District of New Jersey

NEWARK, N.J. – Sixteen individuals were charged in connection with a sprawling “grandparent scam” to defraud hundreds of elderly Americans out of millions of dollars, U.S. Attorney Philip R. Sellinger announced today.

Eleven men from the Dominican Republic are charged in a 19-count indictment with mail and wire fraud conspiracy; wire fraud; mail fraud; conspiracy to commit money laundering; and money laundering:

1. *Juan Rafael Parra Arias, aka “Yofre,” 40
2. Nefy Vladimir Parra Arias, aka “Keko,” 39
3. Nelson Rafael Gonzalez Acevedo, aka “Nelson Tech,” 35
4. *Rafael Ambiorix Rodriguez Guzman, aka “Max Morgan,” 59
5. Miguel Angel Fortuna Solano, aka “Botija,” aka “Boti,” 41
6. *Felix Samuel Reynoso Ventura, aka “Fili,” aka “Filly The Kid,” 36
7. Carlos Javier Estevez, 45
8. Louis Junior Serrano Rodriguez, aka “Junior,” 27
9. Miguel Angel Vasquez, aka “Miguel Disla,” 24
10. Jovanni Antonio Rosario Garcia, aka “Porky,” aka “Chop,” 45
11. *Jose Ismael Dilone Rodriguez, 34

12. *denotes in custody

An additional five defendants were charged by complaint with wire fraud conspiracy as part of the same scheme: Endy Jose Torres Moran, 21, of Brooklyn, New York; Ivan Alexander Inoa Suero, 32, of the Bronx, New York; Jhonny Cepeda, 27, and Ramon Hurtado, 43, both of New York; and Yuleisy Roque, 21, of the Bronx.

“As alleged, these 16 defendants preyed upon grandparents’ familial love and devotion, cheating them out of millions of dollars. In this ‘grandparents’ scam,’ the defendants allegedly impersonated grandchildren in distress, claiming, for example, they had been arrested after a car accident involving a pregnant woman who later miscarried, and they needed immediate cash for bail or a lawyer. The panic-stricken grandparents quickly paid—sometimes tens of thousands of dollars. My office is committed to protecting the rights of all victims, and we will relentlessly prosecute those who allegedly target vulnerable seniors to steal their hard-earned savings.”

U.S. Attorney Philip R. Sellinger

“The Justice Department’s Consumer Protection Branch and its law enforcement partners will vigorously pursue individuals who prey on vulnerable and elderly victims through fraudulent schemes,” Deputy Assistant Attorney General Arun Rao of the Justice Department's Civil Division, Consumer Protection Branch said. “We will continue to identify perpetrators of these schemes and prioritize the pursuit of those who deliberately target vulnerable consumers, whether located in the United States or abroad.”

“Today’s announcement stems from the defendants’ alleged heartless targeting of elderly victims who were collectively tricked into handing over millions of dollars,” Department of Homeland Security, Homeland Security Investigations, New York, Acting Special Agent in Charge Darren B. McCormack, said. “For their own selfish gain, these accused individuals threatened innocent Americans’ livelihoods, and robbed them of their precious time and any nest eggs they had secured for themselves. I commend HSI New York’s El Dorado Task Force Cyber Intrusion Group, the U.S. Attorney’s Office for the District of New Jersey, the NYPD, the FBI, the Social Security Office of Inspector General, and HSI Santo Domingo for their outstanding collaboration and coordination. This can truly happen to anybody, and while we will always be there to assist victims, we hope that raising awareness will give these criminal opportunists fewer chances to target the public.”

“We allege these scammers created an elaborate scheme revolving around a grandchild reaching out to say they were in trouble, had been arrested, and needed help,” FBI – Newark Special Agent in Charge James E. Dennehy said. “Then to reinforce an immediate need for cash, these fraudsters allegedly posed as attorneys, law enforcement officers and court employees explaining how grandparents can get them money. Even the most jaded and savvy of us out there may pause a moment, thinking that this could actually be real. That’s the insidious nature of this particular fraud, criminals are preying on our instinct to protect our families. We ask anyone who believes they could also be a victim to report it at www.ic3.gov.”

“Fraud targeting the elderly has a uniquely harmful effect on a segment of the population that is often amongst society's most vulnerable,” Bradley Parker, Acting Special Agent in Charge, Social Security Administration (SSA) Office of the Inspector General (OIG), Boston - New York Field Division, said. “SSA OIG is proud to join HSI, the FBI, the Justice Department, and the NYPD in investigating these complex, international scams aimed at defrauding SSA beneficiaries.”

“These charges underscore law enforcement’s commitment to protecting our older population from fraudsters and financial exploitation,” New York Police Department Commissioner Edward A. Caban said. “The crimes outlined here are truly depraved in their nature: targeting our parents and grandparents, aunts and uncles, and others in an elaborate venture to bilk them of their hard-earned savings. I applaud our NYPD investigators and all of our federal partners involved in this important case for their tireless dedication to our shared public safety mission.”

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

Juan Rafael Parra Arias, Nefy Vladimir Parra Arrias, and Gonzalez Acevedo operated a sophisticated network of call centers in the Dominican Republic. Their alleged victims included elderly residents of several states, including New Jersey, New York, Pennsylvania, and Massachusetts. The call centers victimized hundreds of Americans through fraud, stealing millions of dollars.

Members of the conspiracy referred to as “openers” called elderly victims in the United States and impersonated the victims’ children, grandchildren, or other close relatives. The call centers used technology to make it appear that the calls were coming from inside the United States. Typically, the victim was told that their grandchild had been in a car accident, was arrested as a result of the accident, and needed help. 

Once openers duped victims into believing their loved ones were in dire trouble, others working at the call centers, known as “closers,” impersonated defense attorneys, police officers, or court personnel and convinced victims to provide thousands of dollars in cash to help their loved ones. 

Closers, including defendants Rodriguez Guzman, Fortuna Solano, Reynoso Ventura, and Estevez, typically told victims to give the cash to couriers who they sent to victims’ homes to collect their money. Other times, closers instructed victims to send the cash by mail.

Once victims were convinced to give cash, call center “dispatchers,” including Serrano Rodriguez, Vasquez, Rosario Rodriguez, and Dilone Rodriguez recruited and managed a network of U.S.-based couriers to steal cash from the elderly victims across the Northeast.

Those U.S.-based couriers, including the five charged by complaint, typically went to the elderly victims’ home to retrieve the cash, often using false names and providing victims with fake receipts in exchange. The couriers then brought the cash to other members of the conspiracy, who sent the victims’ money back to the Dominican Republic.

Each of the charges in the indictment and complaint carries a maximum potential penalty of up to 20 years in prison. Each of the mail and wire fraud charges also carry a potential fine of up to $250,000; each of the money laundering charges also carry a potential fine of up to $500,000.

U.S. Attorney Sellinger credited special agents and investigators of the Department of Homeland Security, under the direction of Acting Special Agent in Charge McCormack; special agents of the FBI, under the direction of Special Agent in Charge Dennehy in Newark; the Social Security Administration, Office of the Inspector General, New York / Boston Field Division, under the direction of Acting Special Agent-in-Charge Bradley Parker; and the New York Police Department, under the direction of Commissioner Caban, with the investigation leading to the charges. He also thanked the Justice Department’s Office of International Affairs.

The government is represented by Assistant U.S. Attorney Carolyn Silane of the Economic Crimes Unit in Newark, and Jason Feldman, Joshua Ferrentino, and Emily Powers of the Department of Justice, Consumer Protection Branch in Washington, D.C.

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

Video press statement: Grandparents Scam press statement - YouTube

usattorney_remarks.pdf grandparents.indictment.pdf

WASHINGTON – Sixteen individuals were charged in connection with a sprawling “grandparent scam” to defraud elderly Americans out of millions of dollars, the Justice Department announced today during a virtual announcement. 

Eleven men from the Dominican Republic are charged in a 19-count indictment with mail and wire fraud conspiracy, wire fraud, mail fraud, conspiracy to commit money laundering and money laundering:

• Juan Rafael Parra Arias, also known as Yofre, 41;
• Nefy Vladimir Parra Arias, also known as Keko, 39;
• Nelson Rafael Gonzalez Acevedo, also known as Nelson Tech, 35;
• Rafael Ambiorix Rodriguez Guzman, also known as Max Morgan, 59;
• Miguel Angel Fortuna Solano, also known as Botija, and Boti, 41;
• Felix Samuel Reynoso Ventura, also known as Fili, and Filly The Kid, 37;
• Carlos Javier Estevez, 45;
• Louis Junior Rodriguez Serrano, also known as Junior, 27;
• Miguel Angel Vasquez, also known as Miguel Disla, 24;
• Jovanni Antonio Rosario Garcia, also known as Porky, and Chop, 45; and
• Jose Ismael Dilone Rodriguez, 34

According to the indictment, unsealed yesterday, in Newark, New Jersey, the defendants engaged in a long-running “grandparent” or “family in need of bail” scam against seniors in the United States.  The scam was operated from call centers in the Dominican Republic.

An additional five defendants were charged by complaint with wire fraud conspiracy as part of the same scheme: Endy Jose Torres Moran, 21, of Brooklyn, New York; Ivan Alexander Inoa Suero, 32, of New York City; Jhonny Cepeda, 27, of New York City; Ramon Hurtado, 43, of New York City, and Yuleisy Roque, 21, of the Bronx, New York.  All five of the defendants charged by complaint are alleged to have acted as couriers who picked up cash from defrauded victims in New Jersey, New York and elsewhere.

“The Justice Department’s Consumer Protection Branch and its law enforcement partners will vigorously pursue individuals who prey on vulnerable and elderly victims through fraudulent schemes,” said Deputy Assistant Attorney General Arun G. Rao of the Civil Division. “We will continue to identify perpetrators of these schemes and prioritize the pursuit of those who deliberately target vulnerable consumers, whether located in the United States or abroad.”

“As alleged, these 16 defendants preyed upon grandparents’ familial love and devotion, cheating them out of millions of dollars,” said U.S. Attorney Sellinger for the District of New Jersey. “In this ‘grandparents’ scam,’ the defendants allegedly impersonated grandchildren in distress, claiming, for example, they had been arrested after a car accident involving a pregnant woman who later miscarried, and they needed immediate cash for bail or a lawyer. The panic-stricken grandparents quickly paid — sometimes tens of thousands of dollars. My office is committed to protecting the rights of all victims, and we will relentlessly prosecute those who allegedly target vulnerable seniors to steal their hard-earned savings.”

“Today’s announcement stems from the defendants’s alleged heartless targeting of elderly victims who were collectively tricked into handing over millions of dollars," said Acting Special Agent in Charge Darren B. McCormack of Homeland Security Investigations (HSI) New York. “For their own selfish gain, these accused individuals threatened innocent Americans’ livelihoods and robbed them of their precious time and any nest eggs they had secured for themselves. I commend HSI New York’s El Dorado Task Force Cyber Intrusion Group, the U.S. Attorney’s Office for the District of New Jersey, the NYPD, the FBI, the Social Security Office of Inspector General and HSI Santo Domingo for their outstanding collaboration and coordination. This can truly happen to anybody, and while we will always be there to assist victims, we hope that raising awareness will give these criminal opportunists fewer chances to target the public.”

“Fraud targeting the elderly has a uniquely harmful effect on a segment of the population that is often amongst society's most vulnerable,” said Acting Special Agent in Charge Bradley Parker of the Social Security Administration Office of the Inspector General (SSA-OIG), Boston New York Field Division. “SSA OIG is proud to join HSI, the FBI, the Justice Department and the NYPD in investigating these complex, international scams aimed at defrauding SSA beneficiaries.”

“These charges underscore law enforcement’s commitment to protecting our older population from fraudsters and financial exploitation,” said Commissioner Edward A. Caban of the New York Police Department (NYPD). “The crimes outlined here are truly depraved in their nature: targeting our parents and grandparents, aunts and uncles, and others in an elaborate venture to bilk them of their hard-earned savings. I applaud our NYPD investigators and all of our federal partners involved in this important case for their tireless dedication to our shared public safety mission.”

“The FBI and its partners are deeply committed to keeping our elderly population out of harm’s way,” said Executive Assistant Director Timothy Langan of the FBI’s Criminal, Cyber, Response and Services Branch. “Even when components of these grandparent scams are being perpetuated from beyond our borders, those who engage in illicit activity seeking to defraud the American people can be assured that their actions have consequences. If you or someone you know is a victim of elder fraud, please come forward and report it.”

According to documents filed in this case and statements made in court, Juan Rafael Parra Arias, Nefy Vladimir Parra Arrias and Gonzalez Acevedo operated a sophisticated network of call centers in the Dominican Republic. Their alleged victims included elderly residents of several states, including New Jersey, New York, Pennsylvania and Massachusetts. The call centers victimized hundreds of Americans through fraud, stealing millions of dollars.

Members of the conspiracy referred to as “openers” called elderly victims in the United States and impersonated the victims’ children, grandchildren, or other close relatives. The call centers used technology to make it appear that the calls were coming from inside the United States. Typically, the victim was told that their grandchild had been in a car accident, was arrested in connection with an accident, and needed help. 

Once openers tricked victims into believing their loved ones were in dire trouble, others working at the call centers, known as “closers,” allegedly impersonated defense attorneys, police officers or court personnel and convinced victims to provide thousands of dollars in cash to help their loved ones. 

According to charging documents, closers, including defendants Rodriguez Guzman, Fortuna Solano, Reynoso Ventura and Estevez typically told victims to give the cash to couriers who they sent to victims’ homes to collect their money. Other times, closers instructed victims to send the cash by mail.

Once victims were convinced to give cash, call center “dispatchers,” including Rodriguez Serrano, Vasquez, Rosario Garcia, and Dilone Rodriguez, recruited and managed a network of U.S.-based couriers to obtain cash from the elderly victims across the northeastern United States.

Those U.S.-based couriers, including the five charged by complaint, typically went to the elderly victims’ home to pick up the cash, often using false names and providing victims with fake receipts. The couriers then brought the cash to other members of the conspiracy, who sent the victims’ money to the Dominican Republic.

If convicted, the defendants face a maximum penalty 20 years in prison for each count, a maximum fine of $250,000 for each count of the mail and wire fraud charges and a maximum fine of $500,000 for each count of money laundering.

Deputy Assistant Attorney Rao joined U.S. Attorney Sellinger, Special Agent in Charge James E. Dennehy of the FBI’s Newark Division and Deputy Special Agent in Charge McCormack of Homeland Security Investigations New York made the announcement.

HIS, SSA-OIG, NYPD, and the FBI are investigating the case. The Justice Department’s Office of International Affairs provided significant assistance.

Trial Attorneys Jason Feldman, Joshua Ferrentino and Emily Powers of the Civil Division's Consumer Protection Branch and Assistant U.S. Attorney Carolyn Silane for the District of Jersey are prosecuting the case.

If you or someone you know is age 60 or older and has experienced financial fraud, experienced professionals are standing by at the National Elder Fraud Hotline at 1-833-FRAUD-11 (1-833-372-8311). This Justice Department hotline, managed by the Office for Victims of Crime, can provide personalized support to callers by assessing the needs of the victim and identifying relevant next steps. Case managers will identify appropriate reporting agencies, provide information to callers to assist them in reporting, connect callers directly with appropriate agencies and provide resources and referrals, on a case-by-case basis. Reporting is the first step. Reporting can help authorities identify those who commit fraud and reporting certain financial losses due to fraud as soon as possible can increase the likelihood of recovering losses. The hotline is open Monday through Friday from 10:00 a.m. to 6:00 p.m. ET. English, Spanish, and other languages are available.

More information about the department’s efforts to help American seniors is available at its Elder Justice Initiative webpage. For more information about the Consumer Protection Branch and its enforcement efforts, visit www.justice.gov/civil/consumer-protection-branch. Elder fraud complaints may be filed with the FTC at www.reportfraud.ftc.gov/ or at 877-FTC-HELP. The Justice Department provides a variety of resources relating to elder fraud victimization through its Office for Victims of Crime, which can be reached at www.ovc.gov.

An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

NEWARK N.J. – A Middlesex County, New Jersey, man was sentenced today to 30 months in prison for conspiring to illegally obtain over $400,000 in COVID-19 unemployment benefits, U.S. Attorney Philip R. Sellinger announced.

Christopher Valerio, 33, of Perth Amboy, New Jersey, previously pleaded guilty before U.S. District Judge Robert Kirsch to an information charging him with one count of conspiracy to commit wire fraud. Judge Kirsch imposed the sentence today in Newark federal court.

Valerio’s conspirator, Yanira Abreu of Keasby, New Jersey, pleaded guilty on Sept. 12, 2023, on charges stemming from the same scheme and is scheduled to be sentenced on May 9, 2024. A third conspirator, Jose Tavares of New York, is charged by indictment and his case remains pending.

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

From July 2020 through February 2021, Valerio, Abreu and others submitted false and fraudulent applications for unemployment insurance benefits to the New York Department of Labor (NYDOL) through fictitious online profiles that they created using personally identifiable information, including names, dates of birth, and Social Security numbers, of other individuals without their consent. Once the NYDOL processed and approved the fraudulent applications, Valerio and his conspirators obtained debit cards with illegally obtained funds totaling $444,738, which they used for personal gain. 

In addition to the prison term, Judge Kirsch sentenced Valerio to two years of supervised release and ordered restitution and forfeiture, each in the amount of $444,728.

U.S. Attorney Sellinger credited special agents of Homeland Security Investigations Newark, under the direction of Acting Special Agent in Charge William S. Walker; special agents of the U.S. Department of Labor, Office of Inspector General, Northeast Region, under the direction of Special Agent in Charge Jonathan Mellone, and postal inspectors of the U.S. Postal Inspection Service in Newark, under the direction of Inspector in Charge Christopher A. Nielsen, Philadelphia Division, with the investigation leading to today’s sentencing.  

The District of New Jersey COVID-19 Fraud Enforcement Strike Force is one of five strike forces established throughout the United States by the U.S. Department of Justice to investigate and prosecute COVID-19 fraud. The strike forces focus on large-scale, multi-state pandemic relief fraud perpetrated by criminal organizations and transnational actors. The strike forces are interagency law enforcement efforts, using prosecutor-led and data analyst-driven teams designed to identify and bring to justice those who stole pandemic relief funds.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

The government is represented by Assistant U.S. Attorney Fatime Meka Cano of the Economic Crimes Unit in Newark.

The charges and allegations against Tavares are merely accusations, and Taveras is presumed innocent unless and until proven guilty.

CAMDEN, N.J. – An Atlantic County, New Jersey, man was arrested today for fraudulent acts he committed in connection with COVID-19 relief funds, U.S. Attorney Philip R. Sellinger announced.

Luquay Zahir, 49, of Atlantic City, New Jersey, is charged by complaint with one count of making false statements to influence the U.S. Small Business Administration (SBA) and one count of wire fraud. He is scheduled to make his initial appearance this afternoon before U.S. Magistrate Judge Elizabeth A. Pascal in Camden federal court and was released on $100,000 unsecured bond.   

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

In 2020 and 2021, Zahir, then the Coordinator for the Resident Opportunity and Self Sufficiency (ROSS) grant program for the Atlantic City Housing Authority and Urban Redevelopment Agency, fraudulently obtained more than $30,000 through a Paycheck Protection Program loan and Economic Injury Disaster Loan advance issued under the Coronavirus Aid, Relief, and Economic Security Act. 

The count of making false statements to influence the SBA carries a maximum potential penalty of two years in prison and a maximum fine of $250,000. The count of wire fraud carries a maximum potential penalty of 20 years in prison and a maximum fine of $250,000.

U.S. Attorney Sellinger credited special agents of the FBI Newark Atlantic City Resident Agency under the direction of Special Agent in Charge James E. Dennehy; and special agents of SBA Office of Inspector General’s Eastern Region, under the direction of Special Agent in Charge Amaleka McCall-Braithwaite, with the investigation leading to today’s arrest. 

The government is represented by Assistant U.S. Attorney Eric A. Boden, Attorney-in-Charge of the Trenton Branch Office.

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

zahir.complaint.pdf

CAMDEN, N.J. – A California man today admitted his role in a narcotics conspiracy involving approximately 1.9 kilograms of a substance containing methamphetamine, U.S. Attorney Philip R. Sellinger announced.

Aaron Joseph, 41, of Los Angeles, California, pleaded guilty before U.S. District Judge Renee Marie Bumb in Camden federal court to an information charging conspiracy to possess with intent to distribute methamphetamine.

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

From October 2020 through July 2022, Joseph participated in a conspiracy to distribute methamphetamine. Joseph shipped packages from California to conspirators in Camden County, New Jersey. Joseph’s conspirators then distributed the methamphetamine in southern New Jersey. Joseph received payment via Cash App from a conspirator for the shipments. On Feb. 14, 2022, Joseph shipped a package containing 5,100 pills from California to New Jersey. The pills contained methamphetamine and weighed approximately 1.9 kilograms.

The count of conspiracy to possess with intent to distribute methamphetamine carries a maximum penalty of 30 years in prison and a $1 million fine. Sentencing is scheduled for Sept. 3, 2024.

U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge James E. Dennehy in Newark; special agents of Homeland Security Investigations Newark, under the direction of Acting Special Agent in Charge William S. Walker; and postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Christopher A. Nielsen, Philadelphia Division, with the investigation leading to today’s guilty plea.

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

joseph.information.pdf

NEWARK, N.J. – A Bergen County, New Jersey, man today admitted more than $487,000 in overtime fraud involving projects on which he worked relating to the Hudson Bergen Light Rail (HBLR), U.S. Attorney Philip R. Sellinger announced.

Joseph Ferrara, 56, of North Arlington, New Jersey, pleaded guilty before U.S. District Judge Julien X. Neals in Newark federal court to one count of embezzling, stealing, and obtaining by fraud more than $487,000 of funds belonging to and under the care, custody and control of the HBLR. 

According to the documents filed in this case:

From January 2018 through April 2020, Ferrara submitted fraudulent claims for compensation related to work performed on HBLR projects on which he had worked as an employee of a subcontractor specializing in electrical work. The HBLR maintains approximately two dozen stations throughout Hudson County and serves more than 50,000 passengers each weekday. Ferrara, who supervised numerous workers on HBLR projects, was compensated at a regular rate for normal workday hours, at an elevated overtime rate for work performed during non-regular weekday hours and Saturdays, and at a double time rate for work performed on Sundays.  During a more than two-year period, Ferrara submitted claims for compensation covering hundreds of hours relating to work allegedly performed during regular, overtime and double time hours knowing that he had not actually performed that work for his employer or on HBLR projects. For example, Ferrara admitted that he spent approximately 10 days vacationing in Florida in both late December 2018 and late December 2019 during which he performed no work for his employer or upon HBLR projects. Nevertheless, Ferrara submitted fraudulent claims representing that he had worked more than 200 hours at regular, overtime and double time rates during those periods. In total, Ferrara admitted to receiving $487,899 in compensation for hours during which he performed no work. As part of his plea agreement, Ferrara agreed to forfeit this amount.  

The theft charge is punishable by a maximum potential penalty of 10 years in prison and a maximum $250,000 fine. Sentencing is scheduled for Sept. 5, 2024.

U.S. Attorney Sellinger credited special agents with the FBI, under the direction of Special Agent in Charge James E. Dennehy in Newark, with the investigation leading to the guilty plea.

The government is represented by Assistant U.S. Attorney Mark J. McCarren of the Special Prosecutions Division in Newark.

 

ferrara.information.pdf

CAMDEN, N.J. – An Atlantic County, New Jersey, man was sentenced to 30 months in prison for laundering the proceeds of fraudulently obtained Paycheck Protection Program loans, U.S. Attorney Philip R. Sellinger announced today.

Jeremy Earley, 42, of Egg Harbor Township, New Jersey, and Lilburn, Georgia, pleaded guilty on June 1, 2023, before U.S. District Judge Karen M. Williams to an information charging him with one count of engaging in a monetary transaction in criminally derived property. Judge Williams imposed the sentence on April 29, 2024, in Camden federal court.

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

In 2020 and 2021, two companies owned by Earley received loans totaling more than $1.3 million from the Paycheck Protection Program (PPP), a federal program that provided forgivable loans to small businesses for job retention and certain other expenses. The loans were approved based on fraudulent applications submitted by another individual stating that the companies had dozens of employees and monthly payrolls of $145,000 and $382,400, respectively. The applications also contained forged tax forms. In fact, Earley’s businesses had no employees other than himself and paid minimal to no wages. After receiving the PPP loan proceeds, Earley wrote checks totaling nearly $400,000 to the individual who submitted the loan applications to compensate her for her role in submitting the fraudulent loan applications.  Earley also wired $85,000 of the proceeds out of a bank account he controlled after being advised by federal agents not to spend the money because it constituted proceeds of bank fraud.

In addition to the prison term, Judge Williams sentenced Earley to three years of supervised release.

Rhonda Thomas previously pleaded guilty to bank fraud conspiracy and money laundering and was sentenced to five years in prison.

U.S. Attorney Sellinger credited special agents of the Federal Deposit Insurance Corporation – Office of the Inspector General, under the direction of Patricia Tarasca, Special Agent-in-Charge, New York Regional Office; special agents of the Social Security Administration, Office of the Inspector General, Boston-New York Field Division, under the direction of Acting Special Agent in Charge Bradley Parker; special agents of the FBI’s South Jersey Resident Agency, under the direction of Special Agent in Charge Wayne A. Jacobs in Philadelphia; and special agents of the U.S. Department of Labor, Office of the Inspector General, New York Region, under the direction of Special Agent in Charge Jonathan Mellone, with the investigation leading to the sentencing.

The government is represented by Assistant U.S. Attorney Daniel A. Friedman and Attorney-In-Charge Jason M. Richardson of the U.S. Attorney’s Office’s Criminal Division in Camden.

NEWARK, N.J. – U.S. Attorney Philip R. Sellinger announced today that the District of New Jersey collected a total of $214 million in Fiscal Year 2023. Of this amount, $33.4 million was collected in criminal actions and $13.4 million was collected in civil actions. The district also collected $91 million in cases the office handled jointly with other U.S. Attorney’s Offices and components of the Department of Justice, including $90.9 million in civil actions and $60,851 in criminal actions. In addition, the district recovered $71.5 million in civil bankruptcy proceedings where individuals and businesses owed debts to federal agencies.  And the district, working with partner agencies and divisions, collected $4.7 million in asset forfeiture actions.

“Part of the mission of our office is to ensure that defendants are held financially accountable for their criminal and civil wrongdoing. Our recoveries in fiscal year 2023 demonstrate this commitment. We pursue restitution for victims, ensure that defendants are made to forfeit assets they have accumulated through criminal activity, and recover federal funds obtained through fraud. We also recover debts owed to the United States in bankruptcy.”       

U.S. Attorney Philip R. Sellinger

Significant recoveries included a $14.7 million False Claims Act settlement the District of New Jersey entered into with Biotelemetry Inc. and Lifewatch Services Inc. Both companies were alleged to have knowingly submitted inflated claims for remote cardiac monitoring that were not supported by medical necessity. The district also recovered $4.25 million in an FCA settlement with Watermark Retirement Communities LLC, a senior living facility alleged to have received kickbacks in return for referrals to a nationwide home health agency which previously settled its liability with the government for $17 million. The district’s significant bankruptcy recoveries included over $18 million of delinquent tax debts for the IRS and over $16 million of outstanding commercial loans for the U.S. Small Business Administration.        

The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims Fund, which distributes the funds collected to federal and state victim compensation and victim assistance programs. Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes. Recoveries in bankruptcy are returned to the federal agencies that are creditors in the case.

NEWARK, N.J. – A Virginia man was convicted for possession with intent to distribute fentanyl, U.S. Attorney Philip Sellinger announced today.

Djavon Holland, 37, of Virginia, was convicted on April 15, 2024, by a federal jury of two counts of possession with intent to distribute fentanyl following trial before U.S. District Judge Peter G. Sheridan in Trenton federal court.

According to court documents and evidence presented at trial:

In August 2021, law enforcement officials received information that Holland was engaged in narcotics trafficking in or around the Virginia area and New Jersey. On Aug. 12, 2021, a confidential source working with the Ocean County Prosecutor’s Office contacted Holland to arrange a meeting with a confidential source working with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). On several occasions, Holland drove to New Jersey and sold fentanyl to ATF’s confidential source.

The narcotics offenses each carry a minimum penalty of five years in prison, a maximum potential penalty of 40 years in prison, and a fine of $5 million. Sentencing will be scheduled at a later date.

U.S. Attorney Sellinger credited special agents of the ATF, under the direction of Acting Special Agent in Charge Rossin Marchetti, and the Ocean County Prosecutor’s Office, under the direction of Ocean County Prosecutor Bradley D. Billhimer, with the investigation leading to the conviction.

The government is represented by Assistant U.S. Attorneys Megan N. Linares and Jenny Chung of the Office’s Criminal Division in Newark.

NEWARK, N.J. – A construction company based in South Carolina and its owner entered into a settlement agreement with the United States resolving allegations that the company violated the False Claims Act by taking two Paycheck Protection Program (PPP) loans and an Economic Injury Disaster Loan (EIDL) to which the company was not entitled, U.S. Attorney Philip Sellinger announced today.

Congress created the PPP in March 2020, as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, to provide emergency financial support to the millions of Americans suffering the economic effects caused by the COVID-19 pandemic. The CARES Act authorized billions of dollars in forgivable loans to small businesses struggling to pay employees and other business expenses. The act also authorized EIDL non-forgivable loans to small businesses impacted by the COVID-19.

According to the allegations in the complaint and the contentions of the United States in the settlement agreement:

From June 20, 2020, to Nov. 21, 2021, Dennis Corp., a construction company owned by Daniel R. Dennis III, applied for and received two PPP loans, each for approximately $512,900, and a loan pursuant to the EIDL program, for $500,000. In applying for the loans, Dennis denied having a been convicted of a felony involving fraud within five years of the submitting the loan applications. In fact, in February 2017, Dennis pleaded guilty in U.S. District Court for the Northern District of West Virginia to the felony charge of conspiring to impede the IRS. As a result of Dennis’s false certification on the PPP and EIDL applications, Dennis Corp. received more than $1.5 million in loans to which it was not entitled.

Dennis Corp. and Dennis fully cooperated in the investigation and resolution of this matter. In accordance with the terms of the settlement agreement, Dennis Corp. and Dennis will pay a total of $2.5 million plus interest. The settlement resolves a lawsuit filed under the whistleblower provision of the False Claims Act, which permits private parties, called relators, to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery. In this matter, the relator is receiving $250,180 as his share.

The government is represented by Assistant U.S. Attorney David V. Simunovich of the Health Care Fraud Unit in Newark.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

The qui tam case is captioned United States ex rel. Forsyth v. Dennis Corp. et al., 23-20792 (D.N.J.).

denniscorp.settlement.pdf

NEWARK, N.J. – A Morris County, New Jersey, man, and former general counsel for a large public corporation admitted willfully failing to file federal income tax returns, U.S. Attorney Philip R. Sellinger announced today.

John Goggins, 63, of Chatham, New Jersey, pleaded guilty before U.S. Magistrate Judge André M. Espinosa in Newark federal court on April 25, 2024, to a four-count information charging him with willfully failing to file federal income tax returns for tax years 2018 through 2021.

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

Goggins was a former senior vice-president and general counsel of a large publicly traded corporation. For the years 2018 through 2021, Goggins earned total gross income of $54 million from wages, restricted stock awards, the exercise of annual nonqualified stock options, interest, dividends, and gains from stock sales. Goggins failed to file federal income tax returns for those years.

The willful failure to file tax returns charges each carry a maximum potential penalty of one year in prison and a $100,000 fine, or twice the gross gain or loss from the offense. Any prison sentence imposed on Counts One through Four may run consecutively to each other.  Sentencing is scheduled for Sept. 6, 2024.

U.S. Attorney Sellinger credited IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Jenifer L. Piovesan with the investigation leading to the guitly plea.

The government is represented by Assistant U.S. Attorney Shontae D. Gray of the Economic Crimes Unit in Newark, and Trial Attorney Kenneth Vert of the Justice Department’s Tax Division.

goggins.information.pdf

A federal jury convicted a New Jersey doctor today for causing the submission of over $5.4 million in fraudulent claims to Medicare for orthotic braces ordered through a telemarketing scheme.

According to court documents and evidence presented at trial, Adarsh Gupta, M.D., 51, of Sewell, signed thousands of prescriptions for orthotic braces for over 2,900 Medicare beneficiaries whom he was connected with by telemarketers who convinced the beneficiaries to accept unnecessary braces. After briefly speaking to the beneficiaries over the telephone, Gupta prescribed orthotic braces for them. For instance, Gupta prescribed a back brace, shoulder brace, wrist brace, and knee brace for an undercover agent after speaking with the agent for just over a minute on the telephone. In another instance, Gupta prescribed a knee brace for a Medicare beneficiary whose legs had previously been amputated. The evidence presented at trial showed that Gupta could not possibly have diagnosed the beneficiaries or determined that the braces were medically necessary during his brief telephonic encounters with them. Nonetheless, Gupta signed prescriptions for braces that falsely represented that the braces were medically necessary and that he diagnosed the beneficiaries, had a care plan for them, and recommended that they receive certain additional treatment. Gupta’s false prescriptions were used by brace supply companies to bill Medicare more than $5.4 million.

The jury convicted Gupta of three counts of health care fraud and two counts of false statements relating to health care matters. He is scheduled to be sentenced on October 8, 2024 and faces a maximum penalty of 10 years in prison on each of the health care fraud counts and five years in prison on each of the false statements relating to health care matters counts. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division; Assistant Director Michael D. Nordwall of the FBI’s Criminal Investigative Division; and Deputy Inspector General for Investigations Christian J. Schrank of the Department of Health and Human Services Office of Inspector General (HHS-OIG) made the announcement.

The FBI and HHS-OIG investigated the case.

Trial Attorneys Darren C. Halverson and Sarah E. Edwards of the Criminal Division’s Fraud Section are prosecuting the case, with assistance from Assistant U.S. Attorney Kelly M. Lyons for the District of New Jersey. Trial Attorney Steven Michaels of the Special Matters Unit of the Criminal Division’s Fraud Section assisted with filter matters.

The Fraud Section leads the Criminal Division’s efforts to combat health care fraud through the Health Care Fraud Strike Force Program. Since March 2007, this program, currently comprised of nine strike forces operating in 27 federal districts, has charged more than 5,400 defendants who collectively have billed federal health care programs and private insurers more than $27 billion. In addition, the Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to hold providers accountable for their involvement in health care fraud schemes. More information can be found at www.justice.gov/criminal-fraud/health-care-fraud-unit.

NEWARK, N.J. – Two men have been charged in connection with their roles in a large-scale mortgage fraud scheme, U.S. Attorney Philip R. Sellinger announced today.

Christopher J. Gallo, 44, of Old Tappan, New Jersey, and Mehmet A. Elmas, 32, a U.S. citizen who resides in Turkey, are charged by complaint with one count of conspiracy to commit bank fraud. They appeared today before U.S. Magistrate Judge André M. Espinosa in Newark federal court and were each released $200,000 unsecured bond.

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

Gallo and Elmas were previously employed by a New Jersey-based, privately owned licensed residential mortgage lending business. Gallo was employed as a senior loan officer and  Elmas was a mortgage loan officer and Gallo’s assistant. From 2018 through October 2023, Gallo and Elmas used their positions to conspire and engage in a fraudulent scheme to falsify loan origination documents sent to mortgage lenders in New Jersey and elsewhere, including their former employer, to fraudulently obtain mortgage loans. Gallo and Elmas routinely mislead mortgage lenders about the intended use of properties to fraudulently secure lower mortgage interest rates. Gallo and Elmas often submitted loan applications falsely stating that the listed borrowers were the primary residents of certain proprieties when, in fact, those properties were intended to be used as rental or investment properties. 

By fraudulently misleading lenders about the true intended use of the properties, Gallo and Elmas secured and profited from mortgage loans that were approved at lower interest rates.  The conspiracy also included falsifying property records, including building safety and financial information of prospective borrowers to facilitate mortgage loan approval. Between 2018 through October 2023, Gallo originated more than $1.4 billion in loans. 

The conspiracy to commit bank fraud charge carries a maximum potential penalty of 30 years in prison and a $1 million fine, or twice the gross gain or loss from the offense, whichever is greatest.

U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge James E. Dennehy in Newark, and special agents of the Federal Housing Finance Agency, Office of Inspector General, under the direction of Special Agent in Charge Robert Manchak, with the investigation leading to today’s arrests.

The government is represented by Assistant U.S. Attorney Shontae D. Gray of the Economic 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.

galloelmas.complaint.pdf

NEWARK, N.J. – An Essex County, New Jersey, man admitted his role in a scheme to steal checks sent through the mail and commit bank fraud, U.S. Attorney Philip R. Sellinger announced today.

Malachi Jefferson, 25, of Newark, pleaded guilty on April 22, 2024, before U.S. District Judge Julien X. Neals in Newark federal court to an information charging him with bank fraud.

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

From April 2022 through November 2022, Jefferson’s conspirator, a U.S. Postal Service employee, stole checks from a Keansburg, New Jersey, post office. Jefferson and his conspirators then worked to deposit the stolen checks in order to fraudulently obtain more than $150,000 from the victim financial institutions.

The defendant faces a maximum sentence of 30 years in prison and a fine of up to $1 million. Sentencing is scheduled for Sept 9, 2024.

U.S. Attorney Sellinger credited special agents with the U.S. Postal Service – Office of Inspector General, under the direction of Special Agent in Charge Matthew Modafferi, Northeast Area Field Office; postal inspectors of the U.S. Postal Inspection Service in Newark, under the direction of Inspector Christopher A. Nielsen, Philadelphia Division, officers with the Keansburg Police Department, under the direction of Chief Andrew Gogan, the Hazlet Police Department, under the direction of Chief of Police Robert Mulligan, and the Monmouth County Prosecutor’s Office, under the direction of Prosecutor Raymond S. Santiago, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Francesca Liquori of the Special Prosecutions Division.

jefferson.information.pdf

After a two-week trial, a federal jury in Camden, New Jersey, found Bolaji Bolarinwa, 50, and Isiaka Bolarinwa, 67, both of Burlington County, New Jersey, guilty of forced labor and other crimes related to their coercive scheme to compel two victims to perform domestic labor and childcare in their home.

Bolaji Bolarinwa was found guilty of two counts of forced labor, one count of alien harboring for financial gain and two counts of document servitude. The jury also convicted Isiaka Bolarinwa of two counts of forced labor and one count of alien harboring for financial gain. The defendants were each acquitted of a second count of alien harboring for financial gain.

“The defendants deceitfully lured the victims to the United States with promises of benefits, but then betrayed them,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “The defendants confiscated the victims’ passports, threatened them, degraded them, physically abused them and kept them under constant surveillance, all to coerce the victims’ labor and ruthlessly exploit them for the defendants’ own profit. Human trafficking is a heinous crime, and this verdict should send the very clear message that the Justice Department will investigate and vigorously prosecute these cases to hold human traffickers accountable and bring justice to their victims.”

“These defendants engaged in an egregious bait-and-switch, luring the victims with false promises of a life and an education in the United States, and instead subjected them to grueling hours, physical abuse and psychological abuse,” said U.S. Attorney Philip R. Sellinger for the District of New Jersey. “Forced labor and human trafficking are abhorrent crimes that have no place in our society, and I am grateful to our team of prosecutors, agents and support staff for ensuring that justice was done in this case.”

“Imagine showing up in a foreign land, hoping for a better life and ending up trapped with no place to go and no one to turn to for help,” said Special Agent in Charge James E. Dennehy of the FBI Newark Field Office. “The victims in this investigation suffered in unimaginable ways at the hands of their captors, enduring years of physical and mental abuse. Human trafficking often takes on many different forms and can hide in plain sight. I want to commend the agents and victim specialists who worked on this case, alongside our partners at the U.S. Attorney’s Office. We want everyone to know if you or anyone you know is a victim – you can come to us for help. We will bring your tormentors to justice.”

The evidence presented at trial, including the testimony of two victims, established that, between December 2015 and October 2016, Bolaji and Isiaka Bolarinwa – originally from Nigeria, but living in New Jersey as U.S. citizens – recruited two victims to come to the United States and then coerced them to perform domestic labor and childcare services for their children through physical harm, threats of physical harm, isolation, constant surveillance and psychological abuse. The defendants engaged in this venture knowing that both victims were out of lawful status while working in their home.

Once Victim 1 arrived in the United States in December 2015, Bolaji Bolarinwa confiscated her passport and coerced her through threats of physical harm to her and her daughter, verbal abuse, isolation and constant surveillance to compel her to work every day, around the clock for nearly a year. Isiaka was aware of his wife’s threats and abusive behavior toward Victim 1 and directly benefited from Victim 1’s cooking, cleaning and childcare. The defendants then recruited Victim 2 to come to the United States on a student visa. When Victim 2 arrived in the United States in April 2016, Bolaji Bolarinwa similarly confiscated her passport and coerced her to perform household work and childcare but relied more heavily on physical abuse. On at least one occasion, Isiaka Bolarinwa also physically abused Vitim 2, and he was aware of his wife’s coercive, abusive behavior toward Victim 2 and directly benefited from her cleaning and childcare. Victim 1 and Victim 2 lived and worked in the Bolarinwa home until October 2016, when Victim 2 summoned the courage to outcry to a professor at her college, who in turn, reported the targets to the FBI. 

A sentencing hearing will be scheduled at a later date. Both defendants face a maximum penalty of 20 years in prison for each forced labor count, and a maximum penalty of 10 years in prison for the alien harboring count. Bolaji Bolarinwa faces a maximum penalty of five years in prison for each unlawful document conduct count. They will also be required to pay mandatory restitution to the two victims and each face a fine on each count of up to $250,000 or twice the gross gain or gross loss from the offense, whichever is greatest.

The FBI Newark Field Office investigated the case.

Assistant U.S. Attorney Jeffrey Bender for the District of New Jersey and Trial Attorney Elizabeth Hutson of the Civil Rights Division’s Human Trafficking Prosecution Unit prosecuted the case.

Anyone who has information about human trafficking should report that information to the National Human Trafficking Hotline toll-free at 1-888-373-7888, which is available 24 hours a day, seven days a week. For more information about human trafficking, please visit www.humantraffickinghotline.org. Information on the Justice Department’s efforts to combat human trafficking can be found at www.justice.gov/humantrafficking.

TRENTON, N.J. – A California man was sentenced to 15 months in prison for his role in a conspiracy to broker patients as part of a multistate patient scheme in which he directed recruiters to bribe drug-addicted individuals to enroll in drug rehabilitation and received referral fees from the rehabilitation centers, U.S. Attorney Philip R. Sellinger announced today.

Kevin M. Dickau, 35, of Tustin, California, pleaded guilty by videoconference before U.S. District Judge Peter G. Sheridan to an information charging him with one count of conspiracy to commit health care fraud. Judge Sheridan imposed the sentence on April 23, 2024.

Six other individuals have previously pleaded guilty for their roles in the scheme: Peter Costas; Seth Logan Welsh; John C. Devlin; Akikur Mohammad; Lauren Philhower; and Anastasia Passas.

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

Dickau, Welsh, Devlin, and their conspirators owned and operated a marketing company in California. Dickau, Welsh, and Devlin used the marketing company to help orchestrate a scheme in New Jersey, Maryland, California, and other states that involved bribing individuals addicted to heroin and other drugs to enter into drug rehabilitation centers so Dickau, Welsh, Devlin, and their conspirators could generate referral fees from those facilities. Two facilities in California that paid such referral fees were owned or operated by Mohammad, Philhower, and Passas.

The marketing company run by Dickau, Welsh, and Devlin maintained contractual relationships with drug treatment facilities around the country, including the ones run by Mohammad, Philhower, and Passas. The marketing company also engaged a nationwide network of recruiters – including Costas in New Jersey – to identify and recruit potential patients, from New Jersey and other states, who were addicted to heroin or other drugs and who had robust private health insurance.

To convince drug-addicted individuals to travel to and enroll in rehabilitation when they otherwise would not have, Costas and other recruiters offered to bribe them – often as much as several thousand dollars – with the approval of Dickau, Welsh, and Devlin. Once the patients agreed to enroll in drug rehabilitation in exchange for the offered bribe, Dickau, Welsh, Devlin, and Costas would arrange and pay for cross-country travel to the drug treatment centers in California and other states, in concert with the owners of the facilities themselves, including Mohammad, Philhower, and Passas. Costas would stay in touch with the New Jersey patients at the facilities and specifically instruct them to stay at the facilities long enough to generate referral payments, and he would pass along information to Dickau, Welsh, and Devlin about the patients’ status at the facilities. Dickau, Welsh, and Devlin would monitor the other patients they brokered by speaking to other recruiters or to the owners and employees of the drug treatment facilities themselves.

The drug treatment facilities  run by Mohammad, Philhower, and Passas had contracts with the marketing company. Those facilities typically paid the marketing company a fee of $5,000 to $10,000 per patient referral. Dickau, Welsh, Devlin, and their conspirators shared that money among themselves. Costas and other recruiters received approximately half that amount for each patient they brokered. Dickau, Welsh, Devlin, and their conspirators brokered scores of patients to drug treatment facilities around the country, including the ones run by Mohammad, Philhower, and Passas, and the conspiracy caused millions of dollars of losses for health insurers.

In addition to the prison term, Judge Sheridan sentenced Dickau to three years of supervised release.

U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge James E. Dennehy in Newark, with the investigation leading the sentencing. He also thanked the FBI, under the direction of Acting Assistant Director in Charge Amir Ehsaei in Los Angeles and the District Attorney’s Office in Orange County, California.

The government is represented by Jason S. Gould, Chief of the Health Care Fraud Unit and Assistant U.S. Attorney Angelica Sinopole of the Health Care Fraud Unit in Newark.

CAMDEN, N.J. – A Burlington County, New Jersey, couple was convicted today of forced labor and other crimes related to their coercive scheme to compel two victims to perform domestic labor and childcare in their home, harbor the victims knowing that they were unlawfully present in the United States and unlawfully confiscate the victims’ passports, U.S. Attorney Philip R. Sellinger and Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division announced.

Bolaji Bolarinwa, 50, was found guilty of two counts of forced labor, one count of alien harboring for financial gain and two counts of document servitude following a two-week trial before U.S. District Judge Karen M. Williams in Camden federal court. The jury also convicted Isiaka Bolarinwa, 67, of two counts of forced labor and one count of alien harboring for financial gain. The defendants were each acquitted of a second count of alien harboring for financial gain.

“These defendants engaged in an egregious bait-and-switch, luring the victims with false promises of a life and an education in the United States, and instead subjected them to grueling hours, physical abuse and psychological abuse. Forced labor and human trafficking are abhorrent crimes that have no place in our society, and I am grateful to our team of prosecutors, agents and support staff for ensuring that justice was done in this case.”

U.S..Attorney Philip R. Sellinger

“The defendants exploited the victims’ trust and then inflicted physical and mental abuse against them, all so they could keep the victims working for their profit,” Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division said. “Human trafficking is a heinous crime, and this verdict should send the very clear message that the Justice Department will investigate and vigorously prosecute these cases to hold human traffickers accountable and bring justice to their victims.”

“Imagine showing up in a foreign land, hoping for a better life, and ending up trapped with no place to go and no one to turn to for help,” FBI Newark Special Agent in Charge James E. Dennehy said. “The victims in this investigation suffered in unimaginable ways at the hands of their captors, enduring years of physical and mental abuse. Human trafficking often takes on many different forms and can hide in plain sight. I want to commend the agents and victim specialists who worked on this case, alongside our partners at the US Attorney's Office. We want everyone to know if you or anyone you know is a victim – you can come to us for help. We will bring your tormentors to justice.” 

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

From December 2015 to October 2016, Bolaji and Isiaka Bolarinwa – originally from Nigeria, but living in New Jersey as U.S. citizens – recruited two victims to come to the United States and then coerced them to perform domestic labor and childcare services for their children through physical harm, threats of physical harm, isolation, constant surveillance and psychological abuse. The defendants engaged in this venture knowing that both victims were out of lawful status while working in their home.

Once the first victim arrived in the United States in December 2015, Bolaji Bolarinwa confiscated her passport and coerced her through threats of physical harm to her and her daughter, verbal abuse, isolation and constant surveillance to compel her to work every day, around-the-clock for nearly a year. Isiaka was aware of his wife’s threats and abusive behavior toward the victim and directly benefited from the victim’s cooking, cleaning and childcare. The defendants then recruited a second victim to come to the United States on a student visa. When the second victim arrived in the United States in April 2016, Bolaji Bolarinwa similarly confiscated her passport and coerced her to perform household work and childcare but relied more heavily on physical abuse. On at least one occasion, Isiaka Bolarinwa also physically abused the second victim, and he was aware of his wife’s coercive, abusive behavior toward the second victim and directly benefited from her cleaning and childcare. The two victims lived and worked in the Bolarinwa home until October 2016, when the second victim notified a professor at her college, who reported the information to the FBI. 

The defendants face a maximum penalty of 20 years in prison for each forced labor count. The defendants face a maximum penalty of 10 years in prison for the alien harboring count and Bolaji faces a maximum penalty of five years in prison for each unlawful document conduct count. They will also be required to pay mandatory restitution to the two victims and each face a fine on each count of up to $250,000 or twice the gross gain or gross loss from the offense, whichever is greatest.

U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge Dennehy in Newark, with the investigation leading to the guilty verdict. 

The government is represented by Assistant U.S. Attorney Jeffrey Bender for the District of New Jersey and Trial Attorney Elizabeth Hutson of the Civil Rights Division’s Human Trafficking Prosecution Unit.

Anyone who has information about human trafficking should report that information to the National Human Trafficking Hotline toll-free at 1-888-373-7888, which is available 24 hours a day, seven days a week. For more information about human trafficking, please visit www.humantraffickinghotline.org. Information on the Justice Department’s efforts to combat human trafficking can be found at www.justice.gov/humantrafficking.

NEWARK, N.J. – A Somerset County, New Jersey, man has been charged with a federal hate crime for breaking into the Center for Islamic Life at Rutgers University (CILRU) in New Brunswick, New Jersey, and destroying property, U.S. Attorney Philip R. Sellinger for the District of New Jersey, Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division, and New Jersey State Attorney General Matthew J. Platkin announced.

Jacob Beacher, 24, was arrested this morning and is charged by complaint with one count of intentional or attempted obstruction of religious practice and one count of making false statements to federal authorities. Beacher is scheduled to have his initial appearance this afternoon before U.S. Magistrate Judge André M. Espinosa in Newark federal court. 

According to the criminal complaint, on April 10, during the Eid-al-Fitr holiday, Beacher broke into the CILRU around 2:41 a.m., where he damaged the CILRU’s property, including several religious artifacts, such as Turbah prayer stones, which are clay stones on which Muslims prostrate during prayer, and numerous other items that contained holy language from the Qur’an, Islam’s sacred scripture. The complaint also alleges that Beacher also stole a Palestinian flag and a charity box belonging to the CILRU.

U.S. Attorney Sellinger and Attorney General Platkin credited the many agencies that collaborated on this joint investigation: special agents of the FBI, Branchburg Resident Agency, under the direction of Special Agent in Charge James E. Dennehy in Newark; prosecutors and detectives from the New Jersey Division of Criminal Justice, under the direction of Director J. Stephen Ferketic; detectives from the Middlesex County Prosecutor’s Office, under the direction of Prosecutor Yolanda Ciccone; the Rutgers University Police Department-New Brunswick Division, under the leadership of Chief of University Police Kenneth Cop; the New Brunswick Police Department, under the leadership of Chief Vincent Sabo; the New Jersey State Police, under the leadership of Colonel Patrick J. Callahan and the New Jersey Regional Computer Forensics Laboratory.

The government is represented by Assistant U.S. Attorney Benjamin Levin and Deputy Chief R. Joseph Gribko for the District of New Jersey and Trial Attorney Daniel Grunert of the Justice Department’s Civil Rights Division.

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

beacher.complaint.pdf

 A New Jersey man has been charged with a federal hate crime for breaking into the Center for Islamic Life at Rutgers University (CILRU) in New Brunswick, New Jersey, and destroying property.

Jacob Beacher, 24, of Somerset County, was arrested this morning and charged by complaint with one count of intentional or attempted obstruction of religious practice and one count of making false statements to federal authorities.

According to the criminal complaint, on April 10, during the Eid-al-Fitr holiday, Beacher broke into the CILRU around 2:41 a.m., where he damaged the CILRU’s property, including several religious artifacts, such as Turbah prayer stones, which are clay stones on which Muslims prostrate during prayer, and numerous other items that contained holy language from the Qur’an, Islam’s sacred scripture. The complaint also alleges that Beacher stole a Palestinian flag and a charity box belonging to the CILRU.

Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division, U.S. Attorney Philip R. Sellinger for the District of New Jersey and New Jersey State Attorney General Matthew J. Platkin made the announcement.

The FBI Newark Field Office, Branchburg Resident Agency, New Jersey Attorney General’s Office, Middlesex County Prosecutor’s Office, Rutgers University Police Department-New Brunswick Division and New Jersey Regional Computer Forensics Laboratory investigated the case.

Assistant U.S. Attorney Benjamin Levin and Deputy Chief R. Joseph Gribko for the District of New Jersey and Trial Attorney Daniel Grunert of the Justice Department’s Civil Rights Division are prosecuting the case.

A criminal complaint is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

CAMDEN, N.J. – A Dominican Republic and Venezuelan dual citizen was sentenced today to 84 months in prison for possessing with intent to distribute fentanyl and methamphetamine, U.S. Attorney Philip R. Sellinger announced.

Jordge Luis Rodriguez Tejada, 38, previously pleaded guilty before former U.S. District Judge John Michael Vasquez to an information charging one count of possession with the intent to distribute 400 grams or more of fentanyl and 500 grams or more of methamphetamine. U.S. Circuit Judge Stephanos Bibas imposed the sentence today in Camden federal court.

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

On July 5, 2022, law enforcement conducted a motor vehicle stop of a vehicle driven by an individual with Rodriguez Tejada in the front passenger seat. After a drug detection canine alerted to the presence of controlled substances in the vehicle, law enforcement searched the vehicle. Law enforcement recovered a box containing approximately 1.5 kilograms of fentanyl and approximately 900 grams of methamphetamine.

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

U.S. Attorney Sellinger credited special agents and task force officers with the Drug Enforcement Administration (DEA) operating in New Jersey, under the direction of Special Agent in Charge Cheryl Ortiz in Newark, with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorney Farhana C. Melo of the OCDETF/ Narcotics Unit in Newark.

TRENTON, N.J. – A Somerset County, New Jersey, man was convicted of conspiracy to commit healthcare fraud, five acts of healthcare fraud, and four counts of tax evasion, U.S. Attorney Philip R. Sellinger announced today.

C.R. Kraus, 58, of Manville, New Jersey was convicted of all 10 counts of an indictment following a trial before U.S. District Judge Zahid N. Quraishi in Trenton federal court. In January 2023, Kraus’s conspirators, Harry Pizutelli and Maritza Flores, pleaded guilty to conspiracy to commit healthcare fraud and tax evasion relating to defrauding the New Jersey Traumatic Brain Injury Fund (TBI Fund) of millions of dollars for their own personal benefit.

“This defendant was convicted of multiple crimes for his role in a conspiracy that resulted in the theft of millions of dollars earmarked for victims of traumatic brain injuries. Stealing resources intended to help New Jersey residents who are already coping with serious challenges is especially egregious. My office, and our law enforcement partners, are always working to root out this kind of criminal activity and ensure the guilty face appropriate punishment.”

U.S. Attorney Philip R. Sellinger

“People battling to regain their lives after surviving a traumatic brain injury, and then digging out from the astronomical costs of healthcare related to the injury are the victims in this case,” FBI – Newark Special Agent in Charge James E. Dennehy said. “Those people should have been the recipients of money from a fund created specifically to help them, not Kraus and his co-conspirators. I want to commend the outstanding work of the investigators and prosecutors in this investigation who successfully fight each day to seek justice against criminals who believe their crimes may not harm or impact anyone. It does, and they will be held accountable.”

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

The TBI Fund is a publicly funded program run by the New Jersey Division of Disability Services, a component of the New Jersey Department of Human Services. The TBI Fund’s purpose is to provide New Jersey residents who have suffered a traumatic brain injury with services and support in order to maximize their quality of life when funding from insurance, personal resources, or other programs is unavailable to meet their needs. Services funded by the TBI Fund include physical, occupational, and speech therapy; service coordination; assistive technology; cognitive therapy; neuropsychological services; pharmaceuticals; wheelchair ramp installation and other home modifications; and general home management and maintenance.

After a prospective patient applies for services, TBI Fund personnel review the application and, if approved, the patient is authorized to secure designated services from a third-party vendor. Once a patient receives services approved by the TBI Fund, the vendor or service provider submits an invoice to the TBI Fund for payment. When an invoice is received, TBI Fund personnel review the invoice to ensure that the patient had been approved to receive the services. If the invoice is approved, an internal payment voucher is generated, authorized by TBI Fund personnel, and then submitted to the New Jersey Department of the Treasury for payment, which issues a check directly to the vendor.

Pizutelli was the manager of the TBI Fund and was responsible for its day-to-day operation. He supervised, managed, and oversaw the process by which third-party vendors were paid for services rendered to eligible TBI Fund beneficiaries. From 2009 through June 2019, Pizutelli, Kraus, and Flores conspired to defraud the TBI Fund by misappropriating more than $4 million in fraudulent vendor payments for purported services that were never actually provided. Pizutelli orchestrated the distribution of fraudulent vendor payments to Flores and Kraus by generating and processing false invoices and internal payment vouchers. Pizutelli generated these invoices and vouchers to give the appearance that Flores and Kraus had provided approved services to eligible patients when, in fact, they had not provided any services. Pizutelli then approved and transmitted the internal payment vouchers so that his conspirators received vendor payments.

Pizutelli orchestrated these fraudulent payments to maintain and further romantic and/or sexual relationships with Flores, including more than $940,000 in fraudulent distributions to Flores and more than $3.245 million in fraudulent distributions to Kraus. To obscure their fraudulent conduct, Flores and Kraus also evaded the payment of substantial amount of income taxes by making material misstatements and omissions on their federal income tax returns and significantly underreporting the income they had derived from the fraudulent scheme.

The healthcare fraud conspiracy charge and substantive healthcare fraud charges to which Kraus was convicted each carry a maximum penalty of 10 years in prison and a maximum fine of $250,000. The tax evasion charges to which Kraus was convicted each carry a maximum penalty of 10 years in prison and a maximum fine of $250,000. Sentencing is scheduled for Oct. 8, 2024.

U.S. Attorney Sellinger credited special agents of the FBI, Newark Division, Red Bank Resident Agency, under the direction of Special Agent in Charge James E. Dennehy, and special agents of IRS - Criminal Investigation, under the direction of Acting Special Agent in Charge Jenifer L. Piovesan, with the investigation leading to the guilty verdict. He also thanked the New Jersey Attorney General’s Office, Division of Law, and the New Jersey Department of Human Services, for their assistance.

The government is represented by Eric A. Boden, Attorney-in-Charge in Trenton, and Assistant U.S. Attorney Eric Suggs of the U.S. Attorney’s Office Trenton Branch Office.

NEWARK, N.J. – A Middlesex County, New Jersey, man was charged with possessing images of child sexual abuse, U.S. Attorney Philip R. Sellinger announced today.

Andrew Chu, 33, of Edison, New Jersey, is charged by complaint with one count of possession of child pornography. Chu made his initial appearance today before U.S. Magistrate Judge Leda Dunn Wettre in Newark federal court on April 18, 2024, and was detained.

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

From May 2023 through November 2023, Chu used his computer to view approximately 100 images of child sexual abuse, including depictions involving pre-pubescent children.

In a prior federal prosecution in New Jersey in 2021, Chu was convicted of possession of child pornography; for a repeat offender, the charge of possession of child pornography carries a mandatory minimum term of 10 years in prison, a maximum of 20 years in prison, and a $250,000 fine.

U.S. Attorney Sellinger credited special agents of Homeland Security Investigations Newark, under the direction of Acting Special Agent in Charge William S. Walker, with the investigation leading to the charge.

The government is represented by Assistant U.S. Attorney Ariel Douek of the General Crimes Unit in Newark.

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

chu.complaint.pdf

NEWARK, N.J. –A Passaic County correctional officer today admitted conspiring to obstruct justice in connection with an investigation of an assault of a pretrial detainee, U.S. Attorney Philip R. Sellinger announced.

Officer Lorenzo Bowden, 39, pleaded guilty today before U.S. District Judge Michael E. Farbiarz in Newark federal court to an information charging him with conspiracy to obstruct justice.

“Lorenzo Bowden, a correctional officer, admitted today that he helped transport a detainee to an area where there were no video cameras and stood by while other officers repeatedly hit and assaulted the handcuffed detainee who posed no threat. The vast majority of law enforcement officers understand the trust placed in them by our community when they wear the badge. But when law enforcement officers abuse the trust the community places in them – when they violate the constitutional rights of the people of New Jersey, including prisoners, they will be held accountable.”

U.S. Attorney Philip R. Sellinger

“There are methods to hold accountable suspected criminals who act out while in custody,” FBI – Newark Special Agent in Charge Hames E. Dennehy said. “Corrections officers know these procedures and policies. Instead of following those rules, Bowden admits he and his co-conspirators took matters into their own hands and then decided to lie about it. As law enforcement, we must live up to a higher standard of behavior because of the legal and physical power we wield.” 

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

On Jan. 22, 2021, a pretrial detainee at the Passaic County Jail (PCJ) squirted a mixture containing urine onto a correctional officer. The following day Bowden admitted that he, along with Sergeant Jose Gonzalez and Sergeant Donald Vinales, who were also charged in this case, transported the detainee through an area of the PCJ that does not have a video surveillance camera, which correctional officers and inmates at the PCJ have referred to as a “blind spot.” Gonzalez and Vinales assaulted the detainee, as he was handcuffed, when they knocked him to the ground and struck him multiple times. Bowden later admitted that he did not intervene to stop the assault. One day after the assault, the detainee was taken to a local hospital, which documented injuries from the assault.

In April 2022, after receiving federal grand jury subpoenas in connection with this investigation, Gonzalez, Vinales, and Bowden, among others, met to discuss the federal investigation. The group agreed not to cooperate with the federal investigation and also agreed to say that nothing had happened to the detainee (referring to the assault). During an interview with federal investigators in October 2022, Bowden falsely stated that the detainee had not been assaulted and that there had not been any meeting or communication among those who participated in or witnessed the assault.

The charge of conspiracy to obstruct justice carries a maximum penalty of 20 years in prison and a fine of $250,000. Bowden’s sentencing is scheduled for Sept. 5, 2024.

U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge James E. Dennehy in Newark; and the Passaic County Sheriff’s Office Division of Internal Affairs, under the direction of Acting Sheriff Gary F. Giardina, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Benjamin Levin of the Criminal Division and the Civil Rights Division’s Criminal Civil Rights Task Force, and R. Joseph Gribko, Deputy Chief of the U.S. Attorney’s Office’s Civil Rights Division.

The charges and allegations against Sergeants Gonzalez and Vinales, which are still pending, are merely accusations, and each defendant is presumed innocent unless and until proven guilty.

bowden.information.pdf

NEWARK, N.J. – A Morris County, New Jersey, man who was employed by a New Jersey elementary school and helped run a youth soccer club was sentenced today to 204 months in prison for producing and possessing child pornography, U.S. Attorney Philip R. Sellinger announced.

Steven Brooks, 37, of Morristown, New Jersey, previously pleaded guilty before former U.S. District Judge John Michael Vazquez to an information charging him with one count of production of child pornography and one count of possession of child pornography. U.S. District Judge Brian Martinotti imposed the sentence today in Newark federal court.

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

In January 2021, law enforcement officers were notified about possible child pornography on an external hard drive belonging to Brooks. Pursuant to judicially authorized search warrants, law enforcement officers searched Brooks’ external hard drive, electronic devices and social media accounts. Brooks utilized fake online personas on social media platforms to solicit photos and videos from dozens of minors that depicted the minors engaging in sexual activity. Brooks acknowledged, as relevant conduct, the attempted online enticement, production and possession of child pornography involving at least 79 victims.

In addition to the prison term, Judge Martinotti sentenced Brooks to 10 years of supervised release and ordered restitution of $237,000.

U.S. Attorney Sellinger credited special agents and members of the Child Exploitation Human Trafficking Task Force of the Newark field office of the FBI, under the direction of Special Agent in Charge James E. Dennehy, as well as special agents from the FBI’s San Francisco field office, under the direction of Special Agent in Charge Robert K. Tripp, with the investigation leading to today’s sentencing.

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

NEWARK, N.J. – Five members and associates of a Jersey City gang associated with the Marion Gardens Housing Complex pleaded guilty this week to racketeering, violent crimes in aid of racketeering, drug trafficking, and firearms offenses, U.S. Attorney Philip R. Sellinger announced today.

Jervon Morris, aka “Sticky,” 35; Kevin Williams, aka “KK,” aka “Kay Kay,” 30; Jakeem Gibson-Madison, aka “Beanz,” 29; K’shawn Jackson, aka “Lil Kay,” 23; and Terick Rogers, aka “Moot,” 32, all of Jersey City, New Jersey, all pleaded guilty before U.S. District Judge Claire C. Cecchi in Newark federal court to racketeering conspiracy and related crimes.

Morris and Gibson-Madison will be sentenced on Aug. 20, 2024; Rogers and Williams will be sentenced on Aug. 21, 2024; and K’Shawn Jackson will be sentenced on Aug. 22, 2024.

“Criminal street gangs – whether they are structured organizations with international reach or, as here, neighborhood based and local – cause devastating damage to the community. Two of these defendants murdered a victim and all the defendants caused senseless violence and shootings and funneled dangerous drugs for personal profit. These defendants will now deservedly face significant sentences in prison as a result of the harm they’ve caused.”

U.S. Attorney Philip R. Sellinger

“Neighborhood street gangs hold communities hostage with the constant threat of violence and dangerous proliferation of illicit drugs,” FBI – Newark Special Agent in Charge James E. Dennehy said. “These men admit they used all methods of criminal activity to defend their turf around the Marion Gardens House Complex, including targeting and murdering rival gang members. This investigation is just one of many cases we are working through the FBI Newark Violent Crimes Task Force with our law enforcement partners, focusing all of our resources, time and energy on taking out the leadership of these groups and ending the brutality they inflict on our city.”

“Each of these defendants threatened public safety and instilled fear in neighborhoods throughout Jersey City,” Hudson County Prosecutor Esther Suarez said. “The outcome here reaffirms a commitment by the Hudson County Prosecutor’s Office to utilize all its resources and law enforcement partners to ensure justice is served on behalf of victims and the communities affected by these senseless crimes.” 

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

The defendants are all members and associates of the neighborhood street gang associated with the Marion Gardens Housing Complex, which routinely distributes cocaine and heroin, among other controlled substances, in and around the Marion Gardens Housing Complex.  Members and associates of the gang also engaged in acts of violence, including numerous assaults, shootings, and murders, which targeted rival gang members and others, including the following:

• On July 28, 2011, Morris and Williams, along with another member of the Marion Gardens street gang, murdered a victim in the area of Gifford Avenue and Bergen Avenue in Jersey City;
• On Nov. 5, 2017, members and associates of the Marion Gardens street gang shot a victim in the area of Van Nostrand Avenue and Bergen Avenue in Jersey City;
• On Feb. 7, 2018, Williams and another member of the Marion Gardens street gang assaulted a victim R.B. in the area of Summit Avenue and Magnolia Avenue in Jersey City;
• On June 30, 2018, Rogers, Jackson, and another member of the enterprise shot five people while celebrating “Meech Day” in honor of a deceased fellow gang member;
• On Jan. 9, 2019, Gibson-Madison, with another member of the enterprise, traveled to the area of Grant Avenue and Ocean Avenue to target a rival gang member, at which time three victims were shot at, two of whom were hit, and
• On June 9, 2019, after being shot at by rival gang member, Kevin Williams brandished a firearm and attempted to shoot back at the rival gang member.

Lakief Grayson, aka “LaLa,” previously pleaded guilty to racketeering conspiracy and related charges in July 2023. Charges remain pending against Jalil Holmes, aka “Broad Day,” aka “BD,” and Willie Williams, aka “Willz,” both of whom are scheduled to appear in court in the coming weeks. The charges and allegations against these defendants are merely accusations and they are presumed innocent unless and until proven guilty.

U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge James E. Dennehy, investigators of the Hudson County Prosecutor’s Office, under the direction of Prosecutor Esther Suarez, and the Jersey City Police Department, under the direction of Director James Shea, for the investigation leading to the charges.

This investigation was conducted as part of the Jersey City Violent Crime Initiative (VCI). The VCI was formed in 2018 by the U.S. Attorney’s Office for the District of New Jersey, the Hudson County Prosecutor’s Office, and the Jersey City Police Department, for the sole purpose of combatting violent crime in and around Jersey City.  As part of this partnership, federal, state, county, and city agencies collaborate to strategize and prioritize the prosecution of violent offenders who endanger the safety of the community.  The VCI is composed of the U.S. Attorney’s Office, the FBI, the ATF, the Drug Enforcement Administration’s (DEA) New Jersey Division, the U.S. Marshals, the Jersey City Police Department, the Hudson County Prosecutor’s Office, the Hudson County Sheriff’s Office, New Jersey State Parole, the Hudson County Jail, and the New Jersey State Police Regional Operations and Intelligence Center/Real Time Crime Center.

The government is represented by Assistant U.S. Attorney Desiree Grace, Chief of the Criminal Division for the District of New Jersey in Newark.

mariongardens.sindictment.pdf

NEWARK, N.J. – An Essex County, New Jersey, man today admitted possessing with intent to distribute over five kilograms of fentanyl and four kilograms of cocaine, and possessing six firearms as a convicted felon, U.S. Attorney Philip R. Sellinger announced.

Carlos Santiago, 49, of East Orange, pleaded guilty before U.S. District Judge Michael Farbiarz in Newark federal court to possession with intent to distribute 400 grams or more of fentanyl, possession with intent to distribute 500 grams or more of cocaine, and possession of firearms by a convicted felon.

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

On Oct. 24, 2022, federal agents encountered Santiago as he was moving controlled substances from a storage unit to his vehicle in Newark. Santiago was arrested after law enforcement located several kilograms of fentanyl and cocaine, as well as one firearm, in Santiago’s storage unit. Law enforcement searched Santiago’s residence in East Orange and located several additional kilograms of fentanyl and cocaine, and five other firearms. Santiago had previously been convicted, in New Jersey Superior Court, Essex County, of a drug offense and resisting arrest.

The count of distribution of 400 grams or more of fentanyl carries a mandatory minimum term of 10 years in prison, a maximum of life imprisonment, and a $10 million fine. The count of distribution of 500 grams or more of cocaine carries a mandatory minimum term of five years in prison, a maximum of 40 years in prison, and a $5 million fine. The count of possession of firearms by a convicted felon carries a maximum term of 15 years in prison and a $250,000 fine. Sentencing is scheduled for Sept. 5, 2024.

U.S. Attorney Sellinger credited special agents of the Drug Enforcement Administration, under the direction of Special Agent in Charge Cheryl Ortiz in Newark, and special agents of the Bureau of Alcohol, Tobacco and Firearms, under the direction of Special Agent in Charge Bryan Miller, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Shawn Barnes, Chief of the OCDETF/Narcotics Unit in Newark.

santiago_information_final.pdf

NEWARK, N.J. – A former bank employee admitted fraudulently withdrawing more than $105,000 in federal retirement benefits from the bank account of a deceased beneficiary at the same bank where the man was previously employed, U.S. Attorney Philip R. Sellinger announced today.

Jorge Nova, 35, of Passaic, New Jersey, pleaded guilty before U.S. District Judge Evelyn Padin in Newark federal court on April 17, 2024, to an indictment charging him with one count of wire fraud.

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

In 2014, Nova was an employee at a commercial bank in Nutley, New Jersey, where a customer received Social Security Administration (SSA) retirement benefits via direct deposit. The Social Security Administration was not notified of the beneficiary’s death and continued to deposit retirement benefits into the beneficiary’s bank account for more than four years, until October 2018. Nova fraudulently obtained funds from the beneficiary’s account by causing debit cards to be issued to himself in the beneficiary’s name, which he then used to drain the retirement benefits from the beneficiary’s bank account. Nova also registered new accounts with a money service provider in the name of the deceased beneficiary and withdrew money from a second bank account held in the beneficiary’s name. Nova fraudulently obtained more than $105,000 intended for the deceased beneficiary.

The count of wire fraud is punishable by a maximum penalty of 30 years in prison and a maximum $250,000 fine. Sentencing is scheduled for Oct. 8, 2024

U.S. Attorney Sellinger credited special agents of the Social Security Administration, Office of the Inspector General, New York Field Division, under the direction of Special Agent-in-Charge Sharon MacDermott, with the investigation leading to the guilty plea.

The government is represented by Assistant U.S. Attorney Rachelle M. Navarro of the Organized Crimes and Gang Unit in Newark.

nova.indictment.pdf

NEWARK, N.J. – Two members of the Jersey City gang associated with the Wilkinson neighborhood were charged by indictment with Racketeer Influenced and Corrupt Organizations (RICO) conspiracy, U.S. Attorney Philip R. Sellinger announced today.

Kenneth Harrigan, aka “Kenny,” aka “Kenny OGM,” 27, and Darion Canary, aka “Goon,” 31, both of Jersey City, New Jersey, are charged with a racketeering conspiracy that included a murder, a shooting, and narcotics distribution. Harrigan and Canary are both in federal custody on previously filed federal charges. Both had their initial appearances and arraignments on April 16, 2024, before the U.S. District Judge Julien X. Neals in Newark federal court and were detained.

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

Harrigan and Canary are both members and associates of the neighborhood street gang associated with the Wilkinson neighborhood. Since 2019, they have committed multiple acts of violence. On July 20, 2019, Harrigan, Canary, and at least one other gang member traveled to the territory of a rival gang in Jersey City and shot three victims, killing one of them.

On Jan. 1, 2024, Canary, along with other gang members, attended a night club in Newark where a rival gang member was performing. At the night club, Canary brandished a firearm and shot a rival gang member before fleeing the nightclub with his fellow gang members and returning to the Wilkinson neighborhood in Jersey City. At this time, Canary was staying at a halfway house as part of his sentencing on a related federal narcotics conviction.

Investigators observed and documented dozens of narcotics transactions in and around the Wilkinson neighborhood during the months-long investigation.

The investigation revealed that Harrigan and Canary were two of the highest ranking members of the Wilkinson neighborhood street gang and that Harrigan was a primary supplier of narcotics to the area.

In December 2021, Harrigan, Canary, and four other members and associates of the Wilkinson  neighborhood street gang were charged by criminal complaint on drug trafficking offenses.

Harrigan and Canary face a maximum sentence of life imprisonment for the racketeering conspiracy, as well as a maximum fine of $250,000. 

U.S. Attorney Sellinger credited investigators of the Gang Intelligence Unit of the Major Case Division of the Hudson County Prosecutor’s Office, under the direction of Prosecutor Esther Suarez; investigators of the Jersey City Police Department, under the direction of Director James Shea; and special agents of Homeland Security Investigations Newark, under the direction of Acting Special Agent in Charge William S. Walker, with the investigation leading to the charges. He also thanked special agents of the FBI, under the direction of Special Agent in Charge James E. Dennehy.

This investigation was conducted as part of the Jersey City Violent Crime Initiative (VCI). The VCI was formed in 2018 by the U.S. Attorney’s Office for the District of New Jersey, the Hudson County Prosecutor’s Office, and the Jersey City Police Department, for the sole purpose of combatting violent crime in and around Jersey City. As part of this partnership, federal, state, county, and city agencies collaborate to strategize and prioritize the prosecution of violent offenders who endanger the safety of the community. The VCI is composed of the U.S. Attorney’s Office, the FBI, the ATF, the Department of Homeland Security (HSI),  the Drug Enforcement Administration’s (DEA) New Jersey Division, the U.S. Marshals, the Jersey City Police Department, the Hudson County Prosecutor’s Office, the Hudson County Sheriff’s Office, New Jersey State Parole, the Hudson County Jail, and the New Jersey State Police Regional Operations and Intelligence Center/Real Time Crime Center.

The government is represented by Assistant U.S. Attorney Kendall Randolph of the District of New Jersey’s Organized Crime and Gangs Unit in Newark.

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

 

harrigancanary.indictment.pdf

CAMDEN, N.J. – Three individuals were indicted for their roles in fraudulently obtaining approximately $5 million of federal Paycheck Protection Program (PPP) loans and Economic Injury Disaster Loans (EIDL) and for laundering the loan proceeds, U.S. Attorney Philip R. Sellinger announced today.

Eric Rivera, 42, of Norcross, Georgia, is charged with one count of bank fraud conspiracy, three counts of bank fraud, one count of wire fraud conspiracy, two counts of wire fraud, one count of money laundering conspiracy, and eight counts of money laundering.  Adrienne Ponzo, 49, of Bear, Delaware, is charged with one count of wire fraud conspiracy, two counts of wire fraud, one count of money laundering conspiracy, and two counts of money laundering.  James Wessels, 54, of Middletown, Delaware, is charged with one count of bank fraud conspiracy, three counts of bank fraud, and one count of money laundering conspiracy.  They were charged by complaint in July 2023.

According to the indictment:

The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a federal law enacted in March 2020 and was designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic. One source of relief provided by the CARES Act was the authorization of hundreds of billions of dollars in forgivable loans to small businesses for job retention and certain other expenses, through a program referred to as the Paycheck Protection Program (PPP).  The CARES Act also authorized the U.S. Small Business Administration (SBA) to provide Economic Injury Disaster Loans (EIDLs) of up to $2 million to eligible small businesses that were experiencing substantial financial disruption due to the COVID-19 pandemic.

To obtain a PPP or EIDL loan, a qualifying small business was required to apply and  provide information on its operations, including the number of employees and revenues or expenses. Businesses generally had to provide supporting documentation such as tax returns and bank statements.

Rivera conspired with Wessels and others to defraud a participating lender in the PPP program. Rivera submitted fraudulent PPP loan applications for two companies he controlled, which included fake bank statements and IRS tax forms. The lender approved the PPP loans and paid Rivera’s companies $285,000. Rivera also recruited individuals who owned businesses with little or no operations and introduced them to a conspirator who prepared fraudulent PPP loan applications for these companies. Most of these PPP loan applications also included fake bank statements and tax forms. After the lender approved the PPP loans, Rivera received payments of 15 percent to 50 percent of the loan proceeds, via wire transfer or check, for his role in orchestrating this scheme. Wessels created fraudulent IRS tax forms for the PPP loan applications for Rivera’s companies and for the other companies for which Rivera was paid.  Wessels was paid a fee for each fraudulent tax form he created.

Wessels also conspired with two individuals who received fraudulent PPP loans from the lender to structure the spending of the PPP loan proceeds to conceal that the proceeds actually were being spent on non-payroll expenses. Wessels created fake payroll checks from the companies and the business owners distributed the fake payroll checks to friends and family members, who cashed the checks and returned the majority of the cash to the business owners.  The lender subsequently forgave these PPP loans based on forgiveness applications that falsely stated that most of the loan proceeds were spent on payroll expenses.

Rivera also conspired with Ponzo and others to defraud the SBA. After the CARES Act was passed, Rivera recruited individuals who owned companies with little or no operations and introduced them to Ponzo, who prepared fraudulent EIDL applications for these businesses and caused them to be electronically submitted to the SBA. Ponzo prepared fraudulent bank statements and tax returns for companies that did not have them. After the SBA approved the EIDL loans, Rivera received payments of 15 to 50 percent of the loan proceeds, via wire transfer or check, for his role in orchestrating this scheme. Rivera, in turn, wired a portion of the loan proceeds to Ponzo for her role in the scheme.

The counts of bank fraud conspiracy and bank fraud are each punishable by a maximum of 30 years in prison and a $1 million fine. The counts of wire fraud conspiracy and wire fraud are each punishable by a maximum of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense, whichever is greatest. The counts of conspiracy to commit money laundering are each punishable by a maximum of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense, whichever is greatest. The counts of money laundering are each punishable by a maximum of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense, whichever is greatest.

U.S. Attorney Sellinger credited special agents of the Federal Deposit Insurance Corporation – Office of the Inspector General, under the direction of Patricia Tarasca, Special Agent-in-Charge, New York Regional Office; special agents of the FBI’s South Jersey Resident Agency, under the direction of Special Agent in Charge Wayne Jacobs in Philadelphia; special agents of the Social Security Administration, Office of the Inspector General, New York Field Division, under the direction of Acting Special Agent in Charge Bradley Parker; and special agents of the U.S. Department of Labor, Office of Inspector General, Northeast Region, under the direction of Special Agent in Charge Jonathan Mellone, with the investigation leading to the charges.

The District of New Jersey COVID-19 Fraud Enforcement Strike Force is one of five strike forces established throughout the United States by the U.S. Department of Justice to investigate and prosecute COVID-19 fraud. The strike forces focus on large-scale, multi-state pandemic relief fraud perpetrated by criminal organizations and transnational actors. The strike forces are interagency law enforcement efforts, using prosecutor-led and data analyst-driven teams designed to identify and bring to justice those who stole pandemic relief funds.

The government is represented by Assistant U.S. Attorney Daniel A. Friedman of the Criminal Division in Camden and Jason M. Richardson, Attorney in Charge of the U.S. Attorney’s Office in Camden.

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

 

riveraponzowessels.indictment.pdf

NEWARK, N.J. – A Morris County, New Jersey, man today admitted possessing and distributing images of child sexual abuse, U.S. Attorney Philip R. Sellinger announced.

Anselmo Girimonte, 53, of Wharton, New Jersey, pleaded guilty before U.S. District Judge Julien Xavier Neals in Newark federal court to an indictment charging him with one count of possession of child pornography and one count of distribution of child pornography.

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

From Dec. 27, 2021, through Jan. 17, 2022, Girimonte distributed material containing images and video files of child sexual abuse, via a publicly available online peer-to-peer (P2P) file-sharing program. Law enforcement used undercover online sessions to access the P2P program and during these sessions a user shared multiple video files of adults sexually abusing prepubescent children from an internet protocol address traced to Girimonte’s residence. During a March 2, 2022, search of Girimonte’s residence, law enforcement found over 100 images and videos depicting child sexual abuse, including images of prepubescent children being sexually abused, on Girimonte’s cell phone.

The count of possession of child pornography carries a maximum penalty of 20 years in prison and a fine of $250,000. The count of distribution of child pornography carries a mandatory minimum penalty of five years in prison, a maximum penalty of 20 years in prison, and a fine of $250,000. Sentencing is scheduled for Aug. 20, 2024.

U.S. Attorney Sellinger credited special agents of Homeland Security Investigations Newark, under the direction of Acting Special Agent in Charge William S. Walker, with the investigation leading to the guilty plea. He also thanked the Morris County Prosecutor’s Office, the Rockaway Township Police Department, and the U.S. Postal Inspection Service.

The government is represented by Assistant U.S. Attorney Chelsea D. Coleman of the Opioid Abuse Prevention and Enforcement Unit in Newark.

girimonte.indictment.pdf

NEWARK, N.J. – A former employee of a now-defunct New Jersey-based marble and granite wholesaler today admitted his role in a scheme to defraud a bank in connection with a $17 million secured line of credit, U.S. Attorney Philip R. Sellinger announced.

Nitin Vats, 52, an Indian national, pleaded guilty before U.S. District Judge Susan D. Wigenton to count one of an indictment charging him with conspiracy to commit wire fraud affecting a financial institution.

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

From March 2016 through March 2018, an owner and employees of Lotus Exim International Inc. (LEI), including Vats, conspired to obtain from the victim bank a $17 million line of credit by fraudulent means. The victim bank extended LEI the line of credit, believing it to have been secured in part by LEI’s accounts receivable. In reality, the conspirators had fabricated and inflated many of the accounts receivable, ultimately leading to LEI defaulting on the line of credit.

To conceal the lack of sufficient collateral, Vats created fake email addresses on behalf of LEI’s customers so that other LEI employees could pose as those customers and answer the victim bank’s and outside auditor’s inquiries about the accounts receivable. The scheme involved numerous fraudulent accounts receivable where the outstanding balances were either inflated or entirely fabricated. The scheme caused the victim bank losses of approximately $17 million.

The count of conspiracy to commit wire fraud affecting a financial institution to which Vats pleaded guilty carries a maximum potential penalty of 30 years in prison and a fine of $1 million. Sentencing is scheduled for Sept. 11, 2024.

U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge James E. Dennehy in Newark, with the investigation leading to today’s guilty plea.

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

 

vats.indictment.pdf

A New Jersey financial counselor with the U.S. Army and major in the U.S. Army Reserves pleaded guilty today to defrauding Gold Star families and related crimes.

Caz Craffy, also known as Carz Craffey, 41, of Colts Neck, pleaded guilty before U.S. District Judge Georgette Castner in Trenton, New Jersey, to six counts of wire fraud and one count each of securities fraud, making false statements in a loan application, committing acts affecting a personal financial interest, and making false statements to a federal agency.

“Those who target and steal from the families of fallen American servicemembers will be held accountable for their crimes,” said Attorney General Merrick B. Garland. “Nothing can undo the enormous loss that Gold Star families have suffered, but the Justice Department is committed to doing everything in our power to protect them from further harm.”

“Caz Craffy admitted today that he brazenly took advantage of his role as an Army financial counselor to prey upon families of our fallen service members, at their most vulnerable moment,  using lies and deception,” said U.S. Attorney Philip R. Sellinger for the District of New Jersey. “These Gold Star families have laid the dearest sacrifice on the altar of freedom. And they deserve our utmost respect and compassion, as well as some small measure of financial security from a grateful nation. We will use every means at our disposal to ensure that those who defraud our military families are held accountable. Caz Craffy now faces the prospect of years in prison for ripping off these families to line his own pocket.”

“Those who prey on the family members of fallen soldiers, will be sought out and held accountable,” said Special Agent in Charge Joel Kirch of the Department of the Army Criminal Investigation Division Northeast Field Office. “The hard work, long hours, and dedication of our partners within the Task Force, from the U.S. Attorney’s Office, Defense Criminal Investigative Service (DCIS), FBI, Homeland Security Investigations (HSI), and our own investigative analyst, resulted in this investigation’s swift resolution.”

“The families of service members who lost their lives while serving their country deserve to be treated with compassion, dignity, and respect by individuals entrusted to assist them in obtaining survivor benefits,” said Principal Deputy Director James R. Ives of DCIS. “Today’s announcement reflects DCIS and our law enforcement partners’ steadfast commitment to holding accountable those who use their official positions to take advantage of grieving military families.”

“Gold Star families are given a title no one would choose because it means they’ve paid the ultimate sacrifice for this country,” said Special Agent in Charge James E. Dennehy of the FBI Newark Field Office. “The soldier, sailor, marine, or airman they loved died during a time of conflict — defending this nation. They are given money and assistance to help ease the burden that comes with losing their loved one, but no amount of money can replace what they’ve lost. Craffey took advantage of his position and defrauded families already going through a tremendous amount of suffering. He is being held accountable, and his victims are seeing justice prevail.”

“Craffy disgraced his entrusted position to care for our nation’s military families when he allegedly took advantage of them during a vulnerable time of grief,” said Acting Special Agent in Charge William S. Walker of Homeland Security Investigations (HSI) Newark. “No family, especially our Gold Star families, should have to face further heartache after a loved one’s death by having their financial security ripped out from under them by fraudsters.”

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

When a member of the Armed Services dies during active duty, his or her surviving beneficiary, now a member of a Gold Star family, is entitled to a $100,000 payment and the servicemember’s life insurance of up to $400,000. These payments are disbursed to the beneficiary in a matter of weeks or months following the servicemember’s death. To assist the beneficiaries in this time of need, the military provides a number of services to the servicemember’s family, including the assistance of a financial counselor.

From November 2017 to January 2023, Craffy was a civilian employee of the U.S. Army, working as a financial counselor with the Casualty Assistance Office. He was also a major in the U.S. Army Reserves, where he has been enlisted since 2003. Craffy was responsible for providing general financial education to the surviving beneficiaries. He was prohibited from offering any personal opinions regarding the surviving beneficiary’s benefits decisions. Craffy acknowledged that he was not permitted to participate personally in any government matter in which he had an outside financial interest. However, without telling the Army, Craffy simultaneously maintained outside employment with two separate financial investment firms.

Craffy used his position as an Army financial counselor to identify and target Gold Star families and other military families. He admitted to encouraging the Gold Star families to invest their survivor benefits in investment accounts that he managed in his outside, private employment. Based upon Craffy’s false representations and omissions, the vast majority of the Gold Star families mistakenly believed that Craffy’s management of their money was done on behalf of and with the Army’s authorization.

From May 2018 to November 2022, Craffy obtained more than $9.9 million from Gold Star families to invest in accounts managed by Craffy in his private capacity. Once in control of this money, Craffy repeatedly executed trades, often without the family’s authorization. These unauthorized trades earned Craffy high commissions. During the timeframe of the scheme, the Gold Star family accounts lost more than $3.7 million, while Craffy personally earned more than $1.4 million in commissions, drawn from the family accounts.

Craffy faces a maximum penalty of of 20 years in prison for each count of wire fraud and securities fraud, a maximum penalty of of two years in prison for submitting a false statement on a loan application,  and a maximum penalty of five years in prison for the charges of acts affecting a personal interest and false statements to a federal agent. All counts but the securities fraud count are also punishable by a maximum fine of either $250,000 or twice the gain or loss from the offense, whichever is greatest. The securities fraud count is punishable by a maximum fine of either $5 million or twice the gain or loss from the offense, whichever is greatest. A sentencing hearing is scheduled for Aug. 21.

The U.S. Securities and Exchange Commission (SEC) has a pending civil complaint against Craffy based on the same and additional conduct. Craffy has been permanently prohibited from association with any member of the Financial Industry Regulatory Authority Inc. (FINRA).

The Department of the Army Criminal Investigation Division, DCIS, FBI, and HSI Newark, investigated the case, with assistance from the SEC and FINRA.

Assistant U.S. Attorneys Martha K. Nye and Carolyn Silane for the District of New Jersey are prosecuting the case.

TRENTON, N.J. – A Monmouth County, New Jersey, financial counselor with the United States Army and major in the U.S. Army Reserves today admitted defrauding Gold Star families and related crimes, U.S. Attorney Philip R. Sellinger announced.

Caz Craffy, aka “Carz Craffey,” 41, of Colts Neck, New Jersey, pleaded guilty before U.S. District Judge Georgette Castner in Trenton federal court to the indictment filed against him, which charged six counts of wire fraud and one count each of securities fraud, making false statements in a loan application, committing acts affecting a personal financial interest, and making false statements to a federal agency.

“Those who target and steal from the families of fallen American servicemembers will be held accountable for their crimes,” Attorney General Merrick B. Garland said. “Nothing can undo the enormous loss that Gold Star families have suffered, but the Justice Department is committed to doing everything in our power to protect them from further harm.”

“Caz Craffy admitted today that he brazenly took advantage of his role as an Army financial counselor to prey upon families of our fallen service members, at their most vulnerable moment,  using lies and deception. These Gold Star families have laid the dearest sacrifice on the altar of freedom. And they deserve our utmost respect and compassion, as well as some small measure of financial security from a grateful nation. We will use every means at our disposal to ensure that those who defraud our military families are held accountable. Caz Craffy now faces the prospect of years in prison for ripping off these families to line his own pocket."

U.S. Attorney Philip R. Sellinger

“Those who prey on the family members of fallen soldiers, will be sought out and held accountable,” Special Agent in Charge Joel Kirch, Department of the Army Criminal Investigation Division, Northeast Field Office, said. “The hard work, long hours, and dedication of our partners within the Task Force, from the United States Attorney’s Office, Defense Criminal Investigative Service, FBI, Homeland Security Investigations, and our own investigative analyst, resulted in this investigation’s swift resolution.”

“The families of service members who lost their lives while serving their country deserve to be treated with compassion, dignity and respect by individuals entrusted to assist them in obtaining survivor benefits,” said James R. Ives, Principal Deputy Director of the Defense Criminal Investigative Service, the law enforcement arm of the DoD Office of Inspector General.  “Today’s announcement reflects DCIS and our law enforcement partners’ steadfast commitment to holding accountable those who use their official positions to take advantage of grieving military families.”

“Gold Star families are given a title no one would choose because it means they’ve paid the ultimate sacrifice for this country,” FBI – Newark Special Agent in Charge James E. Dennehy said. “The soldier, sailor, marine or airman they loved died during a time of conflict – defending this nation. They are given money and assistance to help ease the burden that comes with losing their loved one, but no amount of money can replace what they’ve lost. Craffey took advantage of his position and defrauded families already going through a tremendous amount of suffering. He is being held accountable, and his victims are seeing justice prevail.”

“Craffy disgraced his entrusted position to care for our nation’s military families when he allegedly took advantage of them during a vulnerable time of grief,” Homeland Security Investigations Newark acting Special Agent in Charge William S. Walker said. “No family, especially our Gold Star families, should have to face further heartache after a loved one’s death by having their financial security ripped out from under them by fraudsters.”

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

When a member of the Armed Services dies during active duty, his or her surviving beneficiary, now a member of a Gold Star family, is entitled to a $100,000 payment and the servicemember’s life insurance of up to $400,000. These payments are disbursed to the beneficiary in a matter of weeks or months following the servicemember’s death. To assist the beneficiaries in this time of need, the military provides a number of services to the servicemember’s family, including the assistance of a financial counselor.

From November 2017 to January 2023, Craffy was a civilian employee of the U.S. Army, working as a financial counselor with the Casualty Assistance Office. He was also a major in the U.S. Army Reserves, where he has been enlisted since 2003. Craffy was responsible for providing general financial education to the surviving beneficiaries. He was prohibited from offering any personal opinions regarding the surviving beneficiary’s benefits decisions. Craffy acknowledged that he was not permitted to participate personally in any government matter in which he had an outside financial interest. However, without telling the Army, Craffy simultaneously maintained outside employment with two separate financial investment firms.

Craffy used his position as an Army financial counselor to identify and target Gold Star families and other military families. He admitted to encouraging the Gold Star families to invest their survivor benefits in investment accounts that he managed in his outside, private employment. Based upon Craffy’s false representations and omissions, the vast majority of the Gold Star families mistakenly believed that Craffy’s management of their money was done on behalf of and with the Army’s authorization.

From May 2018 to November 2022, Craffy obtained more than $9.9 million from Gold Star families to invest in accounts managed by Craffy in his private capacity. Once in control of this money, Craffy repeatedly executed trades, often without the family’s authorization. These unauthorized trades earned Craffy high commissions. During the timeframe of the scheme, the Gold Star family accounts lost more than $3.7 million, while Craffy personally earned more than $1.4 million in commissions, drawn from the family accounts.

The wire fraud and securities fraud charges are each punishable by a maximum of 20 years in prison. The charge of submitting a false statement on a loan application is punishable by a maximum of two years in prison. The charges of acts affecting a personal interest and false statements to a federal agent are each punishable by five years in prison. All counts but the securities fraud count are also punishable by a maximum fine of either $250,000 or twice the gain or loss from the offense, whichever is greatest. The securities fraud count is punishable by a maximum fine of either $5 million or twice the gain or loss from the offense, whichever is greatest. Sentencing is scheduled for Aug. 21, 2024.

The U.S. Securities and Exchange Commission (SEC) has a pending civil complaint against Craffy based on the same and additional conduct. Craffy has been permanently prohibited from association with any member of the Financial Industry Regulatory Authority Inc. (FINRA).

U.S. Attorney Sellinger credited special agents of the Department of the Army Criminal Investigation Division, under the direction of Special Agent in Charge Kirch; special agents of DCIS, under the direction of Principal Deputy Director Ives; special agents of the FBI, under the direction of Special Agent in Charge Dennehy; and special agents of Homeland Security Investigations Newark, under the direction of Acting Special Agent in Charge Walker, with the investigation leading to the indictment. He also expressed appreciation for the Securities and Exchange Commission, under the direction of Gurbir S. Grewal, Director, Division of Enforcement, and FINRA, under the direction of Head of Enforcement Bill St. Louis.

The government is represented by Assistant U.S. Attorneys Martha K. Nye of the Criminal Division in Trenton, and Carolyn Silane of the Economic Crimes Unit in Newark.

 

craffy.indictment.pdf

NEWARK, NJ. – Two New York men today admitted conspiring with others to defraud dozens of states to obtain millions of dollars of COVID-19 unemployment benefits; one of the defendants also admitted to fentanyl conspiracy and distribution and conspiring to defraud the IRS of tax credit benefits, U.S. Attorney Philip R. Sellinger announced.

Natanael Valdez Brito, aka “El Pocho,” 35, of the Bronx, New York, pleaded guilty before U.S. District Judge Michael A. Shipp in Trenton federal court to a four-count information charging him with conspiracy to distribute fentanyl, possessing with intent to distribute fentanyl, and two counts of conspiracy to commit wire fraud.

Alexander Arismendy Alix Hernandez, 23, of the Bronx, New York, pleaded guilty before Judge Shipp to an information charging him with one count of conspiracy to commit wire fraud.

Billy Castro, 33, previously pleaded guilty to the wire fraud conspiracy to which Valdez and Alix pleaded guilty, and Castro and Juan De La Cruz Infante Torres, 52, previously pleaded guilty to the fentanyl offenses to which Valdez pleaded guilty. Both Castro and Infante are awaiting sentencing.

The following individuals were previously charged by complaint for the same wire fraud conspiracy: Rafael Josmin Nunez Duarte, 33, and Josmin Rafael Nunez Duarte, aka “Mello,” 33, both of the Bronx, New York; Leonel Frias Espaillat, 32, of Allentown, Pennsylvania; and Abrahan Rivas Rojas, aka “Milandro,” 36, and Yarisa Espaillat, aka “Yari,” 34, both of the Dominican Republic. Nunez, Duarte, Frias, and Espaillat have been released on bond. Rivas remains at large.

“The financial benefits provided by the government in response to the COVID-19 pandemic provided enormous relief to Americans who were struggling to get by. Unfortunately, people like the defendants who pleaded guilty today saw the pandemic as an opportunity to enrich themselves illicitly. Our office is focused on combating all types of fraud, especially when it involves exploiting the suffering of others.”

U.S. Attorney Philip R. Sellinger

“Much of the world has moved on from the pandemic,” FBI – Newark Special Agent in Charge James E. Dennehy said. “Gone are masking, social distancing, and quarantining. However, our work searching out and bringing to justice fraudsters who used COVID-19 as a get-rich-quick scheme forges on even now and will until everyone who broke the law is held accountable. The men pleading guilty to their roles in this conspiracy should serve as a warning to others who think the more time that goes by, they will get away with it. You won't, and we will catch you.”

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

Valdez and Alix conspired with Castro, Nunez, Duarte, Frias, Rivas, Espaillat, and others to use the personal identifying information of thousands of individuals to create fictitious online profiles claiming to be real people seeking unemployment benefits as a result of the COVID-19 pandemic. The conspirators submitted fraudulent applications to the departments of labor of Puerto Rico and dozens of other states, including Pennsylvania, New York, and New Jersey. Once the fraudulent unemployment benefit applications were approved, the conspirators received unemployment benefit funds through debit cards, which they either cashed out at ATMs or used to make purchases. To date, law enforcement has identified that the unwitting individuals’ information was used to fraudulently obtain more than $25 million in unemployment benefits from approximately 29 states and Puerto Rico.

Valdez also conspired with others to attempt to defraud the IRS of more than $1.9 million in tax credit benefits, for which the conspirators received at least $129,446. Valdez and others used personally identifying information to fraudulently apply for $1,800 child tax credit benefits and other benefits from the IRS. When law enforcement searched Valdez’s residence, they recovered hundreds of completed applications in sealed envelopes, which were ready to be mailed to the IRS.

In May and June 2021, Valdez conspired with Castro, Infante, and others to distribute substantial quantities of fentanyl. Valdez obtained kilograms of fentanyl from a source of supply in Mexico. Valdez then provided the kilograms to Castro, which he coordinated with Infante to sell. On June 15, 2021, Castro and Infante took approximately 2 kilograms of fentanyl from Castro’s Queens, New York apartment to Clifton, New Jersey, where they were arrested trying to sell it. Law enforcement agents then searched Castro’s apartment and found approximately 2 additional kilograms of fentanyl, along with driver’s licenses, Social Security cards, debit cards, tax forms, bills, and other documents – including COVID-19 unemployment benefits applications and debit cards – in the names of approximately 100 individual victims that were used in furtherance of the unemployment benefit fraud conspiracy.

The charges of conspiracy to distribute and possession with intent to distribute fentanyl each carry a maximum sentence of 20 years in prison and a maximum fine of $1 million. The conspiracy to commit wire fraud charges carry a maximum penalty of 20 years in prison and a fine of the greatest of $250,000, twice the gross amount of any pecuniary gain that any persons derived from the offense, or twice the gross amount of any pecuniary loss sustained by any victims of the offense, whichever is greatest. Sentencing for both defendants is scheduled for Aug. 27, 2024.

U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge James E. Dennehy in Newark; special agents of the IRS – Criminal Investigation, under the direction of Acting Special Agent in Charge Jenifer L. Piovesan in Newark; special agents with the U.S. Postal Service – Office of Inspector General, under the direction of Special Agent in Charge Matthew Modafferi, Northeast Area Field Office, with the investigation leading to the guilty pleas and charges. He also thanked the U.S. Department of Labor, Pennsylvania Department of Labor and Industry, and New York Department of Labor for their assistance in the investigation.

The District of New Jersey COVID-19 Fraud Enforcement Strike Force is one of five strike forces established throughout the United States by the U.S. Department of Justice to investigate and prosecute COVID-19 fraud. The strike forces focus on large-scale, multi-state pandemic relief fraud perpetrated by criminal organizations and transnational actors. The strike forces are interagency law enforcement efforts, using prosecutor-led and data analyst-driven teams designed to identify and bring to justice those who stole pandemic relief funds.

This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.

The government is represented by Assistant U.S. Attorneys Mark J. Pesce of the Economic Crimes Unit and Sam Thypin-Bermeo of the OCDETF Unit in Newark.

The charges and allegations against Nunez, Duarte, Frias, Rivas, and Espaillat are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

 

alix.information.pdf valdez.information.pdf

NEWARK, N.J. – A member of the Rollin’ 60s Neighborhood Crips gang today admitted his role in a racketeering conspiracy, U.S. Attorney Philip R. Sellinger announced.

Elijah Williams, aka “Lil Smith,” 24, pleaded guilty before U.S. District Judge Susan D. Wigenton in Newark federal court to a superseding indictment that charged him with Racketeer Influenced and Corrupt Organizations (RICO) conspiracy.

“The defendant in this case today admitted to his role in a criminal enterprise involved in violent crime and drug trafficking. Williams murdered and injured rival gang members and left a trail of blood. He now faces spending the rest of his life behind bars. This result was achieved through the hard work of many law enforcement partners, and we will continue this cooperative effort as we battle the scourge of drugs and violence on our streets.”

U.S. Attorney Philip R. Sellinger

“The guilty plea from a member of the Rollin’ 60s Neighborhood Crips gang is a result of the collaborative effort DEA New Jersey has with our law enforcement partners effectively targeting those organizations and individuals poisoning and destroying our communities,” Special Agent in Charge Cheryl Ortiz of the DEA New Jersey Field Division said. “Removing these individuals and their illicit narcotics saves lives and prevents deaths.”

“This investigation is an example of ATF’s dedication to working with our state, local and federal partners in identifying, targeting, and investigating violent criminals who prey upon our citizens and lessen the quality of life of our communities,” Bureau of Alcohol, Tobacco, Firearms and Explosives Special Agent in Charge Bryan Miller said. “We will continue to work with our partners to impact the violence of gangs, drug-related activity, and criminal organizations. Our neighborhoods deserve to exist without fear and intimidation inflicted by these violent offenders.”

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

From 2015 through Sept. 22, 2022, Williams was a member of the Rollin’ 60s Neighborhood Crips, a criminal enterprise responsible for acts of violence and the distribution of controlled substances in the District of New Jersey and elsewhere. On Sept. 25, 2018, in Newark, Williams attempted to murder rival gang members and associates by shooting at four individuals, one of whom was paralyzed. On March 20, 2019, in Irvington, New Jersey, Williams fatally shot another person, in retaliation for the murder of a member and associate of the Rollin’ 60s.

The defendant faces a maximum sentence of life in prison and a fine of up to $250,000. Sentencing is scheduled for Sept. 4, 2024.

U.S. Attorney Sellinger credited special agents of the Drug Enforcement Administration, under the direction of Special Agent in Charge Cheryl Ortiz; special agents of IRS - Criminal Investigation, under the direction of Acting Special Agent in Charge Jenifer L. Piovesan; special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), under the direction of Special Agent in Charge Bryan Miller; investigators of the U.S. Marshals Service, under the direction of Marshal Juan Mattos; the Irvington Police Department, under the direction of Police Division Director Tracy Bowers; the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Theodore N. Stephens II; the Newark Police Department, under the direction of Public Safety Director Fritz Fragé; the Bloomfield Police Department, under the direction of Director of Public Safety Samuel A. DeMaio; the Essex County Sheriff’s Office, under the direction of Sheriff Armando B. Fontoura; the East Orange Police Department, under the direction of Chief Phyllis L. Bindi; the Elizabeth Police Department, under the direction of Police Director Earl J. Graves; the Edison Police Department, under the direction of Chief of Police Tom Bryan; the New Jersey State Police, under the direction of Col. Patrick J. Callahan; the Union County Prosecutor’s Office, under the direction of Prosecutor William A. Daniel; the Spotswood Police Department, under the direction of Chief Philip Corbisiero; and the North Carolina State Bureau of Investigation Fugitive and Missing Person Task Force, which includes members of the FBI, with the investigations leading to the charges in the Rollin 60’s Neighborhood Crips investigation.

This case is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.

The government is represented by Assistant U.S. Attorney Francesca Liquori of the Special Prosecutions Division.

 

williams.sindictment.pdf

TRENTON, N.J. – The owner and sole medical provider of a New Jersey medical practice admitted his role in a health care fraud scheme causing over $1.9 million in insurance reimbursements for false claims, U.S. Attorney Philip R. Sellinger announced today.  

Dr. Fazal Panezai, 76, of Morganville, New Jersey, pleaded guilty before U.S. District Judge Georgette Castner in Trenton federal court to an information charging him with participating in a health care fraud scheme. 

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

Panezai, who owned and operated Matawan-Aberdeen Heart & Medical Center, for years submitted false claims to at least six health insurance benefit programs for office visits that either never occurred or did not take place for the length of time that he claimed.

For example, Panezai submitted claims for office visits lasting approximately 1,675 minutes – approximately 27.9 hours – for one day’s worth of office visits on May 27, 2022. Panezai also billed health insurance providers over $80,000 for office visits when he was out of the country and not conducting any office visits. Panezai also submitted claims for office visits when patients only picked up a prescription for a controlled substance from the front desk and never met with him. The false claims caused insurance plans to issue reimbursement checks to the center. Panezai kept the illicit profits, which totaled more than $1.9 million.

The charge of health care fraud is punishable by a maximum of 10 years in prison and a maximum fine of either $250,000 or twice the gain or loss from the offense, whichever is greatest. Sentencing is scheduled for Aug. 20, 2024.

U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge James E. Dennehy in Newark, with the investigation leading to the guilty plea. He also thanked the Matawan Police Department.

The government is represented by Assistant U.S. Attorney DeNae Thomas of the Health Care Fraud Unit in Newark.

 

panezai.information.pdf

NEWARK, N.J. – The Justice Department announced today that the Procurement Collusion Strike Force (PCSF) is adding four new national partners, for a total of 38 agencies and offices committed to deterring, detecting, investigating, and prosecuting antitrust crimes and related schemes that target government procurement, grants, and program funding at all levels of government.

The new partners include three U.S. Attorney’s Offices in districts with diverse government spending oversight priorities and proven PCSF and Antitrust Division relationships:

• Philip R. Sellinger, District of New Jersey
• S. Lane Tucker, District of Alaska
• Duane A. Evans, Eastern District of Louisiana

The PCSF is also welcoming Department of Commerce Office of Inspector General, whose oversight of billions of dollars authorized under the Infrastructure Investment and Jobs Act and Creating Helpful Incentives to Produce Semiconductors (CHIPS) and Science Act of 2022 closely aligns with PCSF priorities.

“A level playing field and fair competition are vitally important to ensure that taxpayers are getting the best value for their money when government contacts are awarded. My office is proud to join this national effort to combat price-fixing, bid rigging, and any type of collusion or fraud in government procurement. Working with our investigative partners, we will hold accountable anyone who tries to corrupt the procurement process.”

U.S. Attorney Philip R. Sellinger

“Since 2019, the Procurement Collusion Strike Force has aggressively investigated and prosecuted crimes that undermine and distort the competitive process in taxpayer-funded procurements,” said Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division. “With new investments in infrastructure, energy and hi-tech manufacturing the PCFS’ strategic expansion to include these four partners positions it to accomplish its important mandate more effectively.”

“Billions in federal funds are coming into our state to improve the lives of Alaskans, making it imperative that those tax dollars are used for their intended purpose and not illegally obtained,” said U.S. Attorney S. Lane Tucker for the District of Alaska. “The implementation of the Procurement Collusion Strike Force in Alaska showcases my office’s commitment to take action against collusive conduct and related fraudulent schemes by individuals or corporations that threaten government spending destined to progress our great state.”

“We welcome the new partnership and expertise that the PCSF brings to our district,” said U.S. Attorney Duane A. Evans for the Eastern District of Louisiana. “Our office now has access to an important force multiplier, the investigatory strength and institutional knowledge of 37 fellow agencies and offices dedicated to enforcing antitrust laws and protecting the integrity of our government procurement programs. Indeed, it will become a formidable partnership laser-focused on deterring and prosecuting procurement fraud.”

“Preventing, detecting and defeating criminal activity related to federal procurement and grant programs is a high priority for Commerce OIG,” said Acting Inspector General Roderick Anderson of the Department of Commerce. “We are pleased to join this strike force and look forward to collaborating with our partners to enhance our collective efforts to combat antitrust violations, ensure integrity within government procurements and spending and maximize value for taxpayers.”

In November 2019, the Department of Justice created the PCSF, a joint law enforcement effort to combat antitrust crimes and related fraudulent schemes that impact government procurement, grant, and program funding at all levels of government – federal, state and local. For more information, visit https://www.justice.gov/procurement-collusion-strike-force.

NEWARK, N.J. –Two Essex County, New Jersey, men have been charged with carjacking a vehicle in Newark, U.S. Attorney Philip R. Sellinger announced today.

Arraqeeb Williamscook, 23, of East Orange, New Jersey, and Washir Singletary, 30, of Newark, are charged by complaint with one count of conspiracy to commit carjacking and one count of carjacking. Singletary is also charged with one count of possession of a firearm by a convicted felon. Both defendants appeared before U.S. Magistrate Judge José Almonte in Newark federal court on March 9, 2024, and were detained.

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

On Dec. 9, 2023, the victim was waiting for his pick-up order at a restaurant in Newark.  The victim was pumping air into the front passenger side tire while waiting for his food order when Williamscook and Singletary pulled into the parking lot in a Lexus that had been stolen out of Wall Township, New Jersey. Williamscook got out of the Lexus and entered the driver’s side of the victim’s vehicle. When the victim approached Williamscook, Williamscook brandished what appeared to be a firearm. As the victim ran into the restaurant to call for help, Singletary got out of the Lexus and changed places with Williamscook in the victim’s vehicle. Singletary drove away in the victim’s vehicle. Williamscook was apprehended in the restaurant parking lot attempting to flee in the stolen Lexus. Shortly after, Singletary returned to the restaurant parking lot with an unidentified conspirator in the victim’s car to retrieve the stolen Lexus. The unidentified conspirator drove away in the victim’s car and Singletary drove away in the stolen Lexus. Singletary was later apprehended after abandoning the stolen Lexus. At the time of his arrest, he was in possession of a Ruger/Strum revolver.      

The count of conspiracy to commit carjacking carries a maximum potential penalty of five years in prison and a $250,000 fine. The count of carjacking carries a maximum potential penalty of 15 years in prison and a $250,000 fine. The count of possession of a firearm by a convicted felon carries a maximum penalty of 15 years in prison and a $250,000 fine.

U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge James E. Dennehy in Newark, and members of the Newark City Police Department, with the investigation leading to the charges.

The government is represented by Assistant U.S. Attorney Ingrid Eicher of the 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.

 

williamscooketal.complaint.pdf

NEWARK, N.J. – A pharmaceutical manufacturer agreed to pay $2.25 million to resolve allegations that it violated the Controlled Substances Act (CSA), U.S. Attorney Philip Sellinger announced today.

The manufacturer, Novel Laboratories Inc. (Novel), a subsidiary of Lupin Inc., also reached an administrative resolution with the Drug Enforcement Administration (DEA) by entering into a memorandum of agreement (MOA). 

“Manufacturers that work with dangerous and addictive opioids must safeguard the drugs. My office is dedicated to holding every level of the opioid distribution chain accountable for failures to properly handle and account for controlled substances, including manufacturers, distributors, pharmacies, and medical providers to ensure that these drugs are used safely and for legal purposes.”

U.S. Attorney Philip R. Sellinger

“Pharmaceutical companies are not exempt from their regulatory responsibilities especially when dealing with controlled substances and the dangerous effects they have when misused,” Special Agent in Charge Cheryl Ortiz of the Drug Enforcement Administration’s New Jersey Field Division said. “This settlement reflects DEA’s commitment to making sure measures are in place to safeguard the community and hold DEA registrants accountable. I commend our Diversion Investigators for bringing this matter to a resolution”

According to documents filed in this case and the contentions of the United States contained in the settlement agreement:

From Jan. 1, 2019, to Aug. 31, 2021, Novel committed CSA violations involving its failure to account for approximately 3.1 kg oxycodone, 7.7 kg hydrocodone, and 30 kg Temazepam. DEA discovered these violations during on-site inspections of Novel beginning in the summer of 2021. The MOA requires Novel to improve its operations and remain in compliance with the law, and will remain in effect for three years.  

U.S. Attorney Sellinger credited diversion investigators of DEA, under the direction of Special Agent in Charge Cheryl Ortiz in Newark, with the investigation leading to the settlement agreement and MOA. 

The government is represented by Assistant U.S. Attorney Jordann R. Conaboy of the U.S. Attorney’s Opioid Abuse Prevention and Enforcement Unit in Newark.

The claims settled by the agreement are allegations only, and there has been no determination of liability.

 

noveldea.moa_.pdf novel.settlement.pdf

TRENTON, N.J. – An Ocean County man was sentenced today to 30 months in prison for failing to pay over $10 million in payroll taxes stemming from his ownership of several businesses, U.S. Attorney Philip R. Sellinger announced.

Josef Neuman, 37, of Lakewood, New Jersey, previously pleaded guilty before U.S. District Judge Michael A. Shipp to an information charging him with willful failure to pay over payroll taxes for one of his businesses in 2018. Judge Shipp imposed the sentence today in Trenton federal court.

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

Neuman was chief executive officer of a business in Lakewood. The company provided administrative services to operators of nursing homes and other health care facilities, including at least approximately 20 entities co-owned and operated by Neuman. As a person who controlled the companies’ financial affairs, Neuman had the responsibility to collect, truthfully account for, and pay over to the IRS the companies’ payroll taxes. During tax years 2017 and 2018, Neuman failed to pay over to the IRS over $10 million in payroll taxes owed by the companies. Neuman knew that payroll taxes were due and owing to the IRS at this time, but continued to pay other business expenses and employee salaries, instead of the unpaid taxes, while tax liabilities continued to accrue. 

In addition to the prison term, Judge Shipp sentenced Neuman to two years of supervised release and ordered restitution of $11.2 million.

U.S. Attorney Sellinger credited special agents of IRS – Criminal Investigation, under the direction of Acting Special Agent in Charge Jenifer L. Piovesan, with the investigation leading to the guilty plea.

The government is represented by Assistant U.S. Attorney Katherine Romano of the Health Care Fraud Unit in Newark.

TRENTON, N.J. – A Monmouth County, New Jersey, man was arrested today for tax evasion and endeavoring to obstruct the administration of IRS laws, U.S. Attorney Philip R. Sellinger announced.

Matthew Tucci, 51, of West Long Branch, New Jersey, is charged in an indictment unsealed today with one count each of willfully attempting to evade the payment of his 2015 and 2016 taxes and corruptly endeavoring to obstruct the administration of IRS laws. He is scheduled to make his initial appearance this afternoon before U.S. Magistrate Judge Tonianne J. Bongiovanni in Trenton federal court.

According to the documents filed in this case:

In 2015 and 2016, Tucci received millions of dollars in income from refunds issued by the Customs and Tax Administration of the Kingdom of Denmark. Tucci subsequently reported on his federal tax returns for those years that he owed over $2 million in taxes based on his receiving that income. Despite admitting that he owed those taxes, Tucci failed to fully pay his taxes when they were due. Tucci purchased more than $7.6 million worth of real estate and attempted to conceal his assets from the IRS by engaging in a series of fraudulent transactions, many of which were designed to disguise the true ownership of real estate he purchased and controlled.

Tucci also made false statements to IRS revenue officers in connection with collection proceedings and failed to disclose material facts to the IRS concerning his financial resources and his ability and intent to pay his outstanding tax liabilities.

The count of tax evasion carries a maximum potential penalty of five years in prison and a maximum fine of $250,000. The count of obstructing the administration of IRS laws carries a maximum potential penalty of three years in prison and a maximum fine of $100,000.

U.S. Attorney Sellinger credited special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Jenifer L. Piovesan in Newark; and special agents of the FBI, under the direction of Special Agent in Charge James E. Dennehy, with the investigation leading to today’s arrest. 

The government is represented by Assistant U.S. Attorney Eric A. Boden, Attorney-in-Charge of the Trenton Branch Office and Senior Litigation Counsel Nanette Davis and Trial Attorney Catriona M. Coppler of the Tax Division.

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

 

tucci.indictment.pdf

NEWARK, N.J. – An Essex County man was convicted today for ordering and committing three murders and for his role in a large-scale narcotics enterprise, U.S. Attorney Philip R. Sellinger announced.

Michael Healy, 43, of Montclair, New Jersey, was convicted by a federal jury of racketeering conspiracy, conspiracy to distribute narcotics, conspiring to murder a federal witness, three counts of murder in aid of racketeering, and related firearms offenses following a four-week trial before U.S. District Judge Michael E. Farbiarz in Newark federal court. 

“Michael Healy ruthlessly ordered murders so that he could protect his narcotics operation and continue to sell large quantities of dangerous narcotics. He recruited men to kill someone he thought was an informant, and even when they killed the wrong person – a bystander – he ordered them to kill his target. He personally pulled the trigger on another victim. Healy’s brazen violence resulted in the senseless killing of three men and caused incredible danger to the community. He now faces multiple mandatory life sentences for his crimes, and the District of New Jersey is safer as a result. As this case demonstrates, my office will use every tool available to prosecute violent crime and ensure that those who endanger the community will face lengthy jail sentences.” 

U.S. Attorney Philip R. Sellinger

“Three families were forced to bury their loved ones because one man decided his warped kingdom of illicit drugs and dirty money meant more than their lives,” FBI – Newark Special Agent in Charge James E. Dennehy said. “Healy mercilessly ordered and hunted down those he believed could harm his criminal enterprise and lucrative relationship with the gangs and cartels, going so far as to pull the trigger himself on one of the victims. Justice has been served with this verdict, and Healy now faces a grim life in federal prison without any chance of parole.”

According to court documents and evidence presented at trial:

In February 2018, Healy found out that one of his conspirators in the drug trafficking enterprise (DTE) was cooperating with law enforcement by providing information about the drug enterprise. Healy ordered members of the Bloods in East Orange to kill the informant, referenced in the Indictment as “A.S.” On Feb. 3, 2018, outside the informant’s residence in Bloomfield, New Jersey, Healy’s conspirators shot and killed a bystander, referenced in the indictment as “Victim-1,” believing the bystander was the informant. Realizing they killed the wrong person, Healy ordered the Bloods to finish the job, and on March 12, 2018, in Bloomfield, the conspirators killed the informant while walking his dog in the area of his residence. On April 6, 2018, believing that another member of the enterprise – identified in the indictment as “J.C.” – might also pose a risk to the enterprise, Healy himself shot and killed “J.C.” in Newark.

Healy’s DTE operated in and around Newark beginning in approximately 2012. Between 2003 and 2012, Healy became a member of the Tree Top PIRU set of the Bloods street gang in Maryland. In and around 2012, Healy formed and led the Healy DTE, a large and sophisticated drug distribution organization that obtained, transported and distributed large amounts of cocaine, heroin, fentanyl and marijuana. Healy used his leadership status in the Tree Top PIRU Bloods to assist him with obtaining suppliers, recruiting and controlling enterprise members, and otherwise conducting the Healy DTE’s operations.

The Healy DTE transported multi-kilogram quantities of controlled substances from California to New Jersey by various means, including private aircraft, vehicles with hidden secret compartments, and the U.S. Postal Service. The Healy DTE then processed and repackaged the controlled substances at various “stash houses” in New Jersey. The Healy DTE distributed some of the controlled substances in New Jersey, including through Bloods gang members in East Orange.

Thomas Zimmerman, Tyquan Daniels, and Ali Hill – all members of the Brick City Brims subset of the Bloods street gang in East Orange – previously pleaded guilty to racketeering conspiracy for their respective roles in the murders of Victim-1 and A.S.  Zimmerman was sentenced to a 37-year term of imprisonment; Daniels was sentenced to a 35-year term of imprisonment; and Hill was sentenced to a 25-year term of imprisonment. In addition, on Feb. 22, 2024, Leevander Wade pleaded guilty to racketeering conspiracy for his roles in all three murders. His sentencing is scheduled for June 25, 2024.

The counts of racketeering conspiracy, murder in aid of racketeering, discharge of a firearm resulting in death, and conspiracy to murder a federal witness are all punishable by a maximum of life in prison and a $250,000 fine. The counts of use of a firearm in furtherance of violent crime are punishable by a mandatory minimum of 10 years in prison, a maximum of life in prison, and a $250,000 fine. The count of conspiracy to distribute controlled substances is punishable by a mandatory 10 years in prison, a maximum of life in prison and a $10 million fine. Sentencing is scheduled for Oct. 1, 2024. 

U.S. Attorney Sellinger credited special agents of the FBI, under the direction of special agent in charge James E. Dennehy in Newark; the Newark Police Department, under the direction of Public Safety Director Fritz G. Fragé; the Essex County Prosecutors Office; the Union County Prosecutor’s Office, the East Orange Police Department; the Montclair Police Department, the Maryland Department of Public Safety and Correctional Services, Intelligence and Investigative Division, under the direction of Secretary Robert Green; the Ohio State Highway Patrol, under the direction of Colonel Charles A. Jones.

The government is represented by Senior Trial Counsel Robert L. Frazer and Assistant U.S. Attorney Samantha C. Fasanello.

NEWARK N.J. – A federal grand jury returned an indictment today charging a Bergen County, New Jersey, tax preparer with fraudulently seeking more than $150 million from the IRS by filing more than 1,600 false tax returns for himself and his clients that claimed COVID-19-related employment tax credits, U.S. Attorney Phillip R. Sellinger for the District of New Jersey and Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division announced.   

Leon Haynes of Teaneck, New Jersey, is charged with 55 counts of aiding and assisting in the preparation of false tax returns, five counts of mail fraud, one count of aggravated identity theft, and two counts of tax evasion. Haynes was previously charged by complaint in relation to the same scheme.

“As alleged in the indictment, Haynes filed over 1,600 phony tax forms seeking more than $150 million dollars in refunds to which he and his clients were not entitled. He allegedly took advantage of programs earmarked for struggling small businesses who needed financial relief during the COVID 19 pandemic and  used them to generate illicit profits for himself. Combatting pandemic fraud in all of its forms is a top priority for this office and our law enforcement partners.”

U.S. Attorney Philip R. Sellinger

“This is precisely the type of conduct IRS Criminal Investigation and our law enforcement partners are committed to deterring,” Jenifer L. Piovesan, Acting Special Agent in Charge of IRS – Criminal Investigation, Newark Field Office, said. “The defendant’s alleged abuse of a program designed for those in need is appalling. Today’s indictment sends a clear message that we are committed to protecting the integrity of our tax system and relief programs.”

In response to the COVID-19 pandemic and its economic impact, Congress authorized an employee retention tax credit that an eligible small business could use to reduce the employment tax it owed to the IRS, also known as the “employee retention credit” or ERC.

Congress also authorized a credit that a business could take against employment taxes to reimburse businesses for the wages paid to employees who were on sick or family leave and could not work because of COVID-19. This “paid sick and family leave credit” was equal to the wages the business paid the employees during their leave.

As charged in the indictment, from November 2020 to May 2023, Haynes repeatedly exploited these programs that were intended to help small businesses impacted by the COVID-19 pandemic. Acting as a tax preparer, Haynes allegedly filed more than 1,600 false employment tax returns with the IRS claiming COVID-related tax credits on behalf of himself and his clients.

Haynes allegedly falsely told his clients that the government was giving out COVID-relief money for businesses and that they were eligible for it simply because they had a business. Haynes allegedly submitted forms to the IRS on behalf of his client’s businesses, often without consulting his clients, that grossly overstated the number of employees and the amount of wages paid to fraudulently claim these COVID-related tax credits. Haynes allegedly submitted similarly false forms for four of his own companies.

According to the indictment, based on these and other misrepresentations, Haynes fraudulently sought more than $150 million in tax refunds on behalf of his companies and numerous other businesses in his clients’ names. 

The IRS allegedly disbursed at least $40 million in tax refunds to Haynes’ clients based on the false tax forms that Haynes filed. Haynes allegedly collected a percentage of the tax refunds the client received from the IRS as a fee. At Haynes’ request, many clients allegedly paid him those fees in cash. Haynes allegedly did not report on his or his businesses’ tax returns some of the income he received from clients as his share of the fraudulent obtained tax refunds.  The IRS also allegedly directly mailed Haynes multiple tax refund checks totaling approximately $1.43 million based on false claims he submitted relating to his businesses.

Each count of aiding and assisting in the preparation of false returns carries a maximum penalty of three years in prison and a $250,000 fine; each mail fraud count carries a maximum penalty of 20 years in prison and a $250,000 fine; both tax evasion counts carry a maximum penalty of five years in prison and a $250,000 fine; and the count of aggravated identity theft carries a mandatory two year term of imprisonment to run consecutively to any other sentence imposed by the court.

U.S. Attorney Sellinger credited special agents of IRS – Criminal Investigation, under the direction of Acting Special Agent in Charge Jenifer L. Piovesan; special agents of the Social Security Administration, Office of the Inspector General, under the direction of Special Agent in Charge Sharon MacDermott, and postal inspectors from the U.S. Postal Service, under the direction of Inspector in Charge Christopher Nielsen, Philadelphia Division, with the investigation.

The government is represented by Assistant U.S. Attorney Fatime Meka Cano of the Economic Crimes Unit in Newark and Trial Attorney Samuel Bean of the U.S. Justice Department’s Tax Division.

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

The District of New Jersey COVID-19 Fraud Enforcement Strike Force is one of five strike forces established throughout the United States by the U.S. Department of Justice to investigate and prosecute COVID-19 fraud. The strike forces focus on large-scale, multi-state pandemic relief fraud perpetrated by criminal organizations and transnational actors. The strike forces are interagency law enforcement efforts, using prosecutor-led and data analyst-driven teams designed to identify and bring to justice those who stole pandemic relief funds.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

 

haynes.indictment.pdf

CAMDEN, N.J. – A New Jersey man today admitted conspiring with two others in a kickback scheme to defraud the owner of a condominium complex in Jersey City of $470,000, U.S. Attorney Philip R. Sellinger announced.

Ranaldo Bennett, 56, of Jersey City, New Jersey, pleaded guilty before U.S. District Court Judge Karen M. Williams in Camden federal court to an information charging him with one count of conspiracy to commit wire fraud. Bennett’s conspirators, Nathaniel Obedos and Jonathan Smith, pleaded guilty before Judge Williams on July 6, 2023, and Feb. 8, 2024, respectively, and are awaiting sentencing.

According to the publicly filed documents and statements made in Court:

From November 2018 through October 2020, Bennett conspired with Smith and Obedos to engage in a kickback scheme to defraud the owner of the condominium complex. Bennett was the complex’s lead property manager and Smith was its superintendent. Bennett and Smith steered repair and maintenance work to Obedos and his company in exchange for kickbacks from Obedos. Bennett and Smith falsified invoices that grossly inflated the value of Obedos’s work. Relying on those fake invoices, the complex paid Obedos the inflated prices, and Obedos then used the excess money to pay Bennett and Smith kickbacks. The complex paid Obedos and his company over $1 million for work that was actually valued at $500,000. Obedos used the overpayments to pay $440,000 in kickbacks to Bennett and approximately $30,000 in kickbacks to Smith.

The charge of conspiracy to commit wire fraud carries a maximum potential penalty of 20 years. The charge also carries a maximum fine of $250,000, or twice the gross gain or loss from the offense. Bennett’s sentencing is scheduled for Aug. 7, 2024.

U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge James E. Dennehy in Newark, with the investigation leading to the  guilty plea.

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

 

bennett.information.pdf

NEWARK, N.J. – Two laboratory marketers, their marketing companies, and five doctors have agreed to pay over $1.5 million to resolve allegations of False Claims Act allegations of involvement in laboratory kickback schemes in violation of the Anti-Kickback Statute.

“The kickbacks resulted in the submission of fraudulent laboratory testing claims to Medicare. Clinical laboratories, marketing companies, and health care practitioners are on notice that kickback arrangements in any form are not acceptable. No matter how they are named – as a ‘consulting fee,’ ‘commission,’ or otherwise – or whether they are paid through intermediaries, kickbacks undermine the integrity of medical decision making and have no place in our healthcare system. Today’s agreement is yet another example of my office’s commitment to enforcing the False Claims Act and the Anti-Kickback Statute and protecting Medicare from shelling out taxpayer money for reimbursements tainted by improper kickbacks.”  

U.S. Attorney Philip R. Sellinger

“Kickbacks can harm taxpayer-funded healthcare programs, distort the market for healthcare services and improperly influence healthcare providers’ medical decisions,” Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division, said. “We will continue to pursue those involved in illegal kickback schemes, including marketers, doctors, and medical practices.”

“Certain violations of the Anti-Kickback Statute can induce medically unnecessary testing and inappropriately steer medical tests to providers who may not return timely or quality results,” Special Agent in Charge Naomi D. Gruchacz of the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), said. “We will continue to work with our law enforcement partners to seek resolutions and effect change to preserve the integrity of the federal health care system.”

The Anti-Kickback Statute prohibits offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by Medicare and other federally funded healthcare programs. The Anti-Kickback Statute is intended to ensure that medical providers’ judgments are not compromised by improper financial incentives and are instead based on the best interests of their patients.

The Anti-Kickback Statute holds accountable parties on both sides of an impermissible kickback arrangement. The settlements announced today resolve allegations that laboratory marketers and their companies paid or conspired to pay kickbacks to doctors, and that doctors and their companies received kickbacks in return for laboratory referrals. The alleged kickbacks resulted in the submission of false or fraudulent laboratory testing claims to Medicare in violation of the False Claims Act.

The Marketer Settlements

George Carralejo of Yorba Linda, California, and his marketing company, OC Genetic Consultants Inc., agreed to pay $400,000 to resolve allegations that they entered into two illegal schemes to pay kickbacks to doctors for laboratory referrals. From August 2020 to September 2021, Carralejo and his company allegedly conspired with a South Carolina marketer, Ralston Health Group Inc., to pay kickbacks disguised as consulting and medical director fees to a doctor in Houston, Texas. Carralejo and his company paid the kickbacks in order to induce the doctor to order laboratory testing from RDx Bioscience Inc. (RDx), a clinical laboratory in Kenilworth, New Jersey, and NEXT Bio-Research Services LLC, doing business as NEXT Molecular Analytics (Next Molecular), a clinical laboratory in Chester, Virginia. Carralejo’s company and Ralston allegedly profited from the kickback scheme in the form of commissions from RDx and Next Molecular based on the Houston doctor’s referrals.

From October 2021 to October 2022, Carralejo and his company allegedly conspired with a Texas marketer to pay kickbacks disguised as consulting fees to induce a doctor in Little Rock, Arkansas to order RDx laboratory testing. The settlement resolves allegations that Carralejo provided commission numbers to the Arkansas doctor or her staff so that she could prepare false consulting invoices to disguise both the reason for the Texas marketer’s payments (to induce referrals, not for consulting work) and the calculation of such payments (based on reimbursements from her referrals, not hourly pay for consulting work). Carralejo allegedly tried to hide his role in the fraud scheme by deleting related text messages on the day he and the Texas marketer received subpoenas from the Department of Justice.

Michael Jeresaty of Daniel Island, South Carolina, and his company, Ralston, agreed to pay $320,000 for allegedly paying kickbacks to the Houston physician referenced above and to a South Carolina doctor who previously settled related allegations. The Department of Justice previously settled with RDx allegations relating to Carralejo’s and Jeresaty’s kickback schemes.

The Physician Settlements

The settlements announced today also resolve allegations that four physicians and related entities received kickbacks in violation of the Anti-Kickback Statute from purported management service organizations (MSOs) in return for making referrals to laboratories in Florida and Texas.

• Dr. Paul Bierig agreed to pay $120,634 to resolve allegations that from October 2016 to June 2022, he and his medical practice, Paul C. Bierig, M.D., P.A., received thousands of dollars in payments from Avior Group LLC and other purported MSOs, including Infinity One Health Group MSO LLC and Infinity Three Health Group MSO LLC, in return for ordering laboratory tests from RDx and InHealth Diagnostic LLC doing business as RealLab (InHealth), a clinical laboratory in Dallas, Texas.

• Dr. Mohd Azfar Malik of St. Louis, Missouri, agreed to pay $217,430 to resolve allegations that from January 2019 to March 2020, he and his medical practice, Psych Care Consultants LLC (PCC), received thousands of dollars in payments from a purported MSO, Alari Group LLC (Alari), in return for ordering laboratory tests from Genesis Reference Laboratories LLC (Genesis), a clinical laboratory in Orlando, Florida, and InHealth Diagnostic LLC doing business as RealLab (InHealth), a clinical laboratory in Dallas, Texas. Genesis and InHealth allegedly paid commissions to an independent contractor recruiter, Corum Group LLC (Corum), which used Alari to pay kickbacks to Malik and other healthcare providers in return for their referrals. The Department of Justice previously settled related allegations with Genesis and PCC.

• Dr. Robert Ain of Wichita, Kansas, and his pain management practice, Comprehensive Pain Treatment LLC, agreed to pay $100,632 to resolve allegations that from May 2017 to February 2019, they received thousands of dollars in payments from a purported MSO named Ruthenium Management LLC in return for ordering laboratory tests from Landmark Diagnostics LLC (Landmark), a clinical laboratory in Houston, Texas.

• Dr. Barry Feinberg, Dr. Rachel Feinberg, of St. Louis, and BIF Family Trust, a family trust, agreed to pay $342,466 to resolve allegations that from January 2016 to December 2018, they received thousands of dollars in payments from purported MSOs named ESA Toxicology LLC and Beachwood Services LLC in return for ordering laboratory testing from Landmark.

The parties have agreed to cooperate with the Department of Justice’s investigations of, and litigation against, other participants in the alleged schemes.

The settlements were the result of a coordinated effort between the U.S. Attorney’s Office for the District of New Jersey and the Civil Division’s Commercial Litigation Branch, Fraud Section, with assistance from HHS-OIG.

The government is represented by Assistant U.S. Attorney Kruti Dharia of the U.S. Attorney’s Office, District of New Jersey, Opioid Abuse Prevention and Enforcement Unit and Senior Trial Counsel Christopher Terranova in the Civil Division’s Commercial Litigation Branch (Fraud Section).

The government’s pursuit of these matters illustrates the government’s emphasis on combating healthcare fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services, at 1-800-HHS-TIPS (800-447-8477).

The claims resolved by the settlements are allegations only, and there has been no determination of liability.

ralstonjeresaty.settlement.pdf malik.settlement.pdf feinberg.settlement.pdf carralejo.settlement.pdf bierig.settlement.pdf ain.settlement.pdf

Two laboratory marketers, George Carralejo of Yorba Linda, California, and Michael Jeresaty of Daniel Island, South Carolina and their marketing companies, as well as five physicians, Dr. Paul Bierig of Plano, Texas, Dr. Mohd Azfar Malik of St. Louis, Missouri, Dr. Robert Ain of Wichita, Kansas and Drs. Barry Feinberg and Rachel Feinberg also of St. Louis, and certain affiliated entities have agreed to pay a total of $1,501,162 to resolve alleged False Claims Act violations arising from their involvement in laboratory kickback schemes. The parties have agreed to cooperate with the Justice Department’s investigations of other participants in the alleged schemes.

“Kickbacks can harm taxpayer-funded healthcare programs, distort the market for healthcare services and improperly influence healthcare providers’ medical decisions,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “We will continue to pursue those involved in illegal kickback schemes, including marketers, doctors and medical practices.”

The Anti-Kickback Statute prohibits offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by Medicare and other federally funded healthcare programs. The settlements announced today resolve allegations that laboratory marketers and their companies paid or conspired to pay kickbacks to doctors, and that doctors and their companies received kickbacks in return for laboratory referrals. The alleged kickbacks resulted in the submission of false or fraudulent laboratory testing claims to Medicare in violation of the False Claims Act.

The Marketer Settlements

George Carralejo and his marketing company, OC Genetic Consultants Inc. agreed to pay $400,000 to resolve allegations that they entered into two illegal schemes to pay kickbacks to doctors for their laboratory referrals. First, from August 2020 to September 2021, Carralejo and his company allegedly conspired with a South Carolina marketer, Ralston Health Group Inc. (Ralston), to pay kickbacks disguised as consulting and medical director fees to a doctor in Houston to induce him to order laboratory testing from RDx Bioscience Inc. (RDx), a clinical laboratory in Kenilworth, New Jersey, and NEXT Bio-Research Services LLC, doing business as NEXT Molecular Analytics (Next Molecular), a clinical laboratory in Chester, Virginia. Carralejo’s company and Ralston allegedly profited from the kickback scheme in the form of commissions from RDx and Next Molecular based on the Houston doctor’s referrals.

Second, from October 2021 to October 2022, Carralejo and his company allegedly conspired with a Texas marketer, BeauMed Consultants LLC, to pay kickbacks disguised as consulting fees to a doctor in Little Rock, Arkansas, to induce her to order laboratory tests from RDx. Carralejo allegedly provided commission numbers to the Arkansas physician or her staff, to allow for the preparation of false consulting invoices disguising that the Texas marketer’s payments were designed to reimburse for referrals rather than consulting work and were calculated based on the amount generated by those referrals. Carralejo allegedly tried to hide his role in the fraud scheme by deleting related text messages on the day he and the Texas marketer received subpoenas from the Justice Department.

In addition, Michael Jeresaty and his company, Ralston, agreed to pay $320,000 for allegedly paying kickbacks to the Houston physician referenced above and to a South Carolina doctor who previously settled related allegations involving referrals to RDx. The Justice Department previously settled with RDx allegations relating to Carralejo’s and Jeresaty’s kickback schemes.

The Physician Settlements

The settlements announced today also resolve allegations that five physicians and related entities received kickbacks in violation of the Anti-Kickback Statute from laboratory marketers’ purported management service organizations (MSOs) in return for making referrals to RDx and other laboratories.

• Paul Bierig: Dr. Bierig agreed to pay $120,634 to resolve allegations that from October 2016 to June 2022, he and his medical practice, Paul C. Bierig M.D., P.A., received thousands of dollars in payments from Avior Group LLC and other purported MSOs, including Infinity One Health Group MSO LLC and Infinity Three Health Group MSO LLC, in return for ordering laboratory tests from RDx and InHealth Diagnostic LLC doing business as RealLab (InHealth), a clinical laboratory in Dallas, Texas.
• Mohd Azfar Malik: Dr. Malik agreed to pay $217,430 to resolve allegations that from January 2019 to March 2020, he caused his medical practice, Psych Care Consultants LLC (PCC), to receive thousands of dollars in payments from Alari Group LLC (Alari) in return for ordering laboratory tests from Genesis Reference Laboratories LLC (Genesis), a clinical laboratory in Orlando, Florida, and InHealth. Genesis and InHealth allegedly paid commissions to an independent contractor recruiter, Corum Group LLC (Corum), which used Alari to pay kickbacks to Dr. Malik and other healthcare providers in return for their referrals. The Justice Department previously settled related allegations with Genesis and PCC.
• Robert Ain and Comprehensive Pain Treatment LLC: Dr. Ain and his pain management practice agreed to pay $100,632 to resolve allegations that from May 2017 to February 2019, they received thousands of dollars in payments from a purported MSO named Ruthenium Management LLC in return for ordering laboratory tests from Landmark Diagnostics LLC (Landmark), a clinical laboratory in Houston.
• Barry Feinberg, Dr. Rachel Feinberg and BIF Family Trust: Drs. Feinberg and Feinberg and a family trust agreed to pay $342,466 to resolve allegations that from January 2016 to December 2018, they received thousands of dollars in payments from purported MSOs named ESA Toxicology LLC and Beachwood Services LLC in return for ordering laboratory tests from Landmark.

“The kickbacks resulted in the submission of fraudulent laboratory testing claims to Medicare,” said U.S. Attorney Philip R. Sellinger for the District of New Jersey. “Clinical laboratories, marketing companies and health care practitioners are on notice that kickback arrangements in any form are not acceptable. No matter how they are named – as a ‘consulting fee,’ ‘commission’ or otherwise – or whether they are paid through intermediaries, kickbacks undermine the integrity of medical decision making and have no place in our healthcare system. Today’s agreement is yet another example of my office’s commitment to enforcing the False Claims Act and the Anti-Kickback Statute and protecting Medicare from shelling out taxpayer money for reimbursements tainted by improper kickbacks.”

“Violations of the Anti-Kickback Statute can induce medically unnecessary testing and inappropriately steer medical tests to providers who may not return timely or quality results,” said Special Agent in Charge Naomi D. Gruchacz of the Department of Health and Human Services, Office of Inspector General (HHS-OIG). “We will continue to work with our law enforcement partners to seek resolutions and effect change to preserve the integrity of the federal health care system.”

The settlements were the result of a coordinated effort between the Civil Division’s Commercial Litigation Branch, Fraud Section and the U.S. Attorney’s Office for the District of New Jersey, with assistance from HHS-OIG. Senior Trial Counsel Christopher Terranova of the Civil Division’s Commercial Litigation Branch (Fraud Section) and Assistant U.S. Attorney Kruti Dharia for the District of New Jersey handled the settlements. The United States has recovered over $47 million relating to conduct involving MSO kickbacks to healthcare providers, including False Claims Act settlements with 46 physicians.

The government’s pursuit of these matters illustrates the government’s emphasis on combating healthcare fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse and mismanagement can be reported to HHS at 1-800-HHS-TIPS (800-447-8477).

The claims resolved by the settlements are allegations only. There has been no determination of liability.

Ralston-Jeresaty Settlement Feinberg Settlement Malik Settlement Carralejo Settlement Ain Settlement Bierig Settlement

TRENTON, N.J. – An Ocean County, New Jersey, man was sentenced to 87 months in prison for distributing child pornography, U.S. Attorney Philip R. Sellinger announced today.

Alec Donovan, 26, of Brick, New Jersey, a youth wrestling coach and referee, previously pleaded guilty before U.S. District Judge Zahid N. Quraishi to an information charging him with one count of distribution of child pornography. Judge Quraishi imposed the sentence on March 28, 2024, in Trenton federal court.

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

From January 2021 through March 2021, Donovan used an internet-based application to exchange multiple images and videos of child sexual abuse, including depictions involving pre-pubescent children. Donovan also used the web-based messaging application to solicit and engage in conversations with minors, including requesting nude photographs from the minors and sending nude photographs to them.

In addition to the prison term, Judge Quraishi sentenced Donovan to 30 years of supervised release.

U.S. Attorney Sellinger credited the Newark Child Exploitation and Human Trafficking Task force, under the direction of FBI Special Agent in Charge James E. Dennehy in Newark, with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorney Michelle L. Goldman of the General Crimes Unit in Newark.

CAMDEN, N.J. – Three Philadelphia men pleaded guilty today to their roles in a conspiracy to burglarize approximately 55 United Parcel Service (UPS) warehouses across the United States, resulting in the theft of over $1.6 million worth of merchandise, U.S. Attorney Philip R. Sellinger announced.

Sekou Fofanah, 20, Shamaire Brown, 19, and Quamaire Brown, 19, all of Philadelphia, each pleaded guilty before U.S. District Judge Robert B. Kugler in Camden federal court to informations charging each with one count of conspiracy to commit cargo theft.

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

From January 2021 through April 2023, Fofanah, Shamaire Brown, Quamaire Brown, as well as co-defendant Aboudramane Karamoko, and others, conspired to commit burglaries of UPS facilities throughout the United States, including warehouses in New Jersey, New York, Pennsylvania, Indiana, and Rhode Island. The defendants gained access to the UPS facilities by breaking the window of the loading bay door or by prying open the loading bay door. Once inside, they sought parcels marked with “lithium-ion battery” warnings, which indicated that the packages contained high-value electronic devices such as a cell phones. Fofanah, Shamaire Brown, Quamaire Brown, admitted that they participated in the burglary of at least 55 UPS facilities and stole items valued at approximately $1.6 million.

The charge of conspiracy to commit cargo theft carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the amount of money involved in the offense, whichever is greater.

U.S. Attorney Sellinger credited special agents of Homeland Security Investigations Newark, under the direction of Acting Special Agent in Charge Michael Alfonso, with the investigation. He also acknowledged South Brunswick Police Department; Warwick, Rhode Island, Police Department; Clarkstown, New York, Police Department; Livonia, Michigan, Police Department; HSI State College; State College, Pennsylvania, Police Department; New York State Police; Fulton County Sheriff’s Office; Homeland Security Investigations Philadelphia and Rhode Island; New Jersey State Police; Philadelphia Police Department; Pennsylvania State Police; Ohio State Highway Patrol; Taylor Police Department; Brookfield Police Department; Summit County Prosecutor’s Office; and Centre County District Attorney’s Office, for their assistance in the investigation.

The government is represented by Assistant U.S. Attorney Jake A. Nasar of the Organized Crime/Gangs Unit in Newark.

The charges against Karamoko remain pending, and he is presumed innocent unless and until proven guilty.

 

sbrown.information.pdf qbrown.information.pdf fofanah.information.pdf

NEWARK, N.J. – A Passaic County man was charged with using an explosive to damage a Chase Bank automated teller machine (ATM) in Prospect Park, New Jersey, U.S. Attorney Philip R. Sellinger announced.

Nicolas Torres, 41, of Passaic, New Jersey, is charged by complaint with using an explosive to damage real property used in interstate commerce and possession of an unregistered firearm, namely the destructive device. The defendant appeared today before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court and was detained.

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

In the early morning hours of July 5, 2022, Torres was captured on surveillance video approaching the Chase Bank ATM in Prospect Park and appearing to ignite an item in front of the ATM. Several seconds later, an explosion was seen at the ATM. Torres was seen fleeing the location with two individuals.

In addition to the surveillance video, cellular phone location data placed Torres in the area of the Chase Bank at the time of the explosion. The investigation also revealed that Torres had traveled to Pennsylvania the day before and purchased approximately $1,000 worth of fireworks.

Examination of the physical evidence obtained from Chase Bank revealed cardboard with “MgAl” stamped on it. MgAl refers to magnalium, an alloy of magnesium and aluminum, which can be used as fuel to form an explosive when ignited by heat or a flame (as depicted in the surveillance video), thereby making it an improvised explosive device.

The use of an explosive to damage real property used in interstate commerce charge carries a statutory minimum of five years in prison, a statutory maximum of 20 years in prison, and a fine of $250,000. The possession of an unregistered firearm charge carries a statutory maximum of 10 years in prison and a fine of $10,000.

U.S. Attorney Sellinger credited special agents of the Federal Bureau of Investigation, Newark Field Division, under the direction of Special Agent in Charge James E. Dennehy, and the Prospect Park Police Department, under the direction of Officer in Charge Captain Walter Richmond, with the investigation leading to today’s arrest. 

The government is represented by Assistant U.S. Attorney Vera Varshavsky of the U.S. Attorney’s National Security 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.

 

torres.complaint.pdf

NEWARK, N.J. – A Bergen County, New Jersey, man was charged with tax evasion and failure to file tax returns, U.S. Attorney Philip Sellinger announced today. 

John Constantino, 67, of Ridgewood, New Jersey, is charged in an 18-count indictment with six counts of tax evasion and 12 counts of failure to file tax returns.

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

Constantino owned and operated a fireproofing and painting business since at least 1989.  Despite both the company and Constantino earning income between 2017 and 2022, Constantino failed to report the company’s income on corporate tax returns and also failed to report his own income on personal tax returns, resulting $682,735 in taxes due and owing to the United States, which Constantino never paid.

Instead of paying those taxes, Constantino took affirmative steps to conceal both his and the company’s income and assets including, cashing approximately $13 million worth of checks payable to the company at a check cashing facility and structuring cash deposits into both his and the company’s bank accounts to avoid triggering Currency Transaction Reports, which are reported to the U.S. Department of Treasury.

The tax evasion counts each carry a maximum potential penalty of five years and a fine of $100,000. Each count of failure to file tax returns carry a maximum potential penalty of one year in prison and a fine of $100,000 each.

U.S. Attorney Sellinger credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Tammy Tomlins, with the investigation leading to the charges.

The government is represented by Assistant U. S. Attorney Rachelle M. Navarro of the Organized Crime and Gangs Unit in Newark.

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

 

r_constantino.indictment.pdf