District of New Jersey

TRENTON, N.J. – The former secretary-treasurer of a Newark union today admitted embezzling $71,000 from Local 1233 of the International Longshoreman’s Association, U.S. Attorney Paul J. Fishman announced.

Gregory Taylor, 57, of Edison, N.J., pleaded guilty to Count 26 of an Indictment that charged him with issuing a vacation check for $7,852 to himself without authorization. Taylor also admitted to embezzling an additional $63,148 in union funds while he was in control of the union’s finances. Taylor entered his guilty plea before U.S. District Judge Joel A. Pisano in Trenton federal court.

According to documents in this case and statements made in court: Taylor admitted he had been removed from his elected position as secretary-treasurer in April 2010, yet continued to write himself checks, including a $7,852 vacation check to which he was not entitled. Taylor admitted that between 2007 and 2010, while secretary-treasurer, he embezzled a total of $71,000 by improperly cashing duplicate paychecks, as well as other checks from the union’s operating account, including for unauthorized credit card expenditures.

The charge to which Taylor pleaded carries a maximum potential penalty of five years in prison and a $250,000 fine. Taylor is scheduled to be sentenced on May 6, 2013.

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 detectives and auditors from the Waterfront Commission, under the supervision of Assistant Counsel Michelle Demeri, with the investigation leading to today’s guilty plea.

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

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Defense counsel: Lorraine Gauli-Rufo Esq., Federal Public Defender’s Office, Trenton

Taylor Indictment

NEWARK, N.J. – A Hunterdon County man who owns and operates P.H. Robinson Design and Landscaping Company Inc. (“P.H. Design”) today admitted under-reporting $1.38 million in money paid to his business by customers, U.S. Attorney Paul J. Fishman announced.

Paul Robinson, 45, of High Bridge, N.J., pleaded guilty before U.S. District Judge Katharine S. Hayden to an Information charging him with one count of filing a false tax return.

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

Robinson owned and operated P.H. Design, a landscaping business located in Scotch Plains, N.J. Despite maintaining several different bank accounts into which he deposited P.H. Design customer monies, Robinson only provided his accountant with records for one bank account. Robinson caused false corporate returns to be filed for P.H. Design for 2005, 2006, 2007, and 2008, and caused false personal returns to be filed for 2006, 2007, and 2008. Under terms of the plea agreement, Robinson admitted to causing tax losses of $200,000 and $400,000.

On the false filing count, Robinson faces a maximum potential penalty of three years in prison and a fine of $100,000. Sentencing is scheduled for May 15, 2013.

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

The government is represented by Assistant U.S. Attorney Joseph Mack of the Healthcare and Government Fraud Unit in Newark.

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Defense counsel: John P. McDonald Esq., Somerville, N.J.

Robinson Information

NEWARK, N.J. – An Essex County, N.J., woman today admitted to committing perjury while testifying in a federal trial, U.S. Attorney Paul J. Fishman announced.

Debora Medeiros Da Silva, 27, of Newark, pleaded guilty before U.S. District Judge Katharine S. Hayden in Newark federal court to an Information charging her with knowingly making false declarations before a grand jury or court.

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

On Sept. 23, 2009, while appearing as a witness under oath before the federal grand jury, Da Silva testified that she witnessed Peter Ventricelli, the target of a grand jury investigation, retrieve a bag of guns from her bedroom closet, and that he later gave the bag of guns to his brother, Mark Ventricelli. Da Silva subsequently appeared as a witness under oath at the trial in the matter of United States v. Peter Ventricelli and Mark Ventricelli, where she denied ever seeing any guns in a bag.

The federal charge of knowingly making false declarations before a grand jury or court carries a maximum potential penalty of five years in prison and a maximum fine of $250,000.

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 guilty plea.

Sentencing before Judge Hayden is scheduled for May 16, 2013.

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: Lorraine Gauli-Rufo Esq., Assistant Federal Public Defender, Newark

Da Silva Information

Crime Ring Invented 7,000 Fake Identities to Obtain Tens of Thousands of Credit Cards

NEWARK, N.J. – Federal agents in four states arrested 13 people today for allegedly creating thousands of phony identities to steal at least $200 million in one of the largest credit card fraud schemes ever charged by the Department of Justice, U.S. Attorney Paul J. Fishman announced.

The activity described in a Complaint unsealed today describes a sprawling criminal enterprise that stretched across dozens of states and numerous countries. The defendants charged in the Complaint allegedly fabricated identities to obtain credits cards and doctored credit reports to pump up the spending and borrowing power associated with the cards. They would then borrow or spend as much as they could based on their fraudulently obtained credit history and not repay the debts, looting businesses and financial institutions of more than $200 million in confirmed losses.

This morning, hundreds of law enforcement officers from the FBI and the U.S. Postal Inspection Service arrested 13 defendants and searched 13 locations in New Jersey, New York, Pennsylvania, and Connecticut. All of the defendants are charged with one count of bank fraud. The defendants are scheduled to appear later today before U.S. Magistrate Judge Madeline Cox Arleo in Newark federal court.

“This type of fraud increases the costs of doing business for every American consumer, every day,” U.S. Attorney Fishman said. “Through their greed and their arrogance, the individuals arrested today and their conspirators allegedly harmed not only the credit card issuers, but everyone who deals with increased interest rates and fees because of the money sucked out of the system by criminals acting in fraud rings like this one.”

“The criminal activity described in today’s complaint highlights the activity of an extensive, sophisticated, organized scheme, executed against U.S. financial institutions, which, in turn, effects every citizen of the United States,” Acting Special Agent in Charge Velazquez said. “This elaborate network utilized thousands of false identities, fraudulent bank accounts , fake companies, and collusive merchants, to defraud financial institutions of hundreds of millions of dollars, in order to facilitate extravagant lifestyles they could otherwise not afford. The arrests today are the result of the relentless and tenacious work of the United States Attorney’s Office,  U.S. Postal Inspection, U.S. Secret Service, the Social Security Administration, the Federal Bureau of Investigation and numerous financial institutions.”

According to documents filed in this case:

The defendants and their conspirators stole hundreds of millions of dollars through a scheme repeated thousands of times to create more than 7,000 false identities and fraudulently obtain tens of thousands of credit cards (the “Fraud Cards”). The scheme involved a three-step process in which the defendants would:

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

The Sham Companies

The enormous size and scope of the Criminal Fraud Enterprise required the defendants and others to construct an elaborate network of false identities. Across the country, the defendants and their co-conspirators maintained more than 1,800 “drop addresses,” including houses, apartments, and post office boxes, which they used as the mailing addresses of the false identities.

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

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

Tradelines

The defendants used sophisticated methods – including a network of black-market businesses called “tradelines” providers – to commit fraud.

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

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

Some defendants created and sold fake lines of credit for false identities made up by other defendants. These fraudulent primary tradelines were then used to increase the credit limits on Fraud Cards, so that the defendants could reap even larger profits. Defendants used the authorized user tradelines to create new identities.

Complicit Businesses

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

Lavish spending

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

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

The investigation that produced today’s arrests involved cyber crime investigators from the FBI and has been ongoing for more than 18 months. It previously resulted in the arrest of four other individuals and the seizure of more than $2 million in gold from a jewelry store in Jersey City.

The bank fraud count with which the defendants are charged is punishable by a maximum potential penalty of 30 years in prison and a fine of $1 million.

U.S. Attorney Fishman praised special agents of the FBI’s Cyber Division, under the direction of Acting Special Agent in Charge David Velazquez, for the investigation leading to today’s arrests, as well as postal inspectors under the direction of Acting Postal Inspector in Charge Marie Kelokates and the U.S. Secret Service, under the direction of Special Agent in Charge James Mottola. He also thanked the U.S. Social Security Administration for its role in the investigation.

The government is represented by Assistant U.S. Attorney Erez Liebermann, chief of the Computer Hacking and Intellectual Property section of the Economic Crimes Unit, and Assistant U.S. Attorneys Daniel V. Shapiro of the General Crimes Unit, Zach Intrater of the Economic Crimes Unit, and Barbara Ward of the Asset Forfeiture Unit of the U.S. Attorney’s Office in Newark.

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

Defendants:

Name

Age

Residence

59

Iselin, N.J.

Muhammad Shafiq

38

Bellerose, N.Y.

Ijaz Butt

53

Hicksville, N.Y.

Qaiser Khan

48

Valley Stream, N.Y.

Shafique Ahmed

52

Floral Park, N.Y.

Habib Chaudhry

45

Valley Stream, N.Y.

Raghbir Singh

57

Hicksville, N.Y.

Muhammad Naveed

35

Flushing, N.Y.

Khawaja Ikram

40

Staten Island, N.Y.

Nasreen Akhtar

37

Jersey City, N.J.

Mohammad Khan

48

Staten Island, N.Y.

Azhar Ikram

39

Howard Beach, N.Y.

Shahid Raza, a/k/a “Abid Mian”

44

Valley Stream, N.Y.

Vernina Adams

31

Philadelphia, Pa.

Sat Verma

60

Iselin, N.J.

Vijay Verma

45

Iselin, N.J.

Tarsem Lal

74

Iselin, N.J.

Vinod Dadlani

49

Lyndhurst, N.J.

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Qureshi, Babar, et al., Complaint

NEWARK, N.J. – A New York man today admitted his role in a large scale and sophisticated identity theft scheme, U.S. Attorney Paul J. Fishman announced.

Young-Woo Ji, 38, Bayside, N.Y., pleaded guilty before U.S. District Judge Katharine S. Hayden to an Information charging him with conspiracy to commit wire fraud affecting financial institutions and bank fraud, aggravated identity theft and false claims. He was arrested on Sept. 16, 2010 and released on a $250,000 bail.

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

Ji conspired with Sang-Hyun Park, a/k/a “Jimmy,” and others to defraud banks, credit card companies, and other lenders. Ji admitted that in February 2008, he traveled to Illinois and used a Social Security card, beginning with the prefix “586” and belonging to a person with the initials F.C., to fraudulently obtain a driver’s licenses. These “586” Social Security cards were issued by the United States to individuals, usually from China, who were employed in American territories, such as Guam. Park is alleged to have been the leader of a criminal organization headquartered in Bergen County, N.J. that obtained, brokered, and sold identity documents to customers for the purpose of committing credit card fraud, bank fraud, tax fraud, and other crimes. Park pleaded guilty on Jan. 9, 2012, to his role in the enterprise and is awaiting sentencing.

The Park Criminal Enterprise engaged in the fraudulent “build up” of credit scores associated with the Chinese identities. They did so by adding the Chinese identity as an authorized user to the credit card accounts of various conspirators who received a fee for this service – members of the enterprise’s credit build-up teams. By attaching the Chinese identities to these existing credit card accounts, the teams increased the credit scores associated with the Chinese identities to between 700 and 800. The members of the build-up teams knew neither the real person to whom the identity belonged nor virtually any of the customers who had purchased the identities.

After building up the credit scores associated with these identities, Park and his conspirators directed, coached, and assisted his customers to open bank accounts and obtain credit cards. Park and his conspirators then used these accounts and credit cards to commit fraud. Park relied on several collusive merchants who possessed credit card processing, or swipe, machines. For a fee, known as a “kkang fee,” these collusive merchants charged the fraudulently obtained credit cards, although no transaction took place. After receiving the money into their merchant accounts from the credit card elated to these fraudulent transactions, the collusive merchants gave the money to Park and his conspirators, minus their “kkang fee.”

Ji admitted that he used the F.C. identity to fraudulently obtain credit cards. He then used these credit cards, in the name of F.C., to fraudulently build up credit scores and credit histories for Park’s customers who had obtained “586” identities from the Park Criminal Enterprise.

Ji also admitted that he used the F.C. identity to establish a merchant account for ZZ Entertainment, Inc., a completely fictitious business. By establishing this account, Ji obtained a credit card processing machine and thereafter served as a “collusive merchant” for the Park Criminal Enterprise. Ji acknowledged that between Oct. 5, 2008, and Oct. 20, 2008, he charged $50,000 in fraudulent credit card charges through his ZZ Entertainment Corp. account and then shared portions of this fraud with Park. In total, Ji caused more than $400,000 in financial losses to bank, credit card companies, and others.

Ji admitted that he used the “586” identities that he had obtained from Park to file fraudulent tax returns with the IRS. Ji admitted that he used these identities, together with fraudulent Forms W-2, to claim hundreds of thousands of dollars in tax refunds.

Ji faces the following statutory maximums: 30 years’ in prison on the conspiracy count, two years in prison on the identity theft count and two years on the false claims count. Sentencing is scheduled for May 15, 2013.

U.S. Attorney Fishman praised special agents of the FBI, under the direction of Special Agent in Charge David Velazquez in Newark; IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen; the Department of Homeland Security’s Immigration and Customs Enforcement, under the direction of Special Agent in Charge Andrew M. McLees; and the Bergen County Prosecutor’s Office, under the direction of Prosecutor John L. Molinelli; and the Office’s Chief of Detectives Steven Cucciniello for the investigation leading to today’s plea.

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

As for other members of the Park Criminal Enterprise, 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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Defense Counsel: James K. Grace Esq., Mount Holly, N.J.

Ji, Young-Woo Information

NEWARK, N.J. – A Somerset County, N.J., man pleaded guilty today to one count of securities fraud and one count of money laundering, admitting that he defrauded victims of an investment scheme by misusing their capital contributions and misrepresenting the performance of their investments, U.S. Attorney Paul J. Fishman announced.

David Connolly, 51, of Watchung, N.J., pleaded guilty to Counts One and Ten of a Superseding Indictment before U.S. District Judge William J. Martini in Newark federal court.

Connolly was originally charged by Indictment on May 16, 2012. On Jan. 23, 2013, the grand jury returned a 15-count Superseding Indictment charging Connolly with one count of securities fraud, six counts of mail fraud, two counts of wire fraud, and six counts of money laundering.

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

From at least 2006 through October 2009, Connolly orchestrated a real estate investment fraud scheme in which he took in more than $50 million from more than 200 victims, causing losses of at least $9 million.

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

Connolly took significant portions of his victims’ money, which had been provided for specific real estate transactions, and used it for other purposes, without disclosing the diversions of funds to victims. These included funding unrelated real estate transactions in which Connolly was engaged; paying prior victims; and paying himself. The scheme collapsed in the summer of 2009, after Connolly began to default on the mortgage payments for the investment properties.

Connolly faces a maximum potential penalty of 20 years in prison and a $5 million fine on the securities fraud count and a maximum potential penalty of 10 years in prison and a $250,000 fine on the money laundering charges. He also agreed to forfeit $9.92 million as part of the plea agreement. Sentencing is scheduled for June 4, 2013.

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 indictment. He also thanked special agents of IRS – Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen, for their important contributions to the investigation.

The government is represented by Assistant U.S. Attorney Charlton A. Rugg of the OCDETF Unit and Senior Litigation Counsel Leslie F. Schwartz of the Economic Crimes Unit.

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

This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. 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: Gerald M. Saluti Esq., Newark

Connolly Superseding Indictment

NEWARK, N.J. – A Hudson County, N.J., man who worked as a tax preparer admitted today that he filed falsified returns on behalf of his clients, and also failed to report his own income, U.S. Attorney Paul J. Fishman announced.

Elijah Washington, Jr., of Jersey City, N.J., pleaded guilty before U.S. District Judge Jose L. Linares in Newark federal court to an Indictment charging him with aiding in the preparation of false tax returns and tax evasion. Washington was arrested after preparing a false tax return for an undercover law enforcement agent and was indicted in April 2012 by a federal grand jury.

According to documents filed in this case and statements made in court: In addition to being a public school teacher, Washington owned and operated a tax preparation business – Elijah’s Professional Tax Service – in Jersey City, where he prepared tax returns for tax years 2005 through 2008. He fabricated various items to obtain larger refunds for clients, including tuition and fees deductions, child tax credits, charitable contributions and job expenses. Washington also failed to report his own income on the money he earned from the tax preparation business.

On the tax evasion charges, Washington faces a maximum penalty of five years in prison and a maximum fine of $250,000, or twice the loss sustained by the Government, or twice the gain derived from the offense, whichever is greatest. Sentencing is scheduled for April 24, 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 leading to today’s guilty plea.

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

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Defense counsel: Peter Willis Esq., Jersey City

Washington, Elijah Indictment

NEWARK, N.J. – The owner and president of GAC Consulting Group LLC (“GAC”) today admitted his role in a scheme to defraud at least 17 charities and non-profit organizations, costing them more than $750,000 in losses, U.S. Attorney Paul J. Fishman announced.

Gregory Ciccone, 36, of Woodland Park, N.J., pleaded guilty before U.S. District Judge Katharine S. Hayden in Newark federal court to one count of wire fraud and one count of filing a false tax return. On Oct. 26, 2010, Ciccone was arrested and charged with mail fraud and wire fraud in connection with his charity fraud scheme, which promised high-end prizes that were never delivered.

A Superseding Indictment returned by a federal grand jury on May 15, 2012, charged Ciccone with mail fraud, wire fraud and filing a false 2009 tax return.

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

Ciccone owned and operated GAC, a business which contracted with charities and non-profit organizations and arranged for high-end prizes to be auctioned off to bidders during fund-raising events. They included: a walk-on role on the “Desperate Housewives” television show; tickets to the 2009 Tony Awards; an appearance by “C.A.,” a celebrity who is a cancer survivor; and rounds of golf at the Augusta National Golf Course in Augusta, Ga.

Ciccone convinced the charities and non-profit organizations to pay GAC both an up-front retainer and commission fees based upon his ability to provide certain prizes. Ciccone not only did not deliver the vast majority of the prizes offered to his victims, he never had the ability to do so. From October 2006 through April 2010, Ciccone’s actions caused more than $768,000 in losses to at least 17 different charities and non-profit organizations.

After his Oct. 26, 2010, arrest, Ciccone filed a false 2009 tax return on May 13, 2011, in which he failed to list certain retainer fees and commissions received from his victims, as well as gambling winnings. As part of his plea, Ciccone agreed to pay back $267,778 in criminal forfeiture.

The fraud charges to which Ciccone pleaded guilty are punishable by a maximum penalty of 20 years in prison and a maximum fine of $250,000, or twice the gain or loss caused by the offense; and a maximum penalty of three years in prison and a fine of $100,000 on the tax fraud count. Judge Hayden continued Ciccone’s bail pending sentencing. Sentencing is scheduled for May 14, 2013.

U.S. Attorney Fishman credited special agents with the FBI under the direction of Acting Special Agent in Charge David Velazquez, special agents of the IRS - Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen, and criminal investigators with the U.S. Attorney’s Office’s criminal investigator program, for the investigation leading to the guilty plea.

The government is represented by Assistant U.S. Attorneys Joseph Mack and Kathleen P. O’Leary of the U.S. Attorney’s Healthcare and Government Fraud Unit.

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Defense counsel: Salvatore T. Alfano Esq., Bloomfield, N.J., and Louis C. Esposito Esq., Cedar Grove, N.J.

Ciccone, Gregory Superseding Indictment

TRENTON, N.J. – A physician who wrote illegal prescriptions for oxycodone today admitted his participation in a conspiracy to illegally distribute the medication, and admitted that he distributed it on numerous occasions, U.S. Attorney Paul J. Fishman announced.

Dr. Hassan Lahham, 54, of New York, was charged by Indictment with one count of conspiracy to distribute oxycodone and eleven counts of distribution of oxycodone. He pleaded guilty before U.S. District Judge Freda L. Wolfson in Trenton federal court to Count One of the Indictment, which charges that he conspired to distribute oxycodone.

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

Since January 2009, Lahham issued prescriptions to co-conspirators for drugs containing oxycodone, outside the usual course of medical practice and not for any legitimate medical purpose. The prescriptions were filled at various New Jersey pharmacies located in and around Monmouth, Ocean, and Atlantic counties and redistributed by others. Lahham wrote the prescriptions in exchange for cash payments, and knew the pills were to be redistributed.

Oxycodone, the active ingredient in brand name pills such as Oxycontin, Roxicodone and Percocet, is a Schedule II controlled substance – meaning that it has a high potential for abuse, a currently accepted medical use with severe restrictions, and abuse of the drug may lead to severe psychological or physical dependence.

The charge to which Lahham pleaded guilty is punishable by a maximum potential penalty of 20 years in prison and a $1 million fine. Sentencing is scheduled for May 10, 2013.

U.S. Attorney Fishman credited the Drug Enforcement Administration’s New Jersey Division under the direction of Acting Special Agent in Charge Robert G. Koval, along with the Special Agents, Diversion Investigators, Task Force Officers, Detectives and Intelligence Analysts of the Atlantic City Resident Office; Camden Resident Office Diversion Group; Seaside Heights Police Department; Barnegat Police Department; Ship Bottom Police Department; and the N.J. DEA Tactical Diversion Squad, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorneys R. Joseph Gribko and Fabiana Pierre-Louis of the U.S. Attorney’s Office in Trenton.

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

Lahham Indictment

NEWARK, N.J. – Daisy Deguzman, a New Jersey doctor who practiced in Newark, today was sentenced to six months in prison and six months of home detention for her role in a cash-for-patients scheme with a diagnostic facility in Orange, N.J., U.S. Attorney Paul J. Fishman announced.

Deguzman, 70, of Livingston, N.J., pleaded guilty June 4, 2012, before U.S. District Judge Claire C. Cecchi in Newark federal court to an Information charging her with one count of violating the federal healthcare program anti-kickback statute.

“Patients have every right to expect their doctors will recommend medical service providers because they do the best job, not because they provide the best bribes,” said U.S. Attorney Fishman. “The sentence handed down today shows the federal healthcare system cannot be abused by those practitioners who see a person in need of care as an opportunity to illegally make an extra buck.”

“Buying patient referrals has absolutely no place in a modern health care system,” said Tom O’Donnell, Special Agent in Charge of the U.S. Department of Health and Human Services Office of Inspector General’s region including New Jersey. “The country's taxpayers are fed up with footing the bill for health care fraud, so these criminals can expect to pay the price.”

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

On Dec. 13, 2011, Deguzman was arrested and charged with accepting cash kickback payments from Orange Community MRI (“Orange MRI”), a diagnostic facility, in exchange for her referral of Medicare and Medicaid patients. Twelve other New Jersey doctors and one nurse practitioner were arrested that day and charged in separate Complaints with accepting similar cash kickback payments from Orange MRI. Each defendant was recorded taking envelopes of cash in exchange for their patient referrals. On Dec. 8, 2011, an Orange MRI executive was arrested and charged in a separate Complaint in connection with his participation in the scheme. Deguzman is the first of the defendants to be sentenced.

Starting in at least 2010, Orange MRI began making monthly cash kickback payments to Deguzman in exchange for her referral of patients for diagnostic tests. At the end of each calendar month, individuals at Orange MRI printed Orange MRI patient reports that detailed how many magnetic resonance imagings (“MRIs”) and computed axial tomographies (“CAT Scans”) were referred by Deguzman. These patient reports were used to calculate the kickback payment owed to Deguzman. Pursuant to Deguzman’s agreement with Orange MRI, she was paid kickbacks for each Medicare or Medicaid beneficiary MRI or CAT Scan referred.

Deguzman received three separate payments from a cooperating government witness during the course of the investigation. On Oct. 11, 2011, Deguzman accepted $1,700 in cash for her September 2011 referrals to Orange MRI; she accepted another $1,130 on Nov. 17, 2011 for her October 2011 referrals to Orange MRI, and another $1,000 on Dec. 6, 2011 for her November 2011 referrals to Orange MRI.

In addition to the prison term, Judge Cecchi sentenced Deguzman to two years of supervised release, fined her $20,000 and ordered her to forfeit $23,595.

With respect to the other defendants charged in the investigation: • Jose Castaneda, a nurse practitioner formerly practicing in Newark, pleaded guilty before Judge Cecchi on April 3, 2012, and is scheduled to be sentenced on June 18, 2013.

• Yash Khanna, M.D., a doctor practicing in East Orange, 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, pleaded guilty before Judge Cecchi on May 18, 2012, and is scheduled to be sentenced on Feb. 13, 2013.

• William Lagrada, M.D., another Newark 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 doctor, was indicted on 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 doctor, was indicted on 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 Sept. 19, 2012, and is scheduled to be sentenced on Feb. 26, 2013.

• Ashokkumar Babaria, M.D., a Moorestown 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 physician, pleaded guilty before Judge Cecchi on Oct. 10, 2012, and is scheduled to be sentenced on March 27, 2013.

• Rameshcha Kania, M.D., an East Orange doctor, pleaded guilty before Judge Cecchi on Oct. 12, 2012, and is scheduled to be sentenced Feb. 14, 2013.

• 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.

U.S. Attorney Fishman credited special agents with the Department of Health and Human Services, Office of the Inspector General, under the direction of Special Agent in Charge O’Donnell, with the investigation leading to today’s sentencing.

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

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Defense counsel: Daniel A. Giaquinto Esq., Bridgewater, N.J.

CAMDEN, N.J. – Four individuals from New Jersey were taken into custody today for their alleged roles in a $15 million mortgage fraud scheme on an Indictment returned by a federal grand jury on Jan. 30, 2013, U.S. Attorney Paul J. Fishman announced.

The four defendants are: Fredric M. Diantonio, 40, of Wildwood, N.J.; Louis V. Catarro, 60, of Runnemede, N.J.; Kathryn W. Lockwood, 43, of Wildwood Crest, N.J.; and Thomas E. Morello, 55, of Mt. Laurel, N.J. All defendants were charged with conspiracy to commit wire fraud. Diantonio, Catarro, and Lockwood were also charged with conspiracy to commit money laundering. In addition, Diantonio and Catarro were charged with making false statements to the U.S. Department of Housing and Urban Development. The defendants are expected to appear today before U.S. Magistrate Judge Karen M. Williams in Camden federal court.

According to the Indictment:

Real estate agents Diantonio, Catarro, and Lockwood located properties in Wildwood and North Wildwood, N.J., for sale by real estate developers such as Morello. Diantonio, Catarro, and Lockwood caused real estate sales contracts to be created, which listed deposit monies from buyers that often were not collected. The conspirators also agreed that sellers such as Morello would pay kickbacks to the buyers of the properties without disclosing the kickbacks to the lending institutions funding mortgages used by the buyers to purchase the properties. The conspirators caused fraudulent documents to be signed at real estate closings, including U.S. Department of Housing and Urban Development Settlement Statements, which failed to disclose the kickbacks paid to the buyers or which falsely stated that a deposit toward the purchase of the property had been collected. Diantonio, Catarro, and Lockwood received real estate sales commissions for putting the transactions together.

The wire fraud conspiracy charge is punishable by 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. The false statements charge carries a maximum potential penalty of two years in prison and a $250,000 fine.

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 Velasquez in Newark; special agents from the FBI’s Newtown Square Resident Agency, under the direction of Acting Special Agent in Charge John J. Brosnan in Philadelphia; special agents from IRS – Criminal Investigation in Philadelphia, under the direction of Special Agent in Charge Akeia Conner; and special agents from the Department of Housing and Urban Development Office of Inspector General, under the direction of Special Agent in Charge Joseph Clarke in Philadelphia for the investigation leading to the Indictment and arrests.

The government is represented by R. Stephen Stigall, Attorney in Charge of the U.S. Attorney’s Office in Camden.

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

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Diantonio, Fredric, et al. Indictment

CAMDEN, N.J. – A former National Football League player who formerly resided in Passaic County was sentenced today to seven months in prison for failing to file a federal income tax return, U.S. Attorney Paul J. Fishman announced.

William James, 33, of Brownsville, Pa., formerly known as William J. Peterson, pleaded guilty on May 23, 2012, before U.S. District Court Judge Jerome B Simandle to Count One of a five-count Information. Count One charged James, who formerly resided in Woodland Park, N.J., with having willfully failed to file a tax return for the tax year 2005.

According to documents filed in this case:

James was a professional football player from 2001 to 2010, having played for teams that included the New York Giants and the Philadelphia Eagles. While playing professionally, James earned a substantial income from the NFL teams for which he played. In 2005 his salary was $5.5 million. James was required to file an individual income tax return because his gross income exceeded the sum of the personal and standard deductions available to him that year.

Although he had repeatedly been advised by the IRS and by his personal accountant that he was obligated to file a tax return, James ignored their notices and failed to file a return.

In addition to the prison term, Judge Simandle sentenced James to one year of supervised release. As part of the plea agreement, James has agreed to file back returns and to pay back taxes and penalties, which total $470,254. He has already served four months in custody.

U.S. Attorney Fishman credited 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 sentence.

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

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Defense Counsel: Lori Koch Esq., Assistant Federal Public Defender, Camden

CAMDEN, N.J. – A former Camden police officer was sentenced today to 46 months in prison for conspiring with fellow officers to deprive others of their civil rights, U.S. Attorney Paul J. Fishman announced.

Jason Stetser, 34, of Waterford Township, N.J., previously pleaded guilty before U.S. District Judge Robert B. Kugler in Camden federal court. He admitted he conspired with Antonio Figueroa, 36, of Camden; Dan Morris, 49, of Mount Laurel, N.J.; and Kevin Parry, 32, of Brooklawn, N.J., to deprive others of their due process rights and their right to be free from unreasonable searches and seizures.

“The punishment handed down today is a just response to Jason Stetser’s betrayal of his oath of office,” U.S. Attorney Fishman said. “He also betrayed the trust of those whose rights he violated, the public he was sworn to protect, and all of the honest police officers who risk everything to keep us safe.”

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

From May 2007 to October 2009, while on duty as a uniformed police officer with the Camden Police Department, Stetser engaged in a conspiracy with other Camden Police officers to deprive individuals of their due process rights by charging them with planted evidence; threatening certain individuals with arrest using planted evidence if they did not cooperate with law enforcement; conducting illegal searches without a search warrant or consent; stealing money during illegal searches and arrests; paying for cooperation and information with illegal drugs; failing to report found drugs and stashing them to use as planted evidence; and preparing false police reports or testifying falsely in court to conceal his actions.

In addition to the prison term, Judge Kugler sentenced Stetser to two years of supervised release.

Morris previously pleaded guilty to conspiracy to deprive others of civil rights and was sentenced Dec. 11, 2012, to eight months in prison. Parry was sentenced Oct. 10, 2012, to 20 months in prison. Figueroa was convicted following a three-and-a-half week trial before Judge Kugler and was sentenced on Sept. 7, 2012, to 120 months in prison.

U.S. Attorney Fishman credited special agents of the FBI’s Resident Agency in Cherry Hill, N.J., under the direction of Acting Special Agent in Charge John J. Brosnan; investigators and prosecutors of the Camden County Prosecutor’s Office, under the direction of Prosecutor Warren W. Faulk; deputy attorney generals from the N.J. Attorney General’s Office, Division of Criminal Justice, under the direction of Attorney General Jeffrey Chiesa; and the Camden Police Department, under the direction of Chief John S. Thomson, with the investigation leading to today’s sentence.

The government is represented by Assistant U.S. Attorneys William E. Fitzpatrick and Matthew J. Skahill of the U.S. Attorney’s Office in Camden.

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Defense counsel: Frederick W. Klepp Esq., Cherry Hill, N.J.

NEWARK, N.J. – The owner of a Phillipsburg, N.J., luggage manufacturing company admitted today that he defrauded the Lakeland Bank of Oak Ridge, N.J., of $3 million, U. S. Attorney Paul J. Fishman announced.

Richard Rekuc, 59, of Asbury, N. J., pleaded guilty before U. S. District Judge William J. Martini in Newark federal court to an Information charging him with one count of bank fraud.

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

Rekuc operated a luggage manufacturing company called Royalox International Inc, based in Phillipsburg. Rekuc arranged with Lakeland Bank to obtain a line of credit for Royalox that was based on Royalox’s accounts receivable: the higher Royalox’s sales, the more money it could borrow from the line of credit.

An investigation led by the Federal Deposit Insurance Corporation revealed that between 2004 and December 2009, Rekuc was submitting false invoices and copies of payments to Lakeland so that he could draw on his line of credit. Rekuc first opened fake bank accounts in names very similar to some of the clients with whom Royalox did business. Rekuc moved money from bank accounts he controlled to the fake accounts. He then created fictitious invoices, billed the fictitious “companies,” and made payments from the fake company accounts to Royalox. Rekuc submitted the false invoices and the copies of the payments from the fake company accounts to the Royalox accounts.

These false documents gave Lakeland the impression that Royalox was doing a substantial amount of business and was entitled to draw off the accounts receivable line of credit to cover payments for materials and other expenses. In fact, Rekuc was pocketing the money. Rekuc’s actions caused Lakeland Bank to lose $3 million.

The bank fraud charge to which Rekuc pleaded guilty carries a maximum potential penalty of 30 years in prison and a $1 million fine. Sentencing is set for May 6, 2013.

U.S. Attorney Fishman credited special agents of the Federal Deposit Insurance Corporation under the direction of FDIC-Office of Inspector General, Inspector General Jon. T. Rymer, with the investigation which led to today’s guilty plea.

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

This case was brought in coordination with President Barack Obama’s interagency Financial Fraud Enforcement Task Force, which was established 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.

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Defense counsel: Donald McCauley Esq., Newark, N.J.

Rekuc, Richard Information

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

Teresa Webb, 41, of Plainfield, N.J., pleaded guilty before U.S. District Court Kevin McNulty in Newark federal court to an Information charging her with one count of bank robbery.

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

On July 31, 2012, Claude Williams, 60, of Elizabeth, N.J., was charged by Complaint with six counts of bank robbery and two counts of using a firearm in furtherance of a crime of violence. In the course of those robberies, Williams would generally send an accomplice into the bank to case it shortly before he entered to commit the robbery.

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

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

The bank robbery count to which Webb pleaded guilty is punishable by a maximum potential penalty of 25 years in prison and a $250,000 fine, or twice the gain or loss from the offense. Sentencing is scheduled for May 8, 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 the arrest. He also thanked the Somerset County Prosecutors Office and the Middlesex Borough, Piscataway, Clifton, Metuchen, North Plainfield, and Plainfield Police Departments for their work in this case.

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

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

Webb Information

TRENTON, N.J. – An Ocean County, N.J., woman today admitted concealing from a bankruptcy trustee profits she had made on a Ponzi scheme investment, U.S. Attorney Paul J. Fishman announced.

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

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

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

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

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

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

The count of bankruptcy fraud to which Parise pleaded guilty is punishable by a maximum potential penalty of five years in prison and a fine of $250,000. Sentencing is scheduled for May 10, 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 for the investigation leading to today’s guilty plea.

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

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

Parise Indictment

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.

Eric Reilly, 34, of Galloway, N.J., pleaded guilty to an Information charging him with one count of conspiracy to commit mail and wire fraud. Reilly entered his 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, purported to offer owners of timeshares consulting services, including timeshare cancellation services. In September 2010, Reilly started working at the VO Group and was trained by VO Group managers to call customers using a prepared script and regularly lie to customers. Reilly would call customers and falsely state that he was calling in response to a complaint they had made to timeshare developers and lenders. He gave customers the false impression that he was working for Wyndham Vacation Resorts, a developer of timeshare resorts. Reilly then would falsely represent that the VO Group could pay off the customers’ timeshares or have their timeshares cancelled. Reilly falsely told some customers that their credit would not be damaged if they stopped paying for their timeshares. Reilly gave some customers “references” who were actually VO Group employees posing as satisfied customers. After hearing Reilly’s false representations, some customers sent checks to the VO Group, including one customer who sent the VO Group a $31,385 check. Reilly admitted to causing more than $70,000 in losses.

At 2:00 p.m. today, other former members of the VO Group who were charged in a Superseding Indictment on Jan. 23, 2013, will be arraigned before Judge Hillman.

The mail and wire fraud conspiracy charge to which Reilly pleaded guilty is punishable by a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gain or loss caused by the offense. Sentencing is scheduled for May 17, 2013.

U.S. Attorney Fishman credited special agents from the FBI’s Atlantic City Resident
Agency, under the direction of 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 the investigation leading to today’s guilty plea.

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: Gilbert J. Scutti Esq., Somerdale, Camden, N.J.

NEWARK, N.J. – A Bergen County man today admitted his role in a large-scale and sophisticated identity theft scheme, U.S. Attorney Paul J. Fishman announced.

Sang-Kyu Seo, 63, of Palisades Park, N.J., pleaded guilty before U.S. District Judge Katharine S. Hayden to a five-count Information that charged him with conspiracy to unlawfully produce identification documents and false identification documents (Count One), aggravated identity theft (Count Two), conspiracy to commit wire fraud (Count Three); conspiracy to commit bank fraud (Count Four), and tax evasion (Count Five). He was arrested on Sept. 16, 2010, and released on $250,000 bail.

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

Seo was the owner and operator of Hang Jin Yi Inc., d/b/a Hwangini, a salon located in North Bergen, N.J., and Pier 7 Corporation, a purported small business located in Palisades Park. Seo conspired with Sang-Hyun Park, a/k/a “Jimmy,” and others to obtain a Social Security card beginning with the prefix “586” for another individual. These “586” Social Security cards were issued by the United States to individuals, usually from China, who were employed in American territories, such as Guam. Park is alleged to have been the leader of a criminal organization headquartered in Bergen County, N.J. that obtained, brokered, and sold identity documents to customers for the purpose of committing credit card fraud, bank fraud, tax fraud, and other crimes. Park pleaded guilty on Jan. 9, 2012, to his role in the enterprise and is awaiting sentencing.

The Park Criminal Enterprise engaged in the fraudulent “build up” of credit scores associated with the Chinese identities. They did so by adding the Chinese identity as an authorized user to the credit card accounts of various co-conspirators who received a fee for this service – members of the enterprise’s credit build up teams. By attaching the Chinese identities to these existing credit card accounts, the teams increased the credit scores associated with the Chinese identities to between 700 and 800. The members of the build up teams knew neither the real person to whom the identity belonged nor virtually any of the customers who had purchased the identities.

After building up the credit associated with these identities, Park and his co-conspirators directed, coached, and assisted the customers in opening bank accounts and obtaining credit cards. Park and his co-conspirators then used these accounts and credit cards to commit fraud. In particular, Park relied on several collusive merchants who possessed credit card processing, or swipe, machines. For a fee, known as a “kkang fee,” these collusive merchants charged the fraudulently obtained credit cards, although no transaction took place. After receiving the money into their merchant accounts from the credit cards related to these fraudulent transactions, the collusive merchants gave the money to Park and his co-conspirators, minus their “kkang fee.”

Seo admitted that he obtained a “586” Social Security card and counterfeit driver’s licenses through Park for a family member, who then used this identity to “bust out” credit cards.

Seo also admitted that he gave his corporate and personal credit cards to Park for the purpose of “busting out” these maxed out credit cards. In furtherance of this conspiracy, Park and his co-conspirators issued worthless checks, drawn on bank accounts that had been established using the “586” identities, as payment toward the balances on Seo’s credit cards. Before the banks and credit card companies realized that these checks were bogus, Park and his co-conspirators charged Seo’s credit cards through collusive merchants or used them to purchase merchandise. On Oct. 3, 2009, Park and Seo spoke over the phone concerning this scheme. During this intercepted call, the following conversation ensued:

Park: You know it. If you don't pay for the debt, the score becomes bad.

Seo: That's right. Anyhow, it was already dropped.

Park: And then, you don't have to worry about if someone will come from a bank.

Seo: Yes, yes. Anyway, later . . . . I will declare Chapter 7 or Chapter 13 bankruptcy.

Seo also admitted that in mid-2007, with the assistance of a loan broker, fraudulently obtained a $100,000 commercial loan on behalf of Pier 7. Seo admitted that he and the loan broker made false statements to obtain the loan, including falsely representing this his business’ annual revenue was approximately $620,000.

Finally, Seo admitted that he committed tax evasion by issuing checks to himself and others, representing income derived through the operation of Hwangini, and then failing to report this income on his personal tax returns. For example, Seo admitted that on or about April 15, 2008, he filed an individual income tax return for tax year 2007. This return declared that his taxable income for calendar year 2007 was approximately $197, and the amount of tax due and owing was approximately $19. Seo admitted that this return failed to include $304,848 in additional taxable income that he had received in 2007, thus having an additional tax of $81,643 due and owing to the United States.

Seo faces the following statutory maximums: 15 years in prison (Count One); two years in prison, mandatory minimum (Count Two); 30 years in prison (Counts Three and Four); and five years in prison (Count Five). Sentencing is scheduled for May 14, 2013.

U.S. Attorney Fishman praised special agents of the FBI, under the direction of Special
Agent in Charge David Velazquez in Newark; IRS – Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen; the Department of Homeland Security’s
Immigration and Customs Enforcement, under the direction of Special Agent in Charge Andrew M. McLees; and the Bergen County Prosecutor’s Office, under the direction of Prosecutor John L. Molinelli and the Office’s Chief of Detectives Steven Cucciniello, for the investigation leading to today’s plea.

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

As for other members of the Park Criminal Enterprise, 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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Defense Counsel: Wanda M. Akin Esq., Newark

Seo Information

CAMDEN, N.J. – An Atlantic County, N.J., man was sentenced today to 151 months in prison for robbing Wells Fargo Bank in Atlantic City, N.J., and Sun National Bank in Ventnor, N.J., on Jan. 12, 2012, U.S. Attorney Paul J. Fishman announced.

Larry Patrick Kearns, 46, of Landisville, N.J., previously pleaded guilty before U.S. District Judge Jerome B. Simandle to an Information charging him with two counts of bank robbery. Judge Simandle imposed the sentence today in Camden federal court.

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

On Jan. 12, 2012, Kearns entered a Wells Fargo Bank in Atlantic City, approached a bank teller, threatened her, and demanded money from her. The bank teller complied with Kearns’ demand, and Kearns fled the bank with the money. Kearns traveled to Margate, N.J., and stole a car, which he used in the robbery of the Sun National Bank in Ventnor that same day. Again, Kearns approached a bank teller, threatened her, and demanded money from her. The bank teller complied and Kearns fled the bank with the money in the stolen car. While fleeing from the robbery, Kearns crashed the stolen car into a tree and was apprehended by police.

In addition to the prison term, Judge Simandle sentenced Kearns to three years of supervised release and ordered him to pay $9,458 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, as well as the Atlantic City Police Department, the Ventnor Police Department, the Margate Police Department and the Atlantic County Prosecutor’s Office for the investigation leading to today’s sentence.

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

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

NEWARK, N.J. – A former International Longshoremen’s Association (“ILA”) member was sentenced to 30 months in prison today for conspiring to extort ILA Local 1235 longshoremen on the New Jersey piers for Christmastime tribute payments, New Jersey U.S. Attorney Paul J. Fishman and Eastern District of New York U.S. Attorney Loretta E. Lynch announced.

Edward Aulisi, 53,of Flemington, N.J., previously pleaded guilty before U.S. District Judge Dennis M. Cavanaugh in Newark federal court to conspiring to extort Christmastime tributes from the ILA Local 1235 members – Count Three of the Second Superseding Indictment against him.

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

Edward Aulisi conspired with his father, Vincent Aulisi – the former President of ILA Local 1235 who succeeded another co-defendant, Albert Cernadas – and Michael Coppola, a Genovese organized crime family captain, in the scheme. Coppola was convicted in July 2009 following a trial in the Eastern District of New York of racketeering and racketeering conspiracy, based in part on acts relating to extortion and wire fraud concerning ILA Local 1235.

Edward Aulisi admitted he participated in telephone calls in furtherance of the extortion conspiracy in March 2007 with Coppola – who was then a fugitive from a New Jersey state murder after having been served with a summons to provide DNA in 1996. Edward Aulisi agreed that he passed information to Coppola on the calls – specifically that Cernadas had told Vincent Aulisi the Christmastime extortion scheme would cease once Cernadas left the presidency, and Vincent Aulisi stated it would continue. Edward Aulisi also admitted Vincent Aulisi had asked him to tell Coppola the Christmastime extortion collections had almost doubled.

Edward Aulisi admitted it had been his intention to deliver Christmastime tribute money extorted from ILA Local 1235 members to Coppola had Coppola not been arrested shortly after the phone calls.

In addition to the prison term, Judge Cavanaugh sentenced Edward Aulisi to two years of supervised release and fined him $10,000.

Coppola is serving a 16-year prison term on his conviction.

U.S. Attorneys Fishman and Lynch credited the FBI in New Jersey and New York and the Department of Labor’s Office of Inspector General with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorneys Jacquelyn M. Kasulis and Jack Dennehy of the U.S. Attorney’s Office, Eastern District of New York, and Assistant U.S. Attorney Anthony Mahajan, of the U.S. Attorney’s Office, District of New Jersey.

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Defense counsel: Robert E. Lytle Esq., Lawrenceville, N.J.

CAMDEN, N.J. – A Newark, N.J., man was convicted by a federal jury today of possession of cocaine and marijuana with intent to distribute, possession of a firearm in furtherance of a drug trafficking offense and unlawful possession of a loaded handgun by a convicted felon, U.S. Attorney Paul J. Fishman announced.

Jimmil Henderson, 29, was convicted of all three counts of a Superseding Indictment following a five-day trial before U.S. District Judge Joseph H. Rodriguez in Camden federal court.

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

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

At sentencing, Henderson faces potential penalties as follows:

∙ Count One (possession with intent to distribute) – maximum of 20 years in prison and a $1 million fine.
∙ Count Two (possession of a firearm in furtherance of a drug trafficking offense) – minimum of 5 years in prison, maximum of life in prison, and a $250,000 fine; sentence to run consecutively to any other sentence
∙ Count Three (unlawful possession of a firearm by a convicted felon) – maximum of 10 years in prison and a $250,000 fine).

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

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

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Defense counsel: Michael Huff Esq., Philadelphia

Henderson Superseding Indictment

NEWARK, N.J. – An Essex County, N.J., man was indicted today by a federal grand jury for using stolen identities to file false tax returns and obtain more than $1 million in tax refund checks, U.S. Attorney Paul J. Fishman announced.

Hakeem Awe, 39, of Irvington, N.J., was previously arrested on a Complaint. He was indicted today on one count of mail fraud, one count of filing false claims to the United States government, and two counts of aggravated identity theft.

According to documents filed in this case and statements made in court: Awe acquired the names, Social Security numbers, and other personally identifying information from identity theft victims, and then used this information to commit a three-part scheme: (1) Awe filed false tax returns, using fictitious financial information to make it appear that the filer was entitled to a tax refund; (2) Awe listed the filer’s address as one of several post office boxes that he controlled in and around New Jersey; (3) Awe received the checks at his post office boxes and then deposited them into bank accounts that he controlled.

On the mail fraud count, Awe faces a maximum sentence of 20 years in prison and a fine that is $250,000 or double the total loss or gain, whichever is greatest.

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

The government is represented by Assistant U.S. Attorneys Andrew J. Bruck of the General Crimes Unit and Jacques S. Pierre of the Special Prosecutions Division, both of the U.S. Attorney’s Office in Newark.

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Defense counsel: Timothy R. Anderson Esq., Red Bank, N.J.

Awe, Hakeem Indictment

NEWARK, N.J. – A Bergen County man admitted today to conspiring with his brother to violate federal election law in connection with contributions to a federal campaign committee, U.S. Attorney Paul J. Fishman announced.                                               
                                                                       
Benedetto Bigica, 45, of Elmwood Park, N.J., pleaded guilty to an Information charging him with one count of conspiring to violate the Federal Election Campaign Act (FECA). Bigica entered his guilty plea before U.S. District Judge Faith S. Hochberg in Newark federal court.

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

From April 2005 to April 2008, Benedetto Bigica conspired with his brother, Joseph Bigica, and others to make $21,400 in illegal contributions to the campaign committee of a federal candidate. Benedetto Bigica agreed to serve as a straw contributor along with two other family members for Joseph Bigica, who then reimbursed them for their contributions to the campaign.

Joseph Bigica previously pleaded guilty to an Information charging him with one count of corruptly interfering with the due administration of the internal revenue laws and one count of conspiring to violate the FECA. On Dec. 11, 2012, Judge Hochberg sentenced Joseph Bigica to 36 months on the tax count and 60 months on the FECA conspiracy, to be served concurrently, and ordered $2,141,836 in restitution. No one associated with the campaign has been accused of any wrongdoing.  

The conspiracy charge to which Benedetto Bigica pleaded is punishable by a maximum potential penalty of five years in prison and up to a $250,000 fine. Sentencing is currently scheduled for May 7, 2013.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Charge David Velazquez in Newark; special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen, and criminal investigators from the U.S. Attorney’s Office in Newark, with the investigation leading to today’s guilty plea.

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

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Defense counsel: Michael Baldassare Esq., Newark

Bigica, Benedetto Information

NEWARK, N.J. – An employee of a global wealth management firm (identified only as “Brokerage Firm A”) was arrested at his home this morning on insider trading charges related to Gilead Sciences Inc.’s $11 billion acquisition of New Jersey-based Pharmasset Inc., New Jersey U.S. Attorney Paul J. Fishman announced.

Kevin Dowd, 37, of Boca Raton, Fla., is charged by criminal Complaint with conspiracy to commit securities fraud. Dowd was arrested this morning by agents of the FBI at his home, and is scheduled to appear this afternoon before U.S. Magistrate Judge William Matthewman in West Palm Beach, Fla., federal court.

According to the Complaint:

Dowd was a registered representative in Brokerage Firm A’s Aventura, Fla., branch office and held the titles of second vice president and financial advisor. He joined the firm in 2005 and worked there through late October 2012. A member of Pharmasset’s board of directors was the Aventura branch’s largest customer, and informed his advisors at the Aventura branch that Pharmasset was in the process of being acquired by a large pharmaceutical company, and that the acquisition price was going to be in the high $130s per share.

At approximately 7:00 a.m. on Monday, Nov. 21, 2011, Gilead publicly announced that it had entered into an agreement with Pharmasset to acquire the company for approximately $11 billion, or $137 per share in cash. The purchase price represented an approximately 89 percent premium over Pharmasset’s closing price of $72.67 on Nov. 18, 2011. In response to the announcement, Pharmasset’s stock price increased to $134.14 per share at the close of trading on Nov. 21, 2011.

On Friday, Nov. 18, 2011, prior to the public announcement of the Pharmasset acquisition, however, Dowd tipped conspirator J.F., a childhood friend, about the impending Pharmasset acquisition. Immediately following the tip, J.F. transferred $196,000 into a brokerage account he controlled that previously had no money in it and that had not been used for months, and purchased approximately $196,000 worth of Pharmasset stock in that account. J.F. also tipped conspirator “E.B.”, who purchased 100 highly speculative “out-of-the-money” call options in Pharmasset within minutes of J.F.’s purchase of Pharmasset stock.

A few minutes after the public announcement of the Pharmasset acquisition, Dowd called J.F. several times. Later that same morning J.F. and E.B. engaged in a series of phone calls, following which they liquidated the positions in Pharmasset they had built the previous Friday. J.F. netted an illegal profit of $163,621 based on Dowd’s tip, and E.B. made an illegal profit of $544,706 from his sale of his Pharmasset options. In exchange for the tip, J.F. gave Dowd a wooden dock for his jet skis and a cashier’s check for $35,000, which was deposited into Dowd’s bank account on Jan. 5, 2012. Dowd used the money for an in-ground pool at his Boca Raton home.

When confronted by FBI agents in July 2012 about his conduct, Dowd admitted that he told J.F., but falsely stated that he had never received information that Pharmasset was going to be acquired by another pharmaceutical company.

The conspiracy count with which Dowd is charged is punishable by a maximum potential penalty of five 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, with the ongoing investigation leading to the criminal Complaint. He also thanked the U.S. Securities and Exchange Commission’s Market Abuse Unit and Philadelphia Regional Office, under the direction of Daniel M. Hawke for its assistance.

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

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

Dowd Complaint

CAMDEN, N.J. – A federal grand jury for the District of New Jersey, sitting in Camden, has returned a 44-count Superseding Indictment against six individuals from southern New Jersey and four others for their alleged roles in a $3 million mail and wire fraud conspiracy involving time share mortgages, U.S. Attorney Paul J. Fishman announced today.

The six indicted defendants from New Jersey are: Adam Lacerda, 28, and his wife, Ashley R. Lacerda, 32, of Egg Harbor Township; Ian Resnick, 37, of Absecon; Steven Cox, 48, of Ventnor City; Francis Santore, 52, of Northfield; and Joseph Diventi, 32, of Somers Point.

Also indicted are: Alfred Giordano, 32, of Hurry County, S.C.; Brian Corley, 27, of Little River, S.C.; Joseph Saxon, 38, of St. Thomas, Virgin Islands; and Genevieve Manzoni, 46, of Lake Worth, Fla. The indictment was returned by a federal grand jury on Jan. 23, 2013.

Ian Resnick, Joseph Saxon, and Genevieve Manzoni previously were charged by criminal complaint. Adam Lacerda, Ashley R. Lacerda, Steven Cox, Alfred Giordano, Francis Santore, Brian Corley, and Joseph Diventi previously were indicted on the same charges by a federal grand jury sitting in Trenton on May 3, 2012.

The defendants are expected to be arraigned before U.S. District Judge Noel L. Hillman in Camden federal court in the coming weeks.

According to the Superseding Indictment and the Complaints previously filed:

In July 2010, law enforcement officers commenced an investigation into The Vacation Ownership Group, a/k/a VO Group LLC. The investigation revealed that beginning at least from March 2009 and continuing to Sept. 1, 2011, the defendants through the VO Group participated in a fraudulent scheme in which representatives of the VO Group called owners of timeshare vacation properties purchased from Flagship Resort Development, Wyndham Vacation Resorts Inc., and other timeshare developers and convinced the owners to submit money to the VO Group, purportedly to pay off their “mortgages” on their timeshares. The VO Group claimed that the timeshare owner could pay off the mortgage balance at a substantially reduced amount – often by as much as 50 percent of the amount of the owner’s original mortgage – by mailing payment to the VO Group at a P.O. Box in Pleasantville, N.J. The VO Group representatives also persuaded timeshare owners to send the VO Group money purportedly to have timeshares cancelled or sold. Rather than paying off the timeshare owner’s mortgage, cancelling the owner’s timeshare, or selling the timeshare, the conspirators kept the timeshare owner’s money for their personal use.

The investigation also revealed that in an attempt to cover up the scheme, the conspirators in most cases engaged in a “bait and switch” tactic by purchasing an additional timeshare in the victim’s name without the victim’s knowledge. The victim purportedly had assented to the purchase based on documents the VO Group previously emailed to the victim for signature even though the victim had been led to believe that the victim was simply paying off the victim’s original timeshare mortgage.

According to the Complaint, during the course of the investigation, law enforcement officers interviewed approximately 225 victims of the conspirators’ scheme identified to date. Many of the victims are elderly, causing them to be more vulnerable to the scheme. The Indictment states that law enforcement has determined that the conspirators defrauded the victims of more than $3 million.

The mail and wire fraud conspiracy charge – with which all defendants named in the Superseding Indictment are charged – is punishable by a maximum potential penalty of 20 years in prison and a $250,000 fine. Each additional, substantive charge of mail fraud or wire fraud carries an additional, maximum potential penalty of 20 years in prison and a $250,000 fine. The conspiracy to commit money laundering charge subjects defendants Adam and Ashley Lacerda to an additional, maximum potential penalty of 20 years in prison and a $500,000 fine. Defendants Adam and Ashley Lacerda also face an additional, maximum potential penalty of 10 years in prison for each substantive money laundering count in which they are charged.

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 the investigation leading to today’s Indictment. He also thanked the N.J. Department of Labor, Benefit Payment Control Unit, for its assistance.

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

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

Anyone who believes they are a victim of the fraud should contact the FBI’s Atlantic City Resident Agency at 609-677-6400.

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Defense counsel: Adam Lacerda: Marc Neff Esq., Philadelphia, and Mark E. Cedrone Esq., Philadelphia
Ashley Lacerda: Charles Nugent, Marlton
Ian Resnick: Michael E. Reilly Esq., Philadelphia
Steven Cox: Jeffrey M. Miller Esq., Philadelphia
Alfred Giordano: Martin I. Isenberg Esq., Gibbsboro
Francis Santore: Robert A. Mintz Esq., Philadelphia
Brian Corley: José L. Ongay Esq., Camden
Joseph Saxon: David S. Rudenstein Esq. Philadelphia
Genevieve Manzoni: Ralph A. Jacobs Esq., Philadelphia

Lacerda, Adam and Ashley, et al., Superseding Indictment

NEWARK, N.J. – Nine people involved in a long-running, large-scale mortgage fraud scheme that caused losses of approximately $10 million were charged in two Complaints with conspiracy to commit bank fraud, U.S. Attorney Paul J. Fishman announced.

Jose Luis Salguero Bedoya, also known as Jose Salguero, 36, of Elizabeth and Verona, N.J.; Paul Chemidlin, Jr., 41, of Morganville, N.J.; Delio Coutinho, 50, of Colonia, N.J.; Joseph DiValli, 44, of Jackson, N.J.; Christopher Ju, 26, of East Brunswick, N.J.; Carmine Fusco, 44, of East Hanover, N.J.; Jose Martins, 31, of Newark, N.J.; Yazmin Soto-Cruz, also known as Yazmin Soto, 32, of Elizabeth, N.J.; and Kenneth Sweetman, 32, of Lyndhurst and Nutley, N.J., were arrested this morning by FBI special agents.

Salguero, Chemidlin, Coutinho, DiValli, Ju, Fusco, Martins, Soto, and Sweetman, are scheduled for initial appearances and bail hearings this afternoon before U.S. Magistrate Judge Joseph A. Dickson in Newark.

According to the Complaints:

From March 2008 to July 2012, the defendants engaged in multiple mortgage fraud conspiracies targeting at least 15 properties in and around Newark and Elizabeth, N.J. The defendants mortgage frauds took several forms, including obtaining control of properties through fraudulent “short sale” transactions, short sale flips, and identity theft. They submitted materially false mortgage loan documents to lenders in order to obtain loan proceeds, which the defendants then used for their own financial gain. The defendants also obtained money through various sales to straw buyers.

From March 2008 to June 2010, Salguero, Coutinho, Ju, and Soto conspired with each other and others to release liens on encumbered properties via fraudulently arranged short sale transactions. This allowed the defendants to profit from new fraudulent mortgage loans obtained on the properties from other mortgage lenders. To complete the short sale transactions, the defendants submitted materially false closing and other documents to mortgage lenders. They submitted materially false mortgage loan applications to mortgage lenders to obtain new mortgage loans on properties in and around Elizabeth, New Jersey, including a property on Fulton Street.

From March 2011 to July 2012, Salguero, Chemidlin, DiValli, Fusco, Martins, and Sweetman submitted false mortgage loan applications to mortgage lenders for a property on Smith Street, Elizabeth. The defendants submitted gift letters to mortgage lenders that falsely stated that the borrower was obtaining the funds necessary to close the real estate transaction from a relative or friend in the form of a gift, when the funds used as the borrowers’ down payments were actually provided by Salguero. The defendants also submitted false appraisal reports in order to support inflated property values and therefore obtain mortgage loans in larger amounts. The defendants formed limited liability companies (“LLCs”) in the names of companies similar to those of licensed title companies in order to open bank accounts in the LLC names to conceal the defendants’ identities and to control the receipt and distribution of fraudulently obtained mortgage loan proceeds. They submitted fraudulent documents that misrepresented Salguero’s ownership in various properties and the disposition of mortgage loan proceeds related to various transactions. The defendants then distributed fraudulently obtained mortgage loan proceeds to themselves and others and concealed those distributions by failing to include them on the HUD-1 Settlement Statements.

As a result of the mortgage fraud schemes described in the two Complaints, which involved at least 15 properties, the defendants and others defrauded financial institutions out of approximately $10 million.

The defendants played different roles in the schemes. Salguero was a real estate investor who, along with his girlfriend, Soto, provided much of the funds used by the defendants to perpetuate their fraudulent schemes. Coutinho was a loan officer at a Northern New Jersey mortgage brokerage company; he submitted false documents in support of the schemes. Chemidlin provided fraudulent real estate appraisals for the defendants although he was not a licensed real estate appraiser. DiValli was a loan officer at a Northern New Jersey mortgage brokerage company who also submitted false documents in support of the schemes. Ju negotiated the fraudulent short sale real estate transactions. Fusco and Sweetman conducted fraudulent real estate closings for the defendants although they were not licensed attorneys or title agents. Martins was a bank employee who facilitated certain financial transactions for the defendants.

The criminal Complaints charge each of the defendants with one count of conspiracy to commit bank fraud, which is punishable by a maximum potential penalty of 30 years in prison and a fine of $1,000,000.

U.S. Attorney Fishman credited law enforcement agents of the FBI Newark Mortgage Fraud Task Force for the investigation leading to today’s charges. Specifically, U.S. Attorney Fishman thanked special agents of the FBI, under the direction of Acting Special Agent in Charge David Velazquez, postal inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Maria Kelokates, special agents of the U.S. Housing and Urban Development, Office of Inspector General, Northeast Region of Investigations, under the direction of Special Agent in Charge Cary Rubenstein, special agents of the Federal Housing Finance Agency, Office of Inspector General, under the direction of Inspector General Steve Linick, special agents of the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), under the direction of Special Inspector General Christy Romero, and special agents of IRS–Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen, and the Hudson County Prosecutor’s Office, under the direction of Acting Prosecutor Gaetano Gregory.

The government is represented by Assistant U.S. Attorneys Lakshmi Srinivasan Herman, Aaron Mendelsohn, and Charlton Rugg 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.

The charge and allegations contained in the Complaints against each defendant are merely accusations, and the defendants are considered innocent unless and until proven guilty.

13-038

Coutinho, Delio et al. Complaint
Chemidlin, Pau et al. Complaint

NEWARK, N.J. – The Cooper Health System has agreed with the U.S. Attorney’s Office for the District of New Jersey and the State of New Jersey to pay $12.6 million to settle allegations that it violated the federal False Claims Act and New Jersey False Claims Act by making improper payments to physicians under so-called “consulting” and “compensation” agreements as it sought to build its cardiology program.

U.S. Attorney Paul J. Fishman, Executive Assistant N.J. Attorney General John Hoffman, and Thomas O’Donnell, Special Agent in Charge of the U.S. Department of Health and Human Service's Office of Inspector General region that includes New Jersey, announced the settlement, which was unsealed today.

“Payments to outside physicians by hospitals require heightened scrutiny because those payments may be improper if they are based on patient referrals,” said U.S. Attorney Fishman. “Such kickback arrangements interfere with the physician-patient relationship and can lead to problems of overutilization and increased costs. Federal health care participants, such as Cooper, who run afoul of the prohibitions against kickbacks must be held responsible.”

“Cooper has taken responsibility for its past misconduct,” said Executive Assistant Attorney General Hoffman. Attorney General Jeffrey S. Chiesa is recused from the Cooper matter. “We commend Cooper for implementing substantial internal reforms and accountability measures designed to address the government's concerns and avoid any future transgressions."

“People in Medicare and Medicaid should be confident that health providers are not being inappropriately influenced by financial gain," said Special Agent in Charge O’Donnell. “We will aggressively pursue all those who abuse Federal programs for personal gain.”

According to the results of the joint investigation:

The United States and New Jersey contend that from Oct. 1, 2004, through December 31, 2010, Cooper recruited local outside physicians to serve on the Cooper Heart Institute Advisory Board (“CHIAB”). Physicians were paid approximately $18,000 a year to attend four meetings over the course of any given year. The United States and New Jersey allege that at least one purpose of these payments was to induce the referral of patients to Cooper, that the payments did, in fact, induce such referrals to Cooper, and that Cooper’s subsequent billing of the Medicare and Medicaid programs for services resulting from those tainted referrals were in violation of federal and state anti-kickback and self-referral laws and thus, false claims.

The civil settlement agreement is between (1) the United States of America – acting through the United States Attorney’s Office for the District of New Jersey and on behalf of the Office of Inspector General of the United States Department of Health and Human Services (HHS OIG); (2) the State of New Jersey; and (3) the Cooper Health System. In resolution of the federal and state civil claims, Cooper has agreed to pay $10,200,000 to the United States and $2,300,000 to the State of New Jersey. Cooper has further enacted and agreed to maintain a number of corporate reforms designed to enhance accountability, training, and other aspects of its compliance operations.

The settlement resolves a False Claims Act suit by a physician who was recruited to take part in the CHIAB, but, instead, recognizing its potentially unlawful purpose, demurred and filed a whistleblower – “qui tam” – action. The qui tam provisions of both the federal and state False Claims Acts permit private individuals, known as relators, to file such actions and share in a portion of the proceeds recovered.

U.S. Attorney Fishman credited special agents of HHS OIG, under the direction of Special Agent in Charge O’Donnell, for the investigation leading to today’s settlement. Acting New Jersey Attorney General Hoffman also credited Deputy Attorney’s General Michelle Weiner and Lisa Kutlin for their handling of this matter.

The government is represented by Assistant U.S. Attorney David E. Dauenheimer of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark, and Deputy Attorney General Samuel Cornish of the N.J. Attorney General’s Office

The claims settled by this agreement are allegations only; there have been no admissions of liability.

13-040

Defense counsel: John M. Vazquez Esq., Michael Critchley Sr. Esq., both Roseland, N.J

Cooper Health Settlement Agreement
Cooper, Signed Order

Fakeplastic.net Taken Over By Federal Law Enforcement, Ongoing Investigation Has Led to 11 Additional Arrests

NEWARK, N.J. – Three men who allegedly ran a one-stop online shop selling counterfeit credit cards and holographic overlays, to be used by criminals to make fake identifications, face federal charges in an ongoing investigation that has already resulted in 11 additional arrests, including a customer facing federal charges.

New Jersey U.S. Attorney Paul J. Fishman and U.S. Attorney Anne M. Tompkins for the Western District of North Carolina announced the charges today.

Sean Roberson, 39, of Palm Bay, Fla., who allegedly ran the site, is charged in an amended complaint, unsealed today in the District of New Jersey, with conspiracy to commit wire fraud; conspiracy to traffic in counterfeit goods or services; and conspiracy to commit fraud and related activity in connection with authentication features. A superseding indictment returned today in the Western District of North Carolina charges Roberson’s two conspirators, Vinicio Gonzalez, 30, of Melbourne, Fla., and Hugo Rebaza, 31, of Palm Bay, Fla. with conspiracy to traffic in counterfeit goods and conspiracy to commit mail fraud, wire fraud and bank fraud. The superseding indictment also charges a customer of the website, Nashancy Johnny Colbert, 27, of Charlotte, N.C., with one count of conspiracy to commit mail fraud, wire fraud and bank fraud. All four men are expected to appear this week in U.S. District Courts in Newark and Charlotte to face the charges. Roberson is expected to appear in Newark federal court this afternoon before U.S. Magistrate Judge Mark Falk. The North Carolina court dates have not yet been set.

The FBI and U.S. Postal Inspection Service (USPIS) assumed control of the website, fakeplastic.net, on Dec. 5, 2013, and made more than 30 controlled deliveries of ordered materials – not allowing those materials to leave law enforcement control. Those controlled deliveries have resulted in 11 additional arrests of alleged fakeplastic customers, including Colbert, being handled by federal, state and local prosecutors across the United States.

“According to the complaint, Sean Roberson and his conspirators ran a large-scale, online operation filling custom orders for counterfeit cards,” said U.S. Attorney Fishman. “This made-to-measure service provided the last link in the chain necessary for criminals to make money from stolen credit card numbers and identities.”

U.S. Attorney Tompkins stated, “This ring of computer criminals ran an online one-stop shop where counterfeit credit cards were a mouse click away. As consumer fraud becomes more sophisticated, law enforcement and prosecutors across the country are joining forces to pull aside the veil of cyberspace anonymity and take down criminal enterprises that pilfer the identities of innocent victims for personal gain.”

“This investigation is yet another example of the unrelenting pursuit of cyber criminals by federal law enforcement,” said Newark FBI Special Agent in Charge Aaron T. Ford. “The FBI and its law enforcement partners will continue to identify and investigate individuals that try to hide in the supposed anonymity of Internet crime organizations in order to steal from innocent parties.”

“The defendants in this alleged criminal enterprise used convenience, greed and their technical ability to commit a massive fraud,” USPIS Inspector in Charge Maria L. Kelokates. “Their undoing came when they underestimated the vigilance of Postal Inspectors and their law enforcement partners to bring to justice anyone who uses the U.S. Mail for illegal activities.”

According to the amended complaint unsealed today in Newark federal court and charging documents filed in the Western District of North Carolina:

The FBI and the USPIS have been investigating the online retail shop, fakeplastic.net, since January 2013. The site specialized in selling high-quality, custom-made counterfeit credit and debit cards (collectively, “payment cards”) as well as holographic overlays used to create fake driver’s licenses.

Roberson began selling counterfeit cards and related items as early as April 2011 and launched the fakeplastic website in June 2012. Roberson owned and operated the site with the assistance of Gonzalez and Rebaza. Since April 2011, Roberson and his conspirators fulfilled orders for approximately 69,000 counterfeit credit cards – both embossed and unembossed – more than 35,000 holographic stickers used to make counterfeit cards appear more legitimate and more than 30,000 state identification card holographic overlays. The orders – more than 3,600 parcels – were shipped through the U.S. mail.

Gonzalez was primarily responsible for manufacturing the counterfeit payment cards, packaging the contraband for mailing and placing U.S. Express Mail envelopes in the mail for delivery to the fakeplastic customers. The conspirators used a storage facility in Florida to store supplies and to manufacture the counterfeit payment cards and Gonzalez frequently visited the storage unit to create the custom-embossed cards and to prepare mail packages. Law enforcement arrested Gonzalez on Dec. 4, 2013, while he was in the storage space – seizing computers, printers, counterfeit cards, an embosser and other contraband.

Rebaza was a “runner” for the criminal operation, responsible for picking up packages containing criminal proceeds and supplies from a “mail drop” for the fakeplastic website.

Colbert was a members-only customer of the website, who placed and received orders of counterfeit payment cards delivered to him through the mail. Law enforcement executed a search warrant on Jan. 3, 2014, at Colbert’s Charlotte residence seizing, among other things, 41 counterfeit payment cards embossed with Colbert’s name or the names of other individuals. Law enforcement also recovered a discarded U.S. Express Mail envelope sent from the fakeplastic website.

Using a conservative estimate of loss of $500 associated with each counterfeit payment card (derived from the federal sentencing guidelines estimation of loss associated with stolen payment card information), law enforcement estimates the losses associated with just the counterfeit payment cards trafficked by Roberson and his conspirators at more than $34.5 million. Roberson personally made more than $1.7 million from the scheme.

The fakeplastic website was used by various groups of criminals across the country often referred to as “carding” or “cash out” crews. These crews buy stolen payment card numbers and related information – referred to as “track data” or “dumps” – which typically appear on the magnetic stripe on the back of legitimate payment cards. Illegal vendors of that information usually get it through hacking or skimming operations involving the installation of specialized equipment at ATM locations or point-of-sale terminals. The stolen data is ultimately put on a blank card and used to make unauthorized transactions.

More sophisticated cash out operations use custom-made counterfeit payment cards embossed with the same account numbers that have been encoded on the back of the card, and often acquire fake identification cards in order to reduce the likelihood of detection from law enforcement.

The criminal underground has evolved from fractured, regional operations to an Internet-based market where buyers and sellers across the globe can advertise, purchase and transmit stolen track data. The fakeplastic website brought the physical tools needed by cash out operations to the world of e-commerce, as it eliminated the need for crews to purchase expensive hardware.

By December 2013, the site had more than 400 members. Members with access to the fakeplastic website and seeking to purchase counterfeit payment cards could browse the website’s available counterfeit card templates. Members could then choose whether to input specific information to be embossed on the cards and whether they wanted additional authentication features – such as holographic stickers.

At one time the website accepted Liberty Reserve online currency, but shortly after federal charges against Liberty Reserve were made public in the Southern District of New York in May 2013, the fakeplastic website stopped accepting that currency and began accepting Bitcoin, a cryptographic-based digital currency. As set forth on the site’s “news” section, Bitcoin was viewed as a “safe” and “anonymous” method of payment for contraband.

The maximum potential penalties for each count are as follows:

Defendant

Charge

Maximum Penalty

Conspiracy to commit wire fraud

30 years; $1 million fine or twice the gain or loss from the offense

Gonzalez
Rebaza
Colbert

Conspiracy to commit mail fraud, wire fraud and bank fraud

30 years; $1 million fine or twice the gain or loss from the offense

Roberson
Gonzalez
Rebaza

Conspiracy to traffic in counterfeit goods or services

10 years; $2 million fine or twice the gain or loss from the offense

Roberson

Conspiracy to commit fraud and related activity in connection with authentication features

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

U.S. Attorneys Fishman and Tompkins credited special agents of the FBI, under the direction of Special Agent in Charge Ford in Newark; and inspectors of the USPIS, under the direction of Inspector in Charge Maria L. Kelokates in Newark and Inspector in Charge Keith Fixel in Charlotte, for the ongoing investigation. The Computer Crimes and Intellectual Property Section (CCIPS) of the Justice Department’s Criminal Division is a partner in the prosecution. The U.S. Attorneys also thanked the Charlotte Division of the U.S. Secret Service and Rutherfordton, N.C., Police Department for their vital roles.

The government is represented in the District of New Jersey by Assistant U.S. Attorney Andrew S. Pak of the Computer Hacking and Intellectual Property Section and Assistant U.S. Attorney Andrew Kogan, both of the office’s Economic Crimes Unit, and Barbara Ward of the office’s Asset Forfeiture and money laundering unit; in the Western District of North Carolina by Assistant U.S. Attorney Tom O’Malley and Ben Bain-Creed; and in Washington by CCIPs Trial Attorney Evan Williams.

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

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Defense counsel: Sean Roberson: Assistant Federal Public Defender Patrick McMahon, Esq.
Hugo Rebaza: Jose Rodriguez Esq., Orlando, Fla.
Vinicio Gonzalez: Christopher C. Fialko Esq., Charlotte; Ernest Leo Chang Esq., Melbourne, Fla.
Nashancy Colbert: Laura M. Cobb, James Bradley Smith, Esqs., Charlotte      

Roberson, Sean Complaint                                              

Exhibit A
Exhibit B
Exhibit C
Exhibit D
Exhibit E
Exhibit F
Exhibit G
Exhibit H
Exhibit I
Exhibit J
Exhibit K
Exhibit L
Exhibit M
Exhibit N
Exhibit O

TRENTON, N.J. - A Monmouth County, N.J., man was sentenced today to 78 months in prison for possessing child pornography on his computer, including violent video images, U.S. Attorney Paul J. Fishman announced.

Danial Hillman, 28, of Atlantic Highlands, N.J., previously pleaded guilty before U.S. District Judge Joel A. Pisano to one count of an Indictment charging him with possession of child pornography. Judge Pisano imposed the sentence today in Trenton federal court.

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

As early as Dec. 6, 2010, undercover law enforcement officers downloaded videos and images of child pornography from Hillman on the Internet via peer-to-peer file sharing software.  The images downloaded by federal investigators from Hillman’s shared directories included three videos of three children, all under the age of 12, being sexually abused. Law enforcement officers from the Monmouth County Prosecutor’s Office and the Atlantic Highlands Police Department, who executed a search warrant at Hillman’s home on April 12, 2011, seized multiple computers, one of which contained images depicting child pornography, including sadistic conduct and other violent images involving minors.

U.S. Attorney Fishman praised special agents of the Department of Homeland Security's Immigration and Customs Enforcement, Homeland Security Investigations, in New Jersey under the direction of Special Agent in Charge Andrew M. McLees; the Monmouth County Prosecutor's Office, under the direction of Acting Prosecutor Christopher Gramiccioni; and the Atlantic Highlands Police Department, under the direction of Chief Jerry Vasto, with the investigation leading to today's sentence.               

In addition to the prison term, Judge Pisano sentenced Hillman to five years of supervised release, with computer-use monitoring. He must register as a sex offender.

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

12-036                       

Defense counsel: Charles F. Clark Esq., Freehold, N.J.

NEWARK, N.J. – An Essex County, N.J., man appeared in Newark federal court today in connection with charges arising out of a carjacking that occurred in December 2012 in Union County, U.S. Attorney Paul J. Fishman announced.

Larry Brown, 22, of Newark, is charged by Complaint with one count of theft of a motor vehicle by force, violence, and intimidation, and one count of use of a firearm in furtherance of a crime of violence. The defendant appeared this afternoon before U.S. Magistrate Judge Cathy L. Waldor and was detained.

According to the criminal Complaint:

During the morning of Dec. 26, 2012, Brown approached an individual who was sitting in a parked 2012 BMW X5 in Hillside, N.J. Brown pointed a firearm at the victim, tapped on the vehicle’s window with the gun, and ordered the victim to get out of the car. A second individual robbed the victim of the victim’s personal items. Brown and the other individual then entered the victim’s vehicle and fled the area.

Later that same day, the victim’s vehicle was located in East Orange, N.J., and law enforcement officers observed two individuals, one of whom was Brown, walking away from the carjacked vehicle.

The carjacking count with which Brown is charged is punishable by a maximum potential penalty of 15 years in prison. The charge of use of a firearm in furtherance of a crime of violence is punishable by a maximum potential penalty of life in prison and a mandatory minimum sentence of seven years in prison, which must run consecutively to any other prison term. Each of the two counts also carries a maximum fine of $250,000.

U.S. Attorney Fishman credited special agents of the Department of Homeland Security, Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Andrew M. McLees; the N.J. State Police, under the direction of Col. Rick Fuentes, Superintendent; special agents of the FBI, under the direction of Acting Special Agent in Charge David Velazquez; the Hillside Police Department, under the leadership of Chief Robert B. Quinlan; the East Orange Police Department, under the leadership of Chief William Robinson; and the Union County Prosecutor’s Office, under the direction of Prosecutor Theodore J. Romankow; as well as criminal investigators from the U.S. Attorney’s Office in Newark with the investigation leading to the charges.

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

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

Brown, Larry Complaint

Also Discharged Weapon in Furtherance of a Crime of Violence

TRENTON, N.J. – An Essex County, N.J., man was sentenced to 207 months in prison for federal bank robbery charges and discharge of a firearm in connection with bank robbery, United States Attorney Paul J. Fishman announced.

Maurice Richardson, 43, of Irvington, N.J., was arrested Dec. 1, 2010, by officers of the Old Bridge Police Department. He previously pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton federal court to Counts 12 and 13 of the 13-count Indictment charging him with robbing a Capital One Bank branch and assaulting people during the course of the robbery.

Richardson also admitted nine additional bank robberies, for a total of 10, as follows:

Date

Bank

Location

Commerce Bank

Morris Township, N.J.

May 31, 2008

Commerce Bank

Rahway, N.J.

July 27, 2008

Commerce Bank

Nutley, N.J.

Sept. 28, 2008

Commerce Bank

Nutley, N.J.

April 6, 2009

Capital One Bank

Marlboro, N.J.

Dec. 21, 2009

Capital One Bank

Marlboro, N.J.

July 3, 2010

Capital One Bank

Hasbrouck Heights, N.J.

Aug. 6, 2010

TD Bank

Howell, N.J.

Sept. 1, 2010

Capital One Bank

Paramus, N.J.

Dec. 1, 2010

Capital One Bank

Marlboro, N.J.

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

Richardson entered the banks and gave notes to the tellers, which variously demanded money in large bills, stated that he had a gun, and threatened he would shoot the tellers if they did not comply. Witnesses at some of the robberies observed the defendant leaving the crime scenes in a burgundy SUV.

On Dec. 1, 2010, a Marlboro police officer observed a burgundy Chevrolet Suburban with tinted windows entering Route 9 North from a street adjacent to the Capital One Bank's parking lot. After an approximately one-mile pursuit, the vehicle struck a concrete wall in Sayreville, N.J., and came to a stop. Richardson was apprehended when he got out of the SUV and attempted to flee. A 9 mm bullet was found in the vehicle, and a 9mm handgun was found after a search of the area near where Richardson crashed. It was the third time he had robbed the same bank branch in less than two years.

In addition to the prison term, Judge Sheridan sentenced Richardson fo three years of supervised release and ordered to pay restitution of $50,646.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Charge David Velazquez in Newark with the investigation leading to today’s sentence. He also thanked the Monmouth County Prosecutor's Office, the Old Bridge Police Department, Sayreville, Police Department, Marlboro Police Department, Howell Police Department, Morris Township Police Department, Rahway Police Department, Nutley Police Department, Hasbrouck Heights Police Department and Paramus Police Department for their roles in the investigation.

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

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

NEWARK, N.J. – An Essex County, N.J., man who worked at a facility in Elizabeth, N.J., that manufactured oxycodone was arrested this morning for stealing more than 8,500 pills from the facility, U.S. Attorney Paul J. Fishman announced.

Edwin Hernandez, 48, of Irvington, N.J., was charged by Complaint with possession and distribution of Oxycodone. He was scheduled to make his initial court appearance later today before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court.

According to the Complaint:

Hernandez was previously employed at a company identified as “Company 1,” one of the largest United States manufacturers of oxycodone, at the company’s Elizabeth, N.J., facility. On Nov. 21, 2012, Hernandez was observed by another employee scooping large amounts of 30 mg oxycodone pills into a quart-sized plastic bag. A subsequent search of Hernandez’ locker by security, pursuant to corporate policy, revealed a backpack containing 8,591 30mg oxycodone pills. The street value of the stolen pills ranges from $170,000 to $250,000.

Oxycodone, also known as “oxy,” is a narcotic analgesic or painkiller and is classified as a Schedule II controlled substance. Demand for oxycodone-based prescription pain medication has grown to epidemic proportions in the United States, and dealers profit by selling such medication on the street. Oxycodone-based Schedule II drugs have a high potential for abuse, and users will often crush and snort the pills or dissolve and inject them to get an immediate high. This abuse can lead to addiction and overdose, and, sometimes death.

U.S. Attorney Fishman credited special agents of the Drug Enforcement Administration, under the direction of Acting Special Agent in Charge Robert G. Koval, with the investigation leading to today’s arrest.

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

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

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Defense counsel:

Hernandez, Edwin Complaint

NEWARK, N.J. – A Florida man today admitted his role in conspiring to possess a stolen interstate shipment of prescription respiratory medicine manufactured by a subsidiary of Mylan Inc., that was stolen while on route by tractor-trailer from Texas to a customer in Florida, U.S. Attorney Paul J. Fishman announced.

Reynaldo Tapanes, 46, of Miami, Fla., pleaded guilty before U.S. District Judge William J. Martini to an Information charging him with conspiring to possess the stolen prescription medicine, as well as an additional count of conspiracy to receive and sell stolen L’Oreal hair care products.

On May 3, 2012, Tapanes was charged in a Complaint with conspiracy to deal in stolen goods with Ernesto Romero-Vidal, a/k/a “Bemba,” of Hallandale, Fla.; Rocke R. Lopez-Batista, a/k/a “El Nino;” and Ariel Garcia, of Coral Gables, Fla. Tapanes and Romero-Vidal were charged with conspiracy to receive and sell the stolen L’Oreal hair care products, and Tapanes, Lopez-Batista, and Garcia were charged with conspiracy to possess the stolen Mylan pharmaceuticals. Romero-Vidal and Lopez-Batista were also charged with conspiracy to receive and sell stolen Sandoz prescription respiratory medicine.

Eight other defendants were also charged on May 3, 2012, in two separate Complaints, as part of the same long-term investigation by the FBI into illegal trafficking of pharmaceuticals and other stolen goods.

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

On Sept. 8, 2009, a tractor-trailer containing pharmaceutical products manufactured by a subsidiary of Mylan Inc., was stolen in Tampa. Mylan has estimated the value of the stolen pharmaceuticals – which included Ipratropium Bromide Inhalation and Albuterol Sulfate Inhalation Solutions – to have a wholesale acquisition cost (WAC) of approximately $264,000.

Tapanes admitted that from September 2009 through October 2009, he conspired with others to possess the stolen prescription respiratory medicine. On Oct. 20, 2009, Tapanes and a conspirator delivered samples of the stolen prescription medicine to a confidential source in Elizabeth, N.J. Nine days later, Tapanes and a conspirator delivered a tractor-trailer containing the stolen prescription respiratory medicine to the confidential source. Tapanes admitted that he received a payment. Later that same day of $140,000 in cash at the home of one of the conspirators in payment for the sale and delivery of the stolen prescription respiratory medicine.

Tapanes admitted he conspired with others to receive and sell the stolen L’Oreal hair care products. On Oct. 21, 2009, Tapanes and a conspirator delivered the stolen L’Oreal hair care products to a warehouse in Newark. The products had been shipped from Ohio and were destined for a customer in Florida when they were stolen in Florida in August 2008. L’Oreal has estimated the value of the stolen hair care products – which included shampoo, mousse, and hair color gels – to have a WAC of approximately $330,000. Tapanes also admitted that he and a conspirator received approximately $40,000 in cash from a confidential source in a Toys-R-Us parking lot in North Bergen, N.J., for the sale and delivery of the stolen goods.

The charges against the other defendants remain pending. These charges are merely accusations, and all defendants are considered innocent unless and until proven guilty.

On both of the conspiracy counts, Tapanes faces a maximum potential penalty of five years in prison and a fine of $250,000 on each count. Sentencing is scheduled for April 25, 2013.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Charge David Velazquez; special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen; and detectives of the North Bergen Police Department, under the direction of Chief Robert J. Dowd, for the investigation leading to today’s guilty plea.

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

13-032

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

Tapanes, Reynaldo Information

NEWARK, N.J. – A Hudson County, N.J., man was charged today in an Indictment with one count each of possessing and distributing images of child sex abuse over the Internet, U.S. Attorney Paul J. Fishman announced.

Jonathan Martin, 23, of Jersey City, N.J., and Short Hills, N.J., was previously arrested on a Complaint and is currently in federal custody.

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

On August 7, 2012, special agents of the FBI executed a search warrant at Martin’s Jersey City residence and seized digital evidence containing more than 2000 images depicting child sexual abuse, including prepubescent minors and portrayals of sadistic or masochistic conduct. The digital evidence seized included 50 files previously downloaded from Martin by law enforcement agents working in an undercover capacity on a publicly available peer-to-peer network.

On the distribution count, Martin faces a mandatory minimum penalty of five years in prison, a maximum potential penalty of 20 years, 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, and the Jersey City Police Department, under the direction of Acting Police Director Robert Kakoleski and Chief Thomas Comey with the investigation leading to today’s Indictment.

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

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

Martin, Jonathan Indictment

CAMDEN, N.J. – A former employee of Atlantic County Concrete and Material Co. admitted today evading federal income taxes on nearly $700,000 she received in 2008, U.S. Attorney Paul J. Fishman announced.

Nancy Armienti, 59, of Elmer, N.J., pleaded guilty before U.S. District Court Judge Joseph H. Rodriguez in Camden federal court to an Information charging her with one count of tax evasion.

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

During 2008, Armienti took $589,947 from her employer through cash withdrawals and payments to QVC for items she ordered. Armienti created false business expense records to conceal her receipt of these funds and instructed the company’s bookkeeper to record the cash withdrawals and QVC payments as business expenses. Armienti failed to file a 2008 federal income tax return and failed to pay the IRS the income tax due on the $682,129 in total income she received in 2008.

The tax evasion charge to which Armienti pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gain or loss caused by the offense. Sentencing is currently scheduled for April 23, 2013.

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

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

13-031

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

Armienti, Nancy Information

NEWARK, N.J. – A Hudson County, N.J., pediatrician was arrested at his home this morning for fraudulently billing Medicaid $900,000 for wound-repair treatments on children that were never rendered, U.S. Attorney Paul J. Fishman announced.

Badawy M. Badawy, M.D., 50, of Bayonne, N.J., a licensed pediatrician who owns and operates Sinai Medical Center of Jersey City LLC, a medical practice focusing primarily on pediatrics and family medicine, billed Medicaid thousands of times for nearly $900,000 worth of wound repairs on children and adolescents. He was charged by Complaint with healthcare fraud and is scheduled to make his initial court appearance later today before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court.

According to the Complaint:

From January 2004 through December 2008, Badawy billed Medicaid, through its managed care companies, for certain wound repairs more frequently than any other service provider in the State of New Jersey. His claims for these supposed treatments represented a strong majority of all such claims submitted to Medicaid by all New Jersey medical providers during this time period, including 99.4 percent of all claims for the suturing or stapling of facial wounds larger than 30 centimeters.

Virtually all of these claims, which were submitted for supposed wound repairs on children, were fraudulent. Badawy’s patient charts for a large sample of these children who supposedly received treatment revealed no entry, notation, or other evidence, such as suturing or other closing methods, to support his claims that these procedures were actually performed.

The Complaint also identifies by initials 10 children whom Badawy claimed to have treated for wound repairs on numerous occasions.

∙ From April 2004 through June 2007, Badawy purportedly treated three children on 28 separate occasions for a total of 49 procedures involving some type of wound repair. According to the children’s mother, none of these children has ever had a cut that required stitches or other methods of wound closure.

∙ From March 2006 through February 2007, Badawy submitted eight claims for facial wound repairs, including two 30-centimeter facial wound repairs, on a single teenager during four different visits. According to the teenager, he had never seen Badawy for wounds to his face or other body parts.

∙ From July 2005 through July 2007, Dr. Badawy supposedly performed 15 wound repairs, including six 30-centimeter facial wound repairs, on a boy on eight separate occasions. According to the boy, he was never treated for a cut to his face.

The charge of health care fraud carries a maximum potential penalty of up to 10 years in prison and a maximum fine of $250,000 or twice the gross gain or loss resulting from the crime.

U.S. Attorney Fishman credited special agents of the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Thomas O’Donnell, and the FBI, under the direction of Acting Special Agent in Charge David Velazquez, with the investigation leading to today’s arrest.

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

13-030

Defense counsel: Michael J. Keating Esq., Cranford, N.J.

Badawy Complaint

More than $4M in Cash, 89 Kilograms of Cocaine Seized from Organization

CAMDEN, N.J. – A California man today admitted his role in a drug trafficking organization from which the government has seized $4.6 million and intercepted 89 kilograms of cocaine, U.S. Attorney Paul J. Fishman announced.

Edgar Bracamonte, 39, of California, pleaded guilty before U.S. District Judge Renée Marie Bumb in Camden federal court to an Information charging him with one count of conspiracy to distribute 50 to 150 kilograms of cocaine and with one count of conspiracy to launder narcotics proceeds, U.S. Attorney Fishman announced.

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

Bracamonte was a member of a sophisticated drug trafficking organization (DTO) that was responsible for transporting cocaine from California to New Jersey and elsewhere. In an effort to avoid detection from law enforcement, the cocaine was transported in secret compartments of tractor trailers, including in gas tanks. Once in New Jersey, the cocaine was stored in a warehouse in Passaic County and in “stash houses.” The narcotics proceeds, too, were funneled from New Jersey back to California in hidden compartments of tractor trailers.

From February 2011 through November 2011, law enforcement seized $4.6 million and 89 kilograms of cocaine from the DTO. Fifteen people connected with the DTO have been charged by the U.S. Attorney’s Office, of whom 13 have entered guilty pleas to either conspiracy to distribute narcotics and/or conspiracy to launder money.

The conspiracy to distribute narcotics count to which Bracamonte pleaded guilty is punishable by a mandatory minimum of 10 years in prison, a maximum of life in prison and a fine of $10 million. The conspiracy to launder money count is punishable by a maximum potential penalty of 20 years in prison and a $500,000 fine, or twice the value of the property involved in the transaction, whichever is greater. Sentencing is scheduled for April 26, 2013.

U.S. Attorney Fishman credited special agents and task force officers of the Drug Enforcement Administration, under the direction of Acting Special Agent in Charge Robert G. Koval, with the investigation leading to today’s guilty plea.

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

13-029

Defense counsel: Angel Navarro Esq., Los Angeles, Calif.

Bracamonte, Edgar Information

NEWARK, N.J. – Two Newark, N.J., men are expected to appear in federal court this afternoon after being charged with armed robbery of the Golden Palace jewelry store in Orange, N.J., U.S. Attorney Paul J. Fishman announced.

Charles Madison, 41, and Antonio Moore, 44, both of Newark, N.J., are charged by Complaint with one count of robbery and one count of weapon possession. They will make a court appearance today at 1:30 p.m. before U.S. Magistrate Judge Patty Shwartz in Newark federal court.

According to the Complaint: On August 6, 2012, Madison, Moore, and a co-conspirator agreed to rob the Golden Palace jewelry store. Madison agreed to supply the weapons and serve as the getaway driver, while Moore and the co-conspirator agreed to rob the store at gunpoint. In the early evening of August 6, Moore and the co-conspirator entered the store, pulled stockings over their faces, drew weapons, and demanded that the store’s employees empty all of the jewelry from the display cases.

At one point during the robbery, Moore stated that the employees were taking too long to hand over the jewelry. Moore then approached a 22-year-old female employee and punched her in the head, knocking her against the wall and causing her to collapse to the ground.

After taking approximately $120,000 in jewelry from the store, Moore and the co-conspirator ran into the street and jumped into a white Ford pick-up truck driven by Madison. Approximately one hour later, N.J. State Police pulled over the vehicle on South Orange and Speedway avenues in Newark. All three men were inside. Troopers found dozens of pieces of gold jewelry scattered across the back seat of the car, along with two pairs of stockings and a pair of work gloves. Underneath the car, tucked into the spare tire wheel well, troopers retrieved two firearms, including a semi-automatic handgun with a large-capacity magazine.

If convicted on the robbery charge, both men face maximum sentence of 20 years in prison and a maximum 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, with the investigation leading to today’s Complaint. Fishman also thanked the Orange Police Department and the N.J. State Police for their assistance and cooperation on the investigation.

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

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

13-024

Madison, Charles Et. Al. Complaint

NEWARK, N.J. – One of two Essex County, N.J., men arrested in connection with a gunpoint carjacking in March 2012 is expected to make his initial appearances in court today, U.S. Attorney Paul J. Fishman announced.

Sharod Culp, 19, and Anthony Jefferson, 19, both of Newark, are charged by Complaint with one count of theft of a motor vehicle by force, violence, and intimidation, and one count of use of a firearm in furtherance of a crime of violence. Culp is scheduled to make his initial court appearance this afternoon before U.S. Magistrate Judge Patty Shwartz. Jefferson was arrested in Florida and will make his initial court before U.S. Magistrate Judge Thomas B. McCoun 3rd in Tampa federal court.

According to the Complaint:

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

The carjacking count is punishable by a maximum potential penalty of 15 years in prison. The charge of use of a firearm in furtherance of a crime of violence is punishable by a maximum potential penalty of life in prison and a mandatory minimum sentence of 7 years in prison, which must run consecutively to any other prison term. Each of the two counts also carries a maximum fine of $250,000.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Charge David Velazquez in Newark; the Newark Police Department, under the leadership of Director Samuel A. DeMaio and Chief Sheilah A. Coley; and the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Carolyn A. Murray; as well as criminal investigators from the U.S. Attorney’s Office in Newark with the investigation leading to the 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 charges and allegations contained in the Complaint are merely accusations and the defendants are considered innocent unless and until proven guilty.

13-025

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

Culp, Sharod Et. Al. Complaint

Previously Pleaded Guilty to Conspiracy to Commit Attempted Extortion

NEWARK, N.J. – Former Jersey City Health & Human Services Assistant Director and zoning official Maher A. Khalil was sentenced today to 30 months in prison for conspiring to commit extortion.

Khalil, 42, previously pleaded guilty before U.S. District Judge Jose L. Linares in Newark federal court to an Information charging him with conspiracy to commit extortion under color of official right. Khalil admitted he accepted bribes from a government cooperating witness in return for attempting to obtain real estate development approvals for the cooperating witness, and for facilitating bribe payments to other municipal officials.

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

Between March 2008 and July 2009, Khalil accepted a total of $72,500 in corrupt payments from the cooperating witness, Solomon Dwek, in exchange for his official influence as a Jersey City official in favor of Dwek and for facilitating introductions and corrupt payments to other municipal officials willing to accept corrupt payments for helping Dwek obtain development approvals. Khalil accepted cash bribe payments on numerous occasions in exchange for assistance in obtaining approvals for a property on Garfield Avenue in Jersey City.

Khalil also said he accepted bribe payments from Dwek after arranging meetings between Dwek and various Jersey City municipal officials who, in exchange for corrupt payments, would help Dwek get approvals.

In addition to the prison term, Judge Linares sentenced Khalil to one year of supervised release and ordered him to forfeit $72,500.

U.S. Attorney Fishman credited special agents of the FBI, 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. He also thanked the Monmouth County Prosecutor’s Office, under the direction of Acting Prosecutor Christopher J. Gramiccion, for its role in the investigation.

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

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Defense counsel: Michael F. Pedicini Esq., Morristown, N.J.

Also Convicted of Failing to Pay More Than $250,000 in Taxes

NEWARK, N.J. – A former Citibank employee was convicted today of stealing more than $1.3 million from William Salomon, a 98-year-old former managing partner of Salomon Brothers, which was later acquired by Citibank, U.S. Attorney Paul J. Fishman announced.

Karen Febles, 48, of Wallington, N.J., who worked as an executive assistant for Citibank, helping Salomon with his personal and professional finances, was convicted by a jury of bank fraud, four counts of wire fraud, three counts of money laundering, and two counts of tax evasion, after a one-week trial before U.S. District Judge William J. Martini in Newark federal court.

“Karen Febles took advantage of her position as an executive assistant to loot her employer’s bank accounts of nearly $2 million,” U.S. Attorney Fishman said. “By betraying her employer’s trust, Febles financed a luxurious lifestyle she could not otherwise have afforded. Today’s jury verdict ensures she will soon find out the true cost of her choices.”

Acting Special Agent in Charge of IRS-Criminal Investigation, Newark Field Office, Shantelle P. Kitchen said, “This case shows that the appearance of success can be a mask for a tangled web of financial lies. Today, justice is served as Karen Febles is being held responsible and will now have to face judgment for her criminal conduct.”

Acting Special Agent David Velazquez said: “The FBI remains committed to vigorously investigating individuals who violate positions of trust. Karen Febles took advantage of her unique relationship with her employer in order to fulfill her selfish need for luxurious items and trips. Today’s verdict sends a message to others, in similar positions of trust, that these activities will be fully investigated by the FBI.”

According to documents filed in this case and the evidence at trial: From at least 2000 through September 2011, Febles worked as an executive assistant for Citibank in New York City. Her duties included assisting Salomon with his finances. As part of her employment, Febles had exclusive control over Mr. Salomon’s bank accounts and routinely prepared and negotiated checks on his behalf. Febles was terminated by Citibank in September 2011.

Between 2007 and September 2011, at least $1.3 million of Mr. Salomon’s funds went from his bank accounts directly into Febles’ 21 bank accounts, including two accounts that she maintained for her minor son. A review of hundreds of checks written by Febles revealed that the checks had been altered by Febles – after they had been signed by Mr. Salomon – to add additional sums of money. Once issued, Febles negotiated many of these checks, in cash, for the altered amount.

At the same time that more than $900,000 in checks and almost $400,000 cash went from Mr. Salomon’s bank accounts into Febles’ accounts, Febles spent hundreds of thousands of dollars on luxury purchases. These included, in just a five-month period in 2011, $52,720 in cash for a 2011 Range Rover; $34,650 in cash for a Mercedes-Benz; $43,200 in cash for one year’s rent of a three-bedroom home in Clifton, N.J.; and more than $45,000 in cash for six months’ rent on two apartments in Palisades Park, N.J. Febles’ purchases also included more than $115,000 on vacation and travel expenses; $56,000 rent on a four-bedroom home in Mahwah, N.J.; more than $20,000 on other automobile payments; and more than $20,000 on personal expenses, including entertainment, meals, travel, and clothing. During this time, Febles never earned more than $50,000 per year in take-home pay from Citibank.

In addition to the evidence of Mr. Salomon’s money going into Febles’ bank accounts and the evidence of Febles’ expenditures, the evidence at trial also established that Febles transferred hundreds of thousands of dollars that she stole from Mr. Salomon from her accounts into custodial bank accounts that she maintained for her minor son. The jury found that Febles transferred these funds to her son in order to conceal her bank and wire frauds.

In the tax years 2009 and 2010, Febles failed to disclose to the IRS any of the money that she stole from Mr. Salomon. In those two years, she claimed tax refunds of $14,839 and $9,293, respectively. Had Febles disclosed the money that she stole from Mr. Salomon on her tax returns in 2009 and 2010, she would have owed almost $70,000 to the United States in 2009 and more than $200,000 to the United States in 2010.

The bank fraud count carries a maximum potential penalty of 30 years in prison and a maximum fine of $1 million. Each of the four counts of wire fraud carry a maximum potential penalty of 30 years in prison and a maximum fine of $1 million. Each of the three counts of money laundering carry a maximum potential penalty of 20 years in prison. Each of the two counts of tax evasion carry a maximum potential penalty of five years in prison and a maximum fine of $250,000. Sentencing is scheduled for June 5, 2013.

U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Kitchen in Newark, and special agents of the FBI, under the direction of Acting Special Agent in Charge Velazquez in Newark, with the investigation leading to today’s conviction.

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.

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Defense counsel: Edward J. McQuat and Richard Langweber, New York

CAMDEN, N.J. – A Camden County, N.J., man today admitted selling guns without a license and illegally possessing firearms, U.S. Attorney Paul J. Fishman announced.

Eric J. Reed, 44, of Pennsauken, N.J., pleaded guilty before U.S. District Judge Renée Marie Bumb in Camden federal court to an Information charging him with one count of dealing firearms without a license and one count of transferring a firearm to a previously convicted felon.

According to documents filed in this case and statements made in court: Between May 2012 and August 15, 2012, Reed bought 14 firearms from Pennsylvania gun shops and gun shows, which he then transferred for resale to his nephew, Ammie Steward, a/k/a “Beav,” a/k/a “B,” 37, of Pennsauken, a previously convicted felon who served a substantial prison term for manslaughter. Steward then resold the firearms.

Reed purchased the firearms in Pennsylvania after fraudulently obtaining a Pennsylvania driver’s license. The 14 firearms included five pistols, seven handguns, and two rifles. Steward sold them to a witness cooperating with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). Reed also admitted to using a power tool to obliterate the serial numbers on the 14 guns. A number of the firearms were sold along with ammunition magazines, and seven of the guns were sold along with high-capacity magazines. On at least one occasion, Reed purchased and gave to Steward for resale a firearm (a Kel Tec PLR-16 .223-cal. pistol) along with a box of ammunition. On a separate occasion, Reed purchased and then transferred to Steward for resale a rifle that contained a bayonet. All 14 weapons are now in the custody of law enforcement.

On Dec. 19, 2012, Steward, pleaded guilty before Judge Bumb to one count of dealing firearms without a license and one count of possession of a firearm by a previously convicted felon. He is scheduled to be sentenced March 25, 2013.

The illegal dealing count to which Reed pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine; the transfer of a firearm to a previously convicted felon charge carries a maximum potential penalty of 10 years in prison and a $250,000 fine. Sentencing is scheduled for April 22, 2013.

U.S. Attorney Fishman credited special agents of the ATF, under the direction of Acting Special Agent in Charge Donald J. Soranno, with the investigation leading to today’s guilty plea. He also thanked the Pennsauken Police Department, under the direction of Chief John J. Coffey.

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

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Defense counsel: Maggie Moy, Esq., Assistant Federal Public Defender

Reed Information

TRENTON, N.J. – An Ocean County, N.J., man today admitted using a computer in his home to distribute images of child pornography, including images of infants, U.S. Attorney Paul J. Fishman announced.

Arthur Frazer Jr., 34, of Lanoka Harbor, N.J., pleaded guilty today before U.S. District Judge Joel A. Pisano in Trenton federal court to an Information charging him with one count of distribution of child pornography.

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

Frazer admitted distributing images of infant child pornography via email using a computer located in his residence in December 2010. He also admitted to possessing more than 600 images of child pornography on his computer and accessories, which were seized from his residence in February 2012. Frazer acknowledged that among the images of child pornography he possessed and distributed were images which depicted minors engaging in sexually explicit conduct with other minors and adults, including material portraying sadistic or masochistic conduct or other depictions of violence. Frazer was previously charged by Complaint with distribution of child pornography in February 2012 and has been in custody since his arrest.

The count to which Frazer pleaded guilty carries a mandatory minimum penalty of five years in prison, a maximum potential penalty of 20 years in prison, followed by a mandatory minimum of five years supervised release, and a $250,000 fine. Sentencing is scheduled for April 30, 2013.

U.S. Attorney Fishman credited special agents of the FBI’s Cyber Crimes Squad assigned to Innocent Images, under the direction of Acting Special Agent in Charge David Velazquez in Newark, with the investigation leading to the guilty plea.

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

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Defense Counsel: Andrea Bergman Esq., Assistant Federal Public Defender, Trenton

Frazer Information

CAMDEN, N.J. – A Bergen County, N.J., man was sentenced today to three years of probation, including six months of home confinement, for conspiring to violate the federal Clean Air Act by improperly removing asbestos from a building, U.S. Attorney Paul J. Fishman announced.

Vele Bozinoski, 61, of Elmwood Park, N.J., previously pleaded guilty before U.S. District Judge Noel L. Hillman to an Indictment charging him with violating the Clean Air Act’s asbestos work practice standards and with conspiring with others to commit that offense. Judge Hillman imposed the sentence today in Camden federal court.

According to documents filed in the case and statements made in court: In February 2007, Bozinoski hired workers to remove insulation at the former Garden State Paper Mill, a facility that contained more than 160 linear feet of asbestos-containing material. Bozinoski conspired with others to fail to thoroughly inspect the facility for the presence of asbestos or to notify the Environmental Protection Agency of the presence of asbestos, prior to commencing insulation removal, as was required by federal law. Bozinoski also conspired with others to fail to ensure that material containing asbestos was wet prior to stripping it off pipes and other facility components or to seal asbestos-containing material in leak-tight containers until it was collected for disposal.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Charge David Velazquez; and special agents of the U.S. Environmental Protection Agency, Criminal Investigation Division, under the direction of Special Agent in Charge William V. Lometti, with the investigation leading to today’s sentence.

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

13-021

Defense counsel: Lori M. Koch Esq., Assistant Federal Public Defender, Newark

NEWARK, N.J. – A Bergen County, N.J., man was convicted today of two counts of distribution of child pornography, two counts of receipt of child pornography and one count of possession of child pornography, U.S. Attorney Paul J. Fishman announced.

The jury returned the guilty verdict against Martin J. Villalobos, 41, of Lodi, N.J., following a one-week trial before U.S. District Judge Stanley R. Chesler in Newark federal court.

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

As part of an undercover investigation, special agents of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations discovered an individual sharing images of child pornography over the internet. Agents used the IP address of the computer to identify Villalobos as the individual sharing the child pornography. After obtaining a search warrant, agents found Villalobos in a locked bedroom with eight computer hard drives, more than 100 DVDs and other electronic media. A forensic analysis of the materials found in Villalobos’s bedroom revealed that he was in possession of more than 5,000 photographs and more than 150 videos of minors and prepubescent minors, nude and/or engaged in sexual acts with one another and with adults. Other evidence found in Villalobos’s possession showed that he routinely used the internet to solicit, receive and distribute child pornography.

The receipt and distribution counts each carry a minimum penalty of five years in prison and a maximum penalty of 20 years in prison. The possession count carries a maximum penalty of 10 years in prison. Sentencing is scheduled for April 11, 2013.

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

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

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Defense counsel: Pro se

NEWARK, N.J. – A Newark man was sentenced today to 150 months in prison for his role in an April 2011 carjacking of a victim at gunpoint in Elizabeth, N.J., U.S. Attorney Paul J. Fishman announced.

Jirrod Parker, 25, previously pleaded guilty before U.S. District Judge Susan D. Wigenton to an Indictment charging him with one count each of theft of a motor vehicle by force, violence and intimidation; use of a firearm in furtherance of a crime of violence; and being a felon in possession of a firearm. Judge Wigenton imposed the sentence today in Newark federal court.

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

On April 10, 2011, Parker approached an individual who was walking toward his parked Lexus. Parker pointed a semi-automatic pistol at the individual’s chest and demanded “everything,” including the victim’s car keys and wallet. Parker then drove off in the victim’s Lexus sedan. Shortly thereafter, Parker crashed the stolen Lexus during pursuit by the Elizabeth Police, and fled on foot through a residential area, with a police officer giving chase. Parker attempted to evade the police by breaking into a home, but was apprehended in front of the residence.

In addition to the prison term, Judge Wigenton sentenced Parker to three years of supervised release and ordered him to pay restitution of $7,867.

U.S. Attorney Fishman credited special agents of the FBI’s Violent Crimes/Fugitive Task Force, under the direction of Special Agent in Charge David Velazquez in Newark; the Elizabeth Police Department, under the leadership of Police Director James Cosgrove; and the Union County Prosecutor’s Office, under the direction of Prosecutor Theodore J. Romankow, with the investigation leading to today’s sentence. This case was brought as part of a cooperative effort between federal, state, county and local law enforcement to address a spike in carjacking and related crimes in northern New Jersey.

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: Thomas Ashley Esq., Newark

CAMDEN, N.J. – A Monmouth County man who owned several air conditioning businesses was sentenced today to five months in prison and five months house arrest for evading payment of taxes and penalties over several years, U.S. Attorney Paul J. Fishman announced.

Mark Trawinski, 59, of Morganville, N.J., previously pleaded guilty before U.S. District Judge Joseph H. Rodriguez to an Information charging him with willfully attempting to evade payments of accrued employer’s quarterly federal taxes and the associated trust fund recovery penalties. Judge Rodriguez imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court: Trawinski owned and operated three heating and air conditioning businesses: Air Joy Service, Heating and Cooling Corp.; Air Joy Service Inc.; and Air Joy Sheet Metal. As the owner of those companies, Trawinski was required to report the employment taxes for all his employees to the IRS by filing IRS Form 941. Trawinski was also required to pay to the IRS the employment taxes for his employees on a quarterly basis. For various tax quarters ending between March 31, 2002, and Sept. 30, 2007, Trawinski filed Forms 941 for his various businesses, but did not pay the employment tax liabilities reported.

At various times between 2006 and 2008, the IRS assessed $713,759 in Trust Fund Recovery Penalties against Trawinski for the previously assessed employment tax liabilities and started collection actions against him. In 2005, Trawinski purchased a vacation home in Port Orange, Fla., for $1 million, although he caused the deed and mortgage to be placed in his mother’s name. Between 2005 and 2010, Trawinski made $544,673 in mortgage payments with checks drawn on the heating and air conditioning businesses’ bank accounts and other accounts.

In 2007, Trawinski filed a bankruptcy petition in an attempt to have his debts discharged. During the bankruptcy proceeding, he failed to list the Florida vacation home as an asset on his bankruptcy petition.

In June 2009, the Small Business/Self Employment Collections Division of IRS levied several of Trawinski’s bank accounts to recoup the trust fund recovery penalty. In November 2009, Trawinski met with an IRS agent and submitted a Collection Information Statement for Wage Earners and Self-Employed Individuals, which was signed under penalty of perjury. He failed to disclose his ownership of the Florida vacation home. Trawinski also falsely told the agent that his son ran the heating and cooling business even though his son had no experience in the business. Trawinski further said he was not receiving a salary and that he had no assets or income of any kind.

In addition to the prison term, Judge Rodriguez sentenced Trawinski to three years of supervised release and ordered him to pay restitution of $713,759 to the IRS.

U.S. Attorney Fishman credited 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 sentence.

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

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Defense attorney: Michael Mattaliano Esq., Hackensack, N.J.

Was Free on Bail Pending State Murder Charges at the Time

CAMDEN, N.J. – A Camden County, N.J. man today admitted attempting to purchase 13 kilograms of cocaine for distribution in and through New Jersey, U.S. Attorney Paul J. Fishman announced.

Jamal Herrin, 40, pleaded guilty before U.S. District Judge Joseph H. Rodriguez to an Information charging him with one count of knowingly and intentionally conspiring to distribute and possess with intent to distribute more than five kilograms of cocaine.

According to documents filed in this case and statements made in court: The investigation into Herrin began in April 2012, when the U.S. Drug Enforcement Administration learned that Herrin – who was on bail pending state murder charges – was interested in purchasing large quantities of cocaine. Herrin admitted that he negotiated the purchase of 13 kilograms of cocaine and amassed more than $325,000 to purchase the cocaine.

Herrin faces a mandatory minimum term of 10 years in prison and a maximum potential penalty of life in prison, and a $10 million fine. Sentencing is scheduled for April 15, 2013.

U.S. Attorney Fishman credited special agents of the Drug Enforcement Administration’s Camden Resident Office, under the direction of Acting Special Agent in Charge Robert G. Koval in Newark; the Camden County Prosecutor’s Office; the Rowan University Police Department; the Winslow Township Police Department; the Gloucester County Prosecutor’s Office; and local law enforcement agencies in support of the Camden division of the Philadelphia-Camden High Intensity Drug Trafficking Areas task force.

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

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Defense counsel: Brian J. McMonagle Esq., Philadelphia

Herrin Information

NEWARK, N.J. – A Newark man with prior felony convictions was sentenced today to 66 months in prison for unlawfully possessing a semiautomatic pistol, U.S. Attorney Paul J. Fishman announced.

Clarence Noel, 50, previously pleaded guilty before U.S. District Judge William H. Walls to an Information charging him with being a felon in possession of a firearm. Judge Walls imposed the sentence today in Newark federal court.

According to documents filed in the case and statements made in court: On Sept. 24, 2011, Noel knowingly possessed a .45 caliber Smith & Wesson Chief’s Special, model CS45, in Newark. Noel was found with the pistol after previous felony convictions.

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

U.S. Attorney Fishman credited special agents of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, under the direction of Acting Special Agent in Charge Donald J. Soranno, with the investigation leading to today’s sentencing. He also thanked the Newark Police Department, the N.J. State Police and the acting Essex County Prosecutor’s Office, for their important roles in the investigation.

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

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

CAMDEN, N.J. – A former Pennsville, N.J., police officer today admitted obstructing the FBI’s investigation of his alleged possession of child pornography, U.S. Attorney Paul J. Fishman announced.

Robert Waterman, 31, of Wrightstown, N.J., pleaded guilty today before U.S. District Judge Robert B. Kugler to an Indictment charging him with one count of obstruction of a federal investigation in connection with his destruction of a computer hard drive.

According to the Indictment and statements made in court:

Waterman was formerly a police officer with the Pennsville Police Department. On March 4, 2010, while he was still a member of that department, FBI special agents told Waterman that he was being investigated for alleged possession of child pornography. During the plea hearing, Waterman admitted that following this interview with the FBI, he located a hard drive in his garage and placed it in his patrol car. Waterman admitted that he then broke apart the hard drive’s green printed circuit board into small pieces while in his patrol car at the police department. Waterman admitted he did this to obstruct the FBI’s investigation.

The obstruction count to which Waterman pleaded guilty is punishable by a maximum potential penalty of 20 years in prison and a fine of $250,000. Sentencing is scheduled sentencing for April 18, 2013. Waterman remains released on a personal recognizance bond of $100,000.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge John Brosnan in Philadelphia with the investigation leading to today’s guilty plea. Fishman also thanked the Salem County Prosecutor’s Office, under the direction of Prosecutor John T. Lenahan, and officers of the Pennsville Police Department, for their cooperation and assistance with the investigation.

The government is represented by Assistant U.S. Attorneys Matthew J. Skahill and Amy Luria of the U.S. Attorney’s Office Special Prosecutions Division.

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

Waterman, Robert Indictment