District of New Jersey

NEWARK, N.J. – A Passaic County man was sentenced today to 95 months in prison for coercion and enticement of a minor and for illegally re-entering the United States, Acting U.S. Attorney Rachael A. Honig announced.

Juan Carlos Morales Pedraza, 35, of Paterson, New Jersey, previously pleaded guilty by videoconference before U.S. District Judge Stanley R. Chesler to a superseding information charging him with coercion and enticement of a minor and of illegally re-entering the United States after having previously been deported. Judge Chesler imposed the sentence by videoconference today.

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

On April 13, 2019, Morales Pedraza approached a 15-year-old victim in Passaic County.  Two days later, after engaging in sexual intercourse with the victim, Morales Pedraza and the victim left the New Jersey, with plans to travel to Illinois. Morales Pedraza admitted that he planned to engage in sexual conduct with the victim in Illinois. Law enforcement arrested Morales Pedraza in Ohio. 

Morales Pedraza admitted that he is a citizen of Mexico and that he illegally entered the United States after having previously been deported.

In addition to the prison term, Judge Chesler sentenced Morales Pedraza to three years of supervised release.

Acting U.S. Attorney Honig credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark; the Passaic County Prosecutor’s Office’s Sexual Investigations Unit, under the direction of Prosecutor Camelia M. Valdes, and investigators with the Ohio State Highway Patrol and the Lake Township Police Department in Lake Township, Ohio, with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorney Francesca Liquori of the Organized Crime and Gangs Unit.

NEWARK, N.J. – A Pennsylvania man who worked as a tax preparer in Newark was sentenced today to 18 months in prison for helping his clients file falsified tax returns that generated larger refunds, Acting U.S. Attorney Rachael A. Honig announced.

Sylvain Dienhoue, 53, of Tobyhanna, Pennsylvania, previously pleaded guilty by videoconference before U.S. District Judge Susan D. Wigenton to an indictment charging him with three counts of aiding and assisting in the preparation of false and fraudulent tax returns. Judge Wigenton imposed the sentence today in Newark federal court.

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

Dienhoue worked as a tax preparer at Cadi’s Multi Services in Newark. He knowingly and willfully aided and assisted in the preparation of 44 fraudulent tax returns on behalf of clients for the tax years 2014 through 2016. Dienhoue used fabricated and inflated figures, including expenses and itemized deductions, in order to generate inflated refunds.       

In addition to the prison term, Judge Wigenton sentenced Dienhoue to one year of supervised release and ordered him to pay restitution of $237,738. He is also precluded from preparing taxes on anyone else’s behalf.

Acting U.S. Attorney Honig credited special agents from IRS – Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez in Newark, with the investigation leading to today’s sentencing. 

The government is represented by Assistant U.S. Attorney Samantha C. Fasanello of the U.S. Attorney’s Office’s Criminal Division in Newark.

NEWARK, N.J. – A Bergen County, New Jersey, man was sentenced today to 16 months in prison for using Facebook and other online web forums to cyberstalk victims, Acting U.S. Attorney Rachael A. Honig announced.

Rino Diamante, 26, of Bergenfield, New Jersey, previously pleaded guilty by videoconference before U.S. District Judge William J. Martini to an information charging him with one count of cyberstalking. Judge Martini imposed the sentence today in Newark federal court.

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

Diamante admitted that from January 2016 through August 2019 he engaged in continued online harassment of known and unknown adult victims, including Victims 1-23, by posting semi-nude or nude pictures purporting to be the victims on online web forums such as 4Chan.com and volafile. Diamante also admitted to contacting the victims, their friends and their family members to direct those individuals to the online web forums that contained the purported nude or semi-nude photographs of the victims. 

In addition to the prison term, Judge Martini sentenced Diamante to three years of supervised release.

Acting U.S. Attorney Honig credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, with the investigation leading to today’s sentence. 

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

NEWARK, N.J. – A Virginia diagnostic laboratory will pay $1.4 million to resolve allegations that it violated the False Claims Act by submitting or causing to be submitted claims for genetic tests to Medicare without valid physician oversight, Acting U.S. Attorney Rachael A. Honig announced today. 

According to the contentions of the United States contained in the settlement agreement:

From July 2014 to September 2015, Genetworx Laboratories utilized the services of Seth Rehfuss as a sales representative who persuaded groups of senior citizens in senior housing complexes to submit to genetic testing, despite applicable Medicare rules requiring proper orders from a treating physician for such tests. Genetworx, in turn, submitted claims for payment to Medicare for Rehfuss’s genetic tests performed without valid physician oversight.

Rehfuss, of Somerset, New Jersey, previously pleaded guilty in Trenton federal court to a superseding information charging him with conspiracy to commit health care fraud and was sentenced in May 2019 to 50 months in prison.

Acting U.S. Attorney Honig credited special agents of the U.S. Department of Health and Human Services – Office of the Inspector General, under the direction of Special Agent in Charge Scott J. Lampert; special agents of the U.S. Attorney’s Office for the District of New Jersey, under the direction of Special Agent in Charge Thomas J. Mahoney; and the Cape May County Department of Aging and Disability Services, with the investigation leading to the settlement.

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

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

NEWARK, N.J. – Two medical device manufacturers have agreed to pay $38.75 million to resolve allegations that they violated the False Claims Act for billing the Medicare program for defective rapid point-of-care testing devices, Acting U.S. Attorney Rachael A. Honig announced today.

The settlement announced today resolves allegations that from 2008 to 2016 Alere Inc. and Alere San Diego Inc. (collectively, Alere) knowingly sold defective INRatio blood coagulation monitors used by Medicare beneficiaries taking anticoagulant drugs, such as warfarin. For those patients, blood coagulation monitoring is essential to determining a clinically appropriate and safe dosage for their medications. Too much of an anticoagulant drug can cause major bleeding, and too little of the drug can cause blood clots and strokes.  

Since at least 2008, Alere allegedly knew that the software algorithm used in each version of its INRatio monitors contained a material defect. Based on its own internal research, as well as external complaints and warnings, Alere allegedly knew that INRatio devices had a “system limitation” that produced inaccurate and unreliable results for some patients. The United States alleged that despite awareness that INRatio systems were linked to over a dozen deaths and hundreds of injuries, including intra-cerebral hemorrhaging and cardiovascular events following bleeding episodes, Alere concealed the defect for years and billed Medicare for the use of defective INRatio devices. Alere allegedly failed to take appropriate corrective actions until 2016, when the devices were removed from the market following a nationwide Class I product recall undertaken at the request of the U.S. Food & Drug Administration (FDA).

“Health care companies have an obligation to be candid and clear in their disclosures to the FDA,” Acting U.S. Attorney Honig said. “The government expects companies to be proactive in investigating issues affecting patient safety. The U.S. Attorney’s Office for the District of New Jersey will hold accountable any company that fails to meet these obligations.”

“Patients and health care providers rely on diagnostic devices to provide reliable health information,” Acting Assistant Attorney General Brian M. Boynton of the Department of Justice’s Civil Division said. “The Department of Justice will hold accountable medical device companies that knowingly sell defective products that can harm patients and waste taxpayer dollars.”

“Companies that withhold information from or provide false information to FDA put patients’ health at risk and jeopardize the integrity of the regulatory process designed to protect the public health,” Timothy Stenzel M.D., Ph.D., Director of the Office of In Vitro Diagnostics and Radiological Health in the FDA’s Center for Devices and Radiological Health, said.

“Medical device providers who cut corners or purposefully market defective tools put profit above patient health,” FBI Special Agent in Charge George M. Crouch Jr. said. “The FBI will not sit idly by when people’s lives are at risk. It’s an ill-advised business model that ignores the consequences of getting caught.”

U.S. Attorney Honig credited special agents of the FBI Newark Division, under the direction of Special Agent in Charge Crouch, and Healthcare Fraud Unit Major Provider Response Team; special agents of the Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert; and the  Civil Division’s Commercial Litigation Branch (Fraud Section), with investigation.

The government is represented by Assistant U.S. Attorney Daniel Meyler of the Health Care Fraud Unit in the District of New Jersey and Trial Attorney Christopher Terranova of the Civil Division.

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

NEWARK, N.J. – An alleged member of a Jersey City, New Jersey, gang has been charged with the March 31, 2020, murder of a Jersey City resident, Acting U.S. Attorney Rachael A. Honig announced today.

Phillip Wiggins Jr., 24, of Newark, is charged by complaint with one count each of murder in aid of racketeering, discharging a firearm in furtherance of a crime of violence, and causing death through use of a firearm. He made his initial appearance by videoconference before U.S. Magistrate Judge Michael A. Hammer and was detained without bail.

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

Wiggins is allegedly associated with a street gang known to operate in the area of Wilkinson Avenue, Ocean Avenue, Martin Luther King Drive, and Wegman Parkway in Jersey City. On March 31, 2020, Wiggins traveled to an area controlled by a rival gang with which Wilkinson was feuding, and allegedly murdered Victim-1.

Wiggins faces a potential mandatory life sentence for the murder in aid of racketeering count. The count of causing death through use of a firearm carries a maximum sentence of life in prison. The count of discharging a firearm during an act of violence carries a potential mandatory consecutive sentence of 10 years in prison.

Acting U.S. Attorney Honig credited the Hudson County Prosecutor’s Office, under the direction of Prosecutor Esther Suarez, and the Jersey City Police Department, under the direction of Public Safety Director James Shea, as well as special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, with 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 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 Board, 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 Francesca Liquori of the Organized Crime and Gangs Unit and Assistant U.S. Attorney Sophie Reiter of the Violent Crime Unit.

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

NEWARK, N.J. – A former sales representative for several compounding pharmacies and marketing companies today admitted his role in a scheme to defraud public and private health benefits programs of $7.89 million for the billing of medically unnecessary compounded prescriptions, Acting U.S. Attorney Rachael A. Honig announced. 

Christopher Cuffari, 55, of Little Falls, New Jersey, pleaded guilty by videoconference before U.S. District Judge John Michael Vazquez to an information charging him with conspiracy to commit health care fraud.

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

Compounded medications are specialty medications mixed by a pharmacist to meet the specific medical needs of an individual patient. Although compounded drugs are not approved by the Food and Drug Administration (FDA), they are properly prescribed when a physician determines that an FDA-approved medication does not meet the health needs of a particular patient, such as if a patient is allergic to a dye or other ingredients in the prescription.

Between November 2014 and September 2017, Cuffari participated in a conspiracy that involved the submission of fraudulent prescriptions for compounded medications to public and private insurance plans. The scheme centered on the discovery that certain insurance plans paid for prescription compounded medications – including scar creams, wound creams, and metabolic supplements/vitamins – at exorbitant reimbursement rates.

Cuffari exploited this opportunity through working as a sales representative for several compounding pharmacies. To profit as a sales representative, Cuffari targeted individuals who had insurance plans that covered compounded medications and then convinced those individuals to obtain prescriptions for compounded medications, regardless of medical necessity, often by providing them with cash payments. To obtain prescriptions for compounded medications for some of the recruited individuals, Cuffari caused payments to be made to a New Jersey-based physician.

Once the prescriptions were written, they were filled by the compounding pharmacies with which Cuffari worked. The compounding pharmacies would then receive reimbursement from the insurance plans and would pay Cuffari a percentage of the reimbursement amount.

As part of his plea agreement, Cuffari must forfeit $995,328 in criminal proceeds he received for his role in the scheme and pay restitution of at least $7.89 million. He faces a statutory maximum of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for Nov. 9, 2021.

Acting U.S. Attorney Honig credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Sean M. Sherman of the U.S. Attorney’s Office, Opioid Abuse Prevention and Enforcement Unit, in Newark.

CAMDEN, N.J. – A City of Bridgeton police officer has been indicted for offenses arising from an assault on the streets of Bridgeton, Acting U.S. Attorney Rachael A. Honig announced today.

John Grier III, 49, of Cedarville, New Jersey, is charged in an indictment unsealed today with one count of violating an individual’s civil rights and one count of falsifying a record for submitting a false police report about the assault. A federal grand jury returned the sealed indictment on June 30, 2021. Grier surrendered this morning and was arraigned by videoconference before U.S. Magistrate Judge Ann Marie Donio. He was released on $50,000 bond.

“One of the most important responsibilities we hold at the Department of Justice is the responsibility to investigate and prosecute police officers who abuse their power and deprive our citizens of their civil rights,” Acting U.S. Attorney Honig said. “This Office will continue to charge officers, like this defendant, who dishonor their badges by using force when it is neither reasonable nor necessary and thereby fail to live up to their duty to protect the public they serve.”

“Civil Rights violations are of great concern, particularly when the allegations involve a member of law enforcement,” FBI Newark Special Agent in Charge George M. Crouch Jr. said. “The public has an absolute right to trust that law enforcement will protect those they serve and keep them safe. When that trust is violated, it makes it more difficult for our fellow police officers and federal agents to maintain the community's confidence.”

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

On June 18, 2017, Bridgeton Police Department (BPD) officers were dispatched to a Bridgeton gas station following a report of two males sitting at the gas station yelling at passersby. When an officer arrived, he found the victim in the driver seat of a car parked by the gas pumps, and another man was sitting in the passenger seat. In response to the radio call, Grier arrived as a back-up officer.

Eventually, the driver and passenger were issued summonses, and Grier departed the gas station. Within minutes, an officer who remained at the gas station radioed for assistance because the driver and passenger had gotten out of the car and approached him before he could drive off. As Grier drove back to the gas station, he grabbed a large can of OC spray and pulled out the pin allowing its use.

Upon Grier’s arrival, the driver was yelling at officers. Grier ordered the driver to get back into his vehicle and warned him that if he approached the officers again that he would be arrested. The driver and passenger returned to their car and drove to the side of the gas station. At that point the police officers had probable cause to arrest the victim for driving while intoxicated.

The officers approached the car in order to arrest the victim. Grier got out of his car with the large can of OC spray in his hand and told another officer to “step back,” despite the fact that the officer had nearly finished handcuffing the victim. While holding the OC spray, Grier asked the victim “do you want to feel pain, sir?” Other officers were able to handcuff the victim without incident. 

As an officer attempted to the place the handcuffed victim into the rear of a patrol vehicle, Grier sprayed the victim in the face. The victim doubled over. An officer helped the victim up and sat him on the edge of the rear seat of the police SUV. Grier then sprayed the victim for a second time. After the second burst of OC spray to the face, Grier asked the driver “there, how do you like it now? Now get in the goddamn car.”

Grier returned to the police station to prepare his report in connection with the victim’s arrest. Grier prepared and submitted a false and fraudulent police report in which Grier falsely stated that the victim “refused [to enter the police vehicle] and continued to forcefully remain outside the vehicle,” and, in an effort to falsely justify the use of the OC spray a second time, stated that the “spray did not strike [the victim] in the face and that it did not take immediate effect[.]”

The violation of civil rights count carries a maximum penalty of 10 years in prison. The false records count carries a maximum penalty of 20 years in prison. The maximum fine for each charge is $250,000.

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

Acting U.S. Attorney Honig credited special agents of the FBI, Atlantic City Resident Agency, under the direction of Special Agent in Charge Crouch in Newark, with the investigation leading to today’s indictment. Acting U.S. Attorney Honig also thanked the Internal Affairs Unit of the Bridgeton Police Department, under the direction of Chief Michael A. Gaimari Sr.; investigators and detectives of the New Jersey Attorney General’s Office, under the direction of Attorney General Gurbir Grewal; and the Cumberland County Prosecutor’s Office, under the direction of Prosecutor Jennifer Webb-McCray.

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

CAMDEN, N.J. – A pharmaceutical sales representative today admitted he conspired to defraud New Jersey county health benefits programs and conspired to engage in money laundering and obstruct justice, Acting U.S. Attorney Rachael A. Honig announced.

Paul Camarda, 39, of Holmdel, New Jersey, pleaded guilty before U.S. District Judge Robert B. Kugler in Camden federal court to an information charging him with one count of conspiracy to commit health care fraud and one count of conspiracy to obstruct justice and engage in money laundering. 

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

Camarda was a sales representative for a pharmaceutical company. He created a side business called Dynasty Capital LLC to independently market medical products and services for other companies, including compounded prescription medications for specialty pharmacies.  Camarda marketed compounded medications for several pharmacies, including New Jersey and out-of-state pharmacies identified in court documents as “Compounding Pharmacy 1,” “Compounding Pharmacy 2,” “Compounding Pharmacy 3,” and “Compounding Pharmacy 4.”  As part of his arrangements with the compounding pharmacies and his conspirators, Camarda was paid a percentage of the insurance payments received for prescriptions arranged by him and those working with him.

Compounded medications are specialty medications mixed by a pharmacist to meet the specific medical needs of an individual patient. Although compounded drugs are not approved by the Food and Drug Administration (FDA), they are properly prescribed when a physician determines that an FDA-approved medication does not meet the health needs of a particular patient, such as if a patient is allergic to a dye or other ingredient.

Camarda learned that certain local government employees had insurance coverage for these particular compounded medications. An entity identified in court documents as the “Pharmacy Benefits Administrator” provided pharmacy benefit management services for the Bergen County Prescription Benefits Program (BCPBP), which covered certain local government employees, including county prison guards. The Pharmacy Benefits Administrator paid prescription drug claims and then billed the BCPBP for the amounts paid.

Camarda was a leader and manager of the conspiracy. He and his conspirators discovered that certain compounded medications – including vitamins and pain, scar, antifungal, migraine, and libido creams – reimbursed up to thousands of dollars for a one-month supply. Camarda recruited individuals with BCPBP coverage to fraudulently obtain medically unnecessary compounded medications. He provided the recruits with blank prescriptions forms and directed them to go see an unnamed doctor – referred to in court documents as “Individual 1” – to obtain his authorization for the compounded prescription medications. The investigation revealed that all the recruits went to see Individual 1 for the purpose of obtaining the prescriptions within days of each other and all received prescriptions authorized by Individual 1 for the same specialty compounded medications on the same day or within days of each other. The recruits agreed to receive the very expensive compounded medications not because they needed them, but because they were paid by Camarda to do so. Camarda instructed the recruits that the more compounded medications they agreed to receive and the more people they recruited to also get the medications, the more money they stood to gain in the conspiracy. 

Camarda received more than $2.2 million in payments for the prescriptions he and those working with him arranged, and Camarda and his recruits caused more than $3.4 million in fraudulent claims to be submitted to the Pharmacy Benefits Administrator for compounded medications. Camarda’s payments from the compounding pharmacies and his conspirators, as well as Camarda’s payments to his recruits, served as the basis for the money laundering conspiracy charge to which Camarda pleaded guilty.

In 2017, Camarda learned that federal agents and a federal grand jury were investigating the health care fraud conspiracy. Camarda conspired to obstruct the federal investigation by providing and instructing others to provide false information to federal agents and the grand jury.   

The health care fraud conspiracy count to which Camarda pleaded guilty carries a maximum potential penalty of 10 years in prison and a $250,000 fine, or twice the gain or loss from the offense, whichever is greatest. The obstruction of justice and money laundering conspiracy count carries a maximum penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense, whichever is greatest. Sentencing is scheduled for Nov. 18, 2021.

Acting U.S. Attorney Rachael A. Honig credited special agents of the IRS Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez in Newark; special agents of FBI’s Atlantic City Resident Agency, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark; and special agents of the U.S. Department of Labor Office of Inspector General, New York Region, under the direction of Special Agent in Charge Michael C. Mikulka, with the investigation leading to today’s guilty plea.

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

NEWARK, N.J. – A former pharmacy procurement technician was indicted today for stealing prescription HIV medications from the pharmacy of the Veterans Affairs Medical Center (VAMC) in East Orange, New Jersey, Acting U.S. Attorney Rachael A. Honig announced.

Lisa M. Hoffman, 48, of Orange, New Jersey, is charged by indictment with one count each of conspiracy, theft of government property, and theft of medical products.

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

From October 2015 through November 2019, Hoffman was a procurement officer at the VAMC, who used her authority to order large quantities of HIV prescription medications so that she could steal the excess. After the medications arrived, Hoffman waited until co-workers were out of sight and then removed them from the VAMC. 

Once Hoffman stole the medications, she met her associate, Wagner Checonolasco, aka “Wanny,” generally at Hoffman’s residence, so that Hoffman could provide the stolen HIV medications to Checonolasco in exchange for cash. Hoffman and Checonolasco used an encrypted messaging application to plan and execute their thefts and sales of the stolen HIV medications, including arranging for the medications-for-cash exchanges. After obtaining the stolen HIV medications from Hoffman, Checonolasco sold them. Hoffman and Checonolasco stole approximately $10 million worth of HIV medications belonging to the VAMC during the conspiracy.

Checonolasco, 33, of Lyndhurst, New Jersey, was previously charged with conspiracy to steal government property, and those charges remain pending.

The conspiracy charge is punishable by a maximum penalty of five years in prison. The theft of government property charge is punishable by a maximum penalty of 10 years in prison. The charge of theft of medical products is punishable by a maximum penalty of 20 years in prison. Each charge also is punishable by a maximum fine of $250,000, or twice the gross pecuniary gain derived from the offense, or twice the gross pecuniary loss sustained by any victims of the offense, whichever is greatest. The theft of medical products charge also carries a civil penalty of $1 million, or three times the economic loss attributable to the offense.

Acting U.S. Attorney Honig credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, and the U.S. Department of Veterans Affairs Office of Inspector General, Northeast Field Office, under the direction of Special Agent in Charge Christopher F. Algieri, with the ongoing investigation leading to the charges.

The government is represented by Assistant U.S. Attorney Nicole F. Mastropieri of the Health Care Fraud Unit.

The charges and allegations against the defendants are merely accusations, and they are presumed innocent unless and until proven guilty.

Select Medical Corporation and Encore GC Acquisition LLC have agreed to pay $8.4 million to resolve allegations that Select Medical Rehabilitation Services Inc. (SMRS) violated the False Claims Act by knowingly causing 12 skilled nursing facilities (SNFs) in New York and New Jersey to submit false claims to Medicare for rehabilitation therapy services that were not reasonable, necessary or skilled. Select Medical Corporation was the prior parent company of SMRS, while Encore GC Acquisition LLC is the successor-in-interest to SMRS. The alleged conduct occurred prior to Encore’s acquisition of SMRS. 

From 1997 through March 31, 2016, SMRS offered contract rehabilitation therapy services to SNFs across the country. The United States alleged that, at various times between Jan. 1, 2010, through March 31, 2016, SMRS contracted with 12 SNFs in New York and New Jersey to provide rehabilitation therapy services. The United States alleged that SMRS’ corporate policies and practices encouraged and resulted in the provision of medically unnecessary, unreasonable and unskilled therapy services being provided to patients at the 12 SNFs. 

“Today’s settlement reflects our commitment to protect patients and taxpayers by ensuring that the care provided to Medicare beneficiaries is dictated by their individual clinical needs and not by a provider’s financial interests,” said Acting Assistant Attorney General Brian M. Boynton of the Justice Department’s Civil Division. “Contract rehabilitation therapy companies, like other health care providers, will be held accountable if they knowingly provide patients with unnecessary services that waste taxpayer dollars.”

“Skilled nursing facility residents and their families must be assured that the care and therapy that residents receive is based on medical need, not greed,” said Acting U.S. Attorney Rachael A. Honig for the District of New Jersey. “We must also protect the taxpayers by ensuring that Medicare pays only for appropriate services performed for legitimate medical purposes. We will hold all health care providers who violate the False Claims Act responsible for their actions.”

“Sticking taxpayers with a hefty bill for unnecessary health care services will never be tolerated,” said Special Agent in Charge Scott J. Lampert of the Department of Health and Human Services, Office of the Inspector General (HHS-OIG). “Working closely with our law enforcement partners, we will tirelessly pursue unscrupulous health care companies to protect patients and federal health care programs.”  

The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by Melissa Vail, a former SMRS employee. Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. The qui tam case is captioned U.S. ex rel. Doe v. Select Medical Corporation et al.,No. 2:16-cv-03569 (D.N.J.). 

The resolution obtained in this matter was 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 and the FBI Newark Field Office.

The investigation and resolution of this matter illustrate the government’s emphasis on combating health care 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 800-HHS-TIPS (800-447-8477).

The matter was handled by Trial Attorney Yolonda Campbell of the Civil Division and Assistant U.S. Attorney Marihug Cedeño for the District of New Jersey.

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

NEWARK, N.J. – A contract rehabilitation therapy provider will pay $8.4 million to resolve allegations that it violated the False Claims Act (FCA) by knowingly causing 12 skilled nursing facilities (SNFs) in New York and New Jersey to submit false claims to Medicare for services that were not reasonable, necessary, or skilled, Acting U.S. Attorney Rachael A. Honig announced today. 

Select Medical Corporation and Encore GC Acquisition LLL have agreed to the settlement to resolve allegations that Select Medical Rehabilitation Services Inc. (SMRS) violated the FCA. Select Medical Corporation was the prior parent company of SMRS, while Encore GC Acquisition is the successor-in-interest to SMR

“Skilled nursing facility residents and their families must be assured that the care and therapy that residents receive is based on medical need, not greed,” Acting U.S. Attorney Honig said. “We must also protect the taxpayers by ensuring that Medicare pays only for appropriate services performed for legitimate medical purposes. We will hold all health care providers who violate the False Claims Act responsible for their actions.”

“Today’s settlement reflects our commitment to protect patients and taxpayers by ensuring that the care provided to Medicare beneficiaries is dictated by their individual clinical needs and not by a provider’s financial interests,” Acting Assistant Attorney General Brian M. Boynton of the Department of Justice’s Civil Division said. “Contract rehabilitation therapy companies, like other health care providers, will be held accountable if they knowingly provide patients with unnecessary services that waste taxpayer dollars.”

“Sticking taxpayers with a hefty bill for unnecessary health care services will never be tolerated,” Special Agent in Charge Scott J. Lampert of the Health and Human Services, Office of the Inspector General (HHS-OIG) said. “Working closely with our law enforcement partners, we will tirelessly pursue unscrupulous health care companies to protect patients and federal health care programs.”  

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

From Jan. 1, 2010, to March 31, 2016, SMRS contracted with 12 SNFs in New York and New Jersey to provide rehabilitation therapy services to patients of the nursing homes. The United States contends that SMRS’ profit-driven corporate policies and practices encouraged and resulted in the provision of medically unnecessary, unreasonable, and unskilled therapy services being provided to patients irrespective of the individual clinical needs of the patients.

The civil settlement includes the resolution of claims brought under the qui tam, or whistleblower, provisions of the FCA by Melissa Vail, a former SMRS employee. Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery.

The resolution obtained in this matter was the result of a coordinated effort between the U.S. Attorney’s Office for the District of New Jersey and the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, with assistance from HHS-OIG and the FBI Newark Field Office.  

The government is represented by Assistant U.S. Attorney Marihug P. Cedeño of the U.S. Attorney’s Office’s Opioid Abuse Prevention and Enforcement Unit in Newark and Trial Attorney Yolonda Campbell of the Civil Division, Commercial Litigation Branch, Fraud Section.

Tips and complaints about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).

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

The qui tam case is captioned U.S. ex rel. Doe v. Select Medical Corporation et al., No. 2:16-cv-03569 (D.N.J.).

NEWARK, N.J. – A Union County, New Jersey, U.S. Postal Service (USPS) mail carrier made her initial court appearance today for making false statements to obtain federal workers’ compensation benefits, Acting U.S. Attorney Rachael Honig announced.

Monique Gee, 38, of Hillside, New Jersey, is charged by complaint with one count of knowingly and willfully falsifying, concealing, and covering up a material fact, and making a false, fictitious, and fraudulent statement and representation in connection with the application for and receipt of federal workers’ compensation benefits. Gee made her initial appearance today by videoconference before U.S. Magistrate Judge Leda Dunn Wettre, and was released on $150,000 unsecured bond.

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

Gee worked as a mail carrier for the USPS in Middletown, New Jersey. On June 1, 2016, Gee signed and certified a form in which she alleged she sustained a knee sprain while performing her duties on that date. On subsequent forms, Gee certified that she did not receive earnings from employment outside of her federal job. However, an investigation revealed that Gee operated a business from which she received substantial income. During the investigation, an undercover law enforcement officer placed an order from Gee’s business and made a payment for the order to Gee via a mobile payment platform. As a result of her false representations, Gee received more than $150,000 in federal workers’ compensation benefits to which she was not entitled.

The count of making false statements to obtain federal workers’ compensation benefits carries a maximum penalty of five years in prison and a $250,000 fine.

Acting U.S. Attorney Honig credited members of the USPS Office of Inspector General, under the direction of Special Agent in Charge Matthew Modafferi, Northeast Area Field Office, with the investigation leading to the charges.

The government is represented by Assistant U.S. Attorney Mark J. Pesce of the U.S. Attorney’s Office’s OCDETF/Narcotics 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.

NEWARK, N.J. – A Sussex County, New Jersey, man today admitted fraudulently obtaining a federal Paycheck Protection Program (PPP) loan of over $5 million, Acting U.S. Attorney Rachael A. Honig announced.

Azhar Sarwar Rana, 30, of Newton, New Jersey, pleaded guilty before U.S. District Judge Esther Salas to an information charging him with one count of bank fraud and one count of money laundering. Rana was previously arrested on Dec. 12, 2020, after he booked a same-day flight to Pakistan; he was charged by complaint and made his initial appearance on Dec. 14, 2020.

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

Rana submitted a fraudulent PPP loan application to a lender on behalf of a corporate entity, Azhar Sarwar Rana LLC, that purportedly invested in real estate development. The application falsified payroll and tax information and included internally inconsistent listings of the number of company employees. New Jersey Department of Labor records showed that Azhar Sarwar Rana LLC paid no wages in 2019, and the minimal wages it purportedly paid in 2020 were mostly to individuals whose submitted Social Security numbers did not correspond to their submitted names.

Based on Rana’s alleged misrepresentations, the lender approved Rana’s PPP loan application and provided Azhar Sarwar Rana LLC with approximately $5.6 million in federal COVID-19 emergency relief funds meant for distressed small businesses. Rana used the fraudulently obtained PPP loan proceeds to pay for numerous personal expenses, including to invest millions in the stock market, make a payment to a luxury car dealership, and send hundreds of thousands of dollars to accounts in Pakistan.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a federal law enacted on March 29, 2020. It is designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects resulting from the COVID-19 pandemic. One source of relief provided by the CARES Act is the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP. In April 2020, Congress authorized over $300 billion in additional PPP funding.

The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of 1 percent. Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent and utilities. The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the loan towards payroll expenses.

The count of bank fraud carries a maximum potential penalty of 30 years in prison and a $1 million fine; the count of money laundering carries a maximum potential penalty of 10 years in prison and a $250,000 fine, or twice the gross gain to the defendant or gross loss to the victim, whichever is greater. Sentencing is scheduled for Nov. 3, 2021.

Acting U.S. Attorney Honig credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark; special agents of IRS – Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez; special agents of the Social Security Administration Office of the Inspector General, New York Field Division,  under the direction of Special Agent in Charge John F. Grasso; and special agents of the U.S. Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Peter C. Fitzhugh in New York, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Jennifer S. Kozar of the U.S. Attorney’s Office Economic Crimes 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.

NEWARK, N.J. – A Somerset County, New Jersey, man has been sentenced to 108 months in prison for traveling to the Philippines to engage in sex with a minor, Acting U.S. Attorney Rachael A. Honig announced. 

James A. Diggs, 45, of Somerville, New Jersey, previously pleaded guilty by videoconference before Chief U.S. District Judge Freda L. Wolfson to an information charging him with foreign travel to engage in criminal sexual activity.

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

In October 2018, Diggs traveled to the Philippines to meet and engage in sexual activity with Minor Victim-1 in exchange for money and gifts, knowing the victim was a minor.

In addition to the prison term, Judge Wolfson sentenced Diggs to five years of supervised release and ordered him to register as a sex offender.

Acting U.S. Attorney Honig credited special agents of the U.S. Department of Homeland Security, Homeland Security Investigations, Newark Division, under the direction of Special Agent in Charge Jason J. Molina, with the investigation leading to today’s guilty plea. He also thanked agents of the U.S. Customs and Border Protection, John F. Kennedy International Airport, for their assistance.

The government is represented by Assistant U.S. Attorney Patricia Astorga of the Opioid Abuse Prevention and Enforcement Unit of the U.S. Attorney’s Office in Newark.

NEWARK, N.J. – A New York man today admitted participating in a scheme to traffic in contraband cigarettes, Acting U.S. Attorney Rachael A. Honig announced.

Obadah Saleh, 39, of Queens, New York, pleaded guilty by videoconference before U.S. District Judge Esther Salas to an information charging him with conspiracy to traffic in contraband cigarettes.

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

Most states, including New Jersey, require a stamp to be placed on packs of cigarettes indicating the appropriate state tax has been paid. From October 2014 to October 2019, Saleh worked with conspirators to buy and sell millions of dollars’ worth of untaxed, contraband cigarettes, which they believed were stolen from large cigarette shipments from cigarette manufacturers. Saleh and his conspirators often made these purchases with large sums of cash. Saleh and his conspirators deprived the state of New Jersey of more than $594,000 in taxes as a result of this conspiracy. 

The charge to which Saleh pleaded guilty is punishable by a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense, whichever is greatest. Sentencing is scheduled for Nov. 2, 2021.

Acting U.S. Attorney Honig credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, with the investigation.

The government is represented by Assistant U.S. Attorneys James Donnelly and Joshua L. Haber of the Office’s Criminal Division in Newark.

TRENTON, N.J. – A Hunterdon County, New Jersey, man today admitted receiving and possessing images of child sexual abuse, Acting U.S. Attorney Rachael A. Honig announced.

Daniel Murphy, 48, of Lebanon, New Jersey, pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton federal court to an information charging him with one count of receipt of child pornography and one count of possession of child pornography

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

From Jan. 1, 2017, through Nov. 20, 2019, Murphy received and possessed images of minors being sexually abused.

The charge of receipt of child pornography carries a statutory mandatory minimum sentence of five years in prison, a maximum of 40 years in prison and a fine of up to $250,000. The charge of possession of child pornography carries a maximum sentence of 20 years and a fine of up to $250,000. Sentencing is scheduled for Nov. 3, 2021.

Acting U.S. Attorney Honig credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr., with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Sarah A. Sulkowski of the Cybercrime Unit in Newark.

NEWARK, N.J. – A New York man today admitted participating in a scheme that involved the creation of false documentation to secure over $4 million in bank loans, Acting U.S. Attorney Rachael A. Honig announced.

Cesar Mendez, 49, of New York City, pleaded guilty by videoconference before U.S. District Judge Kevin McNulty to an information charging him with one count of conspiracy to commit bank fraud.

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

Between March 2016 and September 2019, Cash Flow Partners LLC, a business consulting firm with offices in New York and New Jersey, released internet advertisements and held seminars offering to assist customers in obtaining bank loans, including loans insured by the Federal Deposit Insurance Corporation (FDIC). When customers submitted documentation supporting their bank loan applications to Cash Flow Partners, Mendez and others created false documentation to make customers’ loan applications appear more financially viable than they actually were. Victim banks sustained losses of over $4 million.

Four of Mendez’s conspirators, Edward Espinal, Gladys Collins, Jennie Frias, and Raymundo Torres, have previously pleaded guilty to charges relating to their role in the Cash Flow bank fraud conspiracy and are awaiting sentencing.

The conspiracy to commit bank fraud charge carries a maximum potential penalty of 30 years in prison and a $1 million fine. Sentencing is scheduled for Nov. 1, 2021.

Individuals who believe they may have information about this case may contact the FBI at 1-800-CALL-FBI (225-5324).

Acting U.S. Attorney Honig credited special agents of the FDIC-Office of the Inspector General (FDIC-OIG), under the direction of Special Agent in Charge Patricia Tarasca in New York, and special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorneys Ari B. Fontecchio of the U.S. Attorney’s Office’s Special Prosecutions Division and J. Stephen Ferketic of the Health Care Fraud Unit in Newark.

NEWARK, N.J. – An Essex County, New Jersey, man was sentenced today to 82 months in prison for assaulting and carjacking at knifepoint a U.S. Postal Service employee, Acting U.S. Attorney Rachael A. Honig announced.

Wallace Johnson, 32, of Newark, previously pleaded guilty before U.S. District Judge John Michael Vazquez to an indictment charging him with carjacking and assaulting a federal employee. Judge Vazquez imposed the sentence by videoconference today.

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

Johnson admitted that on June 6, 2020, he walked up to a postal employee who was sitting in the car’s driver seat while on a break from delivering mail in Newark. Johnson held a box cutter against the postal employee’s neck and the box cutter’s blade pierced the postal employee’s skin, causing a small laceration. While Johnson held the box cutter against the postal employee’s neck, he demanded that the postal employee get out of the car and leave everything inside of the car. After the postal employee got out of the car, Johnson entered the car and drove away.

Shortly thereafter, law enforcement officers saw the carjacked car driving at a very high rate of speed and attempted to conduct a car stop, not knowing at that time about the carjacking.  During a subsequent car chase, Johnson crashed the car and fled on foot. Several minutes later, during a canvass of the nearby neighborhood, law enforcement officers found Johnson as he hid behind a parked car and then arrested him following a foot pursuit. Law enforcement officers recovered the postal employee’s cellular telephone and the boxcutter that Johnson used during the assault and carjacking.

In addition to the prison term, Judge Vazquez sentenced Johnson to three years of supervised release.

Acting U.S. Attorney Rachael A. Honig credited members of the Newark Police Department, under the direction of Public Safety Director Brian O’Hara, and postal inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Rodney M. Hopkins in Newark, 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 Violent Crimes Unit in Newark.

NEWARK, N.J. – Fifteen people were charged today for their roles in a Newark heroin and crack cocaine distribution organization that sold hundreds of thousands of dollars’ worth of illegal drugs out of a residential building on Fairmount Avenue, Acting U.S. Attorney Rachael A. Honig announced.

The alleged leader of the operation, Jakai Dennis (see chart below), is charged with engaging in a continuing criminal enterprise. Dennis also is charged, along with the 15 other defendants, with one count each of conspiracy to distribute one kilogram or more of heroin and 280 grams or more of crack cocaine, and conspiracy to possess firearms in furtherance of a drug trafficking crime. All of the defendants are in custody and are scheduled to have their initial court appearances later today before U.S. Magistrate Judge Leda Dunn Wettre in Newark federal court.

“This drug trafficking organization attempted to take control of an entire neighborhood,” Acting U.S. Attorney Honig said. “The defendants’ use of violence and intimidation made life intolerable for the community members who live there. We will continue to work with our law enforcement partners to disrupt operations like these and make our streets safer for the people who call Newark home.”

“The residents of this section of Fairmount Avenue have lived as a captive audience, watching their neighborhood degrade due to the daily drug dealing on their street and the unwelcome violence it brings,” Special Agent in Charge George M. Crouch Jr. said. “As shootings and violent crime continue to escalate in this and other cities around the country, the FBI will remain vigilant, working with our law enforcement partners – including the Newark Police Department – to combat this ongoing epidemic.” 

According to the complaint:

The defendants allegedly ran a sophisticated operation that took advantage of the residential building’s location to sell drugs from the porch area, which was guarded by a locked steel door and difficult for law enforcement to infiltrate despite a constant stream of buyers approaching the front porch area day and night. One of the defendants was the building’s superintendent, who was paid in money and heroin to store drugs in his apartment and to give the other defendants access to an empty apartment on the second floor, which they also used to store drugs and guns.

The defendants worked in shifts from 6:00 a.m. until late in the evening. Buyers came on foot, in vehicles and on bicycles to purchase the illegal drugs. The heroin sold was of a high quality and was sold in various “brands,” which were stamped onto the glassine envelopes that contained the heroin, allowing buyers to identify and purchase the brands that they preferred. FBI surveillance witnessed hundreds of narcotics transactions from November 2020 to June 2021.

The charges are the result of an investigation by the FBI, which included surveillance, phone record review, the use of confidential informants to make more than 30 controlled purchases, and the review of arrests by local law enforcement, as well as seizures of heroin, crack cocaine and firearms. Based upon evidence obtained in the case, the defendants sold more than one kilogram of heroin and 280 grams of crack cocaine during the conspiracy period.

The count of running a continuing criminal enterprise carries a minimum sentence of 20 years in prison and a maximum of life in prison. The count of conspiracy to distribute one kilogram or more of heroin and 280 grams or more of crack cocaine carries a minimum sentence of 10 years and a maximum of life in prison. The charge of conspiracy to possess firearms in furtherance of a drug trafficking crime carries a maximum sentence of 20 years in prison.

Acting U.S. Attorney Honig credited special agents of the FBI under the supervision of Special Agent in Charge Crouch in Newark, with the investigation leading to the charges. She also thanked police officers and detectives of the Newark Police Department, under the direction of Public Safety Director Brian O’Hara; officers of the Essex County Sheriff’s Office, under the direction of Sheriff Armando B. Fontoura; detectives of the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Theodore N. Stephens II; the East Orange and Bloomfield police departments and the Essex County Department of corrections for their assistance with the investigation.

The government is represented by Senior Trial Counsel Robert Frazer of the Organized

Crime/Gangs Unit in the Criminal Division in Newark.

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

 

Defendant

Age

Residence

Charge

Jakai Dennis, a/k/a “Bop

31

Newark

Continuing criminal enterprise;

Conspiracy to distribute heroin and crack cocaine; Conspiracy to possess firearms

Angel Kearney, a/k/a “Jim,” a/k/a “Dred”

31

East Orange, NJ

Conspiracy to distribute heroin and crack cocaine; Conspiracy to possess firearms

Thomas Gibson, a/k/a “Tommy,”

44

Newark

Conspiracy to distribute heroin and crack cocaine; Conspiracy to possess firearms

Jamar Hall, a/k/a “Goo”

35

Hamilton, NJ

Conspiracy to distribute heroin and crack cocaine; Conspiracy to possess firearms

Kasim Thurston, a/k/a “Kai,” a/k/a “Kaz”

37

Newark

Conspiracy to distribute heroin and crack cocaine; Conspiracy to possess firearms

Ibn Thurston, a/k/a “Wheezy,” a/k/a “Saheed”

33

Newark

Conspiracy to distribute heroin and crack cocaine; Conspiracy to possess firearms

Antwan Williams, a/k/a “Ant,” a/k/a “Rue”

30

Newark

Conspiracy to distribute heroin and crack cocaine; Conspiracy to possess firearms

Kevin Hall

31

Newark

Conspiracy to distribute heroin and crack cocaine; Conspiracy to possess firearms

Andre Fuller, a/k/a “Draco”

31

Newark

Conspiracy to distribute heroin and crack cocaine; Conspiracy to possess firearms

Akim Gibson, a/k/a “Ching”

24

Newark

Conspiracy to distribute heroin and crack cocaine; Conspiracy to possess firearms

Shalamar McCall, a/k/a “Shaggy”

 

34

Newark

Conspiracy to distribute heroin and crack cocaine; Conspiracy to possess firearms

Hakis Moses, a/k/a “Hak”

43

Newark

Conspiracy to distribute heroin and crack cocaine; Conspiracy to possess firearms

Jaleel Drake, a/k/a “Lil”, a/k/a “SK”

27

Newark

Conspiracy to distribute heroin and crack cocaine; Conspiracy to possess firearms

Elijah Shumate, a/k/a Eli”, a/k/a “E”

50

Newark

Conspiracy to distribute heroin and crack cocaine; Conspiracy to possess firearms

David Williams

51

Newark

Conspiracy to distribute heroin and crack cocaine; Conspiracy to possess firearms

CAMDEN, N.J. – A Burlington County man today was held in criminal contempt and fined $11,227 for conducting outside research while serving on a federal criminal jury and sharing his findings with the other jurors, Acting U.S. Attorney Rachael A. Honig announced.

U.S. District Judge Robert B. Kugler made the contempt finding and imposed the sentence today in Camden federal court.

According to statements made in court:

Juror Number 7 was one of 12 jurors on a federal criminal trial held in Camden federal court before Judge Kugler. Before and during the trial, Juror Number 7 and the other jurors were instructed repeatedly, both in writing and verbally, not to conduct any research about the case, including through use of the Internet. During a recess in the trial, Juror Number 7 conducted internet research into evidence in the case. He then shared his findings with the other jurors during deliberations, causing a mistrial. The fine represents the court’s costs associated with empanelling the jury for the trial.

The government is represented by Assistant U.S. Attorney Daniel A. Friedman of the U.S. Attorney’s Office’s Criminal Division in Camden and Deputy U.S. Attorney Andrew Carey.

CAMDEN, N.J. – A Camden man was convicted today of unlawfully possessing a firearm and ammunition, Acting U.S. Attorney Rachael A. Honig announced.

Marshall Onuorah, 31, of Camden, New Jersey, was convicted on one count of possession of a firearm and ammunition by a previously convicted felon. The jury deliberated two hours before returning the guilty verdict following a four-day trial before U.S. District Judge Noel L. Hillman in Camden federal court.

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

On Jan. 29, 2020, Camden County police officers patrolling in their marked patrol car observed Onuorah, a previously convicted felon, appearing to use his hands to conceal an object from the officers’ view. As one of the officers exited the car to approach Onuorah, Onuorah fled. Both officers pursued Onuorah on foot for several blocks before Onuorah surrendered. During his flight, Onuorah discarded a 50-round drum magazine loaded with 46 rounds of ammunition and a firearm with a Glock slide and polymer frame that had been modified to fire as an automatic weapon. 

The felon in possession of a firearm and ammunition charge carries a maximum penalty of 10 years in prison and a fine of up to $250,000.

Acting U.S. Attorney Honig credited special agents of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, Camden Field Office, under the direction of Acting Special Agent in Charge Toby C. Taylor in Newark; officers of the Camden County Police Department, under the direction of Chief Gabriel Rodriguez; and the Camden County Prosecutor’s Office, under the direction of Acting Prosecutor Jill S. Mayer, with the investigation leading to today’s guilty verdict.

The government is represented by Assistant U.S. Attorney Jeffrey Bender and Senior Trial Counsel Jason Richardson of the U.S. Attorney’s Office in Camden.

NEWARK, N.J. – A Union County man was arrested at Dallas Fort Worth International Airport for transacting in the criminal proceeds of an elaborate romance scam, Acting U.S. Attorney Rachael A. Honig announced today.

Eseosa Obaseki, 36, of Linden, New Jersey, is charged by complaint with engaging in monetary transactions in property derived from wire fraud. He appeared this afternoon before U.S. Magistrate Judge Jeffrey L. Cureton in federal court in the Northern District of Texas and was released in the custody of a third-party custodian pending his initial appearance in the District of New Jersey.

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

Obaseki was the owner of MKO Deliveries Inc. (MKO), a New Jersey-based corporation, and the signatory on a bank account held at Bank-1 (the “Bank-1 account.”) Victim-1 was a resident of Washington State. Individual-1 was a fictious online persona created to defraud Victim-1 and others on online dating and social media applications.

In March or April 2019, Victim-1 was contacted by Individual-1 while playing an internet-based word-game. The pair continued the conversation on a separate internet-based communications platform. Individual-1 and Victim-1 communicated for months on the platform before Individual-1 began asking Victim-1 for money in July 2019. Individual-1, under false pretenses, convinced Victim-1 of his romantic interest in Victim-1, and in doing so, gained Victim-1’s trust.

In June 2019, Individual-1 utilized the communications platform to ask Victim-1 for money. Individual-1 falsely stated to Victim-1 that the money was for business expenses and shipping expenses for a package containing a “box of valuables” that he said he intended to ship to Victim-1. Individual-1 sent Victim-1 emails and messages containing false invoices from a fake shipping company for various fictitious customs fees related to the package.

In January 2020, Individual-1 asked Victim-1 to transfer $100,000 into the Bank-1 account, which only contained $0.41 at the time. Individual-1 falsely represented to Victim-1 that this payment was for expenses associated with the “box of valuables.”  On Jan. 9, 2020, based on the fraudulent pretenses, representations, and promises of Individual-1, Victim-1 arranged to have $100,000 wire-transferred from her bank account to the Bank-1 account.

Over the next several weeks, Obaseki systematically drained the Bank-1 account through a series of withdrawals, cashier’s checks, and other transactions.  For instance, on Jan. 15, 2020, Obaseki withdrew $12,370 from the Bank-1 account at a branch in Elizabeth, New Jersey, in the form of cash, cashier’s checks, and bank fees.

On Feb. 6, 2020, based on the fraudulent pretenses, representations, and promises of Individual-1, Victim-1 arranged to have $210,000 wire-transferred from her bank account to the Bank-1 account. Again, Obaseki systematically drained the funds from the Bank-1 account through a series of withdrawals, cashier’s checks, and other transactions. For instance, on or about February 7, 2020, Obaseki withdrew $24,394 from the Bank-1 account at a branch in Newark, in the form of cash, cashier’s checks, and bank fees.

Victim-1 never received a package from Individual-1, including any package containing the “box of valuables.” On Feb. 21, 2020, an investigator employed by Bank-1 contacted Obaseki to discuss the wire transfers that occurred in January and February 2020. In a recorded call, Obaseki falsely stated that the recent $210,000 wire transfer had come from someone with whom he had just started working in his car part business.

Each charge of transacting in criminal proceeds is punishable by a maximum potential penalty of 10 years or twice the amount of criminally derived property involved in the transaction. 

Acting U.S. Attorney Honig credited special agents of the FBI, under the direction of George M. Crouch Jr., with the investigation leading to today’s arrest.

The government is represented by Assistant U.S. Attorneys Shawn Barnes and Jonathan Fayer of the U.S. Attorney’s Office Economic Crimes Unit in Newark.

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

NEWARK, N.J. – A Freeport, New York, man was sentenced today to 12 months and one day in prison for participating in a conspiracy to carry out a $9 million scheme to use bogus information and simultaneous loan applications at multiple banks to fraudulently obtain home equity lines of credit, a scheme known as “shotgunning,” Acting U.S. Attorney Rachael A. Honig announced.

Yorce Yotagri, 54, previously pleaded guilty before U.S. District Judge John Michael Vazquez to an indictment charging him with one count of conspiracy to commit bank fraud. Judge Vazquez imposed the sentence today in Newark federal court.

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

Yotagri was a business partner of Jorge Flores of Oakdale, New York, and Jose Piedrahita of Freeport, two conspirators also charged in the indictment. From 2010 through February 2018, Yotagri, Flores, Piedrahita, and others conspired to fraudulently obtain multiple home equity lines of credit (HELOC) from banks on residential properties in New Jersey and New York.

In August 2016, Yotagri lived at a property in Freeport. A quitclaim deed was prepared that facilitated the transfer of ownership of the property to Yotagri and Piedrahita even though Piedrahita did not own the property.

In September 2016, with the Freeport property now in the names of Yotagri and Piedrahita, the conspirators applied for a $290,000 HELOC from a victim bank in Yotagri’s and Piedrahita’s names using the property as collateral. Piedrahita’s contact information appeared on the HELOC application on the Freeport property, which also contained inflated income and assets for Piedrahita. On Dec. 2, 2016, based on the false representations contained in the application, the victim bank issued a HELOC to Piedrahita for $290,000. Piedrahita then disbursed the $290,000 to himself, Yotagri, and Flores. The HELOC funds were never repaid.

In January 2017, Flores called another victim bank and applied for a second HELOC in Piedrahita’s name for $250,000 – again using the Freeport property as collateral. This time Flores’ email address and phone number appeared on the HELOC application on the Freeport property. To demonstrate to the second victim bank that the property was unencumbered by any senior mortgages, Flores and Piedrahita sent several fraudulent documents to the victim bank to conceal the existence of or amounts owed on senior mortgages. The false documents the defendants submitted included a series of false payoff letters and fake checks from other banks, all submitted to deceive the victim bank into believing that the remaining value of the senior mortgages on the Freeport property was far less than what was actually owed.

On March 22, 2017, the second victim bank issued a HELOC to Piedrahita for $250,000.  Piedrahita then disbursed nearly the entirety of the HELOC funds to himself and Yotagri. The funds obtained by Piedrahita and Yotagri from the HELOC were not repaid and were overdrawn, causing losses to the second victim bank totaling approximately $290,000.

At the time the applications for the two HELOCS were made, there was not sufficient equity in the Freeport property to support the $540,000 in HELOC applications made by Flores, Piedrahita, and Yotagri.

The overall scheme, which included HELOC loans for approximately 17 different properties, resulted in over $9 million in losses to the victim banks.

In addition to the prison term, Judge Vazquez sentenced Yotagri to three years of supervised release and ordered him to pay restitution of $580,048.

Acting U.S. Attorney Honig credited special agents of the Federal Housing Finance Agency – Office of Inspector General (FHFA-OIG), Northeast Region, under the direction of Special Agent in Charge Robert W. Manchak; and special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorney Jason S. Gould of the U.S. Attorney’s Office Criminal Division in Newark and Special Assistant U.S. Attorney Kevin DiGregory of the FHFA-OIG.

The charges and allegations against Yotagri’s co-defendants contained in the indictment are merely accusations, and they are presumed innocent unless and until proven guilty.

NEWARK, N.J. – Two high-ranking members of the Pagan’s Motorcycle Club were arrested today for assault in aid of racketeering, Acting U.S. Attorney Rachael A. Honig announced. 

Luis Arocho, aka “LuRoc,” 43, of Keansburg, New Jersey, and Maurice Guzman, aka “Dawg,” 51, of Newark, are charged by complaint with one count of aggravated assault in aid of racketeering. They are scheduled to appear by videoconference today before U.S. Magistrate Judge Leda Dunn Wettre. 

“Today’s arrests are the latest in a long-running investigation into the illegal activities of the Pagan’s Motorcycle Club,” Acting U.S. Attorney Honig said. “We have now charged 11 members of this outlaw gang with various weapons, drug-trafficking and violent crimes. Together with our federal, state, and local partners, we remain fully committed to combatting violent crime in New Jersey and prosecuting the members of the criminal organizations who are responsible for it.”    

“This investigation has dealt a significant blow to the Pagans motorcycle gang,” Special Agent in Charge of the DEA’s New Jersey Division Susan A. Gibson said. “The use of violence, weapons, and intimidation was standard for this criminal organization, and law enforcement made it clear that their behavior would not be tolerated. It is a bad day for the Pagans when the combined forces of DEA, ATF, New Jersey State Police and Union County detectives come after you. These arrests made New Jersey safer and this investigation demonstrated the determination of DEA and our amazing partners to pursue the most violent criminal gangs who choose to violate the law.”

“I can say without question that our collective efforts have disrupted and dismantled the daily illegal activities of the Pagans outlaw motorcycle gang, by strategically removing their most violent and most egregious firearm and drug trafficking members and associates,” ATF Newark Field Division Acting Special Agent in Charge Toby C. Taylor said. “This collaborative investigation will undoubtedly make communities safer throughout our state and beyond.”

“The success and scale of this investigation is a testament to the impact a collaboration between law enforcement agencies can have on the safety and security of our communities,” Acting Union County Prosecutor Lyndsay V. Ruotolo said. “Thanks to the hard work and dedication of investigators and prosecutors in this long-term effort, which occurred during the height of the COVID-19 pandemic, dangerous actors, along with mass quantities of narcotics and firearms, have been removed from our streets.”

“Long-term operations of this magnitude require a tremendous amount of work and patience by cooperating detectives, and while the full scope and impact of this investigation may yet be fully realized, its success continues a year after it began,” Col. Patrick J. Callahan, Superintendent of the New Jersey State Police, said. “I commend the hard work and dedication of all the agencies involved. Their efforts have led to the arrests of violent offenders and the seizure of weapons and drugs, which has undoubtedly made our communities safer.”

According to documents filed in these cases and statements made in court:

On April 24, 2018, Arocho, Guzman, and other associates of the Pagans assaulted an associate of the Hells Angels Motorcycle Club at a gas station in Newark. The Pagans and the Hells Angels have a long-standing rivalry. The victim was beaten with an axe handle, punched, and kicked by the Pagans assailants, resulting in significant injuries. Both Arocho and Guzman are high-ranking leaders in the Pagans’ organization. 

Acting U.S. Attorney Honig also announced that a federal grand jury returned an indictment today charging Nicholas Bucciarelli, aka “Booch,” 56, of Brooklawn, New Jersey, with aggravated assault in aid of racketeering, brandishing a firearm in furtherance of a crime of violence, and possession of firearms by a convicted felon, arising from his commission of a gang-related gunpoint assault in which an associate of the Pagans was assaulted for breaking the organization’s rules. Nicholas Marino, aka “Lefty,” 75, of Williamstown, New Jersey, Anthony D’Alessandro, aka “Fugit,” 55, of Williamstown, New Jersey, and Michael Dorazo, aka “Cage,” 42, of Gloucester City, New Jersey, were previously charged by federal criminal complaint for their roles in the assault. At the time of their arrests, Bucciarelli was the sergeant at arms for the Pagans’ Camden County membership chapter, Marino and D’Alessandro served as the president and sergeant at arms, respectively, for the Pagans’ Gloucester County membership chapter, and Dorazo was a member of the Pagans. Bucciarelli was also indicted for distributing five grams or more of methamphetamine.

These charges were filed as part of a multi-agency investigation into the Pagan’s Motorcycle Club – an outlaw motorcycle gang known to engage in illegal activity, including narcotics trafficking, weapons trafficking, and violent crimes. The Pagans have established membership chapters in numerous states and U.S. territories, including multiple active chapters in New Jersey. This investigation involved court-authorized wiretaps, the use of multiple undercover law enforcement agents, and execution of multiple search warrants at physical locations in multiple jurisdictions. Through the investigation, law enforcement seized 10 firearms and more than 800 grams of methamphetamine. 

The U.S. Attorney’s Office previously announced the arrest of Keith Richter, aka “Conan” – the national president of the Pagans – in connection with his illegal possession of a firearm on Feb. 20, 2021. Those charges remain pending.

Law enforcement officials also previously arrested the following individuals in connection with the investigation. (Each of the defendants is charged by federal criminal complaint; the specific charges and corresponding penalties are listed in the chart below.)

Larry Ortiz, aka “Savage,” 31, of Elizabeth, New Jersey, and Junius Aquino, aka “Jayo,” 38, of Vauxhall, New Jersey, were charged with aggravated assault in aid of racketeering and discharging a firearm in furtherance of a crime of violence for their roles in a gang-related shooting. On Oct. 28, 2020, Ortiz and Aquino shot at an associate of a rival gang while driving on the New Jersey Turnpike. The shooting was committed as part of an ongoing dispute between the Pagans and the Hells Angels Motorcycle Club.

Aquino was also charged in a separate criminal complaint with possession of ammunition by a convicted felon in connection with a shooting that occurred three days later. On Oct. 31, 2020, Aquino shot at an occupied vehicle in Elizabeth. Law enforcement officers recovered seven .40 caliber shell casings from the shooting scene. On Nov. 5, 2020, law enforcement executed a search warrant at Aquino’s residence and recovered, among other items, multiple .40 caliber rounds of ammunition and approximately 50 grams of cocaine. After law enforcement officers recovered the cocaine from Aquino’s residence, Aquino was charged with possession with intent to distribute cocaine. At the time of Aquino’s arrest, he was the vice president of the Pagans’ Elizabeth membership chapter. 

Ortiz was also charged with possession with intent to distribute 50 grams or more of methamphetamine and possession of a firearm in furtherance of a drug trafficking crime. On Nov. 17, 2020, law enforcement officers executed a search warrant at Ortiz’s residence and recovered approximately 300 grams of methamphetamine and a loaded firearm. At the time of his arrest, Ortiz was the president of the Pagans’ Jersey City membership chapter.

Daniel Hooban, aka “Jersey,” 33, of Bayonne, New Jersey, was charged with possession of a firearm by a convicted felon; possession with intent to distribute a quantity of cocaine; and possession of a firearm in furtherance of a drug trafficking crime. On June 29, 2020, law enforcement officers executed a search warrant at Hooban’s residence and recovered approximately 30 grams of cocaine and a loaded firearm. At the time of Hooban’s arrest, he was the sergeant at arms for the Pagans’ Jersey City membership chapter.

Glen Turner, aka “Glenny,” 73, of Marcus Hook, Pennsylvania, was charged with possession with intent to distribute 50 grams or more of methamphetamine. Turner is a long-time member of the Pagans. On Dec. 10, 2020, law enforcement officers executed a search warrant at Turner’s residence and recovered approximately 450 grams of methamphetamine.

Acting U.S. Attorney Honig credited a joint task force comprised of special agents of the Drug Enforcement Administration, Newark Division, under the direction of Special Agent in Charge Gibson; special agents of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, Newark Division, under the direction of Acting Special Agent in Charge Taylor; the Union County Prosecutor’s Office, under the direction of Acting Prosecutor Ruotolo; and the New Jersey State Police, under the direction of Col. Callahan, with the investigation leading to these charges.

Acting U.S. Attorney Honig also thanked the U.S. Marshals Service, under the direction of U.S. Marshal Juan Mattos Jr.; the Suffolk County District Attorney’s Office, under the direction of District Attorney Timothy D. Sini; the Elizabeth Police Department, under the direction of Chief Giacomo Sacca; special agents of the FBI Cherry Hill Resident Agency, under the direction of Special Agent in Charge Michael J. Driscoll in Philadelphia; and the West Deptford Police Department, under the direction of Chief John Chambers, for their assistance with this investigation.

These cases are part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.

The government is represented by Assistant U.S. Attorneys Robert Frazer, R. Joseph Gribko, and Samantha C. Fasanello, of the U.S. Attorney’s Office in Newark.

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

21-288                                                             ###

 

Defendant/Docket Number

Position

Charges

Penalties

Keith Richter,

aka “Conan”

Mag. No. 21-10099

National President

Possession of a firearm by a convicted felon

10 year statutory maximum

Luis Arocho

aka “LuRoc”

Mag. No. 21-9365

Mother Club Member, New Jersey

Aggravated assault in aid of racketeering

20 year statutory maximum

Maurice Guzman

aka “Dawg”

Mag. No. 21-9365

President of Presidents, New Jersey

Aggravated assault in aid of racketeering

20 year statutory maximum

Larry Ortiz,

aka “Savage”

Mag. Nos. 20-8455, 21-9041

President, Jersey City Chapter

Discharging a firearm in furtherance of a crime of violence;

Assault with a dangerous weapon in aid of racketeering;

Possession with intent to distribute 50 grams or more of methamphetamine;

Possession of a firearm in furtherance of a drug trafficking crime

10 year mandatory minimum; up to life

20 year statutory maximum

10 year mandatory minimum; up to life

5 year mandatory minimum; up to life

Junius Aquino,

aka “Jayo”

Mag. Nos. 20-1188, 21-9041

Vice president, Elizabeth Chapter

Discharging a firearm in furtherance of a crime of violence;

Assault with a dangerous weapon in aid of racketeering;

Possession with intent to distribute cocaine;

Possession of ammunition by a convicted felon;

 

 

10 year mandatory minimum; up to life

20 year statutory maximum

20 year statutory maximum

10 year statutory maximum

 

Daniel Hooban,

aka “Jersey”

Mag. No. 20-9262

Sergeant at arms, Jersey City Chapter

Possession of a firearm in furtherance of a drug trafficking crime

Possession with intent to distribute cocaine;

Possession of a firearm by a convicted felon;

 

5 year mandatory minimum; up to life

20 year statutory maximum

10 year statutory maximum

 

 

Nicholas Marino,

aka “Lefty”

Mag. No. 20-12328

President, Gloucester County Chapter

Brandishing a firearm in furtherance of a crime of violence;

Assault with a dangerous weapon in aid of racketeering

 

7 year mandatory minimum; up to life

20 year statutory maximum

 

Anthony D’Alessandro,

aka “Fugit”

Mag. No. 20-12328

Sergeant at arms, Gloucester County Chapter

Brandishing a firearm in furtherance of a crime of violence;

Assault with a dangerous weapon in aid of racketeering

 

7 year mandatory minimum; up to life

20 year statutory maximum

 

Nicholas Bucciarelli,

aka “Booch”

TBD

Sergeant at arms, Camden County Chapter

Brandishing a firearm in furtherance of a crime of violence;

Assault with a dangerous weapon in aid of racketeering;

Possession of firearms by a convicted felon

Possession with intent to distribute 5 grams or more of methamphetamine

7 year mandatory minimum; up to life

20 year statutory maximum

10 year statutory maximum

5 year mandatory minimum; up to 40 years

Michael Dorazo,

aka “Cage”

Mag. No. 20-12328

Member

Possession of firearms by a convicted felon

10 year statutory maximum

Glen Turner,

aka “Glenny”

Mag. No. 20-13551

Member

Possession with intent to distribute 50 grams or more of methamphetamine

10 year mandatory minimum; up to life

TRENTON, N.J. – A Burlington County, New Jersey, man was sentenced today to 28 months in prison for attempting to interfere with law enforcement officers during a civil disorder when he attempted to set fire to a police vehicle during a civil disorder in the City of Trenton, Acting U.S. Attorney Rachael A. Honig announced.

Killian F. Melecio, 20, of Columbus, New Jersey, previously pleaded guilty by videoconference before U.S. District Judge Brian R. Martinotti to an information charging him with one count of attempting to obstruct, impede, or interfere with law enforcement officers during a civil disorder affecting commerce.

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

On May 31, 2020, large-scale protests were held throughout the United States, including in Trenton, in response to the death of George Floyd. Although the May 31st protest in Trenton was peaceful earlier in the day, violence erupted later. A group of individuals proceeded down East State Street in downtown Trenton and began to smash store fronts, loot stores, and attack multiple marked Trenton Police Department vehicles parked on the 100 Block of East State Street.

A City of Trenton street camera and other video footage taken by an individual present on the street captured Kadeem Dockery light an explosive device and throw it through the open front driver’s side window of a Trenton Police Department vehicle. Dockery then removed his shirt and handed it to Melecio, who then attempted to stuff the shirt in the gas tank of the police vehicle and ignite it. Melecio was then assisted by Justin Spry in attempting to set fire to the police vehicle. Law enforcement officers on scene arrested Spry, but Melecio and Dockery fled. Law enforcement later identified Melecio and Dockery through analysis of street camera and other video footage. They were arrested on Aug. 5, 2020.

In addition to the prison term, Judge Martinotti sentenced Melecio to three years of supervised release. Spry and Dockery have previously pleaded guilty. Spry is scheduled to sentenced on Aug. 3, 2021, and Docker is scheduled to be sentenced Sept. 21, 2021.

Acting U.S. Attorney Honig credited special agents of the FBI and task force officers of the Joint Terrorism Task Force in Newark, under the direction of Special Agent in Charge George M. Crouch Jr., with the investigation leading to today’s guilty plea. She also thanked officers of the Trenton Police Department, under the direction of Acting Police Director James Slack; troopers of the New Jersey State Police, under the direction of Col. Patrick J. Callahan; and officers of the New Jersey Department of Corrections, under the direction of Commissioner Marcus O. Hicks, for their assistance.

The government is represented by Assistant U.S. Attorneys Alexander E. Ramey and Michelle S. Gasparian of the U.S. Attorney’s Office’s Criminal Division in Trenton.

The charges and allegations remaining against Kadeem Dockery and Justin Spry are merely accusations, and they are presumed innocent unless and until proven guilty.

NEWARK, N.J. – A Middlesex County, New Jersey, man was indicted today for his role in a scheme to defraud banks of more than $1 million using stolen and counterfeited checks and stolen identities, Acting U.S. Attorney Rachael A. Honig announced.

Benjamin Rich, 37, of Edison, New Jersey, is charged with one count of conspiracy to commit bank fraud and one count of aggravated identity theft. Rich and two other men, Felix Alamo and Frank Ambrosio, both of Brooklyn, New York, were previously charged by complaint with conspiracy to commit bank fraud and aggravated identity theft.

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

Rich, Alamo, and certain conspirators agreed to defraud banks across New Jersey by using the stolen personal identification information of other individuals to open fraudulent bank accounts and deposit stolen and counterfeited checks. Rich used stolen identities, which included Social Security numbers belonging to minors, to create sham businesses. Rich, Alamo, and others opened bank accounts for the sham businesses and deposited stolen or counterfeited checks into the accounts and attempted to withdraw or transfer the funds before the banks could detect the fraud. Rich and his conspirators deposited approximately $1 million in fraudulently obtained checks into the fraudulent business bank accounts, resulting in at least $250,000 in losses to the various banks.   

The charge of bank fraud carries a maximum of 30 years in prison and a statutory maximum fine $1 million, or twice the gain derived or loss loss caused by the offense, whichever is greatest.

The charge of aggravated identity theft carries a statutory minimum term of  two years in prison, which must run consecutively to any term of imprisonment imposed on the bank fraud charge, and a statutory maximum fine of $250,000, or twice the gain derived or loss caused by the offense, whichever is greatest.

Alamo previously pleaded guilty and will be sentenced on July 21, 2021.

Acting U.S. Attorney Rachael A. Honig credited postal inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Rodney Hopkins, and special agents of the Treasury Inspector General for Tax Administration under the direction of Special Agent in Charge Andrew McKay, with the investigation leading to today’s indictment.

The government is represented by Assistant U.S. Attorney Perry Farhat of the Government Fraud Unit of the U.S. Attorney’s Office in Newark.

The charges and allegations against Rich and Ambrosio are merely accusations, and they are presumed innocent unless and until proven guilty.

NEWARK, N.J. – Eight of the 12 people arrested for their roles as members and associates of a drug trafficking organization in the Stephen Crane Village Housing Complex in Newark were indicted today, including one defendant who was indicted for the murder of a conspirator, Acting U.S. Attorney Rachael A. Honig announced.

A federal grand jury returned a 37-count superseding indictment charging Gary Shahid, 61; Jose Lora, 23; Charles Mells, 37; Raquan Rawls, 22; James Wicker, 28; Dayquan Jordan, 26; Michael Mayse, 34, and Dayana Valderrama, 25, as follows:

Count

Charge

Defendant

1

Conspiracy to Distribute and Possess with Intent to Distribute Controlled Substances

Shahid, Lora, Mells, Rawls, Wicker, Jordan, and Mayse

2

Distribution and Possession with Intent to Distribute Heroin

Jordan

3-5

Distribution and Possession with Intent to Distribute Controlled Substances

Mells

6-7

Distribution and Possession with Intent to Distribute Controlled Substances

Shahid, Rawls, and Lora

8

Distribution and Possession with Intent to Distribute Controlled Substances

Rawls, Jordan, and Mayse

9

Distribution and Possession with Intent to Distribute Heroin

Rawls

10-18

Distribution and Possession with Intent to Distribute Controlled Substances

Shahid

19-25

Distribution and Possession with Intent to Distribute Controlled Substances

Lora

26

Causing Death Through Use of a Firearm

Mayse

27

Possession of a Firearm and Ammunition by a Convicted Felon

Mayse

28

Possession of a Firearm by a Convicted Felon

Mayse

29

Maintaining a Drug-Involved Premises

Shahid

30

Possession with Intent to Distribute Controlled Substances

Shahid

31

Possession of a Firearm and Ammunition by a Convicted Felon

Shahid

32

Possession of a Firearm in Furtherance of a Drug Trafficking Crime

Shahid

33

Possession with Intent to Distribute Controlled Substances

Lora

34

Possession of a Firearm and Ammunition by a Convicted Felon

Lora and Valderrama

35

Possession of a Firearm by a Convicted Felon

Lora

36

Possession of a Firearm in Furtherance of a Drug Trafficking Crime

Lora

37

Possession with Intent to Distribute Controlled Substances

Wicker

 

In February 2020, Shahid, Lora, Mells, Rawls, Wicker, Jordan, and Mayse – all Newark residents – along with four other members of a drug trafficking conspiracy operating in Newark, were charged by criminal complaint with conspiracy to distribute controlled substances, including heroin, fentanyl, and cocaine base. Jordan, Rawls, Williams, Hatcher, and Mayse were charged with an additional count for distribution of heroin and cocaine base. Mayse was charged with committing murder during and in relation to a drug trafficking crime. 

Lora, and his girlfriend, Valderrama, were charged by separate complaints with unlawful possession of a firearm by a convicted felon. 

On March 6, 2020, a federal grand jury returned a three-count indictment against Shahid for conspiracy to distribute controlled substances, maintaining a drug-involved premises, and possession of a firearm by a convicted felon.

Ricky Terrell, 24; Nasir Williams, 23; Quadir Hatcher, 28; and Tyree Purkett, 24, who were previously charged by the same criminal complaint in February 2020, have each pleaded guilty to an information for their role in the drug trafficking organization.

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

Crane Village is a public housing complex near Branch Brook Park, on the border with Belleville. It consists of standalone buildings, with 354 apartments in total, all of which are accessible via exterior entrances. The buildings are clustered around courtyards and pedestrian walkways with roadways bisecting the complex. Given its location and its layout, which makes it difficult for law enforcement to surveil, Crane Village is the site of an open-air drug market. Between February 2019 and February 2020, law enforcement officers investigated the organization that controlled this drug market.

Through numerous controlled purchases of narcotics, consensually recorded telephone calls and text messages, physical surveillance, and the analysis of telephone call detail records, law enforcement determined that the defendants conspired to distribute narcotics, including heroin, fentanyl, and cocaine base, in and around Crane Village.

The organization used a drug stash apartment in Crane Village to package and store drugs for distribution. On Dec. 15, 2019, Mayse entered the stash apartment and allegedly murdered a conspirator over a monetary debt relating to the distribution of narcotics.

The count of possession with intent to distribute 400 grams or more of fentanyl carries a minimum penalty of 10 years in prison, maximum penalty of life in prison, and a fine of at least $10 million. The count of conspiracy to distribute at least 28 grams of cocaine base and a quantity of heroin and fentanyl carries a mandatory minimum penalty of five years in prison, maximum penalty of 40 years in prison, and a fine of at least $5 million. The counts of distribution of, and/or possession with intent to distribute, 100 grams or more of heroin, 500 grams or more of cocaine, and 28 grams or more of cocaine base each carry a  mandatory minimum penalty of five years in prison, maximum penalty of 40 years in prison, and a fine of at least $5 million.  The counts of distribution of, and/or possession with intent to distribute, a quantity of heroin, fentanyl, and cocaine base each carry a maximum of 20 years in prison and a fine of $1 million.

The counts of unlawful possession of a firearm and/or ammunition each carry a maximum penalty of 10 years in prison and a fine of $250,000. The counts of possession of a firearm in furtherance of a drug trafficking crime each carry a mandatory minimum term of 5 years in prison, which must run consecutive to any other punishment, and a fine of $250,000. The count of maintaining a drug premises carries a maximum penalty of 20 years in prison and a fine of $500,000. The count of causing death through the use of a firearm is eligible for the death penalty, or a maximum sentence of life in prison, and a $250,000 fine. 

Acting U.S. Attorney Honig credited special agents and task force officers with the ATF, Newark Division, under the direction of Acting Special Agent in Charge Toby C. Taylor; the Belleville Police Department, under the direction of Chief Mark Minichini; special agents and task force officers of the DEA, under the direction of Special Agent in Charge Susan A. Gibson in Newark; the Newark Police Department, under the direction of Public Safety Director Brian O’Hara; the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Theodore N. Stephens II; and the Essex County Sheriff’s Office, under the direction of Sheriff Armando B. Fontoura, with the investigation leading to today’s indictment. She also thanked the U.S. Marshals Service, the Nutley Police Department, the Bloomfield Police Department, the West Orange Police Department, the Verona Police Department, the Orange Police Department and the Bergen County Sheriff’s Office for their assistance with this case.

This case is part of the Newark Violent Crime Initiative (VCI). The VCI was formed in August 2017 by the U.S. Attorney’s Office for the District of New Jersey, the Essex County Prosecutor’s Office, and the City of Newark’s Department of Public Safety for the purpose of combatting violent crime in and around Newark. Federal, state, county, and city agencies collaborate and pool resources to prosecute violent offenders who endanger the safety of the community. The VCI is composed of the U.S. Attorney’s Office, the FBI, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Drug Enforcement Administration, the U.S. Marshals, the Newark Department of Public Safety, the Essex County Prosecutor’s Office, the Essex County Sheriff’s Office, N.J. State Parole, Union County Jail, N.J. State Police Regional Operations and Intelligence Center/Real Time Crime Center, N.J. Department of Corrections, the East Orange Police Department, and the Irvington Police Department.

This case is also 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 Tracey Agnew and Cassye Cole of the Organized Crime and Gangs Unit of the U.S. Attorney’s Office’s Criminal Division in Newark.

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

 

NEWARK, N.J. – Eight members of a Jersey City gang associated with the Marion Gardens Housing Complex were charged by indictment today with racketeering, violent crimes in aid of racketeering, drug trafficking, and firearms offenses, Acting U.S. Attorney Rachael A. Honig announced.

The indictment charges Jervon Morris, aka “Sticky,” 32; Jalil Holmes, aka “Broad Day,” aka “BD,” 21; Kevin Williams, aka “KK,” aka “Kay,” 27; Jakeem Gibson-Madison, aka “Beanz,” 27; K’shawn Jackson, aka “Lil Kay,” 21; Lakief Grayson, aka “Lala,” aka “La Greaz,” 30; Willie Williams, aka “Willz,” 30; and Terick Rogers, aka “Moot,” 29, all of Jersey City. (See chart below for specific charges/penalties.)

The charges are the result of a long-running investigation by the FBI, the Hudson County Prosecutor’s Office, and the Jersey City Police Department.

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

Morris, Holmes, Kevin Williams, Gibson-Madison, Jackson, Grayson, Willie Williams, and Rogers, are all members and associates of the neighborhood street gang associated with the Marion Gardens Housing Complex. Members and associates of the Marion Gardens street gang routinely distribute crack 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, Kevin Williams, and another member of the Marion Gardens street gang, murdered Victim A.C. 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 Victim C.C. in the area of Van Nostrand Avenue and Bergen Avenue in Jersey City;
• On Nov. 26, 2017, members and associates of the Marion Gardens street gang shot victim T.C. in the area of Warner Avenue and Martin Luther King Drive in Jersey City;
• On Dec. 3, 2017, Holmes and other members and associates of the Marion Gardens street gang murdered victim R.S. in the area of Warner Avenue and Martin Luther King Drive in Jersey City;
• On Feb. 7, 2018, Kevin Williams and another member of the Marion Gardens street gang assaulted victim R.B. in the area of Summit Avenue and Magnolia Avenue in Jersey City;
• On June 30, 2018, Holmes, Rogers, and Jackson shot five people – victim K.C., victim D.A., victim J.W., victim C.F., and victim R.H. – while celebrating “Meech Day” in honor of a deceased fellow gang member;
• On July 6, 2018, Holmes, Jackson, Gibson-Madison, and at least one other member of the Marion Gardens street gang traveled to the area of Wilkinson Avenue, at which time Victim A.W. and Victim R.H. were shot;
• On Jan. 9, 2019, Holmes and Gibson-Madison traveled to the area of Grant Avenue and Ocean Avenue to retaliate for the murder of a fellow gang member, at which time Holmes shot Victim M.G. and Victim T.S. and attempted to shoot Victim E.M; and
• On June 9, 2019, after being shot at by rival gang member, Victim K.G., brandished a firearm and attempted to shoot back at Victim K.G.

 

Acting U.S. Attorney Honig credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch, Jr., 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 Public Safety Director James Shea, for the investigation leading to the indictment.

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 of the District of New Jersey’s Criminal Division in Newark.

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

 

 

Count

Defendant

Offense

Maximum Penalties

1

Morris

Holmes

Kevin Williams

Gibson-Madison

Jackson

Grayson

Willie Williams

Rogers

RICO Conspiracy

Life imprisonment;

$250,000 fine

2

Grayson

Unlawful Possession of a Firearm and Ammunition by a Convicted Felon

10 years’ imprisonment;

$250,000 fine

3

Grayson

Possession with Intent to Distribute Controlled Substances

20 years’ imprisonment;

$1,000,000 fine

4

Grayson

Possession of a Firearm in Furtherance of a Drug Trafficking Crime

Life imprisonment;

5-year mandatory minimum;

$250,000 fine

5

Holmes

Jackson

Rogers

VICAR Assault with a Dangerous Weapon

20 years’ imprisonment;

$250,000 fine

6

Holmes

Jackson

Rogers

Discharging a Firearm During a Crime of Violence

Life imprisonment;

10-year mandatory minimum;

$250,000 fine

7

Holmes

Jackson

Rogers

VICAR Assault with a Dangerous Weapon

20 years’ imprisonment;

$250,000 fine

8

Holmes

Jackson

Rogers

Discharging a Firearm During a Crime of Violence

Life imprisonment;

10-year mandatory minimum;

$250,000 fine

9

Holmes

Jackson

Rogers

VICAR Assault with a Dangerous Weapon

20 years’ imprisonment;

$250,000 fine

10

Holmes

Jackson

Rogers

Discharging a Firearm During a Crime of Violence

Life imprisonment;

10-year mandatory minimum;

$250,000 fine

11

Holmes

Jackson

Rogers

VICAR Assault with a Dangerous Weapon

20 years’ imprisonment;

$250,000 fine

12

Holmes

Jackson

Rogers

Discharging a Firearm During a Crime of Violence

Life imprisonment;

10-year mandatory minimum;

$250,000 fine

13

Holmes

Jackson

Rogers

VICAR Assault with a Dangerous Weapon

20 years’ imprisonment;

$250,000 fine

14

Holmes

Jackson

Rogers

Discharging a Firearm During a Crime of Violence

Life imprisonment;

10-year mandatory minimum;

$250,000 fine

15

Morris

Possession with Intent to Distribute Controlled Substances

20 years’ imprisonment;

$1,000,000 fine

16

Morris

Unlawful Possession of Ammunition by a Convicted Felon

10 years’ imprisonment;

$250,000 fine

17

Holmes

Gibson-Madison

VICAR Assault with a Dangerous Weapon

20 years’ imprisonment;

$250,000 fine

18

Holmes

Gibson-Madison

Discharging a Firearm During a Crime of Violence

Life imprisonment;

10-year mandatory minimum;

$250,000 fine

19

Holmes

Gibson-Madison

VICAR Assault with a Dangerous Weapon

20 years’ imprisonment;

$250,000 fine

20

Holmes

Gibson-Madison

Discharging a Firearm During a Crime of Violence

Life imprisonment;

10-year mandatory minimum;

$250,000 fine

21

Holmes

Gibson-Madison

VICAR Assault with a Dangerous Weapon

20 years’ imprisonment;

$250,000 fine

22

Holmes

Gibson-Madison

Discharging a Firearm During a Crime of Violence

Life imprisonment;

10-year mandatory minimum;

$250,000 fine

23

Kevin Williams

VICAR Assault with a Dangerous Weapon

20 years’ imprisonment;

$250,000 fine

24

Kevin Williams

Possession with Intent to Distribute Controlled Substances

20 years’ imprisonment;

$1,000,000 fine

25

Willie Williams

Unlawful Possession of a Firearm and Ammunition by a Convicted Felon

10 years’ imprisonment;

$250,000 fine

 

NEWARK, N.J. – Two Passaic County, New Jersey, residents admitted to possessing contraband within a Paterson, New Jersey, home, Acting U.S. Attorney Rachael A. Honig announced today.

Roshiema James, 49, of Paterson, pleaded guilty today before U.S. District Judge Stanley R. Chesler to an information charging her with possession with intent to distribute fentanyl, cocaine, and cocaine base. On June 23, 2021, Matthew P. Peoples, 44, of Paterson, pleaded guilty before Judge Chesler to an indictment charging him with possession of a firearm and ammunition by a convicted felon.

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

On Oct. 3, 2019, pursuant to a lawful search of James’ residence, at which Peoples was an overnight guest, investigators recovered a loaded .357 caliber Rossi revolver with a defaced serial number from a bedroom closet and fentanyl, cocaine, cocaine base, and drug paraphernalia. Peoples, who knew he had previously been convicted of a felony, admitted to knowingly possessing the firearm and ammunition, and James admitted that she possessed the controlled substances with the intent to sell them. 

The offense to which James pleaded guilty carries a maximum penalty of 20 years in prison and a fine of up to $1 million. The offense to which Peoples pleaded guilty carries a maximum penalty of 10 years in prison and a fine of up to $250,000. Sentencing for both defendants is scheduled for Oct. 27, 2021.

This case 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 .

Acting U.S. Attorney Honig credited special agents and task force officers with the Bureau of Alcohol, Tobacco, Firearms and Explosives, Newark Division, under the direction of Acting Special Agent in Charge Toby C. Taylor; special agents of the Drug Enforcement Administration, under the direction of Special Agent in Charge Susan A. Gibson in Newark; officers of the N.J. State Police, under the direction of Col. Patrick J. Callahan; officers of the Paterson Police Department, under the direction of Director Jerry Speziale and Police Chief Ibrahim Baycora; and detectives of the Passaic County Prosecutor’s Office, under the direction of Prosecutor Camelia Valdes, with the investigation leading to the charges. She also thanked the U.S. Marshals Service, the Bergen County Sheriff's Office and the Belleville and Livingston police departments for their assistance with the case.

The government is represented by Assistant U.S. Attorney Francesca Liquori, of the Organized Crime and Gangs Unit.

NEWARK, N.J. – A Morris County man and a New York man today admitted their roles in defrauding a union-run health benefit fund of more than $4 million in connection with running unauthorized health and wellness events where thousands of medically unnecessary tests were performed on union members, Acting U.S. Attorney Rachael A. Honig announced.

Alan Ajamian, 68, of Chester, New Jersey, and James Maginn, 64, of Bellerose, New York, each pleaded guilty by videoconference before U.S. District Judge Madeline Cox Arleo to one count of conspiracy to commit health care fraud.

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

Ajamian bribed an official of a health care benefits fund for a service employees union to conduct health fairs for union members that the union did not authorize. The bribes – which included cash, cigars, Yankees tickets, and trips to Las Vegas – were paid to the official to gain access to union members who received health insurance benefits from the union fund. 

Ajamian, Maginn, and others hired medical professionals, including doctors and nurse practitioners, to conduct various medically unnecessary exams and tests at the health fairs. These exams and tests included ultrasounds, vascular studies, dopplers, echocardiograms, allergy, and pulmonary function tests. Ajamian, Maginn, and others pressured and paid the medical professionals to perform as many tests on union members as possible, regardless of whether the tests were medically necessary. To deceive the union fund, Maginn and others falsely represented to the union that the medical tests were conducted at a physician’s office or an urgent care center. In fact, all the tests were administered at health fairs, which took place at the union members’ places of employment.

Maginn and others used several medical and billing companies to submit to the union fund the fraudulent claims stemming from the medically unnecessary exams and tests performed at the health fairs. Ajamian, Maginn, and others caused these companies to bill the union fund over $6 million for these claims. In turn, the union fund paid the companies associated with Ajamian, Maginn, and others over $4 million in connection with the fraudulent claims.

Two other individuals, Benjamin Iskhakov and Omawattie Dayaram, were previously charged by complaint on Aug. 24, 2020 in connection with their roles in the conspiracy, and those charges remain pending. 

The conspiracy charge to which Ajamian and Maginn each pleaded guilty carries a maximum penalty of 10 years in prison and a fine of $250,000, or twice the gross grain or loss from the offense, whichever is greatest. Sentencing for Ajamian is scheduled for Oct. 25, 2021, and for Maginn, Oct. 26, 2021.

Acting U.S. Attorney Honig credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, and the U.S. Department of Labor, Office of the Inspector General, New York Region, under the direction of Acting Special Agent in Charge Nikitas Splagounias.

The government is represented by Assistant U.S. Attorney Christopher D. Amore of the Government Fraud Unit, and Special Assistant U.S. Attorney Kendall Randolph of the Organized Crime and Gangs Unit of the U.S. Attorney’s Office in Newark.

The charges and allegations against the remaining defendants are merely accusations, and they are presumed innocent unless and until proven guilty.

NEWARK, N.J. – A Morris County, New Jersey, man today admitted conspiring to distribute and possessing with intent to distribute methamphetamine from his residence, Acting U.S. Attorney Rachael A. Honig announced.

Frederick Bailey, 61, of Denville, New Jersey, pleaded guilty by videoconference before U.S. District Judge John Michael Vazquez in Newark federal court to an information charging him with one count of conspiring to distribute methamphetamine and one count of possessing with intent to distribute 50 grams or more of methamphetamine.

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

In January 2020, Bailey agreed with another individual to distribute methamphetamine from his residence. On Jan. 8, 2020, law enforcement searched Bailey’s residence and located methamphetamine and packaging materials throughout the residence.  

The conspiracy and possession with intent to distribute charges to which Bailey pleaded guilty carry a mandatory minimum penalty of five years in prison, a maximum of 40 years in prison, and a $5 million fine. Sentencing is scheduled for Oct. 26, 2021.

Acting U.S. Attorney Honig credited special agents with the Drug Enforcement Administration, under the direction of Special Agent in Charge Susan A. Gibson, with the investigation leading to today’s guilty plea.

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

NEWARK, N.J. –  An Essex County, New Jersey, man was sentenced today to 128 months in prison for possession of heroin with intent to distribute, Acting U.S. Attorney Rachael A. Honig announced.

Shawn Alexander, 52, of Newark, previously pleaded guilty before U.S. District Judge Kevin McNulty to Count Two of an indictment, charging him with possession of heroin with intent to distribute. Judge McNulty imposed the sentence today in Newark federal court.

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

On Jan. 30, 2019, officers of the Newark Police Department arrested Alexander after receiving a tip that Alexander distributed and stored narcotics in the basement of an abandoned house on Lyons Avenue in Newark. At his plea hearing on Dec. 19, 2019, Alexander admitted that he possessed 42 decks of heroin with the intent to distribute them.

In addition to the prison term, Judge McNulty sentenced Alexander to three year of supervised release.

Acting U.S. Honig credited officers of the Newark Police Department, under the direction of Public Safety Director Brian O’Hara, and Task Force Officers of the U.S. Attorney‘s Office, under the direction of Supervisory Special Agent Thomas J. Mahoney, with the investigation leading to today’s sentencing. 

This case is part of the Newark Violent Crime Initiative (VCI). The VCI was formed in August 2017 by the U.S. Attorney’s Office for the District of New Jersey, the Essex County Prosecutor’s Office, and the City of Newark’s Department of Public Safety for the purpose of combatting violent crime in and around Newark. Federal, state, county, and city agencies collaborate and pool resources to prosecute violent offenders who endanger the safety of the community. The VCI is composed of the U.S. Attorney’s Office, the FBI, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Drug Enforcement Administration, the U.S. Marshals, the Newark Department of Public Safety, the Essex County Prosecutor’s Office, the Essex County Sheriff’s Office, N.J. State Parole, Union County Jail, N.J. State Police Regional Operations and Intelligence Center/Real Time Crime Center, N.J. Department of Corrections, the East Orange Police Department, and the Irvington Police Department.

The government is represented by Assistant U.S. Attorney Tracey Agnew and Senior Litigation Counsel V. Grady O’Malley Sr. of the U.S. Attorney’s Office’s Organized Crime/Gangs Unit.

TRENTON, N.J. – The owner of a Monmouth County, New Jersey, construction and demolition business today admitted evading employment and personal income taxes, Acting U.S. Attorney Rachael A. Honig announced.

Peter Alvarez, 54, of Atlantic Highlands, New Jersey, pleaded guilty by videoconference before Chief U.S. District Judge Freda L. Wolfson to an information charging him with one count each of employment tax evasion and personal income tax evasion.

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

From 2011 to 2016, Alvarez owned and operated Mr. Demo, a construction and demolition business in Leonardo, New Jersey. Alvarez was required to report to the IRS federal withholding taxes and FICA taxes for all of Mr. Demo’s employees and to pay those taxes on a quarterly basis. Alvarez cashed numerous checks issued by Mr. Demo’s clients and used the resulting cash, in part, to pay Mr. Demo’s employees’ wages. By using cash to pay Mr. Demo’s employees, Alvarez concealed from the IRS his payment of employees’ wages and his failure to report, account for, and pay employment taxes of a total of $177,649. Count 1 of the information to which Alvarez pleaded guilty referred to Alvarez’s evasion of employment taxes of $23,618 for the first quarter of 2016.

From Aug. 1, 2012, to Oct. 23, 2017, Alvarez filed individual federal tax returns for the calendar years 2011 to 2016 in which he falsely and substantially understated Mr. Demo’s total gross receipts by not reporting the numerous checks issued by Mr. Demo’s clients that he cashed. For those calendar years, Alvarez owed additional income tax of $432,019 on Mr. Demo’s unreported gross receipts less allowable payroll expenses. Count 2 of the information to which Alvarez pleaded guilty referred to Alvarez’s evasion of personal income tax of $89,190 for calendar year 2013.

As part of the plea agreement, Alvarez agreed to make full restitution to the IRS of $609,668.

Each charge of tax evasion carries a maximum potential penalty of five years in prison and a maximum $250,000 fine. Sentencing of the defendant is scheduled for Oct. 28, 2021.

Acting U.S. Attorney Honig credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez, and special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorneys J Fortier Imbert and Sara F. Merin of the Special Prosecutions Division in Newark.

CAMDEN, N.J. – An Atlantic County, New Jersey, man has been charged with orchestrating a long-running securities offering fraud while simultaneously embezzling hundreds of thousands of dollars from his employer’s bank account, Acting U.S. Attorney Rachael A. Honig announced.

Joseph Geromini, 54, of Linwood, New Jersey, is charged in an indictment unsealed today with 10 counts of wire fraud and two counts of securities fraud. He will have his initial appearance and arraignment by videoconference this afternoon before U.S. Magistrate Judge Sharon A. King.

According to the documents filed in this case:

Geromini was the chief operating officer (COO) for a technology startup headquartered in Philadelphia, Pennsylvania, which specialized in the development of point-of-care diagnostic testing of various diseases. Geromini controlled the company’s bank and debit card accounts, and was responsible for soliciting investments in the company through debt and equity fundraising.

From July 2018 through October 2018, the company raised approximately $2.25 million of investor funds. Geromini misrepresented to investors that he would invest their funds to pursue the company’s business plan, for example, by using the funds to further develop and commercialize its products and services, for lab expenses, and to pay employee salaries. Instead, Geromini diverted significant portions of their funds out of the company’s bank account for purposes inconsistent with its business operations, including to pay himself hundreds of thousands of dollars through unauthorized wire transfers, ATM cash withdrawals, and debit card transactions.

Geromini frequently misrepresented to the company that the unauthorized wire transfers were intended to compensate him for his employment. Geromini told the company’s chief executive officer that Geromini had twice secured contracts on behalf of the company with third parties and was, pursuant to his employment agreement, entitled to separate bonus payments. 

The wire fraud counts each carry a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gain or loss from the offense. The securities fraud counts each carry a maximum potential penalty of 20 years in prison and a $5 million fine.

The U.S. Securities and Exchange Commission has filed a civil complaint against Geromini based on the allegations underlying the securities fraud charges.

Acting U.S. Attorney Honig credited special agents of the FBI Atlantic City Resident Agency, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, with the investigation leading to the  indictment. 

The government is represented by Assistant U.S. Attorney Eric A. Boden of the U.S. Attorney’s Trenton Office.

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

CAMDEN, N.J. – The chief executive officer of a private equity investment firm was sentenced today to 30 months in prison for defrauding an investor of $1.35 million dollars, Acting U.S. Attorney Rachael A. Honig announced.

Karl James, 50, previously pleaded guilty before U.S. District Judge Joseph H. Rodriguez to an information that charged him with one count of wire fraud. Judge Rodriguez imposed the sentence today in Camden federal court.

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

James was the CEO of Gore Capital LLC, which he told others was a private equity investment firm. In February 2016, James and the victim agreed to each invest approximately $1.5 million into a company that specialized in extracting and converting cannabinoids from marijuana. They further agreed to form an LCC as a conduit for their joint investment. In April 2016, James incorporated the LLC in Delaware.

On April 20, 2016, James instructed the victim to wire his investment funds into a bank account. James falsely told the victim that the victim also had access to the account. On April 22, 2016, the victim wired $500,000 into the account. On July 12, 2016, James instructed the victim to wire the remaining $1 million of his investment, which the victim did. To induce the victim’s payment, James told the victim that he would deposit his own money into the account. In reality, James never wired or deposited any of his own funds.

James later spent $1.35 million of the victim’s funds on personal and entertainment expenses for himself. 

In addition to the prison term, Judge Rodriguez sentenced James to three years of supervised release and ordered him to pay $1.35 million in restitution.

Acting U.S. Attorney Honig credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorney Matthew Feldman Nikic of the Cybercrime Unit in Newark.

NEWARK, N.J. – A Union County, New Jersey, man who owned and operated contracting businesses in Essex County, New Jersey, was sentenced today to 30 months in prison for filing false tax returns that failed to report all his personal and corporate income, Acting U.S. Attorney Rachael A. Honig announced.

Olger Fallas, 50, of Union, the owner and operator of Olger Fallas Painting (OFP) and Olger Fallas Properties (OFPROP) previously pleaded guilty by videoconference before U.S. District Judge Claire C. Cecchi to an information charging him with two counts of tax evasion. Judge Cecchi imposed the sentence by videoconference today.

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

Fallas admitted that between 2013 and 2017 he owned OFP and OFPROP. He admitted that he attempted to hide personal and corporate income from the IRS by using a check cashing business to cash customer payments, which he did not report to the IRS. Fallas also admitted that he deposited hundreds of thousands of dollars in customer payments into bank accounts that were not associated with his companies. Fallas admitted that he evaded paying approximately $1.7 million in personal and corporate income taxes during the scheme. 

In addition to the prison term, Judge Cecchi sentenced Fallas to three years of supervised release and ordered him to pay $1.68 million in restitution.  

Acting U.S. Attorney Honig credited agents of IRS - Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez, with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorney Jamel Semper, Chief of the Organized Crime and Gangs Unit in Newark.

NEWARK, N.J. – A Passaic County, New Jersey, man was sentenced today to 44 months in prison for conspiring to distribute heroin and distributing a quantity of heroin, Acting U.S. Attorney Rachael A. Honig announced.

Carl Brown, 27, of Paterson, New Jersey, previously pleaded guilty by videoconference before U.S. District Judge Brian R. Martinotti to a superseding information charging him with conspiracy to distribute and possess with the intent to distribute heroin and knowingly and intentionally distributing heroin. Judge Martinotti imposed the sentence by videoconference today.

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

Brown and his conspirators are members and associates of the 230 Boys street gang, which operates primarily around Rosa Parks Boulevard and Godwin Avenue in Paterson. Through numerous controlled purchases of narcotics, consensually recorded telephone calls and text messages, physical surveillance, and the analysis of telephone call detail records, law enforcement officers determined that from September 2018 through Oct. 1, 2019, Brown and his conspirators conspired to distribute narcotics, including heroin.

In addition to the prison term, Judge Martinotti sentenced Brown to three years of supervised release.

This case is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.

Acting U.S. Attorney Honig credited special agents and task force officers with the Bureau of Alcohol, Tobacco, Firearms and Explosives, Newark Division, under the direction of Acting Special Agent in Charge Toby C. Taylor; special agents of the Drug Enforcement Administration, under the direction of Special Agent in Charge Susan A. Gibson in Newark; officers of the N.J. State Police, under the direction of Col. Patrick J. Callahan; officers of the Paterson Police Department, under the direction of Director Jerry Speziale and Police Chief Ibrahim Baycora; detectives of the Passaic County Prosecutor’s Office, under the direction of Prosecutor Camelia Valdes; and the Passaic County Sheriff's Department, under the direction of Sheriff Richard H. Berdnik, with the investigation leading to the charges. She also thanked the U.S. Marshals Service, the Bergen County Sheriff's Office and the Belleville and Livingston police departments for their assistance with the case.

The government is represented by Assistant U.S. Attorney Francesca Liquori, of the Organized Crime and Gangs Unit.

NEWARK, N.J. – A Newark man was sentenced today to 96 months in prison for his role in a large international money laundering conspiracy and using a stolen identity in furtherance of the scheme, Acting U.S. Attorney Rachael A. Honig announced.

Edwin Deleon-Batista, 37, previously pleaded guilty by videoconference before U.S. District Judge Katharine S. Hayden to an information charging him with one count of conspiracy to commit money laundering and one count of identity fraud. Judge Hayden imposed the sentence today in Newark federal court.

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

From March 2018 through October 2019, Deleon-Batista laundered over $23 million in cash drug proceeds on behalf of a money laundering organization with close ties to drug trafficking organizations in the Dominican Republic and elsewhere. Deleon-Batista picked up large amounts of cash drug proceeds in New Jersey, New York, and Florida and laundered it by purchasing cashier’s checks at local bank branches. The checks were made payable to individuals and companies specified by the leaders of the money laundering organization. By converting the drug proceeds to cashier’s checks, Deleon-Batista tried to hide the source of the illegal cash and avoid scrutiny by law enforcement and banks. 

Deleon-Batista was previously arrested on federal money laundering charges in New York in April 2019.  Soon after his arrest, Deleon-Batista began using a stolen identity and obtained a fraudulent identification card issued by the State of Florida to continue the money laundering scheme. He used the fraudulent ID card to open several bank accounts, which he then used as a means to convert millions more in cash drug proceeds into cashier’s checks at bank branches in New Jersey, New York, and Florida over a five-month period. 

In addition to the prison term, Judge Hayden sentenced Deleon-Batista to three years of supervised release.

Acting U.S. Attorney Honig credited special agents and task force officers of the U.S. Drug Enforcement Administration, New Jersey Division, under the direction of Special Agent in Charge Susan A. Gibson, and the New York Division, under the direction of Special Agent in Charge Raymond Donovan; special agents and task force officers of IRS - Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez; the Morristown, New Jersey, police department, under the direction of Acting Police Chief Darnell Richardson, and the Direccion Nacional de Control de Drogas (Dominican Republic National Drug Directorate) with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorney Jonathan M. Peck of the Asset Forfeiture and Money Laundering Unit in Newark.

This case is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.

NEWARK, N.J. – An Essex County, New Jersey, man with a felony record made his initial court appearance today on charges of carrying two loaded handguns and a quantity of heroin and cocaine, U.S. Attorney Rachael A. Honig announced today.

Brandon Jacobs, 30, of Newark, is charged by complaint with one count of possessing as a convicted felon a 9mm Glock, with 17 rounds of ammunition, and a .44 caliber Smith & Wesson revolver with six rounds of ammunition, one count each of possession of crack cocaine with intent to distribute and possession of heroin with intent to distribute, and one count of possession of a firearm in furtherance of a drug crime. He appeared before U.S. Magistrate Judge Cathy L. Waldor and was detained.

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

Jacobs, who was convicted of a felony in 2017, was arrested on Jan. 31, 2021, after police received a tip that he was responsible for a recent shooting and was driving a stolen vehicle in the vicinity of 6th Street in Newark. Police located the vehicle, with Jacobs in the driver’s seat and one passenger. Police found the loaded 9 mm semi-automatic handgun in his left coat pocket and the loaded revolver in his right coat pocket. Jacobs was also in possession of 35 glassine envelopes of heroin, 73 glass vials containing suspected crack cocaine and $688 in cash. Also, there was a loaded shotgun in the front seat area of the vehicle.

The count of possession of a firearm as a convicted felon carries a maximum penalty of 10 years in prison and a $250,000 fine. The drug possession counts each carry a maximum penalty of 20 years in prison and a $1 million fine. The count of possessing a weapon during the commission of a drug crime carries a mandatory minimum of five years in prison, a maximum of 15 years in prison and a $250,000 fine.         

Acting U.S. Attorney Rachael A. Honig credited special agents of the U.S. Attorney’s Office, under the direction of Supervisory Special Agent Thomas J. Mahoney, and officers with the Newark Police Department, under the direction of Public Safety Director Brian O’Hara, with the investigation leading to the arrest.

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

CAMDEN, N.J.  – A Texas man today admitted defrauding victims of more than $5 million in connection with the sale of medical-related business opportunities, Acting U.S. Attorney Rachael A. Honig announced.

David Weinstein, 62, formerly of Cherry Hill, New Jersey, and now of Dallas, Texas, pleaded guilty before U.S. District Judge Robert B. Kugler to an information charging him with one count of conspiracy to commit wire fraud and one count of money laundering.

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

From December 2015 through November 2020, Weinstein and his conspirators, Vijay Reddy and Kevin Brown, advertised business opportunities for sale on various websites. They purported to sell “blocks” of contracts with medical providers who allegedly wanted to outsource their medical billing, collections, appeals, answering, credentialing, or transcription functions. The buyers would then provide the contracted services to the medical providers and earn a profit. The conspirators promised to deliver a specified number of providers and pledged that their proprietary marketing efforts would provide a guaranteed client base to the buyers.

To induce buyers to purchase the business opportunities, the conspirators created fake references purporting to be buyers who vouched for their prior business purchases from the conspirators. In fact, the references were Weinstein, Reddy, and their friends and family members, and they used aliases and disguised phone numbers to speak with potential buyers.

After agreeing to purchase the blocks of medical providers, victims entered contracts with companies represented by Weinstein or Reddy and wired down payments ranging from $15,000 to $240,000 to accounts controlled by Weinstein or Brown. The remainder of each purchase price was payable when the conspirators fulfilled the contract by delivering the agreed-upon number of providers.

After receiving the down payments, Weinstein and Reddy typically delivered to each victim only a small number of medical providers. Despite not fulfilling the contracts of any of the buyers identified by law enforcement, the conspirators continued to sell blocks of medical providers to new buyers and refused to provide refunds for their failures to satisfy the terms of the contracts. The conspirators also periodically sold batches of previously signed contracts and disclaimed further responsibility for those contracts to insulate themselves from complaints or legal action from disgruntled buyers.

Brown acted as the business broker for most of the transactions and received a commission for the sales he brokered. Weinstein or Reddy acted as the seller and signed the contracts with the victims. At least 77 victims sent more than $5 million to accounts controlled by the conspirators. The conspirators spent the victims’ money on personal expenses, including a travel, jewelry, real estate, a wedding, a college education, and other business investments.

The wire fraud conspiracy count is punishable by a maximum of 20 years in prison, and the money laundering count is punishable by a maximum of 10 years in prison. In addition, both counts are punishable by a $250,000 fine, or twice the gross gain or loss from the offense, whichever is greater. As part of his plea agreement, Weinstein agreed to make restitution in excess of $5 million. Sentencing is scheduled for Oct. 25, 2021.

Reddy pleaded guilty on June 9, 2021, to his role in the scheme.

Acting U.S. Attorney Honig credited special agents of the FBI’s South Jersey Resident Agency, under the direction of Special Agent in Charge Michael J. Driscoll in Philadelphia; special agents of IRS - Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez in Newark; and postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Damon Wood in Philadelphia, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorneys Daniel A. Friedman and Diana Vondra Carrig of the U.S. Attorney’s Office in Camden.

The charge and allegations in the criminal complaint against Brown are merely accusations, and he is presumed innocent unless and until proven guilty.

NEWARK, N.J. – A Passaic County, New Jersey, man was arrested today for his role in a kickback tax evasion scheme related to his role as plan administrator of two union-related employee benefit plans, Acting U.S. Attorney Rachael A. Honig announced.

Jose Santa Maria, aka “Joe,” of North Haledon, New Jersey, is charged by complaint with five counts of tax evasion, one count of paying kickbacks related to an employee benefit plan, and one count of making false statements in relation to an employee benefit plan. He is scheduled to appear by videoconference this afternoon before U.S. Magistrate Judge James B. Clark III.

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

From at least 2013, Santa Maria served as the plan administrator, through Company-1, for a health fund and a training fund related to a labor union. At the same time, Santa Maria was employed by Individual-1, who served as counsel for the two union funds. The president of Company-1 was related to Individual-1. From 2013 through 2019, Santa Maria derived approximately $750,000 in income from Company-1, which was paid by the two union funds. He did not report any of the income to the IRS or pay the associated income taxes. Santa Maria also unlawfully paid at least $50,000 to Individual-1, through payments from Company-1 to Company-2, which was owned by Individual-1. These unlawful payments were designed to maintain Santa Maria’s position as the plan administrator to the funds and vice president of Company -1. Company-1 also received insurance commissions, which Santa Maria caused to not be reported, as required, on filings with the IRS and Department of Labor, for the union health fund.

The counts of tax evasion each carry a maximum penalty of five years in prison and a $250,000 fine. The count of paying kickbacks related to an employee benefit plan carries a maximum penalty of three years in prison and a $250,000 fine. The count of making false statements related to an employee benefit plan carries a maximum penalty of five years imprisonment and a $250,000 fine.

Acting U.S. Attorney Honig credited investigators of the Department of Labor, Employee Benefits Security Administration, under the direction of Regional Director of the New York Regional Office Thomas Licetti; special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez; and police investigators of  the Port Authority of New York and New Jersey, under the direction of Acting Inspector General Michael Farbiarz, with the investigation with the investigation leading to the charges.

The government is represented by Senior Litigation Counsel V. Grady O’Malley and Special Assistant U.S. Attorney Kendall Randolph of the U.S. Attorney’s Office’s Organized Crime and Gangs Unit in Newark.

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

NEWARK, N.J. – A U.S. Postal Service (USPS) mail carrier was arraigned today on charges of conspiring to possess with intent to distribute controlled substances, receiving bribes as a public official, and conspiring to defraud the United States, Acting U.S. Attorney Rachael A. Honig announced.

Emerson Pavilus, 46, of Union, New Jersey, was charged May 24, 2021, in a three-count indictment with conspiring to possess with intent to distribute cocaine and marijuana, receiving bribes as a public official, and conspiring to defraud the United States. 

According to documents filed in this case:

Pavilus was a mail carrier at the USPS Post Office in Flanders, New Jersey. From 2015 through June 2020, Pavilus received cash payments from at least two individuals in exchange for helping them to ship controlled substances, including cocaine and marijuana, and other illicit materials through the mail. Among other things, Pavilus provided his conspirators with addresses in Flanders to which parcels could be shipped, intercepted those parcels from the mail stream, and personally delivered those parcels to conspirators at addresses other than those listed on the parcels.

The narcotics offense carries a mandatory minimum sentence of five years in prison, a maximum potential penalty of 40 years in prison, and a maximum fine of $5 million. The bribery charge is punishable by a maximum potential penalty of 15 years in prison and a maximum fine of $250,000 or twice the gross gain from the offense, or three times the monetary equivalent of the bribe amount, whichever is greatest. The conspiracy to defraud the United States charge carries a maximum potential penalty of five years in prison and a maximum fine of $250,000 or twice the gross gain from the offense, whichever is greater.  

Acting U.S. Attorney Honig credited members of the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Jason J. Molina in Newark, the USPS Office of Inspector General, Northeast Area Field Office, under the direction of Special Agent in Charge Matthew Modafferi, and the U.S. Postal Inspection Service, in Newark, under the direction of Acting Inspector in Charge Rodney M. Hopkins, with the investigation leading to the charges. She also thanked the Irvington Police Department for their assistance.

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. Attorney Mark J. Pesce of the U.S. Attorney’s Office’s OCDETF/Narcotics 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.

NEWARK, N.J. –  A Maryland man was arrested today on charges of fraudulently obtaining more than $500,000 in COVID-19 relief funds, Acting U.S. Attorney Rachael A. Honig announced.

Mohamed Kamara, 40, of Greenbelt, Maryland, is charged by complaint with wire fraud. He is scheduled to appear by videoconference this afternoon before U.S. Magistrate Judge Timothy J. Sullivan in Maryland federal court.

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

The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a federal law designed to provide emergency financial assistance to Americans suffering the economic effects of the COVID-19 pandemic. The CARES Act enables the Small Business Administration (SBA) to offer funding through the COVID-19 Economic Injury Disaster Loans (EIDL) program to business owners negatively affected by the COVID-19 pandemic.

Unemployment Insurance (UI) is a joint state/federal program that provides unemployment insurance benefits (UIB) to eligible workers who were unemployed through no fault of their own.

From April 2020 and June 2020, six applications were made to the SBA for EIDLs. Representatives for some of the companies whose names were used to make the applications stated that their company did not make the application. In response to the applications, the SBA provided EIDLs collectively worth more than $500,000. Kamara received or attempted to receive funds in connection with each of the EIDLs.

From Jan. 1, 2020, to Sept. 7, 2020, an IP addresses associated with Kamara’s address was used to submit approximately 50 New Jersey UIB applications for 42 individuals. This resulted in New Jersey Department of Labor (NJDOL) authorizing benefits of approximately $163,000. The IP address also was used to access numerous accounts that received funds as a result of UIB applications submitted to NJDOL from other IP addresses. Those accounts received approximately $34,000 in UIBs.

The charge of wire fraud is punishable by a maximum potential penalty of 20 years in prison and a fine of the greater of $250,000, twice the gross profits or twice the gross loss suffered by the victims of his offense, whichever is greatest.

Acting U.S. Attorney Honig credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, and special agents of the U.S. Department of Labor, Office of Inspector General, under the direction of Special Agent in Charge Michael C. Mikulka in New York, with the investigation leading to today’s arrest. She also thanked the FBI Baltimore Field Office; the Small Business Administration, and the New Jersey Department of Labor & Workforce Development for their assistance.

The government is represented by Assistant U.S. Attorney Andrew Kogan of the U.S. Attorney’s Office Cybercrime 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. 

NEWARK, N.J. – A member of the Rollin’ 60s Neighborhood Crips appeared in court today on charges that include attempted murder and murder as part of a RICO conspiracy, Acting U.S. Attorney Rachael A. Honig announced.

Elijah Williams, aka “Lil Smith,” 21; Jason Franklin, aka “Freak,” aka “OG Freak,” 37; and Tre Byrd, aka “Bands,” aka “G Bandz,” 20, all of Newark, are charged by indictment with Racketeer Influenced and Corrupt Organizations (RICO) conspiracy. Williams was arraigned today before U.S. District Judge Susan D. Wigenton in Newark federal court. Byrd was arraigned on June 9, 2021 before Judge Wigenton. Franklin remains at large.

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

Williams, Franklin, and Byrd are allegedly members and associates of the Rollin’ 60s Neighborhood Crips. On Sept. 25, 2018, Williams shot at four individuals in Newark, striking two. All of the victims survived the attack. On March 20, 2019, in Irvington, New Jersey, aided and abetted by Franklin and Byrd, Williams fatally shot another victim. On June 20, 2020, in Newark, Byrd worked with another member and associate of the Rollin’ 60s Neighborhood Crips to rob another victim at gunpoint. 

All of the defendants face a maximum sentence of life imprisonment and a fine of $250,000.

Acting U.S. Attorney Honig credited special agents and task force officers of the DEA, under the direction of Special Agent in Charge Susan A. Gibson in Newark, with the investigation leading to the charges. She also thanked special agents and task force officers with the Bureau of Alcohol, Tobacco, Firearms, and Explosives, under the direction of Acting Special Agent in Charge Toby C. Taylor; prosecutors and detectives with the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Theodore N. Stephens II; police officers and detectives of the Irvington Police Department, under the direction of Director Tracey Bowers; police officers and detectives of the Newark Police Department, under the direction of Public Safety Director Brian O’Hara; the Essex County Sherriff’s Office, under the direction of Sheriff Armando B. Fontoura; and the Bloomfield Police Department, under the direction of Samuel A. DeMaio, Director of Public Safety. 

The government is represented by Assistant U.S. Attorney Francesca Liquori of the Organized Crime and Gangs Unit.

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

NEWARK, N.J. – An Essex County, New Jersey, man today admitted to conspiracy to commit bank fraud by soliciting U.S. Postal Service (USPS) employees to steal check books and credit cards from the mail, depositing fraudulent checks, including pandemic relief checks, and using stolen credit cards without authorization, Acting U.S. Attorney Rachael A. Honig announced.

Jahaad Flip, 20, of Newark, pleaded guilty by videoconference before U.S. District Judge Susan D. Wigenton to an information charging him with one count of conspiracy to commit bank fraud. 

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

From February 2019 to May 2020, Flip conspired to fraudulently obtain money from victim financial institutions by, among other things, depositing counterfeit checks and checks stolen from the mail into accounts and withdrawing funds from those accounts before the financial institutions identified the fraudulent checks and blocked further withdrawals. Flip and his conspirators arranged for USPS employees to steal credit cards and blank check books from the mail in exchange for cash payments. USPS employees provided the checks to Flip and his conspirators, who forged the signatures of the accountholders and negotiated the checks by making them payable to individuals. Some of these individuals were New Jersey high school students who had given Flip and his conspirators access to their accounts in exchange for cash. Flip and his conspirators also created counterfeit checks, including counterfeit pandemic relief checks. They deposited the fraudulent checks online and at various bank ATMs throughout New Jersey and later withdrew funds from the bank accounts before the victim financial institutions identified the checks as fraudulent. Flip and his conspirators obtained and attempted to obtain approximately $280,000 from victim financial institutions.

One of Flip’s conspirators, Tashon Ragan, pleaded guilty before Judge Wigenton last week to conspiracy to commit bank fraud and is due to be sentenced on Sept. 20, 2021. Charges are still pending against two other conspirators, Jeffrey Bennett and Janel Blackman. The charges against Bennett and Blackman are merely accusations, and they are presumed innocent unless and until proven guilty.

The conspiracy charge is punishable by a maximum potential penalty of 30 years in prison and a fine of up to $1 million. Sentencing is scheduled for Oct. 19, 2021.   

Acting U.S. Attorney Honig credited postal inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Rodney M. Hopkins; special agents with the U.S. Postal Service – Office of Inspector General, Northeast Area Field Office, under the direction of Special Agent in Charge Matthew Modafferi; special agents with IRS – Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez; and special agents with the Office of the Treasury Inspector General for Tax Administration (TIGTA), under the direction of Special Agent in Charge Andrew McKay, with the investigation leading to today’s guilty plea. She also thanked the Summit Police Department, the New Providence Police Department, the Piscataway Police Department, the Newark Police Department, the South Orange Police Department, and the Little Falls Police Department for their assistance.

The government is represented by Assistant U.S. Attorneys Jonathan Fayer and Elaine K. Lou in Newark.

CAMDEN, N.J. – An Atlantic County, New Jersey, man today admitted sending a false distress call to the U.S. Coast Guard and submitting fraudulent information on a loan application, Acting U.S. Attorney Rachael A. Honig announced.

Andrew Biddle, 51, of Egg Harbor Township, New Jersey, pleaded guilty before U.S. District Judge Renée Marie Bumb to an indictment charging him with one count of bank fraud and one count of causing the U.S. Coast Guard to render unnecessary aid.

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

On June 25, 2014, Biddle submitted documents to secure a loan for $55,000 from Southeast Financial Credit Union. Biddle listed as collateral for the loan a boat and provided a fraudulent appraisal document for the boat. Biddle also submitted to Southeast Financial a document that falsely listed his gross earnings as owner of Professional Boat; a document that falsely inflated the net income for Professional Boat; and a fraudulent income tax return. Based on the fraudulent documents Southeast Financial fund the loan and deposit $55,000 into Biddle’s account.

Between February 2014 and July 2014, the Egg Harbor Township Police Department filed theft charges against Biddle. Biddle admitted that on July 20, 2014, he and a passenger took a boat out of Seavillage Marina in Northfield and traveled across Great Egg Harbor Inlet to a restaurant in Somers Point to have dinner. During dinner, Biddle and the passenger finalized a scheme to fake Biddle’s disappearance. After dinner, Biddle and his passenger traveled back to the marina by boat. The passenger dropped Biddle off between two piers so that he could be picked up by another individual and driven out of the area. The passenger then continued back to Seaville Marina and he intentionally hit a navigational marker in Great Egg Harbor Inlet near Longport. The collision caused the passenger to be ejected from the boat. The passenger caused someone to call 911. Based on that call the U.S. Coast Guard, New Jersey State Police and Longport fire/rescue responded to the area to search for and try and save Biddle. The U.S. Coast Guard and others searched for Biddle using vessels and helicopters on July 20 and 21, 2014.  Biddle admitted that while the Coast Guard was searching for him, he was in Florida.

Biddle admitted that he faked his disappearance in order to avoid prosecution by authorities in Atlantic County, but eventually turned himself into authorities in Atlantic County on Feb. 12, 2015.

The count of bank fraud carries a maximum potential penalty of 30 years in prison and a $1 million fine. The false distress call to the U.S. Coast Guard carries a maximum potential penalty of six years in prison and a $250,000 fine. Sentencing is scheduled for Oct. 18, 2021.

Acting U.S. Attorney Honig credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr., and detectives of the N.J. State Police, under the direction of Colonel Patrick J. Callahan for the investigation leading to today’s guilty plea. She also thanked the U.S. Coast Guard Investigative Service, Egg Harbor Township Police Department, and the Atlantic County Prosecutor’s Office for their assistance.

The government is represented by Senior Trial Counsel Jason M. Richardson of the U.S. Attorney=s Office Criminal Division in Camden.

CAMDEN, N.J. – An Atlantic City woman was charged for her role in fraudulently obtaining money from elderly victims and not advising the Social Security Administration (SSA) and the U.S. Department of Housing and Urban Development (HUD) of the substantial amount of money she earned from the scheme, Acting U.S. Attorney Rachael A. Honig announced today.

Victoria Crosby, 44, is charged by complaint with one count of wire fraud, one count of concealing information affecting a continued right to payment by the SSA, one count of health care fraud and one count of making a false statement, representation or document to HUD. Crosby is scheduled to have her initial appearance by videoconference today before U.S. Magistrate Judge Sharon A. King.

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

Crosby and others used prepaid cellular phones to contact victims whose spouses or other family members had recently died. Many of the victims were 70 or older. Crosby and others used fictitious names and purported to be employees of either a retirement benefit office or a life insurance company. They told the victims that life insurance policies, obtained by their deceased family member and for which they were the beneficiary, were in arrears and that to correct the underpayment, victims needed to pay thousands of dollars. Victims were instructed to purchase prepaid cards at various retailers and provide the caller with the 10-digit codes on the back. After obtaining the prepaid card information, Crosby and others loaded the money into accounts they controlled. According to video surveillance footage obtained by law enforcement officials, Crosby withdrew victim funds from various ATMs in New Jersey. 

At the time that Crosby was involved in the fraud scheme, she was receiving Supplemental Security Income (SSI) benefits from the SSA and Medicaid. Crosby was also living in public housing in Atlantic City and receiving housing assistance through HUD’s Public and Indian Housing Program. Between January 2020 and December 2020, Crosby received $110,380 into her bank account. Had SSA or HUD been aware of her income, Crosby would have been ineligible for SSI, Medicaid, or HUD benefits.

The counts of wire fraud and health care fraud each carry a maximum of 20 years in prison and a maximum $250,000 fine, or twice the gross gain or loss from the offense, whichever is greatest. The count of concealing any event affecting continued right to payment by the SSA and making false statements to HUD each carry a maximum of five years in prison and a maximum $250,000 fine, or twice the gross gain or loss from the offense, whichever is greatest.

Acting U.S. Attorney Honig credited criminal investigators of the U.S. Attorney’s Office, under the direction of Supervisory Special Agent in Charge Thomas Mahoney; special agents of the FBI Newark, Atlantic City Resident Agency, under the direction of Special Agent in Charge George M. Crouch Jr.; special agents of the SSA Office of the Inspector General, New York Field Division, under the direction of Special Agent in Charge John F. Grasso; and special agents of the U.S. Department of Housing and Urban Development, Office of the Inspector General, New York Region, under the direction of  Special Agent in Charge Christina Scaringi, with the investigation leading to the charges. She also thanked the Maryland Office of the Attorney General for its assistance.

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

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

NEWARK, N.J. – A New York man was sentenced today to 24 months in prison for his role in a $3.5 million scheme to use false information and simultaneous loan applications at multiple banks to fraudulently obtain home equity lines of credit, a practice known as “shotgunning,” Acting U.S. Attorney Rachael A. Honig announced.

Simon Curanaj, 67, of Yonkers, New York, previously pleaded guilty before U.S. District Judge John Michael Vazquez in Newark federal court to an information charging him with conspiracy to commit bank fraud. Judge Vazquez imposed the sentence by videoconference today.

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

From 2012 through January 2014, Curanaj, Michael Arroyo, and others conspired to fraudulently obtain multiple home equity lines of credit (HELOCs) from banks on residential properties in New Jersey and New York, including a residential property on Havermeyer Avenue in the Bronx. In 2013, Curanaj, Arroyo, and others transferred ownership of the property to an individual living at the property and his family friend.

Curanaj, Arroyo, and others then applied, in the family friend’s name, for two HELOCs from two banks using the Havermeyer Avenue property as collateral. They hid from the lenders the fact that the property was either already subject to senior liens that had not yet been recorded, or that the same property was offered as collateral for a line of credit from another lender. The applications also falsely inflated the family friend’s income without his knowledge. In addition, the equity in the property was far less than the amount of the HELOC loans Curanaj, Arroyo, and others applied for.

The victim banks eventually issued loans to the family friend in excess of $500,000. After the victim banks deposited money into the family friend’s bank accounts, portions of the funds were disbursed to Curanaj, Arroyo, and others. Eventually, the family friend defaulted on the two HELOC loans. The overall scheme resulted in $2.2 million in losses to the victim banks.

In addition to the prison term, Judge Vazquez sentenced Curanaj to five years of supervised release and ordered him to pay $2.1 million in restitution. Arroyo was sentenced in September 2018 to 21 months in prison for his role in the scheme.

Acting U.S. Attorney Honig credited special agents of the Federal Housing Finance Agency (FHFA) – Office of Inspector General, under the direction of Special Agent in Charge Robert Manchak in Newark, and special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch in Newark, with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorney Jason S. Gould of the U.S. Attorney’s Office Criminal Division in Newark and Special Assistant U.S. Attorney Kevin DiGregory of the FHFA, Office of the Inspector General.

CAMDEN, N.J. – A Camden man was sentenced today to 12 months in prison for his role today in a scheme to steal hundreds of thousands of dollars in government funds using fraudulently procured electronic benefits transfer (EBT) cards, Acting U.S. Attorney Rachael A. Honig announced.

Luciano Estevez, 51, previously pleaded guilty by teleconference before U.S. District Judge Renee Marie Bumb to an information charging him with one count of conspiracy to defraud the United States and one count of defrauding the U.S. Department of Agriculture’s (USDA) Supplemental Nutrition Assistance Program (SNAP). Judge Bumb imposed the sentence today in Camden federal court.

Formerly known as the Food Stamps program, SNAP is administered by the USDA to assist low-income individuals and families with the purchase of groceries and food items. SNAP recipients receive EBT cards, similar to commercial debit cards, to make food purchases. Retailers authorized to accept SNAP benefits have EBT terminals to process the food purchases. Food purchases are made by swiping the EBT card at the terminal, and having customers enter a Personal Identification Number (PIN). The EBT terminal verifies the PIN, determines whether the customer’s account balance is sufficient to cover the proposed transaction, and informs the retailer whether the transaction should be authorized or denied. The amount of the purchase is deducted electronically from the SNAP benefits reserved for the customer and the purchase amount is credited to the retailer’s designated bank account.

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

Estevez and others targeted low-income individuals who possessed or had access to EBT cards, and unlawfully purchased the cards from these individuals in exchange for cash and controlled substances. Two confidential sources working with law enforcement engaged in 43 controlled transactions involving EBT cards totaling more than $40,500, which they exchanged for cash and controlled substances, including prescription opioids.

The defendants used the unlawfully procured EBT cards to purchase bulk goods and food items from large national superstores. These goods and food items were then resold in small convenience and grocery stores owned or affiliated with the defendants or their associates, resulting in a profit for the defendants. Hundreds of EBT cards fraudulently procured by the defendants were used at these superstores, resulting in the misappropriation of approximately $150,000 in government funds.

Estevez also unlawfully procured an EBT terminal registered to a superstore in Philadelphia, Pennsylvania, to use at his small grocery store in Camden, which was not registered as a lawful SNAP merchant in the USDA program. Through this terminal, the scheme netted approximately $110,000 in SNAP funds. 

In addition to the prison term, Judge Bumb sentenced Estevez to three years of supervised release and ordered him to pay $155,091 in restitution.

Acting U.S. Attorney Honig credited special agents of the U.S. Department of Agriculture-Office of Inspector General, Northeast Region, under the direction of Special Agent in Charge Bethanne M. Dinkins; the U.S. Department of Health and Human Services-Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert; the FBI Philadelphia Field Office, South Jersey Resident Agency, under the direction of Special Agent in Charge Michael J. Driscoll in Philadelphia; and the Camden County Police Department, under the direction of Chief Gabriel Rodriguez.

The government is represented by Assistant U.S. Attorney Christina O. Hud of the U.S. Attorney’s Office’s Criminal Division in Camden.