District of New Jersey

TRENTON, N.J. – A Middlesex County, New Jersey, man today admitted attempting to interfere with law enforcement officers during a civil disorder when he attempted to set fire to a police vehicle during a riot in Trenton, Acting U.S. Attorney Rachael A. Honig announced.

Justin D. Spry, 22, of South Plainfield, New Jersey, 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 riot, smashing store fronts, looting stores, and attacking 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 Killian Melecio, who then attempted to stuff the shirt in the gas tank of the police vehicle and ignite it. Melecio was then assisted by 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.

Melecio pleaded guilty on Jan. 26, 2021, to one count of attempting to obstruct, impede, or interfere with law enforcement officers during a civil disorder affecting commerce.

The charge of attempting to interfere with law enforcement officers during a civil disorder to which Spry and Melecio have pleaded guilty carries a maximum penalty of five years in prison and a maximum fine of $250,000. Sentencing for Spry is scheduled for Aug. 3, 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 Police Director Sheilah Coley; 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 are merely accusations, and he is presumed innocent unless and until proven guilty.

TRENTON, N.J. – A former Princeton resident was arrested today and charged with engaging in multiple fraudulent schemes intended to steal millions of dollars from individual and institutional victims, Acting U.S. Attorney Rachael A. Honig announced.

Ford Graham, 57, formerly of Princeton, New Jersey, was arrested today in Nellysford, Virginia, and charged by criminal complaint with two counts of wire fraud, one count of conspiracy to commit wire fraud, one count of securities fraud, three counts of aggravated identity theft, and one count of engaging in unlawful money transactions. Graham made his initial appearance before U.S. Magistrate Judge Joel Hoppe in Harrisonburg, Virginia, federal court. Graham will make his initial appearance in U.S. District Court for the District of New Jersey on a date to be determined.

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

From December 2012 to September 2013, Graham represented himself as the owner, chief executive, chairman, manager, and principal member of dozens of corporate entities purporting to do business under an umbrella organization, Vulcan Capital Corp. (Vulcan). Graham held himself out as a highly successful financier who had vast experience sponsoring complex energy and natural resource projects and other investment deals. In connection with one such investment that Graham and a Vulcan entity sponsored, one victim (Victim-1) invested more than $2 million with Graham, relying on Graham’s misrepresentations and omissions regarding the investment. The investigation revealed that Graham misappropriated substantial amounts of Victim-1’s investment money and used it for his own personal benefit and enrichment – including international vacations, private school tuition for his children, and other personal amenities – instead of the investment purpose that Graham had marketed. Graham caused multiple victims to lose more than $2.6 million.

Graham also participated in a scheme to defraud merchant processing institutions through fraudulent credit card transactions. From December 2017 to February 2018, Graham used at least one payment processing platform to process fraudulent charges on stolen credit card numbers that he obtained. After the payment processing platform credited Graham’s account with the payments requested, Graham quickly transferred or caused to be transferred the fraudulently obtained money to other accounts before the victim institutions could act. When requested by the victim payment processing company to provide supporting documentation, Graham submitted false documentation, including fabricated invoices and credit card authorization forms, fabricated e-mails, forged signatures, altered bank statements, and other false and fraudulent information. This scheme resulted in tens of thousands of dollars of losses and the misappropriation of multiple victims’ personal identification information.

From February 2017 to June 2018, Graham conspired with others to defraud victim institutions and individuals of millions of dollars through a business email compromise scheme. Members of the conspiracy sent fraudulent e-mail communications to victims who were scheduled to make substantial outgoing wire transfers to third parties. These fraudulent e-mails created the appearance that they had been sent by the intended third-party recipients of the scheduled payments when, in fact, they were sent by members of the conspiracy. The fraudulent emails requested the victims to reroute the scheduled payments to different bank accounts, which Graham and his conspirators controlled. In one instance, a fraudulent email successfully induced one victim unknowingly to reroute a payment of more than $650,000 to a bank account that Graham controlled. Upon receiving the funds, Graham transferred or caused to be transferred substantial portions of those funds to other accounts that he controlled, and which he used and intended to use for his own personal benefit. Graham and his conspirators attempted to defraud multiple victims of at least $6 million.

The wire fraud and wire fraud conspiracy counts each carry a maximum potential penalty of 20 years in prison and a fine of $250,000, or twice the gross amount of gain or loss from the offense, whichever is greater. The securities fraud count is punishable by a maximum potential penalty of 20 years in prison and a $5 million fine. Each count of aggravated identity theft is punishable by a statutory mandatory consecutive sentence of two years, which must run consecutive to any other sentence. The charge of engaging in unlawful monetary transactions carries a maximum potential penalty of 10 years in prison and a fine of $250,000 or twice the gross gain or loss from the offense or not more than twice the amount of the criminally derived property involved in the transactions.

Acting U.S. Attorney Honig credited special agents of the FBI, Newark Division, Red Bank Resident Agency, under the direction of Special Agent in Charge George M. Crouch Jr.; special agents of IRS - Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez; and inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Rodney M. Hopkins, with the investigation leading to today’s charges. Acting U.S. Attorney Honig also thanked investigators with the New Jersey Bureau of Securities, under the direction of Chief Christopher W. Gerold, for their assistance in connection with the investigation.

The government is represented by Assistant U.S. Attorneys J. Brendan Day, Attorney-in-Charge of the Trenton Branch Office, and Martha K. Nye, of the Criminal Division in Trenton.

NEWARK, N.J. – A Pennsylvania man today admitted his role in a conspiracy to receive kickbacks and bribes from laboratories in exchange for referrals of patient DNA samples and genetic tests, Acting U.S. Attorney Rachael A. Honig announced.

Jeremy Richey, 40, of Mars, Pennsylvania, pleaded guilty by videoconference before U.S. District Judge Brian R. Martinotti to a superseding information charging him with conspiracy to commit an offense against the United States in connection with a scheme to violate the Anti-Kickback Statute. Richey and five co-defendants were previously charged by indictment in September 2019 in connection with the conspiracy and a related health care fraud scheme.

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

Richey and certain conspirators operated Ark Laboratory Network LLC (Ark), a company that purported to operate a network of laboratories that facilitated genetic testing. Through Ark, Richey and others submitted or caused to be submitted referrals for genetic tests and patients’ DNA samples to various clinical laboratories across the country. Richey and certain conspirators entered into kickback agreements with certain clinical laboratories under which the laboratories paid Ark bribes in exchange for delivering DNA samples and orders for genetic tests. Ark concealed these kickback arrangements through issuing sham invoices to laboratories that purportedly reflected services provided at an hourly rate even though the parties had already agreed upon the bribe amount, which was based on the revenue the laboratories received from Medicare or an amount paid for each DNA sample. From January 2018 through January 2019, Medicare paid these laboratories at least approximately $4.6 million for genetic tests that resulted from the referrals and DNA samples that Ark delivered to the laboratories in exchange for bribes. In turn, the laboratories paid Ark at least $1.8 million in bribes.

The charge to which Richey pleaded guilty carries a maximum penalty of five years in prison and a fine of $250,000, or twice the gross grain or loss from the offense. Richey’s sentencing is scheduled for Aug. 9, 2021.

Co-defendants Kacey C. Plaisance, of Altamonte Springs, Florida; Kyle D. McLean, of Arlington Heights, Illinois; and Edward B. Kostishion, of Lakeland, Florida, previously pleaded guilty. Plaisance is scheduled to be sentenced on June 21, 2021. McLean is scheduled to be sentenced on July 26, 2021. Kostishion is scheduled to be sentenced on July 26, 2021.

Acting U.S. Attorney Honig credited special agents of the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert; and special agents of the U.S. Attorney’s Office for the District of New Jersey, under the direction of Supervisory Special Agent Thomas J. Mahoney, with the investigation leading to today’s guilty plea.

The government is represented by Bernard J. Cooney, Chief of the Government Fraud Unit, and Assistant U.S. Attorney José R. Almonte of the Health Care Fraud Unit in Newark.

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

NEWARK, N.J. – A New York man was sentenced today to 33 months in prison for participating in a scheme to buy and sell over $2 million in stolen property, Acting U.S. Attorney Rachael A. Honig announced.

James Olla, 29, of Brooklyn, New York, previously pleaded guilty by videoconference before U.S. District Judge John Michael Vazquez to a superseding indictment charging him with conspiracy to sell, receive or possess stolen goods. Judge Vazquez sentenced Olla today by videoconference.

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

From January 2014 through June 2015, Olla and others procured stolen information related to credit cards belonging to various individuals, including victims living in New Jersey. Using this stolen information, Olla and his conspirators obtained gift cards from various retailers and then sold the cards on the streets of Brooklyn and elsewhere, often for large sums of cash. In total, Olla’s scheme resulted in losses to financial institutions of $2,041,977.

In addition to the prison term, Judge Vazquez sentenced Olla to three years of supervised release, ordered him to forfeit certain property, and pay restitution of $689,124.

Acting U.S. Attorney Honig credited special agents of FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark; the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Rodney M. Hopkins in Newark; and the U.S. Secret Service, under the direction of  Special Agent in Charge Mark McKevitt, with the investigation leading to today’s sentencing.

The government is represented by Cybercrime Unit Chief David W. Feder and Assistant U.S. Attorney Joshua L. Haber of the U.S. Attorney’s Office Criminal Division in Newark.

NEWARK, N.J. – A second man from California has been charged with conspiring to launder money that originated from fraudulently obtained loans from the U.S. Small Business Association and from a business email compromise scheme that targeted a law firm based in New Jersey, Acting U.S. Attorney Rachael A. Honig announced.

Anthony Debose Hannah, 57, of Moreno Valley, California, is charged by complaint with one count of money laundering conspiracy. Hannah was taken into custody this morning in California and is scheduled to appear by videoconference today before U.S. Magistrate Judge Shashi H. Kewalramani in Riverside, California, federal court.

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

In June 2020, Victim 1 communicated via email with a law firm in New Jersey that was helping Victim 1, a resident of Bergen County, New Jersey, with a real estate transaction. One of the law firm’s email accounts was compromised and someone purporting to be emailing on behalf of the law firm sent instructions to Victim 1 to wire approximately $560,000 into an escrow account under the name “Eric’s Commercial LLC.” Victim 1 wired approximately $560,000 into a business bank account controlled by Eric Bullard, Hannah’s conspirator. Victim 1 did not intend for the money to be transferred to Bullard and sent the wire transfer to Bullard’s account under the belief that the wire instructions had come from the New Jersey law firm.

Shortly after the $560,000 was transferred into the Eric’s Commercial LLC bank account, approximately 10 cash withdrawals were made from the account totaling $96,275. On June 14, 2020, three large wire transfers totaling approximately $460,000 were made from the Eric's Commercial Bank Account to other bank accounts. One of those transfers was a wire transfer of approximately $230,000 to an account in the name of “Anthony Property Management & Development,” an account controlled by Hannah.  Hannah opened the Anthony Property Management account on May 18, 2020, and was the sole signatory on the account.

On June 15, 2020, approximately $230,000 was transferred from the Anthony Property Management account to another business account that does not appear to be controlled by Hannah or Bullard.

In addition to laundering of the proceeds from the business email compromise, Bullard and Hannah also obtained and laundered funds from the U.S. Small Business Administration’s (SBA) Economic Injury Disaster Loan (EIDL) program. In July 2020, Hannah received into a business bank account that he controlled $145,400 from an SBA EIDL loan intended for a pharmacy company with a listed location in Idaho, some of which he shared with Bullard.  Bullard also received a $143,100 SBA EIDL loan intended for a pharmacy company with a listed location in Colorado. A few days later, Bullard wrote a check to Hannah for $51,000. In addition to the SBA loan money, Hannah also received payments from the Illinois Department of Employment Security. 

Bullard was arrested on similar charges last week in California and was ordered detained; he is pending transfer to the District of New Jersey.

The count of money laundering conspiracy carries a maximum penalty of 20 years in prison and a fine of up to $500,000 or twice the value of the monetary instrument or funds involved in the transfer, whichever is greater.

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 the charges.

The government is represented by Assistant U.S. Attorney Jamie L. Hoxie of the Cybercrime Unit in Newark.

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

NEWARK, N.J. – An Essex County, New Jersey, man previously convicted of multiple felonies was sentenced today to 36 months in prison for possessing a firearm and ammunition, Acting U.S. Attorney Rachael A. Honig announced.

Sharif Clarke, 39, of Irvington, New Jersey, previously pleaded guilty before U.S. District Judge Brian R. Martinotti to count one of an indictment charging him with being a felon in possession of a weapon. Judge Martinotti imposed the sentence today by videoconference.

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

On Dec. 3, 2018, Clarke possessed a Glock .40-caliber handgun loaded with nine rounds of Remington ammunition. At that time, Clarke had previously been convicted in Essex County Superior Court of resisting and eluding arrest and of possession of a controlled substance on school property, both of which are felonies.

This case is part of Project Guardian, the Department of Justice’s signature initiative to reduce gun violence and enforce federal firearms laws. Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department’s past successful programs to reduce gun violence; enhances coordination of federal, state, local and tribal authorities in investigating and prosecuting gun crimes; improves information sharing by the Bureau of Alcohol, Tobacco, Firearms and Explosives when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities. For more information about Project Guardian, please see https://www.justice.gov/projectguardian.

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

Acting U.S. Attorney Honig credited special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Newark Field Division, under the leadership of Special Agent in Charge Charlie J. Patterson, and the Newark Department of Public Safety, under the leadership of Public Safety Director Anthony F. Ambrose, with the investigation leading to today’s sentencing.

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

CAMDEN, N.J. – A Virginia man was arrested and charged with gun trafficking and possession of firearms by a felon, Acting U.S. Attorney Rachael A. Honig announced today.

Markell Pooler, 26, of Norfolk, Virginia, is charged by complaint with one count of dealing in firearms and two counts of possession of firearms by a convicted felon. He appeared by videoconference this afternoon before U.S. Magistrate Judge Ann Marie Donio and was detained without bail.

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

Pooler was identified as a firearms trafficker who offered to bring guns from pawn shops in Virginia to the Camden area. Between December 2020 and his arrest, Pooler, a convicted felon, obtained handguns in Virginia and sold them in South Jersey. Pooler had in his possession five handguns when he was arrested.

The count of engaging in the business of unlicensed firearms dealing and travelling across state lines to do so carries a maximum potential penalty of 15 years in prison and a $250,000 fine. The counts of possession of a firearm by a felon each carry a maximum potential penalty of 10 years in prison and a $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 Special Agent in Charge of Charlie J. Patterson in Newark; the New Jersey State Police, under the direction of Col. Patrick J. Callahan; the Gloucester County Prosecutor’s Office, under the direction of Acting County Prosecutor Christine Hoffman; and the Woodbury Police Department, under the direction of Chief Thomas R. Ryan, with the investigation leading to the charges.

This case is part of Project Guardian, the Department of Justice’s signature initiative to reduce gun violence and enforce federal firearms laws. Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department’s past successful programs to reduce gun violence; enhances coordination of federal, state, local and tribal authorities in investigating and prosecuting gun crimes; improves information sharing by the Bureau of Alcohol, Tobacco, Firearms and Explosives when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensured that federal resources are directed at the criminals posing the greatest threat to our communities. For more information about Project Guardian, please see: https://www.justice.gov/projectguardian

The government is represented by Assistant U.S. Attorney Alisa Shver of the U.S. Attorney’s Office 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. – Nine Newark residents were charged for their roles in conspiracies to distribute and possess with intent to distribute narcotics, Acting U.S. Attorney Rachael A. Honig announced today.

Robert Covington, aka “Nachie,” 55; Korey Smith, aka “Murda,” 36: Jeffrey Workman, aka “Rah,” 53; Yvonne Jackson, 49; Carlos Stokes, aka “Ab,” 54; Karen Gamble, 50; and Alaa Covington, 21, are charged by criminal complaint with conspiracy to distribute and possess with intent to distribute at least 40 grams of fentanyl. Robert Covington, Workman, Williamson, Stokes, and Gamble are also charged with conspiracy to distribute and possess with intent to distribute cocaine. Smith is additionally charged, along with Leroy Baxter III, 55, and William Lane, 57, with conspiracy to distribute and possess with intent to distribute heroin. Eight of the defendants are expected to appear this afternoon by videoconference before U.S. Magistrate Judge Cathy L. Waldor. Stokes remains at large.

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

From August 2020 through March 2021, multiple individuals were involved in selling fentanyl and cocaine in an open-air narcotics market in Bradley Court Housing Complex in Newark. These individuals comprise at least two separate drug-trafficking organizations (DTOs), which have overlapping membership.

DTO-1 involved individuals engaged in the distribution of fentanyl and included Robert Covington, Smith, Williamson, Gamble, Workman, Stokes, and Alla Covington. DTO-2 involved individuals engaged in the distribution of cocaine and included Robert Covington, Williamson, Gamble, Workman, and Stokes.  

The investigation revealed that Robert Covington was one of the leaders and organizers of DTO-1’s and DTO-2’s distribution of fentanyl and cocaine in or around Bradley Court.  Covington purchased powder cocaine and fentanyl from various sources, including Smith; “cooked” powder cocaine into crack cocaine or directed others to do so; used various “stash houses” to store and distribute fentanyl and cocaine and to store narcotics proceeds; and employed multiple drug dealers, including Workman, Williamson, Stokes, and Alaa Covington, among others, to distribute fentanyl and cocaine to the area surrounding Bradley Court. 

Smith – the fentanyl supplier for DTO-1 – was also engaged in distributing heroin in and around his residence on Fairmount Avenue in Newark from at least January 2021 to the present, along with Baxter, Lane, and others. 

The conspiracy to distribute and possess with intent to distribute fentanyl charge carries a mandatory minimum sentence of five years in prison, a maximum sentence of 40 years in prison, and a $5 million fine. The heroin and cocaine conspiracy charges each have a maximum sentence of 20 years in prison and a $1 million fine.

Acting U.S. Attorney Honig credited special agents of the FBI, under the direction of Acting Special Agent in Charge George M. Crouch Jr. in Newark, with the investigation leading to the charges. She also thanked the Newark Police Department, the Essex County Sheriff's Office and the Bloomfield Police Department for their assistance in the investigation.

This case is part of the Violent Crime Initiative (VCI), which 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. As part of this partnership, 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 ATF, the DEA, 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 Emma Spiro of the United States Attorney’s Office, Opioid Abuse Prevention and Enforcement Unit in Newark.

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

TRENTON, N.J. – A Monmouth County, New Jersey, woman today admitted that she underreported income on her personal tax return, Acting U.S. Attorney Rachael A. Honig announced.

Kathy Manna, 58, of Atlantic Highlands, New Jersey, and formerly of Lavallette, New Jersey, pleaded guilty by videoconference before U.S. District Judge Michael A. Shipp to an information charging her with one count of making and subscribing a false tax return.

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

Manna operated Manna Construction Group, a business headquartered in Lavallette, that provided landscaping and construction services in New Jersey and elsewhere. She admitted that for tax years 2010, 2011, 2012, and 2013, she underreported the gross receipts or sales of Manna Construction Group on Schedule C of her personal tax return. Under the terms of her plea agreement, the government alleges that the total tax loss was $124,480.

The count of making and subscribing a false tax return carries a maximum potential penalty of three years in prison and $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for July 28, 2021.

Acting U.S. Attorney Honig credited special agents of the IRS, under the direction of Special Agent in Charge Michael Montanez, with the investigation leading to today’s guilty plea.   She also thanked the Ocean County Prosecutor’s Office, under the direction of Prosecutor Bradley D. Billhimer, and the Lavallette Police Department, under the direction of Chief Colin M. Grant.

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

NEWARK, N.J. –  Two members of the Newark street gang known as the “Famous Boyz” were sentenced to prison for conspiring to distribute crack cocaine and heroin, Acting U.S. Attorney Rachael A. Honig announced today.  

Malik Minor, aka “YK,” 23, of Newark, was sentenced today to 63 months in prison and five years of supervised release; Javon Holmes, aka “J-Dot,” 21, of Newark, was sentenced March 22, 2021, to 108 months in prison and four years of supervised release. Minor previously pleaded guilty before U.S. District Judge Madeline Cox Arleo to an information charging him with one count of conspiring to distribute 28 grams or more of crack cocaine, and 100 grams or more of heroin. Holmes previously pleaded guilty to a superseding information charging him with one count of conspiring to distribute 28 grams or more of crack cocaine, and 100 grams or more of heroin, and possessing with the intent to distribute 28 grams or more of crack cocaine. Judge Arleo imposed both sentences by videoconference.       

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

The Famous Boyz are a subset of the Brick City Brim set of the Bloods street gang, which dealt significant quantities of heroin and crack cocaine, primarily in and around the area of South 18th Street and 15th Avenue, in Newark. The gang often referred to this area as the “8 Block,” “18th,” or simply by reference to the number “8.”

In October 2018, Minor, Holmes, and 15 other members of a violent drug trafficking conspiracy operating in Newark were charged by complaint with conspiracy to distribute crack cocaine and/or heroin following a lengthy wiretap investigation. Shaka McKinney and Jahid Vauters, aka “K,” aka “KO,” also were charged with firearms possession offenses. To date, 15 of the defendants have pleaded guilty to drug and firearm charges and three await sentencing. 

On Feb. 25, 2019, a grand jury returned an indictment charging three of the defendants, Patricio Hernandez, Jonathan Hernandez, and Jonathan Garcia, aka “Bebo” with one count each of conspiracy to distribute and to possess with intent to distribute 280 grams or more of crack cocaine for their alleged participation in supplying the “Famous Boyz” with cocaine. On Sept. 30, 2019, a grand jury returned a 21-count superseding indictment against Patricio Hernandez, Jonathan Hernandez, Garcia, Holmes, and John Mosley, aka “Breezy,” aka “Brazy.” The charges in the superseding indictment remain pending against Patricio Hernandez and Mosley. 

Acting U.S. Attorney Honig credited special agents of ATF, under the direction of Special Agent in Charge Charlie J. Patterson in Newark, and members of the Newark Department of Public Safety, under the direction of Public Safety Director Anthony F. Ambrose, with the investigation leading to the guilty pleas.

She also thanked the DEA, under the direction of Special Agent in Charge Susan A. Gibson; the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Theodore N. Stephens II; the Essex County Sheriff’s Office, under the direction of Sheriff Armando B. Fontoura; the N.J. State Police, under the direction of Col. Patrick J. Callahan; the Belleville Police Department, under the direction of Chief Mark Minichini; and the Livingston Police Department, under the direction of Chief Gary Marshuetz.

This case is being conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF) and is part of the Violent Crime Initiative (VCI) in Newark. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply. 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 to combat violent crime in and around Newark. As part of this partnership, 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 ATF, the DEA New Jersey Division, 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 Board of 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 Angelica M. Sinopole of the U.S. Attorney’s Office’s Organized Crime and Gangs Unit in Newark.

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

NEWARK, N.J. – Two men today admitted their roles in a Newark carjacking in which a firearm was brandished, Acting U.S. Attorney Rachael Honig announced today.

Rakeem McNair, 21, of Roselle, New Jersey, pleaded guilty today to an information charging him with one count each of carjacking and brandishing a firearm in furtherance of the carjacking. Raquin Tanner, 25, of Newark, pleaded guilty on March 10, 2021, to one count of aiding and abetting the carjacking. Both defendants entered their guilty pleas by videoconference before U.S. District Judge Madeline Cox Arleo and remained detained.

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

On Aug. 13, 2019, the victim parked her car, which she used for her work as an Uber driver, on Summer Avenue in Newark. At approximately 11:00 p.m., the victim was sitting in the driver’s seat when three males approached her car. 

Video surveillance from the scene showed that Tanner walked with the other two males around the corner. As they neared the victim’s car, Tanner spoke to the other two, then went ahead of them, looked into the passenger seat of the car, an upon seeing the lone female driver, signaled the other two males to begin the carjacking.

One of the other males pointed a firearm through the driver’s side window, opened the door and attempted to physically remove the victim from the car. A struggle ensued, and McNair went around the car to aid his conspirator in dragging the victim from the car. McNair and the unidentified male threw the victim violently to the ground and drove away with the vehicle.

The carjacking count carries a maximum potential penalty of 15 years in prison. The brandishing of a firearm during a crime of violence count is punishable by a mandatory minimum of seven years in prison and a maximum sentence of life in prison, which must run consecutively to any term of imprisonment imposed on any other charges. Sentencing is scheduled for July 27, 2021, for McNair and July 12, 2021, for Tanner.

Acting U.S. Attorney Honig credited the Newark Police Department, under the direction of Public Safety Director Anthony Ambrose; the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Theodore N. Stephens II; 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 the guilty pleas.

The government is represented by Senior Trial Counsel Robert Frazer of the Organized Crime/Gang Unit in Newark.

NEWARK, N.J. – A husband and wife were arrested on weapons charges after a standoff at a Hudson County hotel, Acting U.S. Attorney Rachael A. Honig announced.

Rahim Harris, 42, of Maplewood, New Jersey, is charged by complaint with one count of possession of firearms and ammunition by a convicted felon. His wife, Haneefha White, 39, of Pottsville, Pennsylvania, is charged by complaint with aiding and abetting the possession of firearms and ammunition by a convicted felon. They will have their initial appearances by videoconference at a date to be determined.

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

On Dec. 21, 2019, Harris was charged by complaint with weapons and aggravated assault offenses allegedly committed on that date. On March 14, 2021, law enforcement received information indicating that Harris was in a specific room at a hotel in Secaucus, New Jersey. Law enforcement officers responded to the hotel a few hours later to attempt to locate and arrest Harris, who was identified from a photograph as the person staying in the specific hotel room.

Officers observed Harris’ wife entering the room. They attempted to summon White while she was in the hallway, but she entered the room and closed the door. White then called the front desk and asked why police were in the hallway. Law enforcement officers spoke with White on the telephone to persuade her to come out. She indicated there were other individuals in the room and that they were “on edge” and had firearms and hand grenades.

After several hours of unsuccessful negotiations with White, law enforcement called the room and Harris picked up the phone. Harris stated that he did not want to come out because of the arrest warrant and that he was “prepared for war” and “ready to die.”

In the early hours of March 15, 2021, Harris and White (who were the only occupants of the room) surrendered. A lawful search of the room yielded numerous weapons, fraudulent identification papers, bank cards, $36,910 in cash and a vehicle registration.

Each of the charges carries a maximum penalty of 10 years in prison and a fine of up to $250,000.

This case is part of Project Guardian, the Department of Justice’s signature initiative to reduce gun violence and enforce federal firearms laws. Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department’s past successful programs to reduce gun violence; enhances coordination of federal, state, local and tribal authorities in investigating and prosecuting gun crimes; improves information sharing by the Bureau of Alcohol, Tobacco, Firearms and Explosives when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensured that federal resources are directed at the criminals posing the greatest threat to our communities. For more information about Project Guardian, please see https://www.justice.gov/projectguardian

Acting U.S. Attorney Honig credited special agents of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, Newark Division, under the direction of Special Agent in Charge Charlie J. Patterson, with the investigation leading to the charges. She also thanked the Hudson County Prosecutor’s Office; the Secaucus Police Department; the Hudson County Regional SWAT Team; the Hudson County Sheriff’s Office; the Jersey City Police Department Bomb Squad; and the New Jersey Transit Police Department for their roles in the investigation.

The government is represented by Assistant U.S. Attorney Jonathan W. Romankow of the U.S. Attorney’s Office Violent Crimes Unit in Newark.

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

NEWARK, N.J. – A Sussex County, New Jersey, man was charged for his role in fraudulently obtaining federal Paycheck Protection Program (PPP) loans totaling $1.9 million, Acting U.S. Attorney Rachael A. Honig announced.

John Jhong, 51, of Sparta, New Jersey, is charged by complaint with one count of bank fraud, one count of false representation of a Social Security number and one count of money laundering. Jhong is scheduled to make his initial appearance by videoconference this afternoon before U.S. Magistrate District Judge Leda Dunn Wettre.

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

Jhong submitted 10 fraudulent PPP loan applications to several lenders on behalf of 10 purported businesses. The PPP is overseen by the Small Business Administration designed to provide forgivable loans to small businesses affected by the coronavirus pandemic. Applicants for PPP loans apply directly to banks or financial institutions participating in the program; in those applications, applicants make affirmative certifications about their average monthly payroll expenses and number of employees. Applicants also certify their intent to spend PPP proceeds on permissible business expenses, such as payroll costs, rent, utilities, and interest on mortgages. PPP loans may be entirely forgiven if the recipient spends the loan proceeds on these permissible expenses within a designated period after receiving the proceeds.  

Jhong’s PPP applications allegedly contained false and fraudulent representations to the participating lenders, including documentation purporting to be from the IRS. In fact, according to IRS records, none of the tax documents Jhong submitted with the PPP loan applications were ever filed with the IRS. Jhong also fabricated the existence of numerous business partners. In some instances, the personal identifying information for Jhong’s purported business partners belonged to individuals who had been deceased for over a decade.

Based on Jhong’s alleged misrepresentations, the lenders approved Jhong’s PPP loan applications and provided Jhong’s purported business with $1.9 million in federal COVID-19 emergency relief funds meant for distressed small businesses. Jhong then converted a portion of the proceeds into a cashier’s check that was used to fund a business account.

The count of bank fraud carries a maximum penalty of 30 years in prison and a $1 million fine, or twice the gross gain to the defendant or gross loss to the victim, whichever is greater. The count of false representation of Social Security number carries a maximum penalty of five 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. The count of money laundering carries a maximum potential penalty of 20 years in prison and a $500,000 fine, or twice the gross gain to the defendant or gross loss to the victim, whichever is greater.

Acting U.S. Attorney Rachael Honig credited special agents of IRS – Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez; special agents of U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Rodney M. Hopkins; special agents of the Social Security Administration, Office of the Inspector General, under the direction of Special Agent in Charge John F. Grasso; special agents of the Federal Deposit Insurance Corporation – Office of the Inspector General, under the direction of Special Agent in Charge Patricia Tarasca in New York; and special agents of the U.S. Secret Service, under the direction of Special Agent in Charge Mark McKevitt. She also thanked the Sparta Township Police for their assistance.

The government is represented by Assistant U.S. Attorney Olajide A. Araromi of the U.S. Attorney’s Office, Government Fraud Unit, in Newark, and Trial Attorney Chad M. Davis of the  Department of Justice, Criminal Division, Money Laundering and Asset Recovery Section.

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 California man has been charged with laundering money that originated from fraudulently obtained loans from the U.S. Small Business Association and from a business email compromise scheme that targeted a law firm based in New Jersey, Acting U.S. Attorney Rachael A. Honig announced.

Eric Bullard, 59, of Los Angeles, California, is charged by complaint with one count of money laundering conspiracy. Bullard was taken into custody yesterday in California on an unrelated warrant for a violation of federal supervised release. Bullard is scheduled to appear by videoconference before U.S. Magistrate Judge Alexander MacKinnon at 1:00 p.m. PDT.  

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

In June 2020, Victim 1 communicated via email with a law firm in New Jersey that was helping Victim 1, a resident of Bergen County, New Jersey, with a real estate transaction.  One of the law firm’s email accounts was compromised and someone purporting to be emailing on behalf of the law firm sent instructions to Victim 1 to wire approximately $560,000 into an escrow account under the name “Eric’s Commercial LLC.”  Victim 1 wired approximately $560,000 into a business bank account controlled by Bullard. Victim 1 did not intend for the money to be transferred to Bullard and sent the wire transfer to Bullard’s account under the belief that the wire instructions had come from the New Jersey law firm.            

Prior to receiving the $560,000 wire transfer, the Eric’s Commercial LLC bank account had a beginning statement period balance of approximately $40. Shortly after the $560,000 was transferred into the Eric’s Commercial LLC bank account, on the same day the wire transfer posted to his account, approximately 10 cash withdrawals were made from the account totaling $96,275. Surveillance footage obtained from the bank shows Bullard entering the bank to make withdrawals from the account. The same day, three large wire transfers sourced from the transfer from Victim 1 were executed from the Eric’s Commercial LLC bank account to other bank accounts, including an account controlled by a conspirator.     

In addition to laundering of the proceeds from the business email compromise, Bullard also obtained and laundered funds from the U.S. Small Business Administration’s (SBA) Economic Injury Disaster Loan (EDIL) program.  In July 2020, Bullard received into a business bank account that he controlled $51,395 from an SBA EDIL loan intended for a pharmacy company with a listed location in Idaho and $143,100 from an SBA EDIL loan intended for a pharmacy company with a listed location in Colorado.    

Money laundering conspiracy carries a maximum penalty of 20 years in prison and a fine of up to $500,000 or twice the value of the monetary instrument or funds involved in the transfer, whichever is greater.   

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 the charges.

The government is represented by Assistant U.S. Attorney Jamie L. Hoxie of the Cybercrime Unit in Newark.

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

NEWARK, N.J. – A Bergen County, New Jersey, man today admitted orchestrating a long-running bank and securities fraud scheme, which led to large-scale losses for financial institutions and investors, Acting U.S. Attorney Rachael A. Honig announced.

Seth Levine, 52, of Teaneck, New Jersey, pleaded guilty by videoconference before U.S. District Judge Madeline Cox Arleo to an information charging him with one count of conspiracy to commit bank fraud and one count of securities fraud.   

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

Levine was the founding partner, owner, and managing member of Norse Holdings, which was the parent company to more than 70 subsidiary companies. Each of the subsidiary companies owned one or more multifamily buildings, located primarily in New Jersey. From 2009 through August 2019, Levine directed a scheme to fraudulently refinance the multifamily properties by providing materially false information to financial institutions about the rents collected, the number of apartments leased, the expenses, and the true owners of the properties.  Levine and others provided lenders fake documents, including falsified leases that created the appearance that vacant spaces were occupied and that overstated the rent paid by tenants; fake personal financial statements; fake expense documents; and fake operating agreements that misrepresented ownership interests in the multifamily properties. Levine also forged signatures on some of the fraudulent documents submitted to lenders. As a result of the fraudulent refinances, Levine received cash payouts from the lenders, which Levine and others used for their own enrichment and to continue the fraud scheme. 

Many of the lenders who approved mortgages based on the false statements of Levine and others in turn sold those mortgages to the Federal Home Loan Mortgage Corporation (Freddie Mac) and the Federal National Mortgage Association (Fannie Mae). Because the refinances were obtained with fraudulent data regarding the properties’ income and expenses, the multifamily properties were overvalued and rents and other income from the properties did not cover the mortgage payments and other expenses associated with the properties. To cover the shortfalls, Levine obtained additional cash-out refinances, thereby increasing his total debt incurred. In total, Levine controlled at least 70 multifamily properties, comprising approximately 2,500 apartments. The outstanding balance of the fraudulently obtained mortgages on the multifamily properties was more than $150 million, including 40 mortgages held by Freddie Mac with an outstanding loan balance of approximately $103 million. The bank fraud conspiracy resulted in losses to victim lenders of at least $65 million.   

While defrauding the lending financial institutions, Levine also carried out a securities fraud scheme to defraud investors in the multifamily properties. He solicited investors to invest in the multifamily properties based on materially false statements and promises about the condition of the properties and the use of investor funds. Levine represented to investors that his conduct would be limited by an operating agreement. However, after Levine acquired the multifamily properties, he violated representations made to the investors, including by selling off portions of Levine’s ownership interest in the properties without investor consent, bringing on additional investors without consent, and refinancing the multifamily properties without investor consent. Levine provided fraudulent documents to investors, such as operating agreements that overstated Levine’s personal investment in the multifamily properties and documents bearing signatures forged by Levine. He also co-mingled investor funds and used the funds in violation of representations to investors, by using investor money to support other multifamily properties, make payments to other investors, and further the fraud. The securities fraud victims lost more than $15 million.       

The conspiracy to commit bank fraud carries a maximum potential penalty of 30 years in prison and a $1 million fine. The securities fraud count is punishable by a maximum of 20 years in prison and a $5 million fine. Sentencing is scheduled for July 26, 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 FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, and special agents of the Federal Housing Finance Agency, Office of Inspector General, under the direction of Special Agent in Charge, Robert Manchak, with the investigation leading to today’s guilty plea. The U.S. Securities and Exchange Commission has filed a civil complaint against Levine today based on allegations underlying the securities fraud charge. 

The government is represented by Assistant U.S. Attorney Heather Suchorsky of the

Economic Crimes Unit and Special Assistant U.S. Attorney Charlie L. Divine of the Federal Housing Finance Agency, Office of Inspector General.

NEWARK, N.J. – A Middlesex County, New Jersey, man was charged today with tax evasion and filing false tax returns, Acting U.S. Attorney Rachael A. Honig and Acting Deputy Assistant Attorney General Stuart M. Goldberg announced.

Gabriel M. Ferrari of Edison, New Jersey, was indicted by a federal grand jury today on three counts of tax evasion and seven counts of filing false personal and corporate tax returns.  He will have his arraignment and initial appearance at a later date.

According to the indictment:

From 2011 through 2014, Ferrari, owner of Buses and Trucks Inc. (B&T) in Linden, New Jersey, used gross receipts of B&T to pay personal expenses, including gambling on horse races, and then did not disclose the diverted receipts to his return preparer or the IRS. To hide his income, Ferrari filed false business and personal tax returns with the IRS.

Each count of tax evasion carries a maximum potential penalty of five years in prison and a maximum fine of $250,000. Each count of filing a false tax return carries a maximum potential penalty of three years in prison and a maximum fine of $250,000.

Acting U.S. Attorney Honig and Acting Deputy Assistant Attorney General Goldberg credited special agents of IRS-Criminal Investigation Division, under the direction of Special Agent in Charge Michael Montanez in Newark, with the investigation leading to today’s indictment.

The government is represented by Assistant U.S. Attorney Andrew M. Trombly of the Cybercrime Unit in Newark and by Trial Attorney Ann M. Cherry of the Tax Division in Washington, D.C.

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

CAMDEN, N.J. – A New York man was charged with traveling to Atlantic County, New Jersey, to have sex with a minor, Acting U.S. Attorney Rachael A. Honig announced today.

Zachary Williams 33, of New York, is charged by complaint with one count of interstate travel to engage in illicit sexual conduct. Williams was arrested on March 13, 2021, after traveling a second time from New York to New Jersey to meet a minor. He is scheduled to appear today by videoconference before U.S. Magistrate Judge Ann Marie Donio.                                                                                                                                 

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

In September 2020, Williams met the minor victim via SnapChat. He lied about his age, telling the victim that he was 17-years old. Williams asked the minor for nude photographs of the victim and, after receiving them, began to “sextort” the minor by threatening to send photographs to the victim’s friends and family. He ultimately convinced the victim to meet him at a hotel in Atlantic County and agreed to allow the victim to delete the photographs from Williams’ phone. On Oct. 2, 2020, Williams traveled to a hotel in Atlantic County and, two days later, engaged in sexual intercourse with the victim in his hotel room.

Williams continued to send messages threatening to expose the victim’s photographs, and when the victim would block him, he opened new social media accounts to continue to harass the victim., including “IWILLHURTYOU Iwilll_h2021,” “IWILLGETTHESWITCHBACK,” and “Makeadealormomfindsout.”

In March 2021, law enforcement officers took over the victim’s social media accounts and began communicating with Williams while posing as the victim. During those communications, Williams arranged to travel on March 13, 2021 to the same Atlantic County hotel to again have sex with the victim. Law enforcement arrested Williams as he arrived at the hotel.

Williams is charged with interstate travel to engage in illicit sexual conduct with a minor. If convicted of this offense, Williams faces a maximum of 30 years in prison, a $250,000 fine, or twice the gross gain or loss from the offense, and lifetime supervise 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, and officers of the Galloway Township Police Department, under the direction of Chief Donna A. Higbee. She also thanked the Atlantic County Prosecutor’s Office for its assistance.

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

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

NEWARK, N.J. – A former chief investment officer of a medical property management company pled guilty today to a bank fraud conspiracy involving a $91.5 million commercial mortgage loan, Acting U.S. Attorney Rachael A. Honig announced.

Barton Schack, 65, of Ringwood, New Jersey, was charged by information with one count of conspiracy to commit bank fraud.  United States District Court Judge Madeline Cox Arleo accepted the guilty plea.      

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

Schack was the chief investment officer of Regent Medical Properties (“Regent”), a property management company located in Glen Rock, New Jersey.  Sovereign Medical Services, and affiliates (“Sovereign”), was a network of multi-specialty, out-patient medical practices headquartered in Glen Rock, New Jersey, with various practice locations.  Co-conspirator 1 was the founder and chief executive officer of both Regent and Sovereign.

In April 2016, Schack and Co-conspirator 1 used fraudulent representations to obtain a $91.5 million loan (the “Mortgage Loan”) from Lender 1 and others secured by thirteen medical office buildings in New Jersey, New York, and Florida (the “Medical Properties”).  The borrowers in the Mortgage Loan were thirteen separate special purpose entities—majority-owned by Co-conspirator 1—one for each collateral property (collectively, the “Borrowers”). 

Schack and Co-conspirator 1 exploited the fact that, through Sovereign, Co-conspirator 1 controlled approximately half of the tenants in the Medical Properties.  Schack and Co-conspirator 1 misrepresented to Lender 1 the physical occupancy status of certain affiliated tenants and the Medical Properties’ true rental income.

After the Mortgage Loan closed, Schack and Co-conspirator 1 continued their scheme to conceal the actual financial status of the Medical Properties by submitting fraudulent financial statements to the loan servicer on a monthly basis.  Those misrepresentations allowed Schack and Co-conspirator 1 to avoid accelerated payment on the Mortgage Loan.

Finally, after the Mortgage Loan closing, Schack and Co-conspirator 1 diverted rent payments owed through the “lockbox” account procedure specified in the Mortgage Loan agreement.  Instead, Schack and Co-conspirator 1 used the funds for both Regent’s operating expenses and Co-conspirator 1’s personal expenses, including credit card bills of up to approximately $80,000 per month and private jet payments.  Through such means, Co-conspirator 1 diverted millions of dollars in rental payments from the “lockbox” account over the course of the Mortgage Loan for his own personal use.

Shortly after the closing of the Mortgage Loan in April 2016, Lender 1 sold its interest into two commercial mortgage-backed security loans.  By 2019, approximately three years after the closing of the Mortgage Loan, the Borrowers were sixty days behind on loan payments, and administration of the loan was referred to a special servicer.  In February 2020, the Borrowers declared bankruptcy.   

The conspiracy to commit bank fraud count carries a maximum penalty of 30 years in prison and a $1 million fine. Sentencing is scheduled for June 22, 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 IRS-Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorneys Andrew Macurdy and Shawn Barnes of the U.S. Attorney’s Office Criminal Division.                                    

Defense counsel:  Brent Culpepper, Esq.

CAMDEN, N.J. – An Atlantic City, New Jersey, man appeared today following his arrest on charges of escaping from federal custody, Acting U.S. Attorney Rachael A. Honig announced.

Patrick Giblin, 56, of Atlantic City, New Jersey, is charged by complaint with escape from the custody of the Attorney General. Giblin made his initial appearance by videoconference today before U.S. Magistrate Judge Ann Marie Donio.   

According to the complaint and court documents:

On July 23, 2020, Giblin escaped from the custody of the Attorney General while traveling from a federal prison in Lewisburg, Pennsylvania, to a residential living facility in Newark, where he had been directed to serve the remainder of a federal prison sentence. At the time Giblin was serving a 2017 sentence for traveling interstate and using an interstate facility to promote unlawful activity in connection with a scheme to defraud multiple women. Giblin’s 2017 sentence followed an earlier sentence of 115 months’ imprisonment for a 2007 wire fraud conviction for a similar fraud scheme. Members of the U.S. Marshals Service located and arrested Giblin in Atlantic City on March 10, 2021.

Giblin faces up to five years in prison if convicted of the escape charge. 

Acting U.S. Attorney Honig credited members of the U.S. Marshals Service, District of New Jersey, under the direction of U.S. Marshal Juan Mattos Jr., with the investigation leading to the arrest and charges. 

The government is represented by Assistant U.S. Attorney Gabriel J. Vidoni of the U.S. Attorney’s Office’s Criminal Division in Camden.

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

CAMDEN, N.J. – A Camden County man and a Bronx, New York, man were charged for their participation in a scheme to steal bank customer identities and then use that information to steal more than $600,000, Acting U.S. Attorney Rachael A. Honig announced today.

Jamere Hill-Birdsong, 32, of Gloucester City, New Jersey, and Lamar Melhado, 31, of the Bronx, New York, are each charged in a 10-count indictment with one count of conspiracy to commit bank fraud, multiple counts of bank fraud and aggravated identity theft. Both Hill-Birdsong and Melhado were arrested and will appear before U.S. Magistrate Judge Ann Marie Donio in Camden federal court via videoconference this afternoon.

According to the indictment:

From August 2016 through August 2017, Hill-Birdsong and Melhado conspired with each other and others to defraud a Mount Laurel, New Jersey, bank. Hill-Birdsong worked inside the call center and recruited other call center employees to participate in the scheme by stealing the identities and account information of customers who called into the bank’s call center. The conspirator bank employees would then take photographs or screenshots of the bank customer’s account information and signatures and would send that information to Hill-Birdsong and Melhado. The conspirators then had phony identification documents made in the names of the bank customers, and used various runners to go into bank branches and make unauthorized cash withdrawals. The conspirators also used the stolen identity information to conduct unauthorized online transfers of moneys from the customer’s accounts.

Hill-Birdsong is charged with bank fraud conspiracy, five counts of bank fraud and one count of aggravated identity theft. Melhado is charged with bank fraud conspiracy, six counts of bank fraud and two counts of aggravated identity theft. Each count of conspiracy to commit bank fraud and bank fraud are punishable by a maximum of 30 years in prison and a $1 million fine, or twice the gross gain or loss from the offense. Each count of aggravated identity theft is punishable by an additional consecutive term of imprisonment of up to two years.

Acting U.S. Attorney Honig credited agents of the FBI’s South Jersey Resident Agency, under the direction of Special Agent in Charge Michael J. Driscoll in Philadelphia, with the investigation leading to the indictment.

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

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

TRENTON, N.J. – A Trenton man admitted conspiring with others to distribute fentanyl that caused the death of a Monmouth county woman, Acting U.S. Attorney Rachael A. Honig announced today.

Quasaan Bethea, 33, pleaded guilty by videoconference before Chief U.S. District Judge Freda L. Wolfson on March 10, 2021, to Count Two of an indictment charging possession with intent to distribute fentanyl.

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

On May 15, 2018, Bethea conspired with others to distribute fentanyl to a 39-year-old Monmouth County woman, referred to in the indictment as Victim-1. Victim-1 had sought out Bethea and others to purchase heroin, not fentanyl, a significantly more potent narcotic than heroin. Bethea admitted that the fentanyl he sold to Victim-1 was stamped “CAMEL” and packaged to look like heroin. Shortly after Victim-1’s second purchase of fentanyl from Bethea and others, Englishtown police responded to a report of an overdose death. Upon their arrival, they discovered Victim-1, and in Victim-1’s possession were several wax folds of suspected heroin stamped “CAMEL” and empty wax folds stamped “CAMEL” as well. Laboratory analysis of these wax folds bearing the “CAMEL” stamp determined the substance to be fentanyl. An autopsy of Victim-1 found her cause of death to be acute fentanyl toxicity.

The count of conspiracy to distribute and possess with intent to distribute fentanyl carries a maximum penalty of 20 years in prison and a $1 million fine. Sentencing is scheduled for July 26, 2021.

Acting U.S. Attorney Honig credited special agents of the Drug Enforcement Administration, under the direction of Special Agent in Charge Susan A. Gibson; detectives from the Monmouth County Prosecutor’s Office, under the direction of Prosecutor Christopher J. Gramiccioni; the Englishtown Police Department, under the direction of Peter S. Cooke, Jr., and the Trenton Police Department’s Narcotics Task Force, under the direction of Police Director Sheilah Coley, with the investigation leading to the guilty plea.

The government is represented by Assistant U.S. Attorney Ryan L. O’Neill, of the Office’s Opioids Abuse & Prevention Task Force.

NEWARK, N.J. – A Nebraska man was sentenced today to 21 months in prison for engaging in fraudulent activity that exposed his employer’s confidential information, Acting U.S. Attorney Rachael A. Honig announced. 

Timothy Young, 50, of Moorefield, Nebraska, previously pleaded guilty by videoconference before U.S. District Judge Katharine S. Hayden in Newark federal court to an information charging him with wire fraud. Judge Hayden imposed the sentence by videoconference today.

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

Young was employed at a data analytics and risk assessment firm based in New Jersey. The company serves customers worldwide, including entities providing insurance and financial services as well as government entities. The company maintains a network that houses, among other things, significant amounts of personally identifiable information.

Without the firm’s approval, Young obtained confidential, non-public information that belonged to the firm. The information included names, logon names, passwords, email addresses, and telephone numbers for some of the company’s clients. Young then attempted to sell the information.

In addition to the prison term, Judge Hayden sentenced Young to three years of supervised release and ordered him to pay restitution of $296,370.

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 task force officers from the N.J. State Police, Jersey City Police Department, Ocean City Police Department, and Federal Protective Service, with the investigation leading to today’s sentencing. She also thanked the FBI’s Omaha Division, under the direction of Special Agent in Charge Kristi Koons Johnson, for its role in the investigation.

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

NEWARK, N.J. – The Justice Department today announced an agreement with the Township of Toms River, New Jersey, to resolve allegations that the township violated the Religious Land Use and Institutionalized Persons Act (RLUIPA), by severely restricting where houses of worship can locate within its jurisdiction.   

The proposed consent decree, which was filed today in the U.S. District Court of the District of New Jersey and must still be approved by the court, would resolve a lawsuit the United States also filed today alleging that the township’s zoning code places unreasonable limits on where religious assemblies and institutions may locate, substantially burdens religious exercise, and treats religious assemblies and institutions on less than equal terms with nonreligious assemblies and institution. 

“Federal law protects religious communities against unequal treatment and unwarranted burdens,” Rachael A. Honig, Acting U.S. Attorney for District of New Jersey, said. “Zoning regulations that impose unreasonable restrictions or prevent religious faiths from having a place to worship violate RLUIPA. Through the resolution entered today, this office takes another step to put an end to unlawful zoning practices and vindicate the civil rights of minority religious communities in the District of New Jersey.” 

“RLUIPA protects people of all faiths in their right to exercise their religion,” said Principal Deputy Assistant Attorney General Pamela S. Karlan of the Civil Rights Division.  “The Department of Justice has long enforced RLUIPA against zoning regulations that unreasonably burden religious exercise by imposing unwarranted restrictions and conditions on the location of houses of worship.”

The complaint alleges that since 2009, Toms River has enacted a series of revisions to its zoning code – including a 10-acre parcel minimum requirement – which greatly reduced both the number of zoning districts in which houses of worship can locate and the number of sites available for houses of worship. These restrictions have had a particular impact on the township’s Orthodox Jewish population, who, because of their faith and religious traditions, tend to worship at small houses of worship, which they walk to and from on the Sabbath and Holidays. The complaint also alleged that the township’s zoning ordinance treats houses of worship and other religious assemblies and institutions on less favorable terms than nonreligious assemblies and institutions.

As part of the consent decree, the township will revise its zoning code to: reduce the minimum acreage required for a house of worship in many zoning districts from 10 acres to two acres; allow houses of worship as-of-right in certain zoning districts; allow smaller houses of worship to be located on minor collector roads; and treat houses of worship on comparable terms to nonreligious places of assembly. The consent decree also requires the township to train its officials and employees on RLUIPA’s requirements, establish a procedure for receiving and resolving RLUIPA complaints, and other injunctive relief. 

RLUIPA is a federal law that protects religious institutions from unduly burdensome or discriminatory land use regulations. In June 2018, the Justice Department announced its Place to Worship Initiative, which focuses on RLUIPA’s provisions that protect the rights of houses of worship and other religious institutions to worship on their land. More information is available at www.justice.gov/crt/placetoworship.

In July 2018, the Department of Justice announced the formation of the Religious Liberty Task Force. The Task Force brings together department components to coordinate their work on religious liberty litigation and policy, and to implement the Attorney General’s 2017 Religious Liberty Guidance.

Individuals who believe they have been subjected to discrimination in land use or zoning decisions may contact the Civil Rights Division Housing and Civil Enforcement Section at (800) 896-7743, or the U.S. Attorney’s Office Civil Rights Hotline at (855) 281-3339, or may submit a complaint through the complaint portal on the Place to Worship Initiative website. More information about RLUIPA, including questions and answers about the law and other documents, may be found at http://www.justice.gov/crt/about/hce/rluipaexplain.php.

The United States is represented by Assistant U.S. Attorney Michael E. Campion, Chief of the U.S. Attorney’s Office’s Civil Rights Unit, Civil Division, Assistant U.S. Attorney Susan Millenky, of the Civil Rights Unit, Civil Division, and Trial Attorneys Ryan G. Lee and Noah D. Sacks, U.S. Department of Justice, Civil Rights Division, Housing and Civil Enforcement Section.

NEWARK, N.J. – A former pharmacy technician was arrested 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 complaint with theft of medical products, specifically HIV medication. Hoffman is scheduled to make her initial appearance by videoconference before U.S. Magistrate Judge Mark Falk this afternoon.

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

Hoffman’s responsibilities at the VAMC included ordering the necessary drugs and supplies for the outpatient pharmacy, including determining when to place orders and for what products, as well as regularly maintaining inventory levels of needed drugs and supplies. From at least August 2017 through November 2019, Hoffman used her position to steal prescription HIV medication from the VAMC. She placed large orders for HIV medication, purportedly on behalf of VAMC, and then stole the medication after it was delivered. VAMC surveillance footage captured Hoffman regularly taking dozens of bottles of HIV medications from the shelves of the outpatient pharmacy, placing them in a white mail bin, and then transferring the medications from the mail bin to her bag and exiting with the stolen medication. Hoffman stole approximately $8.2 million worth of the VAMC’s HIV medication.

Once Hoffman had the medication, Hoffman met her associate, Wagner Checonolasco, aka “Wanny,” 33, of Lyndhurst, New Jersey, often at her residence, so that she could sell the stolen HIV medication to Checonolasco for cash. After obtaining the stolen HIV medication, Checonolasco resold it to others.       

Checonolasco was previously charged with conspiracy to steal government property.  Those charges remain pending.

The charge of theft of medical products is punishable by a potential penalty of 20 years in prison, and a fine 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 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 contained in the complaints are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

TRENTON, N.J. – A Trenton man was sentenced today to 48 months in prison for unlawfully possessing a semi-automatic rifle while attempting to sell it to another individual, Acting U.S. Attorney Rachael A. Honig announced.

Edwin Gaines, 59, previously pleaded guilty by videoconference before U.S. District Judge Peter G. Sheridan to an information charging him with one count of possession of a firearm by a convicted felon. Judge Sheridan imposed the sentence by videoconference today.

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

On Feb. 15, 2019, Gaines, who previously had been convicted of murder in New Jersey Superior Court and who has other felony convictions, arranged to sell to another individual a Ruger .22 semi-automatic rifle as well as an extended magazine. The purchaser, however, was acting at the direction and supervision of law enforcement. In a video- and audio-recorded transaction in the basement of a Trenton residence, the individual purchased the rifle and magazine from Gaines using money that law enforcement had provided.

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

Acting U.S. Attorney Honig credited special agents of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, Newark Division, Trenton Field Office, under the direction of Special Agent in Charge Charlie J. Patterson; detectives from the New Jersey State Police, under the direction of Superintendent Col. Patrick J. Callahan; and officers of the Trenton Police Department, under the direction of Police Director Sheilah Coley, with the investigation leading to today’s sentencing.

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

NEWARK, N.J. – Two Newark men made their initial appearances today on charges stemming from a Feb. 22, 2021, attempted carjacking in Newark during which a firearm was discharged, Acting U.S. Attorney Rachael A. Honig announced.

Antwan Malone, 34, and Dawan Walker, 24, both of Newark, are charged by complaint with one count of attempted carjacking and one count of discharging of a firearm during a crime of violence. They appeared by videoconference today before U.S. Magistrate Judge Mark Falk and were detained.

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

On Feb. 22, 2021, law enforcement officers responded to the area of the I-78 West entrance ramp and Irvine Turner Boulevard in Newark on a report of an attempted carjacking with a weapon. They learned that Malone and Walker had pulled up beside a blue BMW M5 SUV that was stopped at a stop light and blocked the BMW’s ability to enter I-78. Malone approached the vehicle brandishing a handgun, and then pointed the gun at the driver’s face while repeatedly telling the driver to either exit the vehicle or Malone would shoot them. At that point, the driver was able to escape by ramming the BMW into Malone and Walker’s vehicle and entering the I-78 entrance ramp. Malone fired two shots at the BMW. 

The count of attempted carjacking carries a maximum potential sentence of 15 years in prison. The count of discharging of a firearm during a crime of violence is punishable by a mandatory minimum of 10 years in prison and a maximum sentence of life in prison, which must run consecutively to any term of imprisonment imposed on any other charges.

Acting U.S. Attorney Honig credited the New Jersey State Police, under the direction of Col. Patrick J. Callahan; the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Theodore N. Stephens II; special agents of the DEA, under the direction of Special Agent in Charge Susan A. Gibson in Newark; 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 the charges and arrests.

This case is part of the Violent Crime Initiative (VCI), which 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. As part of this partnership, 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 ATF, the DEA, 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 George L. Brandley of the OCEDTF Unit in Newark.

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

NEWARK, N.J. – A South Carolina investment fund manager today admitted his role in a scheme to fraudulently obtain over $20 million from investors through misrepresentations about trading strategy and fund performance, Acting U.S. Attorney Rachael A. Honig announced.

George Heckler, 64, of Charleston, South Carolina, pleaded guilty by videoconference before U.S. District Judge Madeline Cox Arleo to an information charging him with one count of securities fraud.      

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

Heckler managed, controlled or was involved with multiple investment funds, including Conestoga Partner Holdings (Conestoga), Cassatt Short Term Trading Fund LP (Cassatt), CV Special Opportunity Fund LP (CVSO), and TA1 LLC (TA1). 

From 2014 to 2018, Heckler misrepresented to investors that he would invest their funds in particular trading strategies. Instead, he diverted their funds out of Cassatt and TA1 for purposes inconsistent with the trading strategies, including to pay out millions of dollars to other investors. Heckler also used investors’ funds to cover investment losses suffered by other funds under his management and/or control.

Heckler solicited investments from Victim-1, claiming the investments would be invested in Cassatt, which employed a “first loss” trading strategy intended to protect investors from losses. However, as of December 2013, Cassatt no longer had a brokerage account that was necessary to employ the represented trading strategy. Despite Cassatt no longer having a brokerage account, in 2014, Heckler represented to Victim-1 that Cassatt was still engaged in a first loss trading strategy and solicited Victim-1’s investment in Cassatt. In September 2014, Victim-1 invested approximately $9.1 million in Cassatt, relying on Heckler’s representation that Victim-1’s money would be invested consistent with Cassatt’s first loss trading strategy.  Heckler used $4.6 million of Victim-1’s investment to repay existing investors and the remainder to satisfy other obligations Heckler owed that were unrelated to Cassatt.

Heckler also approached Victim-2 about the possibility of creating a hedge fund that would deploy capital to first-loss traders, who would serve as the “first loss” protection for investors’ capital. In late 2015, Victim-2 formed a hedge fund, utilizing the concept proposed by Heckler (Entity-1). In 2015 and 2016, Entity-1 invested $10.1 million in TA1 via a participation agreement that provided that Entity-1’s investment would be used for an “options arbitrage dividend recapture trade,” otherwise known as the “skate trade.” In fact, none of Entity-1’s investment was used for the “skate trade.”  Entity-1’s investment was used for other purposes, including repaying others who had previously invested with Heckler.

Over the course of the scheme, Heckler sent out statements to investors that misled them into believing the value of their investments was increasing, when, in fact, the value was declining. Heckler took approximately $1 million in fees and distributions from the fraudulently obtained investments for his personal use. 

The securities fraud count carries a maximum penalty of 20 years in prison and a $5 million fine. Sentencing is scheduled for July 15, 2021.

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

Acting U.S. Attorney Honig credited special agents of the FBI, under the direction of Special Agent in Charge Michael J. Driscoll, Philadelphia Field Office, with the investigation leading to the charge. 

The government is represented by Assistant U.S. Attorneys Catherine R. Murphy and Andrew Macurdy of the U.S. Attorney’s Office Criminal Division.

NEWARK, N.J. – A Passaic County man today admitted to coercion and enticement of a minor and to illegally reentering the United States, Acting U.S. Attorney Rachael A. Honig announced.

Juan Carlos Morales-Pedraza, 34, of Paterson, New Jersey, 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.

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.

The count of coercion and enticement carries a maximum penalty of 20 years in prison, a $250,000 fine, and mandatory restitution. The count of illegal re-entry carries a maximum prison sentence of two years and a $250,000 fine. Sentencing is scheduled for July 14, 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; 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 the charges.

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

NEWARK, N.J. – A Passaic County, New Jersey, man today admitted distributing fentanyl, Acting U.S. Attorney Rachael A. Honig announced.

Tawan Grier, a/k/a “TJ,” 22, of Paterson, New Jersey, pleaded guilty by videoconference before U.S. District Judge Brian R. Martinotti to an information charging him with knowingly and intentionally distributing fentanyl.

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

Grier is an associate 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, Grier and other members and associates of the 230 Boys distributed narcotics, including heroin, fentanyl, and cocaine base.

The count of distributing fentanyl carries a maximum penalty of 20 years in prison and a fine of at least $1 million. Sentencing is scheduled for July 14.

This case is being conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF). The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.

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 Special Agent in Charge Charlie J. Patterson; 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 Office, 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. –  An Amtrak employee was arrested last night for stealing chainsaws and chainsaw parts valued at over $50,000 from Amtrak and reselling them, primarily through an online auction service, Acting U.S. Attorney Rachael A. Honig announced today.

Jose Rodriguez, 48, of Brick, New Jersey, is charged by complaint with one count of theft from an agency receiving federal funds and one count of theft of government property. Rodriguez is scheduled to appear via videoconference this afternoon before U.S. Magistrate Judge Mark Falk in Newark federal court.

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

Rodriguez has been an Amtrak employee since October 2007, most recently as a senior engineer and repairman, based out of an Amtrak facility in North Brunswick, New Jersey.  Between August 2016 and July 2020, Rodriguez obtained 77 chainsaws, 103 bars, and 163 chains from Amtrak, the total value of which was over $50,000. Rodriguez used an online auction service to sell most of the Amtrak chainsaws and parts to purchasers throughout the United States. Rodriguez also directly contacted one purchaser on multiple occasions offering to sell chainsaws and parts the day before or the same day that Rodriguez picked up chainsaws and parts from Amtrak. Agents recovered several chainsaws that Rodriguez sold, which had serial numbers matching Amtrak’s chainsaws. One of those chainsaws had previously been reported stolen by Amtrak. 

The offenses charged in the complaint each carry a maximum penalty of 10 years in prison and maximum fine of $250,000. 

Acting U.S. Attorney Honig credited detectives from Amtrak Police New York Division and Mid-Atlantic Division, under the direction of Chief Sam Dotson, and special agents from Amtrak Office of Inspector General, under the direction of Special Agent in Charge Michael J. Waters, Eastern Field Office, with the investigation leading to the charges.

The government is represented by Assistant U.S. Attorneys Cari Fais and Jeffrey Manis of the Office’s Special Prosecutions Division 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 New Jersey physician and his medical practice will pay $106,255 to resolve allegations that they violated the False Claims Act by making false representations in connection with submissions to the Centers for Medicare & Medicaid Services, Acting U.S. Attorney Rachael A. Honig announced today. 

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

From Jan. 1, 2016, through March 31, 2020, Vedat Obuz and his medical practice, Lotus Clinics P.C./Lotus Family Medicine, falsely billed certain medical procedures to Medicaid and Medicare by representing that the procedures had been performed by Obuz when, in fact, those procedures were performed by nurse practitioners.

The allegations were originally made in a lawsuit filed under the whistleblower provisions of the False Claims Act by Kathleen Menold. The Act permits private parties to sue for false claims on behalf of the United States and to share in any recovery. Ms. Menold will receive 20 percent from the federal share of the settlement.

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

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; and special agents of the U.S. Attorney’s Office for the District of New Jersey, under the direction of Supervisory Special Agent Thomas Mahoney, 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 lawsuit is captioned United States ex rel. Menold v. Lotus Family Medicine, Vedat Obuz, and Ozlem Obuz, 17-cv-1728 (D.N.J.). The claims settled by this agreement are allegations only, and there has been no determination of liability.

NEWARK, N.J. – A former police officer with the North Brunswick police department today admitted his role in a multimillion-dollar scheme that defrauded state health benefits programs through the submission of medically unnecessary prescriptions for compounded medications, Acting U.S. Attorney Rachael A. Honig announced.

Daniel Passafiume, 45, of Monroe, New Jersey, pleaded guilty by videoconference before U.S. District Judge Michael A. Shipp to an information charging him with conspiring to commit health care fraud.

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

Between January 2014 and November 2016, Passafiume and a conspirator, identified as CC-1 in the information, marketed certain prescription “compounded medications,” including vitamins and pain creams, to beneficiaries of New Jersey state insurance plans, including the State Health Benefits Program (SHBP). These insurance plans paid thousands of dollars for compounded medications, which 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 because, for example, the patient is allergic to a dye or other ingredient or requires the medication in a different form.

Passafiume and his conspirator had agreements with pharmacies to collect large commission payments for each prescription they obtained for the pharmacy. Passafiume and CC-1 found individuals with these insurance plans and connected them with doctors who were willing to sign prescriptions without an examination or a determination that the individuals needed the compounded medications. Those recruited to obtain prescriptions included employees of a New Jersey police department, family members of these employees, and Passafiume’s own family members. At times, Passafiume provided beneficiaries with cash, checks, and gift cards for agreeing to obtain these prescriptions.

The conspiracy charge carries a maximum potential penalty of 10 years in prison and a fine of $250,000 fine, or twice the gain or loss from the offense, whichever is greater. As part of his plea agreement, Passafiume must forfeit $284,659 in criminal proceeds and pay restitution of $3.27 million. Sentencing is scheduled for July 12, 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 Senior Trial Counsel Leslie Faye Schwartz of the Special Prosecutions Division and Assistant U.S. Attorney Osmar J. Benvenuto of the Health Care Fraud Unit in Newark.

NEWARK, N.J. – A New Jersey cardiologist today admitted unlawfully prescribing thousands of Oxycodone pills, Acting U.S. Attorney Rachael A. Honig announced.

Raymond Catania, 59, of Warren, New Jersey, pleaded guilty by videoconference before U.S. District Judge Michael A. Shipp to an information charging him with dispensing Oxycodone outside of the usual course of professional practice and not for a legitimate medical purpose.

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

Catania was a New Jersey physician specializing in cardiology and practicing in Watchung, New Jersey. From January 2016 through March 2017, Catania issued prescriptions for thousands of Oxycodone pills to one of his patients, and Catania did so without a legitimate medical purpose and outside of the usual course of professional practice. Catania also issued prescriptions for thousands of Oxycodone pills to that patient’s wife even though the wife was not Catania’s patient. Oxycodone – a Schedule II controlled substance – has a high potential for abuse that can lead to severe psychological and physical dependence and can result in fatal overdoses. Catania prescribed more than 8,600 Oxycodone 30 mg pills.

Catania faces a maximum penalty of 20 years in prison and a $1 million fine. Sentencing is scheduled for July 14, 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 Osmar J. Benvenuto of the Health Care Fraud Unit, and Leslie F. Schwartz, Senior Litigation Counsel, of the Special Prosecutions Division, in Newark.

NEWARK, N.J. – Three Essex County correctional officers and one sergeant have been charged with conspiring to violate a pretrial detainee’s civil rights, Acting U.S. Attorney Rachael A. Honig announced today.

Officers Angel Chaparro, 38, Damion James, 40, and Luis Ortiz, 29, and Sgt. Herman Pride, 51, are each charged by complaint with one count of conspiracy to violate civil rights.  Pride and Ortiz were arrested on March 4, 2021, and had their initial appearances before U.S. Magistrate Judge James B. Clark III. Both were released on bail. Chaparro and James were arrested this morning and will have their initial appearances by videoconference Judge Clark this afternoon. 

According to the criminal complaint:

On the evening of Aug. 17, 2020, a federal pretrial detainee at Essex County Correctional Facility (ECCF) squirted a mixture of urine, yogurt, and milk onto a correctional officer. The detainee subsequently was transported to a disciplinary cell, where Chaparro, James, and Ortiz assaulted the detainee, striking him multiple times. Pride did not intervene to stop the assault. At the end of the assault, Pride said, “okay, that’s enough.” During the assault, James’ watch fell off. He and other officers returned to the detainee’s cell to retrieve his watch.

The detainee asked for, and was initially denied, medical assistance. The victim later told Pride that if Pride would provide the victim with medical attention, the victim would lie and say that he had fallen off his bed. Pride refused to provide any medical attention. Two days later, the detainee was finally taken to the emergency room at University Hospital in Newark. He was diagnosed with large swelling and tenderness in the right side of his face and discoloration and bruising around his right eye.

The defendants all were required to submit documentation regarding their use of force.  None of them submitted any such reports. Instead, Chaparro signed a false report indicating that no force had been used. 

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 Essex County Correctional Facility Internal Affairs Bureau, under the direction of Director Alfaro Ortiz and the Office of the Warden, with the investigation leading to the charges.

The government is represented by Acting Principal Assistant U.S. Attorney Rahul Agarwal.

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

NEWARK, N.J. – A portfolio manager and senior independent executive advisor at a Secaucus-based real estate fund was charged with using a sham loan document to defraud an investor of hundreds of thousands of dollars, Acting U.S. Attorney Rachael A. Honig announced today.

Thomas Nicholas Salzano, aka “Nick Salzano,” of Secaucus, New Jersey, was charged by complaint with one count of wire fraud and one count of aggravated identity theft. Salzano appeared by videoconference on March 4, 2021, before U.S. Magistrate Judge Leda Dunn Wettre and was released on a $100,000 unsecured bond.

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

Salzano was employed at National Realty Investment Advisors (NRIA), a private real estate management fund with a purported $1.25 billion in assets under management as of 2021. In May 2018, Victim 1 purchased three purported units in NRIA’s real estate investment fund for $150,000, after hearing an advertisement for the fund on the radio. Individual 1, a vice president and senior independent project manager at NRIA, offered Victim 1 a guaranteed 6 percent return for each unit purchased, paid monthly, for the first two to two-and-a-half years of the five-year term, and the potential of greater guaranteed returns after the initial period. 

Near the end of 2018, Individual 1 approached Victim 1 about a supposed new opportunity to become a joint venture partner with NRIA in a property in North Bergen, New Jersey, allegedly owned by NRIA. According to Individual 1, the minimum investment was $300,000, and Victim 1 could use her original $150,000 investment in the NRIA fund toward the required $300,000 investment in the North Bergen property.  

Victim 1 asked Individual 1 for more information on the North Bergen property. Individual 1 sent Victim 1 materials purporting to show that NRIA intended to obtain a $25 million bank loan on the property. Victim 1 asked for information on the loan. Individual 1 then referred Victim 1 to Salzano.

On Jan. 17, 2019, Salzano emailed Victim 1 a purported letter of intent (LOI) from Lender 1, a loan provider for estate investors and developers, purportedly signed by Victim 2, the chief executive officer of Lender 1. The LOI sent by Salzano was fraudulent. A representative later confirmed that the letter was fraudulent and Victim 2’s signature was forged.   

The wire fraud charge carries a maximum potential penalty of 20 years in prison and a fine of $250,000. The aggravated identity theft charge is punishable by a mandatory sentence of two years in prison to be served consecutively to any other term of imprisonment imposed.

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 the charges.

The government is represented by Assistant U.S. Attorneys Andrew Macurdy and Jonathan Fayer of the of the U.S. Attorney’s Office Economic Crimes Unit.

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

NEWARK, N.J. – Four individuals admitted to their roles in conspiring to transport stolen property derived from home burglaries across state lines and related crimes, Acting U.S. Attorney Rachael A. Honig announced today.

Julian Zorilla, 53, Erica Rincon, 39, Jhonatan Lozada Serna, 32, all Colombian nationals, and Pablo Neira, 26, of New York, pleaded guilty by videoconference this week before U.S. District Judge Stanley R. Chesler to informations charging each of them with one count of conspiracy to transport stolen property across state lines. In addition, Zorilla, Rincon, and Neira also pleaded guilty to conspiracy to commit bank fraud, and Lozada Serna pleaded guilty to illegally re-entering the United States of America after being previously deported for an aggravated felony.

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

From Dec. 14, 2019, through Jan. 14, 2020, Zorilla, Rincon, Neira, and Lozada Serna conspired with each other to burglarize homes in New Jersey, Pennsylvania, and Delaware. The defendants stole money, jewelry, and designer clothing. They were arrested while breaking into a home in Wilmington, Delaware.

Zorilla, Rincon, and Neira obtained fraudulent foreign travel documents under fictitious names to gain access to United States banks. They used fraudulently obtained financial devices to rent vehicles and hotel rooms used in furtherance of the commission of these home burglaries.  Lozada Serna illegally re-entered the United States after his removal in 2019 after he was previously convicted of an aggravated felony in Texas.

The charge of conspiracy to transport stolen property carries a maximum penalty of five years in prison, and a maximum fine of $250,000. The charge of conspiracy to commit bank fraud carries a maximum penalty of 30 years in prison and a maximum fine of $1 million. The charge for illegally re-entering the United States carries a maximum penalty of 20 years in prison and a maximum fine of $250,000. Sentencing for all four defendants is scheduled for July 13, 2021.

Acting U.S. Attorney Honig credited the FBI, under the direction of George M. Crouch Jr. in Newark, with the investigation leading to the guilty pleas. She also thanked special agents of the FBI Baltimore Division, Wilmington Resident Agency and Delaware Violent Crimes Task Force; the FBI New York Office, Joint Terrorism Task Force, John F. Kennedy Airport Resident Agency; Immigration and Customs Enforcement – Enforcement and Removal Operations, Newark; the New Castle County Delaware Police Department, and the Beachwood New Jersey Police Department, for their work on the case.

The government is represented by Special Assistant U.S. Attorney Keith Travers of the U.S. Attorney’s Office OCDETF/Narcotics Unit in Newark.

NEWARK, N.J. – A Pennsylvania doctor today admitted participating in two conspiracies to receive bribes and kickbacks in exchange for ordering genetic tests, Acting U.S. Attorney Rachael A. Honig announced.

Lee Besen, 65, of Waverly, Pennsylvania, pleaded guilty by videoconference before U.S. District Judge Anne E. Thompson to an information charging him with two counts of conspiring to violate the Anti-Kickback Statute.

Besen is the fourth defendant to plead guilty in bribery and kickback schemes involving doctors and medical employees in the Scranton, Pennsylvania, area.

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

Besen was a primary care physician with an office in the Scranton area. In 2018, he began accepting monthly cash kickbacks and bribes in exchange for collecting DNA samples from Medicare patients and sending them for genetic tests to clinical laboratories in New Jersey and Pennsylvania. The cash kickbacks ranged from $500 to over $8,000. Besen typically accepted the cash inside his office, at times behind locked doors.

When Besen did not receive his kickback and bribe payments, the volume of genetic tests he ordered dipped. When he accepted those payments, that volume typically increased because, as Besen said in a recorded conversation, “Greenbacks speak.” Besen was also recorded discussing the kickback and bribe payments as “vigs” – slang for fees collected by bookies.

Besen frequently sought ways to make more money. At one point, he proposed adding to the scheme by collecting “CGx” cancer screening tests from Medicare patients, sending the tests to a new lab, and then splitting lucrative sales commissions that the lab paid out – ranging up to $2,500 per test. Although Besen had not previously ordered CGx tests for any of his patients, once he realized there was money to be made, he said in a recording that his office was “totally open now for CGx.” He was also recorded saying that he hoped the money he made from CGx tests would help him “retire early.”

Even as the ongoing COVID-19 pandemic substantially reduced in-patient visits, Besen worked with his staff to generate more genetic tests from Medicare patients. Before one illicit payoff that Besen accepted in the parking lot of a fast-food restaurant, he was recorded making veiled threats and expressing concern about being caught on camera accepting kickbacks and bribes. Despite such concerns, he followed through with the meeting because, as he was recorded saying, he wanted to collect “greenbacks” for his “pool house.”

Besen enlisted his employee, Kimberly Schmidt, who, in exchange for cash kickbacks and bribes, helped prepare paperwork for the genetic tests. Schmidt has previously pleaded guilty for her role in the scheme and is awaiting sentencing.

As a result of the scheme, Medicare paid $350,374 for genetic tests generated from Besen’s medical practice.

Separately, Besen and Terri Haines, of Kennett Square, Pennsylvania, entered into a different kickback and bribery scheme involving “health fairs.” Haines was not a health care provider, but made a living soliciting and collecting CGx genetic screening tests from Medicare patients at health fairs, and then sending those tests to a lab in exchange for commissions. She was not authorized to order those CGx tests without a doctor’s sign-off. Haines paid Besen a kickback and bribe to use his name and medical credentials to order CGx tests for the Medicare patients she met at fairs, even though Besen never actually attended any of the health fairs and never met the patients for whom the genetic tests were ordered. Medicare paid $713,882 for CGx genetic tests that resulted from this scheme.

Each conspiracy charge is punishable by a maximum of five years in prison and a fine of $250,000, or twice the gross gain or loss derived from the offense, whichever is greater. Sentencing is scheduled for July 6, 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 in Newark; and special agents of the U.S. Department of Health and Human Services, Office of Inspector General, Philadelphia Regional Office, under the direction of Special Agent in Charge Maureen R. Dixon, with the investigation leading to the charges. She also thanked the FBI Scranton Field Office, FBI Philadelphia Division, and the Pennsylvania Attorney General’s Office for their assistance.

The government is represented by Assistant U.S. Attorney Joshua L. Haber of the Health Care Fraud Unit and Acting Principal Assistant U.S. Attorney Rahul Agarwal.

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

NEWARK, N.J. – Three Essex County, New Jersey, men admitted conspiring to defraud two banks of $250,000 using stolen credit cards and blank checks, Acting U.S. Attorney Rachael A. Honig announced today.

Alexander Varice, 22, and Dashawn Duncan, 27, both of South Orange, New Jersey, and Nasheed Jackson, 24, of Newark; of South Orange, New Jersey, pleaded guilty this week by videoconference before U.S. District Judge Susan D. Wigenton to informations charging each of them with one count of conspiracy to commit bank fraud.

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

From August 2018 through January 2020, Varice, Jackson, and Duncan engaged in a scheme to use stolen credit cards or checks to fraudulently make purchases and withdraw money from two banks. The credit cards were stolen from facilities used by the U.S. Postal Service in Pine Brook and Warren, New Jersey, and never reached the intended cardholders. After obtaining the stolen cards, Varice, Jackson, and Duncan used them to make unauthorized purchases at various retail stores and to withdraw cash from automated teller machines (ATMs) in New Jersey and elsewhere. The blank checks were also stolen from various New Jersey-based post office facilities, and never reached their intended recipients. Varice and Jackson altered the date, payee, and amount of the stolen checks prior to deposit into a third-party account so that they could manually enter the amounts that they wanted to fraudulently withdraw from a victim bank ATM.

The charge of conspiracy to commit bank fraud carries a maximum penalty of 30 years in prison and a maximum fine of $1 million. Sentencing is scheduled as follows: Varice, July 13, 2021; Jackson, July 14, 2021; and Duncan, July 19, 2021.

Acting U.S. Attorney Honig credited inspectors of the U.S. States Postal Inspection Service, under the direction of Acting Inspector in Charge Raimundo Marrero in Newark, with the investigation leading to the guilty pleas.

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

NEWARK, N.J. – A Bergen County, New Jersey, man was charged today with tax evasion for calendar years 2014 to 2016, Acting U.S. Attorney Rachael A. Honig announced.

David Kushner, 55, of Cresskill, New Jersey, was indicted by a federal grand jury on three counts of tax evasion. He will be arraigned at a later date.

According to the indictment:

Kushner served as a partner of a real estate investment business and as a partner and president of a property management business. Based on his roles, Kushner received management fee income and additional payments from the businesses.

Kushner controlled four bank accounts. Kushner deposited payments and income from the businesses and elsewhere into the accounts and then used most of the funds for personal expenses. Kushner failed to file any income tax returns, failed to make any estimated payments for the accounts, and failed to declare most of the funds in the accounts as income on his individual income tax returns. As a result, Kushner evaded hundreds of thousands of dollars in personal income taxes.

Each count of tax evasion carries a maximum potential penalty of five years in prison and a maximum fine of $250,000.

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

The government is represented by Assistant U.S. Attorney Alexandra Saker of the U.S. Attorney’s Office’s Narcotics/OCDETF 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. – The manager of a Jersey City jewelry store today admitted lying to federal agents during an investigation into a fraud conspiracy, Acting U.S. Attorney Rachael A. Honig announced today.

Khaled Hamade, 60, of Clifton, New Jersey, pleaded guilty by videoconference before U.S. District Judge Claire C. Cecchi to an information charging him with one count of making false statements to federal agents.

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

Hamade was the manager of a jewelry store at the Newport Mall in Jersey City. In March 2019, he provided false information to federal agents who were investigating a fraud conspiracy against a financial institution. Hamade denied knowledge of the identities, and personal information, of numerous customers of his jewelry store who were believed to have engaged in the fraud.

The count of providing false statements to which Hamade pleaded guilty carries a maximum penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for July 14, 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 inspectors of the U.S. Postal Inspection Service, under the supervision of Acting Inspector in Charge Raimundo Marrero in Newark, with the investigation leading to today’s guilty plea.

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

NEWARK, N.J. – A Bergen County, New Jersey, man today admitted filing 18 fraudulent tax returns in victims’ names to obtain tax refunds to which he was not entitled, Acting U.S. Attorney Rachael A. Honig announced.

Emmanuel A. Barrientos-Fermin, 33, of Tenafly, New Jersey, pleaded guilty by videoconference before U.S. District Judge Claire C. Cecchi to an indictment charging him with one count each of conspiracy to commit wire fraud, access device fraud, and aggravated identity theft.

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

Barrientos-Fermin admitted that from January 2020 through February 2020, he and others conspired to use stolen personal identifying information (PII) to submit fraudulent tax returns in victims’ names to obtain tax refunds without the victims’ knowledge or consent. A conspirator (CC-1) obtained falsified Social Security cards, driver’s licenses, birth certificates and W-2 forms bearing the victims’ stolen PII. The conspirator provided the documents to Barrientos-Fermin and others, who would use fraudulently obtained PII to file tax returns at various tax preparation company branches, posing as the victims.

Barrientos-Fermin admitted that he entered into an agreement in which CC-1 would pay him $200 to enter tax preparation companies posing as the victims to file tax returns in their names. Barrientos-Fermin provided CC-1 a photo of himself and CC-1, in turn, provided Barrientos-Fermin with driver’s licenses bearing Barrientos-Fermin’s photos and the victims’ PII. CC-1 also provided Barrientos-Fermin with matching Social Security cards, W-2s, and sometimes birth certificates. Barrientos-Fermin admitted going into tax preparation locations pretending to be the victims and providing the false documents to the tax preparers to prepare and file the fraudulent tax returns. After submitting each fraudulent tax return and collecting advance refund debit cards, Barrientos-Fermin provided CC-1 the debit cards in exchange for cash payments of about $200 per return.

The count of conspiracy to commit wire fraud carries a maximum sentence of 20 years in prison, and the count of access device fraud carries a maximum sentence of 10 years in prison. The count of aggravated identity theft carries a statutory minimum term of imprisonment of two years in prison, which must run consecutively to any other term of imprisonment imposed. All the counts also carry a maximum fine of $250,000, or twice the gross gain or loss caused by the offenses, whichever is greater. Sentencing is scheduled for Sept. 15, 2021.

Acting U.S. Attorney Honig credited postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Raimundo Marrero in Newark; and special agents of IRS - Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez in Newark, with the investigation leading to today’s guilty plea. She also thanked the Totowa, New Jersey, Police Department, under the direction of Chief of Police Carmen Veneziano, for its assistance.

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

NEWARK, N.J. – Two men will make their initial court appearances today after being arrested and charged in connection with a drug distribution conspiracy, Acting U.S. Attorney Rachael A. Honig announced.

Luis Cepeda-Capellan, 25 of Paterson, New Jersey, and Isidro Fernandez, 32, of New York, are each charged by complaint with one count of conspiracy to distribute heroin. They are scheduled to appear this afternoon by videoconference before U.S. Magistrate Judge James B. Clark III.

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

During an investigation by the Drug Enforcement Administration (DEA), New York Drug Enforcement Task Force (NYDETF), law enforcement officers learned that Fernandez purchased significant quantities of items associated with the illegal manufacture and distribution of narcotics, including thousands of glassine bags, strainers, sifters, and scales. On Feb. 25, 2021, law enforcement officers observed Fernandez receive boxes of items consistent with those used to transport drug paraphernalia, such as large quantities of glassine bags, in New York. After obtaining the boxes, Fernandez traveled into New Jersey and delivered these boxes to an individual who brought them to Cepeda-Capellan’s residence.  

The charge of conspiracy to distribute one kilogram or more of heroin carries a mandatory minimum of 10 years in prison, a maximum of life in prison, and a fine of $10 million, or twice the amount of money involved in the offense, whichever is greater.

Acting U.S. Attorney Honig credited the NYDETF, which comprises special agents and task force officers of the DEA, New York City Police Department, and New York State Police,with the investigation leading to the charges.

The government is represented by Special Assistant U.S. Attorney Keith Travers of the U.S. Attorney’s Office Organized Crime and Drug Enforcement Task Force/Narcotics Unit in Newark.

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

NEWARK, N.J. – A Bronx, New York, man appeared in court today on charges of possessing and distributing images of child sexual abuse, Acting U.S. Attorney Rachael A. Honig announced.

Perth De, aka “Parthasarthie Kapoor,” 47, is charged by complaint with one count of distribution of child pornography and one count of possession of child pornography. He appeared by videoconference today before U.S. Magistrate Judge James B. Clark III and was ordered detained.

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

On Jan. 21, 2020, De was arrested at Newark Liberty International Airport pursuant to a provisional arrest warrant obtained at the request of the Government of Canada, which previously charged De with sexually assaulting minors. Law enforcement officials found several cellular phones in De’s luggage. A subsequent forensic examination of one of the cellular phones revealed numerous videos of children being sexually abused. Some of the videos had been distributed from the cellular phone.

The charge of distribution of child pornography carries a mandatory minimum penalty of five years in prison, a maximum penalty of 20 years in prison and a fine of $250,000. The charge of possession of child pornography carries a maximum penalty of 10 years in prison and a fine of $250,000.

Acting U.S. Attorney Honig credited special agents with U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, under the direction of Special Agent in Charge Jason J. Molina, and the U.S. Department of State Diplomatic Security Service, with the investigation leading to the charges.

The government is represented by 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 in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

NEWARK, N.J. – A Suffolk County, New York, man was arrested today for illegally possessing a firearm, Acting U.S. Attorney Rachael A. Honig announced.

Keith Richter, aka “Conan,” 62, of Bay Shore, New York, is charged by criminal complaint with one count of possession of a firearm by a convicted felon. He is scheduled to appear by videoconference this afternoon before U.S. Magistrate Judge Michael A. Hammer.

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

Richter is the national president of the Pagan’s Motorcycle Club, an outlaw motorcycle gang known by law enforcement to engage in illegal activity, including narcotics trafficking, weapons trafficking, and violent crimes. 

On Feb. 20, 2021, the Pagans hosted a party in Lancaster, Pennsylvania. While Richter was traveling home from the party late at night, he was stopped by law enforcement officers in Mercer County, New Jersey. Officers recovered a loaded Ruger P345 .45 caliber handgun from the vehicle. 

Richter was previously convicted of felony offenses, including conspiracy to commit murder in aid of racketeering and attempted assault with a dangerous weapon in aid of racketeering, for which he served 16 years in prison.

The count of being a felon in possession of a weapon carries a maximum sentence of 10 years in prison and a fine of $250,000. 

Acting U.S. Attorney Honig credited special agents of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, Newark Division, under the direction of Special Agent in Charge Charlie J. Patterson in Newark; special agents of the Drug Enforcement Administration, Newark Division, under the direction of Special Agent in Charge Susan A. Gibson; the Suffolk County District Attorney’s Office, under the direction of District Attorney Timothy D. Sini; the Union County Prosecutor’s Office, under the direction of Acting Prosecutor Lyndsay V. Ruotolo; and the New Jersey State Police, under the direction of Col. Patrick J. Callahan, with the investigation leading to these charges.

This case is part of Project Guardian, the Department of Justice’s signature initiative to reduce gun violence and enforce federal firearms laws. Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department’s past successful programs to reduce gun violence; enhances coordination of federal, state, local and tribal authorities in investigating and prosecuting gun crimes; improves information sharing by the Bureau of Alcohol, Tobacco, Firearms and Explosives when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensured that federal resources are directed at the criminals posing the greatest threat to our communities.

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 complaint are merely accusations, and the defendant is considered innocent unless and until proven guilty.

CAMDEN, N.J. – A Camden County man today admitted his role in conspiring with members of a white supremacist hate group to threaten and intimidate African Americans and Jewish Americans by vandalizing minority-owned properties throughout the country in September 2019, Acting U.S. Attorney Rachael A. Honig announced.

Richard Tobin, 19, of Brooklawn, New Jersey, pleaded guilty to an information charging him with conspiracy against rights before U.S. District Judge Robert B. Kugler in Camden federal court.

“Americans should never have to fear racist, antisemitic or any other form of bias-motivated violence,” Acting U.S. Attorney Rachael A. Honig said. “This defendant encouraged hateful acts of violence against individuals and their houses of worship, based solely on their religion or the color of their skin. Together with our colleagues in the Civil Rights Division and the Joint Terrorism Task Force, this Office will continue to work every day to identify individuals like him and bring them swiftly to justice.”

“The FBI and our partners simply won’t tolerate crimes spurred by hate, which are meant to intimidate and isolate the groups targeted,” Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division, said. “People of all races and faiths deserve to feel safe in their communities. Richard Tobin encouraged others to victimize innocent people, in furtherance of his abhorrent white supremacist beliefs. While we all have the right to believe whatever we want, when those views lead to violence, that’s a different and dangerous story.”

“Conspiring with others to vandalize and destroy property owned by African-Americans and Jewish Americans will not be tolerated by the Department of Justice,” said Principal Deputy Assistant Attorney General Pam Karlan of the Civil Rights Division. “Every person should feel secure knowing they have the right to own and use their property free from being targeted because of their race or religion. We will continue to protect the civil rights of all individuals and vigorously prosecute bias motivated crimes.”

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

Tobin admitted that from Sept. 15 to Sept. 23, 2019, he was a member of a white supremacist group, “The Base,” and during that time, he communicated online with other members and directed them to destroy and vandalize properties affiliated with African Americans and Jewish Americans. Tobin dubbed this coordinated attack “Kristallnacht,” or “Night of Broken Glass,” after an attack in Germany on Nov. 9 and 10, 1938, in which Nazis murdered Jewish people and burned and destroyed Jewish homes, synagogues, stores and schools. Tobin implored members of The Base to post propaganda flyers and to break windows and slash tires belonging to African Americans and Jewish Americans. On Sept. 21, 2019, members of The Base vandalized synagogues in Racine, Wisconsin, and Hancock, Michigan, by spray painting them with hate symbols. 

A conspirator, Yousef Omar Barasneh, previously pleaded guilty to conspiracy against rights in federal court in the Eastern District of Wisconsin, for his role in vandalizing the synagogue in Racine, Wisconsin.    

The conspiracy charge carries a maximum potential penalty of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense, whichever is greater. Sentencing is scheduled for June 28, 2021. 

Acting U.S. Attorney Honig credited special agents of the FBI Philadelphia Division’s South Jersey Resident Agency, under the direction of Special Agent in Charge Driscoll, and the Joint Terrorism Task Force and its member agencies, including the Department of Homeland Security – Homeland Security Investigations, the New Jersey Office of Homeland Security and Preparedness, the New Jersey State Police and the Camden County Police Department, with the investigation leading to today’s guilty plea. She also thanked the Brooklawn and Cherry Hill police departments for their assistance.

The government is represented by Assistant U.S. Attorney Kristen M. Harberg of the U.S. Attorney’s Office in Camden and Trial Attorney Eric Peffley of the Civil Rights Division, Criminal Section.

NEWARK, N.J. – A pharmacy employee was charged for conspiring to offer and pay bribes and kickbacks in exchange for having prescriptions steered to the Morris County, New Jersey, pharmacy where he worked, Acting U.S. Attorney Rachael A. Honig announced today.

Srinivasa Raju, 49, of Haskell, New Jersey, was arrested today and charged by complaint with conspiring to violate the Anti-Kickback Statute. He had his initial appearance by videoconference before U.S. Magistrate Judge Michael A. Hammer and was released on $250,000 unsecured bond.

Magdalena Jimenez, 56, of Newark, New Jersey, was previously charged with a parallel bribery and kickback scheme involving the same pharmacy. Those charges remain pending.

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

Raju had various responsibilities at the Morris County pharmacy, including coordinating prescription deliveries and soliciting business. From at least January 2019, Raju worked with other pharmacy personnel to pay kickbacks and bribes to a doctor’s employee in exchange for receiving numerous prescriptions from that doctor’s Jersey City office.

Raju first paid the kickbacks and bribes using gift cards, but soon switched to cash and checks. He typically handed the kickbacks and bribes to coworkers inside the pharmacy and directed them to deliver the payments to the doctor’s employee. To conceal the true nature of some of the illicit payments, Raju had approximately $8,000 worth of checks made out to the employee’s relative, under the guise of paying for IT services. In truth, Raju never met or communicated with the relative, and no actual services were performed.

In November 2020, Raju was recorded inside the pharmacy directing an employee to deliver a kickback and bribe of “200 bucks for Thanksgiving.” Raju asked, “What do you think, I should give $300? What do you think?” Raju then counted out more cash, which he put in a sealed envelope to have hand delivered. In December 2020, he had a $250 cash kickback and bribe, which was stashed inside a Christmas card, hand delivered to the doctor’s employee, inside the doctor’s office.

The conspiracy charge is punishable by a maximum of five years in prison and a fine of $250,000, or twice the gross gain or loss derived from the offense, whichever is greater.

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 with the U.S. Attorney’s Office, under the direction of Supervisory Special Agent Thomas Mahoney, with the investigation leading to the charges.

The government is represented by Assistant U.S. Attorney Joshua L. Haber of the Health Care Fraud Unit.

The charges and allegations in the complaints against Raju and Jimenez are merely accusations, and they are both presumed innocent unless and until proven guilty.

NEWARK, N.J. – A New Jersey nurse today admitted her role in a multimillion-dollar compounding fraud scheme, Acting U.S. Attorney Rachael A. Honig announced.

Jennifer Nash, 51, of River Vale, New Jersey, pleaded guilty by videoconference before U.S. District Judge John Michael Vazquez to an information charging her with conspiracy to commit health care fraud.

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

Beginning in 2015, Nash was recruited by two individuals who owned a pharmaceutical marketing company to write prescriptions for customized drugs known as “compounded medications” in exchange for payment. Not only did Nash write these prescriptions regardless of whether a health insurance plan beneficiary needed such a medication, she also wrote them even though her Advance Practice Nurse license was inactive or suspended. On other occasions, Nash wrote prescriptions for compounded medications, in exchange for cash payments, without meeting with or examining patients.

In addition to authorizing these medically unnecessary prescriptions, Nash served as a sales representative. She collected large commission payments in exchange for marketing these compounded medications without regard to whether a beneficiary needed such a medication or whether an FDA-approved medication would have been appropriate and sufficient.

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 medical professional determines that an FDA-approved medication does not meet the health needs of a particular patient.  For example, compounded drugs may be appropriate for a patient who is allergic to a dye or other ingredient or a patient who cannot consume a medication by traditional means, such as an elderly patient or child who needs the medication in a liquid form instead of an FDA-approved pill.

The conspiracy count to which Nash pleaded guilty carries a maximum penalty of 10 years in prison and a fine of $250,000 fine, or twice the gain or loss from the offense, whichever is greater. Sentencing is scheduled for July 6, 2021.

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

The government is represented by Assistant U.S. Attorneys Osmar J. Benvenuto and José R. Almonte of the Health Care Fraud Unit in Newark.

NEWARK, N.J. – A former sales representative was arrested today for his role in a scheme to defraud public health benefits programs by billing for medically unnecessary compounded prescriptions, Acting U.S. Attorney Rachael A. Honig announced. 

Matthew Puccio, 38, of Randolph, New Jersey, was indicted by a federal grand jury on Feb. 17, 2021, for conspiracy to commit health care fraud. He will be arraigned at a date to be determined. 

According to the indictment returned yesterday:  

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 March 2016, Puccio participated in a conspiracy that involved the submission of fraudulent prescriptions for compounded medications to public health benefits programs. The scheme centered on marketing companies recruiting and paying sales representatives, such as Puccio, to obtain compounded medications for themselves and others regardless of medical necessity, and by specifically targeting health plans that reimbursed for compounded medications at high rates.

Puccio exploited this opportunity through working as a sales representative for several compounding pharmacies. He targeted individuals who had health plans that covered compounded medications and then convinced those individuals to obtain prescriptions for compounded medications, regardless of medical necessity. Puccio and others induced two New Jersey based physicians to sign medically unnecessary prescriptions for beneficiaries that he and others had recruited.

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

The charge of conspiracy to commit health care fraud carries a maximum sentence of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense.

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

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

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

TRENTON, N.J. – A Somerset County, New Jersey, man today admitted traveling to the Philippines to engage in sex with a minor, Acting U.S. Attorney Rachael A. Honig announced. 

James A. Diggs, 45, pleaded guilty by videoconference before Chief U.S. District Judge Freda L. Wolfson to an information that charged him with traveling outside of the United States 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.

Foreign travel to engage in criminal sexual activity carries a maximum potential penalty of 30 years in prison and a $250,000 fine.

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. She 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 Morris County, New Jersey, man who owned and operated construction businesses in Morris County was sentenced today to 18 months in prison for filing false tax returns that failed to report all his personal income, acting U.S. Attorney Rachael A. Honig announced.

Roger Magill, 51, of Wharton, the owner and operator of Reliable Construction, aka Reliable Paving, and Hackensack Pavers, aka Hackensack Paving, previously pleaded guilty before U.S. District Judge Susan D. Wigenton to one count of an information charging him with tax evasion. Judge Wigenton imposed the sentence by videoconference today.

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

Between 2014 and 2016, obtained hundreds of thousands of dollars in personal income from his construction businesses, which he attempted to hide from the IRS by using a fictitious identity to cash business checks at several check cashing businesses. Magill attempted to hide his personal income by depositing money into bank accounts that he did not report to the IRS. He evaded paying $261,758 in personal income taxes.

In addition to the prison term, Judge Wigenton sentenced Magill to two years of supervised release.

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.