempted to collect a debt by extortion, U S. Attorney Paul J. Fishman announced.

Stefano Mazzola, 68, of Rockaway, is charged in a Complaint with one count of using extortion to collect or attempt to collect a debt and to punish a person for non-repayment of a debt. Mazzola appeared this afternoon before U. S. Magistrate Judge Madeline Cox Arleo and was detained.

According to the criminal Complaint:

In 2012, the victim obtained a loan of $30,000 from an individual, who subsequently transferred the loan to Mazzola. The victim periodically made payments on the loan to Mazzola. In late 2012, Mazzola began to threaten that if the victim did not repay the loan, he would physically harm the victim.

The victim made a number of consensually recorded phone calls to Mazzola, during which Mazzola threatened the victim. During a phone call on Jan. 17, 2013, Mazzola acknowledged that an individual had transferred the loan to him, stating: “He gave me that debt, I’ve paid out $20-something-thousand, if not more, for him.”

Later in the conversation, Mazzola threatened the victim. “Let me explain something to ya, and I really mean this, and I don’t care who is listening to my phone or not, if I want to do something to ya, I don’t give a f–k if you give me a million dollars. If I’m looking to hurt ya, I’ll take the money and still hurt ya. It has nothing to do with it,” Mazzola said.

On another call that occurred on Jan. 23, 2013, the victim told Mazzola: “You know you’re gonna get paid.” In response, Mazzola said : “You say you know I’m gonna get paid, I don’t believe nothing. .. If I write it off in my head, it doesn’t matter. Because I’m a firm believer in time. ... But listen, I know what I’m gonna do. ’Cause it doesn’t matter to me. It don’t matter whether it’s now or ten years from now. It don’t matter. You don’t understand. You just don’t know me. I don’t give a f–k if an agent is listening.”

The charge of extortionate collection of a debt is punishable by a maximum potential penalty of 20 years in prison and a fine of $250,000.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Charge David Velazquez in Newark, and the Waterfront Commission of New York Harbor, under the direction of Commissioner Jan Gilhooly, with the investigation that led to today’s charges.

The government is represented by Assistant U.S. Attorney Lisa M. Colone of the U.S. Attorney’s Office Criminal Division 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: Miles Feinstein Esq., Clifton, N.J.

Mazzola Complaint

NEWARK, N.J. – A former Passaic County man who had been a fugitive since being charged in 2009 with multiple crimes in connection with an investigation into several loosely connected Balkan criminal enterprises operating throughout New Jersey, New York, Chicago, Philadelphia, Canada, and the Netherlands made his initial court appearance today, U.S. Attorney Paul J. Fishman announced.                                                                                                            

Kujtim Lika, 47, (a/k/a “Timmy”) was arrested by the Toronto Police Department/Toronto Task Force in Canada on May 24, 2012. He had been using the alias “Dashamir Cela” at the time of his arrest. He made his initial appearance today before U.S. Magistrate Judge Madeline Cox Arleo in Newark federal court. He was detained without bail.

Three years ago, the FBI, in conjunction with Immigration and Customs Enforcement (ICE) and Alcohol, Tobacco and Firearms (ATF) charged 26 individuals – including Lika – with numerous crimes, including narcotics and firearms trafficking, money laundering, interstate transportation of stolen property, and criminal conspiracy. The arrests were part of a joint operation between federal agencies that began in late 2003 with targets in Albania, Macedonia, Kosovo, Serbia, Canada, the Netherlands and the United States.

Lika’s case has been featured on the television program “America’s Most Wanted.”

U.S. Attorney Fishman credited the FBI, under the direction of Acting Special Agent in Charge David Velazquez; Immigration and Customs Enforcement (ICE) HSI, under the direction of Special Agent in Charge Andrew M. McLees; special agents of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, under the direction of Acting Special Agent in Charge Donald J. Soranno; and the Waterfront Commission of New York Harbor, under the direction of Commissioner Jan Gilhooly.   

The government is represented by Assistant U.S. Attorney David E. Malagold, chief of the Organized Crime/Gangs Unit in Newark.

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

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

NEWARK, N.J. – Two lawyers with a Fairfield, N.J., law firm today admitted they structured $354,000 in client funds into their attorney accounts to avoid currency reporting requirements, U. S. Attorney Paul Fishman announced.

Goldie Sommer, 61, of Montville, and Edward Engelhart, 61, of Rockaway, attorneys with the firm of Sommer and Engelhart, pleaded guilty before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court to conspiring to structure transactions to avoid reporting large amounts of currency. They had surrendered to IRS agents in Newark on Nov. 16, 2011.

According to documents filed in this case and statements made in court: Between Aug. 13, 2010, and Sept. 22, 2010, Sommer and Engelhart made numerous deposits totaling $354,000 into their attorney trust account in large, even dollar amounts. None of these deposits were made in an amount greater than $10,000, the amount that would have triggered the filing of a currency transaction report (“CTR”) with the IRS.

CTR forms require disclosure of the identity of the individual who conducted the transaction and the individual or organization for whom the transaction was completed. Many individuals involved in illegal activities, such as narcotics trafficking, tax evasion, and money laundering, are aware of these reporting requirements and take active steps to cause financial institutions to fail to file CTRs in order to avoid detection of the movement of large amounts of U.S. currency. These steps are referred to as “structuring” and involve making multiple cash deposits or withdrawals in amounts of $10,000 or less on the same day or consecutive days in order to avoid the filing of CTRs. Structuring transactions to avoid the filing of a CTR is prohibited by law.

The charge to which Sommer and Engelhart pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for May 14, 2013.

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

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

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Defense counsel: Sommer: Erich H. Jaso Esq., New York
Engelhart: Howard Brownstein Esq., Union City, N.J.

Sommer Information
Engelhart Information

NEWARK, N.J. – An Ohio woman who claims she investigates labor unions on behalf of attorneys was arrested today and charged by Complaint with making false accusations against former officers of an international labor union, falsely claiming she was the victim of a shooting, and fabricating evidence to support her false allegations, U.S. Attorney Paul J. Fishman announced.

Debbie Shank Morgan, 54, of Euclid, Ohio, was arrested this morning and made her initial appearance before U.S. Magistrate Judge Madeline Cox Arleo in Newark federal court.

According to the Complaint: In May 2012. Morgan contacted federal agents from the U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations (“DOL-OIG”) in New Jersey. The DOL-OIG is a federal law enforcement agency that investigates allegations related to federal crimes, such as bribery and theft, committed by and against labor unions, union officers, and employee benefit plans, among others.

She claimed that she was a non-practicing lawyer who investigates crimes associated with labor unions, employee benefit plans, and other alleged violations of federal criminal and civil law. Morgan reported that she had information that a former union officer and his father from an international labor union had committed serious violations of federal law. Morgan alleged that the former union officer had admitted to her that the father had embezzled at least $30 million from a Political Action Committee (“PAC”) associated with the International.

In support of her allegations, Morgan claimed that she had a relationship with the former union officer, and he had sent her numerous incriminating text messages. Morgan “cut and pasted” these alleged text messages, which she claimed were communications between herself and the former union officer, into e-mails and sent them to a DOL-OIG agent in New Jersey.
Federal agents obtained information from the service provider of the phone number provided by Morgan. This information revealed that the phone number had not been in service and was associated with a “land line” or “hard line,” which cannot be used to transmit text messages.

In September 2012, Morgan claimed that an unknown individual had fired a weapon at her car in Ohio, but damaged only the mirror. A police officer found no damage or holes in the mirror’s housing.

Morgan is charged with two counts of making false statements (Counts One and Two), each punishable by a maximum of five years in prison and a statutory maximum fine of $250,000. Morgan is also charged with obstruction of justice (Count Three), punishable by a maximum prison term of 20 years and a statutory maximum fine of $250,000

U.S. Attorney Fishman credited special agents of the Department of Labor-Office of Inspector General, under the direction of Special Agent in Charge Robert Panella; and special agents of the U.S. Department of Labor Office of Inspector General Office of Labor Racketeering and Fraud Investigations, Chicago Region, under the direction of Special Agent in Charge James Vanderberg, for their assistance in the investigation leading to today’s arrest.

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

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

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Morgan Complaint

CAMDEN, N.J. – Jermel Brown, a former senior corrections officer with the N.J. Department of Corrections (NJDOC) was sentenced today to 30 months in prison for using his official position to smuggle contraband to a prisoner in the Garden State Youth Correctional Facility in Yardville, N.J., (Yardville Prison) in exchange for $12,000, U.S. Attorney Paul J. Fishman announced.

Brown, 35, of Camden, N.J., previously pleaded guilty before Senior U.S. District Judge Joseph H. Rodriguez to an Information charging him with conspiracy to extort a cooperating witness who was incarcerated at Yardville Prison and who was identified in court filings as “CW1.” Judge Rodriguez imposed the sentence today in Camden federal court.

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

Brown agreed to use his position as a senior corrections officer to smuggle items, including mobile telephones and music players, into Yardville Prison for delivery to a prisoner – CW1 – in exchange for cash payments. Between July 2010 and July 2011, Brown and his co-conspirators, Kenneth Richards and Maurice Brown-Harden, conducted three transactions in which another cooperating witness outside the prison provided Richards and Brown-Harden with two mobile telephones and two portable music players and three cash payments of $4,000, $4,500, and $3,500 each. Brown then used his official position at the prison to deliver the mobile telephones and music players to the prisoner inside the facility.

In addition to the prison term, Judge Rodriguez sentenced Brown to three years of supervised release, 500 hours of community service and fined him $1,000. Richards and Brown-Harden previously pleaded guilty before Judge Rodriguez and both were sentenced in 2012 to 18 months’ imprisonment.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Charge David Velazquez, for the investigation leading to today’s sentence. He also thanked the N.J. Department of Corrections, Special Investigation Division, for its cooperation and assistance throughout the investigation.

The government was represented by Assistant U.S. Attorney Lee M. Cortes Jr. of the U.S. Attorney’s Office Special Prosecutions Division.

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Defense counsel: Joseph M. Marrone Esq., Philadelphia, PA

Bribery and Money Laundering Charges Also Lodged Against One Defendant

NEWARK, N.J. – Federal and state agents this morning arrested 11 people who are charged by Complaint, along with two corporations, in connection with a large-scale scheme to defraud the Medicaid program of millions of dollars, U.S. Attorney Paul J. Fishman announced today.

The Complaint also charges the owner of a home health aide business headquartered in Linden, N.J., with attempting on two occasions to hinder a state investigation by bribing a state regulator – who was working with the FBI – and with conspiring with the owner of another home health aide business in Elizabeth, N.J., to launder money.

The defendants arrested this morning are scheduled to appear this afternoon before U.S. Magistrate Judge Madeline Cox Arleo in Newark federal court.

“The defendants in this case allegedly enriched themselves by gaming the Medicaid system,” U.S. Attorney Fishman said. “The actions described in this Complaint are especially egregious, because the taxpayer dollars that were stolen were intended to provide necessary health care for our most vulnerable citizens. I’m especially proud that federal and state law enforcement agencies worked together effectively to uncover this alleged fraud.”

David Velazquez, Acting Special Agent in Charge of the FBI, Newark, said, “The FBI views health care fraud as a severe crime problem that poses a potential risk to patients and increases health care costs for all. Today's arrests are the result of a four-year investigation into a sophisticated scheme, involving multiple layers of fraud, money laundering and bribery, in order to defraud the New Jersey Medicaid program of millions of dollars. This case is indicative of how the FBI, along with its federal partners, and the State of New Jersey, will continue to work together to pursue those that steal from our health care system.”

“Falsely billing Medicaid for millions of dollars as alleged in today’s Complaint is a serious crime,” IRS-Criminal Investigation Acting Special Agent in Charge Shantelle P. Kitchen, Newark Field Office, said. “Financial fraud schemes such as this are often described as a house of cards.  The underlying structure can fall apart at any time and expose the individuals responsible. “IRS-Criminal Investigation is committed to unraveling complex financial transactions and money laundering schemes where individuals attempt to conceal the true source of their money.”

New Jersey Attorney General Jeffrey Chiesa said: “The New Jersey Division of Consumer Affairs regulates nurses, home health aides, and home health agencies in our state, and the Division's Enforcement Bureau aggressively investigates any allegations of fraud or wrongdoing by those regulated professionals and businesses. We are proud to have worked with the FBI on this investigation.  Alleged billing fraud by health professionals affects the entire economy, and will not be tolerated.”

According to the Complaint filed in this case:

Irina Krutoyarsky, 58, of Springfield, N.J., was the owner and operator of HHCH Health Care Inc. (HHCH), a for-profit home health aide business located in Linden. HHCH billed Medicaid for services purportedly provided by home health aides to Medicaid-eligible patients.  Medicaid is a jointly funded, federal-state health insurance program that provides certain health benefits to the disabled and individuals and families with low incomes and resources. Paul Mil, 68, of Springfield, was the owner and operator of People Choice Home Care Inc. (People Choice), another for-profit home health business located in Linden and Elizabeth, which also billed Medicaid for services purportedly provided by home health aides.

Krutoyarsky, Mil and their conspirators allegedly defrauded Medicaid of millions of dollars through a variety of schemes, including:

                        ●          billing Medicaid for treatment and services not actually rendered;

                        ●          obtaining fraudulent home health aide certifications for employees and others;   

                        ●          using illegal aliens and/or non-certified individuals to provide home health aide services and billing Medicaid, claiming the services had been provided by certified home health aides.

According to the Complaint:

During the investigation, an individual working with the FBI – “Cooperating Witness Three” (CW3) – met Krutoyarsky, Mil, and others at HHCH and consensually recorded a number of conversations. For example, on Jan. 31, 2012, CW3 met with Krutoyarsky and Mil to discuss obtaining a home health aide license. During this consensually recorded conversation (audio and video), they discussed fraudulently billing Medicaid providing false information about the patients, known as a “bait and switch:”

Krutoyarsky:   You know, it's just the free money . . .  coming in.

CW3:               That's true.

Mil described how they billed Medicaid for services not actually rendered:

Mil:                  It’s a lot of people, a lot of people who . . . Medicaid. Government pay for the service. We can get, you know, between 10 and 18 hours [of Medicaid billing per week per patient]. Look, people can work in a week and get paid hundred bucks a week doing nothing. Why not?

Krutoyarsky:   . . . But as long as these people doesn't live in the same address, so Medicaid is not gonna trace.

CW3:               Oh, so otherwise they will trace. Okay.

Krutoyarsky:   Because they do the tracings, you know. They gonna see who's working, who's not working, this and that. . . . So this way, they gonna have a free money. . . . Government, free money.

After meeting with Krutoyarsky and Mil, CW3 met with defendant Nekadam S. Galibova, an HHCH office employee, who assisted CW3 in obtaining a home health aide license without taking the required course or test. CW3 underwent neither the required training nor testing, but in March 2012, CW3 received a home health aide license from the New Jersey. Krutoyarsky, Mil, and others billed Medicaid under CW3’s license, knowing that CW3 provided no treatment to any patients.

Galibova was also a purported HHCH home health aide. The investigation revealed that she conspired with Krutoyarsky and others to bill Medicaid for services not rendered. Galibova and HHCH billed Medicaid for a patient (referred to as Patient M.N.) from July 27 to 31, 2009, and August 3 to 4, 2009, periods when that patient was, in fact, out of the country.

Krutoyarsky and Mil also dispatched undocumented aliens and other unlicensed individuals to patients’ homes. Defendant Sonia Mesa was observed by the FBI visiting a patient’s home, however, Medicaid was billed using the names of others, including Alla Neymet and Leonora Popesku.

Krutoyarsky also bribed a N.J. Department of Labor employee on two occasions to stop wage and hour investigations into HHCH and People Choice. This state employee, however, was cooperating with the FBI and is referred to in the Complaint as “Cooperating Witness Two” (CW2). On June 14, 2010, Krutoyarsky met CW2 about the state investigation into HHCH.  Krutoyarsky did not want to provide CW2 with records related the HHCH and handed CW2 an envelope containing approximately $1,000 in cash.

Krutoyarsky and CW2 passed notes back and forth, negotiating the bribe. Eventually, Krutoyarsky agreed to pay CW2 $10,000, which she later paid. On April 14, 2011, Krutoyarsky paid another $15,000 to CW2 to subvert a state investigation into People Choice.

Krutoyarsky and Mil then allegedly laundered the proceeds of the Medicaid fraud to conceal their scheme and allow it to continue. Krutoyarsky and defendant Gulmira Shayakhmetova are alleged to have conspired to structure money, by making numerous cash withdrawals in amounts under $10,000, to evade the banks requirement to file a report with the United States Treasury.

Count One charges conspiracy to commit health care fraud and carries a maximum penalty of 20 years in prison and a $250,000 fine. Counts Two and Three each charge bribery, and each charge carries a maximum penalty of 10 years in prison and a $250,000 fine.  Count Four charges conspiracy to commit money laundering and carries a maximum penalty of 20 years in prison and a $500,000 fine.  Count Five charges conspiracy to unlawfully structure financial transactions and carries a maximum penalty of five years in prison and a $250,000 fine.

In addition, HHCH and People Choice were charged in Count One of the Criminal Complaint with conspiracy to commit health care fraud.

The Criminal Complaint also alleges forfeiture and provides notice of the federal government’s intent to forfeit at least $3.45 million in proceeds from the alleged offense and numerous properties in Krutoyarsky’s name in New Jersey, Florida and New York.

U.S. Attorney Fishman praised agents of the FBI, under the direction of Acting Special Agent in Charge David Velazquez in Newark, IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen; U.S. Citizenship and Immigration Services; N.J. Attorney General Jeffrey Chiesa; N.J. State Comptroller Matthew Boxer; Division Director Mark Anderson, Office of the State Comptroller, Medicaid Fraud Division; N.J., Division of Consumer Affairs, under the direction of Director Eric T. Kanefsky, Board of Nursing; Hal Wirth, Commissioner, N.J. Department of Labor; U.S. Department of State-Diplomatic Security; and the Marlboro Police Department, under the direction of Chief Bruce Hall, for the investigation leading to today’s charges.

The government is represented by Assistant U.S. Attorneys Anthony Moscato and Jonathan W. Romankow of the Organized Crime/Gangs Unit, Lakshmi Srinivasan Herman of the Economic Crimes Unit and Peter W. Gaeta of the Asset Forfeiture and Money Laundering 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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The following individual defendants were charged:

Name

Residence

Age

Charge(s)

Springfield, NJ

58

Counts One, Two, Three, Four, and Five

Paul Mil

Springfield, NJ

68

Counts One and Four

Nekadam S. Galibova

Union, NJ

51

Count One

Lilia Berstein

Old Bridge, NJ

57

Count One

Bella Fridman

East Brunswick, NJ

66

Count One

Malvina Frolova

Old Bridge, NJ

41

Count One

Sonia Mesa

Elizabeth, NJ

 

Count One

Nelson Mesa

Elizabeth, NJ

68

Count One

Alla Neymet

Edison, NJ

56 or 57

Count One

Leonora Popesku

Edison, NJ

65

Count One

Gulmira Shayakhmetova

Howell, NJ

46

Count Five

Additional information: Certified Homemaker Home Health Aide employees who will be locked out of their place of employment and are looking for work should call: Home Health Assembly 732-877-1100 (Central NJ), 609-275-6100 (Southern NJ); Home Health Services Association of NJ 732-864-6111.

To help care for family members in their homes or in a community-based system that will lose their homemaker home health aide due to the closing, please contact the NJ Division of Aging Services at 1-877-222-3737.  The division's direct toll-free number, 1-800-792-8820, can only be used from in-state. They may also contact their HMO directly.

For Home-maker Home Health Aide applicants who were trained by these companies and are waiting to be certified (that is, their applications are still in process), the state Board of Nursing will be contacting each individual shortly with guidance.

HHCH Health Care Complaint

NEWARK, N.J. – An Albanian national who was living in Clifton, N.J., admitted in federal court today to robbing two TD Bank branches while armed with a gun in late 2011, U.S. Attorney Paul J. Fishman announced.

Shpend Mazari, 30, also known as “Arlind Hyseni”and “Luie Belushi,” pleaded guilty to an Information charging him with two counts of bank robbery at two TD Bank branches. One occurred on Nov. 2, 2011, in Clifton in Passaic County, N.J. and the other on Dec. 30, 2011, in Wallington in Bergen County, N.J.

Mazari pleaded guilty before U.S. District Judge Esther Salas. At his plea hearing, he admitted Arlind Hyseni is his real name. He was previously arrested on Feb. 28, 2012, in New York City.

According to documents filed in this case and statements made in court: On Nov. 2, 2011, Mazari entered a TD Bank in Clifton armed with a handgun and disguised with a baseball cap and a flesh-colored mask covering the lower part of his face. He ordered two bank employees to go to the vault and turn over cash, which they placed into a dark nylon bag.

Mazari left the bank with $286,000 in cash, which included several “bait” bills and a dye pack.  Mazari dropped the money a short distance from the scene after the dye pack concealed within the bills exploded.

On Dec. 30, 2011, Mazari entered a TD Bank in Wallington shortly after it opened. He vaulted over the teller counter wearing a ski mask and armed with a handgun.  He again ordered bank employees to go to the vault and hand over cash, this time making off with $182,000.

The charges to which Mazari pleaded guilty carry a maximum penalty of 25 years in prison and a fine of $250,000, or twice the total loss or gain, whichever is greatest. Sentencing is scheduled for May 20, 2013.

Mazari was wanted by Interpol in a 2004 homicide in Albania. He was since convicted in absentia and sentenced to 25 years. It is the U.S. Attorney’s position that he must serve his time in the U.S. first.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Charge David Velazquez in Newark, and Department of Homeland Security, Immigration and Customs Enforcement, under the direction of Andrew M. McLees, for the investigation leading to today’s guilty plea.

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

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Defense counsel: David Holman Esq., Assistant Federal Public Defender

Mazari, Shpend Information

NEWARK, N.J. – A Union County, N.J., man was indicted today by a federal grand jury for possessing and distributing over the Internet images depicting child sex abuse, U.S. Attorney Paul J. Fishman announced.

Carl Tullis Sr., 48, of Plainfield, N.J., was previously arrested in June 2011. He was indicted today on two counts of distribution of child pornography and one count of possession.

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

On June 2, 2011, special agents of the FBI executed a search warrant at Tullis’ residence. They seized digital evidence that contained more than 1,600 images and 1,400 videos depicting child sexual abuse, including material that involved prepubescent minors and material that portrays sadistic or masochistic conduct. The digital evidence seized included files previously downloaded from Tullis by law enforcement agents working in an undercover capacity on a publicly available peer-to-peer network.

On the distribution counts, Tullis faces a mandatory minimum penalty of five years in prison, a maximum potential penalty of 20 years and a $250,000 fine. On the possession count, he faces a maximum penalty of five years in prison and a $250,000 fine.

U.S. Attorney Fishman credited special agents of the FBI Newark Division’s Child Exploitation Task Force, under the direction of Acting Special Agent in Charge David Velazquez in Newark, with the investigation leading to today’s indictment.

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

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Defense counsel: Carol Gillen Esq., Newark, NJ

Tullis Indictment

NEWARK, N.J. – A former mortgage broker and bank officer from Bergen County, N.J., was arrested this morning for allegedly conspiring to commit bank fraud to secure a $1.5 million residential loan, U.S. Attorney Paul J. Fishman announced.

James Cockinos, 58, a resident of Englewood Cliffs, is charged by Complaint with one count of conspiracy to commit bank fraud. The defendant allegedly defrauded Washington Mutual Bank (later acquired by JPMorgan Chase) in New York, to secure the loan. He is expected to make his initial court appearance before U.S. Magistrate Judge Madeline Cox Arleo in Newark federal court this afternoon.

According to the criminal Complaint:

Cockinos was the owner and president of Federated Mortgage Company of America (FMCA) as well as on the Board of Directors at Mariner’s Bank. Through FMCA, Cockinos served as the mortgage broker on a $1.5 million residential loan with Washington Mutual Bank in an application dated April 19, 2007. The borrower, identified as “Individual Two” in the Complaint, applied for the loan at the request of a spouse, identified as “Individual One” in the Complaint. There was no co-borrower on the loan.

The loan application indicated it was for the purchase of a $1.9 million home located in Englewood Cliffs, N.J. Cockinos fraudulently indicated in the application that he had obtained the information through a face-to-face interview with Individual Two, when no such interview took place. The application, in fact, falsely represented the employment, income and assets of the applicant.

The application indicated that there was $400,000 in a joint account held by Individuals One and Two at Mariner’s Bank in New Jersey. Cockinos and Individual One had temporarily deposited $350,000 into the joint account for the purpose of misrepresenting Individual Two’s assets. Cockinos also directed a Mariner’s Bank employee to falsely verify that the account held $350,000 during the prior two months, when there was significantly less in the account during that time.

Washington Mutual ultimately approved a loan of $1.5 million. On Sept. 25, 2008, JPMorgan Chase acquired the banking operations of Washington Mutual Bank. In 2010, Individual Two defaulted on the loan and the home went into foreclosure. It was sold March 16, 2012, leaving JPMorgan Chase with a loss of more than $500,000.

The bank fraud conspiracy charge carries a maximum potential penalty of 30 years in prison and a fine of $1 million.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent In Charge David Velazquez in Newark, and criminal investigators from the U.S. Attorney’s Office in Newark, with the investigation leading to the charges and today’s arrest.

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

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

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Defense counsel: Edward J. Plaza Esq., Red Bank, N.J.

Cockinos Complaint