District of New Jersey

NEWARK, N.J. –A Bergen County, New Jersey, man was sentenced today to 84 months in prison for his role in a scheme to transport more than 20 kilograms of cocaine from California to New Jersey, U.S. Attorney Craig Carpenito announced.

Irving Olivero-Pena, 48, a/k/a “Fausto Molina,” of Edgewater, New Jersey, previously pleaded guilty before U.S. District Judge Kevin McNulty to Count One of an indictment charging him with conspiracy to possess with the intent to distribute five kilograms or more of cocaine. Judge McNulty imposed the sentence by videoconference today.

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

Olivero-Pena and co-defendants Melvin Feliz, 54, of Englewood Cliffs, New Jersey, and Robert Crawford, 45, of Long Island City, New York, each previously pleaded guilty to their roles in the scheme. They admitted that from January 2011 through March 2014, they conspired to purchase narcotics for distribution in New Jersey. On Oct. 22, 2012, they met a courier in Bergen County. They admitted that they gave the courier $549,950 in currency to transport to California via tractor trailer, where it would be used to purchase approximately 20 kilograms of cocaine. Afterwards, the courier would transport the cocaine to New Jersey for distribution. The currency was ultimately seized by law enforcement officers in California.

In addition to the prison term, Judge McNulty sentenced Olivero-Pena to 5 years of supervised release. Feliz was sentenced on Nov. 6, 2020, to 14 years in prison. Crawford was sentenced in July 2015 to 10 years in prison.

U.S. Attorney Carpenito credited special agents from the U.S. Drug Enforcement Administration (DEA), Newark Division, under direction of Special Agent in Charge Susan A. Gibson; 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 sentencing.

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

Defense counsel: Olivero-Pena: David Touger Esq., New York
Feliz: Patrick Joyce Esq., New York
Crawford: Rubin Sinins Esq., Springfield, New Jersey

NEWARK, N.J. – A Bergen County, New Jersey, man was sentenced today to 168 months in prison for using bogus litigation support companies to obtain millions from two law firms where his wife was a partner and for his role in a scheme to transport more than 20 kilograms of cocaine from California to New Jersey, U.S. Attorney Craig Carpenito announced.

Melvin Feliz, 54, of Englewood Cliffs, New Jersey, previously pleaded guilty before U.S. District Judge Kevin McNulty to an information charging him with one count of conspiracy to commit wire fraud and one count of tax evasion. He also previously pleaded guilty to Count One of an indictment charging him and two co-defendants with conspiracy to possess with the intent to distribute five kilograms or more of cocaine. Judge McNulty imposed the sentence today in Newark federal court.

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

Feliz’s wife, Keila Ravelo, 55, also of Englewood Cliffs, worked as a partner at Law Firm 1 from July 1, 2005, through October 2010. She then joined Law Firm 2 as a partner and worked there from October 2010 through November 2014. Feliz admitted that during that time, Feliz and Ravelo formed two limited liability companies, Vendor 1 and Vendor 2, that purported to provide litigation support for both firms, but in fact provided no actual services.       

Feliz admitted that from 2008 through July 2014, he and Ravelo controlled the Vendor 1 and Vendor 2 bank accounts and submitted invoices to Law Firm 1, Law Firm 2 and a client of both firms for work that was never performed. Ravelo, in her capacity as a partner at the law firms, approved payments to Vendor 1 and Vendor 2 that Ravelo and Feliz later used for personal expenses.  

Over the course of the conspiracy, the law firms paid Vendor 1 and Vendor 2 approximately $7.8 million. Feliz admitted that he failed to report the income on his tax returns, including $2.36 million in illicit profits from 2012 alone.

Separately, Feliz and co-defendants Irving Olivero-Pena, 48, of Edgewater, New Jersey, and Robert Crawford, 45, of Long Island City, New York, each previously pleaded guilty to their roles in a cocaine distribution scheme. They admitted that from January 2011 through March 2014, they conspired to purchase narcotics for distribution in New Jersey. On Oct. 22, 2012, they met a courier in Bergen County. They admitted that they gave the courier $549,950 in currency to transport to California via tractor trailer, where it would be used to purchase approximately 20 kilograms of cocaine. Afterwards, the courier would transport the cocaine to New Jersey for distribution. The currency was ultimately seized by law enforcement officers in California.

In addition to the prison term, Judge McNulty sentenced Feliz to five years of supervised release and ordered forfeiture of $7.9 million. Restitution will be determined at a later date. Ravelo was sentenced in October 2018 to five years in prison. Crawford was sentenced in July 2015 to 10 years in prison. Olivero-Pena is scheduled to be sentenced Nov. 9, 2020.

U.S. Attorney Carpenito credited special agents from the U.S. Drug Enforcement Administration (DEA), Newark Division, under direction of Special Agent in Charge Susan A. Gibson; 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 sentencing.

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 owner of a New Jersey-based scrap metal company has been arrested for allegedly orchestrating a scheme to defraud one of his customers, U.S. Attorney Craig Carpenito announced.

Creed White, a/k/a “Dan Stein,” 62, of Freeland, Maryland, is charged by complaint with four counts of wire fraud. White made his initial court appearance today by videoconference before U.S. Magistrate Judge Martin C. Carlson in Harrisburg, Pennsylvania, federal court.

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

In early 2017, White contacted the victim through an internet message board and offered to sell the victim aluminum scrap metal. White introduced himself as “Dan Stein.” White’s company, American Scrap LLC, sold the victim 25 containers of aluminum scrap metal in exchange for wire payments totaling approximately $629,973. The containers were shipped to Korea. When the first container arrived at its destination, the victim discovered that the container contained dirt and debris and no aluminum scrap metal. The victim reached out to White to complain and met him in person in Newark in March 2017. White, posing as “Dan Stein,” assured the victim that he would correct the mistake and reimburse the victim for the costs incurred in connection with the container that contained useless waste.

Prior to shipping the next container, White sent the victim photos of the contents of the container. The photos showed that the container was filled with aluminum scrap. There was a copy of the New York Post inside the container to document the date the photos were taken. However, each of the remaining containers arrived in Korea was filled with dirt, debris or plastic waste, and no aluminum. White promised to make the victim whole and sent wire transfers to the victim in the amount of $15,000, but then failed to make good on his promise, causing the victim losses in excess of $600,000. 

Each count of wire fraud carries a maximum potential penalty of 20 years in prison and a fine of $250,000 or twice the gross gain or loss derived from the offense, whichever is greater.

U.S. Attorney Carpenito 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 these charges.

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

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

NEWARK, N.J. – A New York man today admitted he defrauded credit card companies of hundreds of thousands of dollars, U.S. Attorney Craig Carpenito announced.

James Olla, 28, of Brooklyn, New York, pleaded guilty by videoconference before U.S. District Judge John Michael Vazquez to one count of a superseding indictment charging him with conspiracy to sell, receive or possess stolen goods.

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 in Brooklyn and elsewhere, often for large sums of cash.

The count of conspiracy to sell, receive or possess stolen goods carries a maximum potential penalty of five years in prison. Sentencing is scheduled for March 18, 2021.

U.S. Attorney Carpenito 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 Raimundo Marrero; and the U.S. Secret Service, under the direction of Special Agent in Charge Mark McKevitt, with the investigation leading to today’s guilty plea.

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.

TRENTON, N.J. – A Hunterdon County, New Jersey, man was sentenced today to 120 months in prison for possession of cocaine with intent to distribute and conspiring to distribute five kilograms or more of cocaine, U.S. Attorney Craig Carpenito announced.

Javier Maldonado, 46, of Hampton, New Jersey, previously pleaded guilty before U.S. District Judge Anne E. Thompson in Trenton federal court to an information charging him with one count of conspiracy to distribute and possess with the intent to distribute five kilograms or more of cocaine and one count of possession with intent to distribute over 500 grams of cocaine. Judge Thompson imposed the sentence by videoconference today.

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

In June 2019, Maldonado agreed with one or more other individuals to purchase 10 kilograms of cocaine. Law enforcement arrested Maldonado after he provided $280,000 to an individual to purchase the narcotics, which he intended to redistribute. A search of Maldonado’s residence revealed a large quantity of bulk cocaine, cutting agents, processing equipment, and packaging materials.

In addition to the prison term, Judge Thompson sentenced Maldonado to five years of supervised release.  

U.S. Attorney Carpenito credited special agents with the U.S. Drug Enforcement Administration, under the direction of Special Agent in Charge Ray Donovan in New York, with the investigation leading to these charges.

The government is represented by Assistant United States Attorney Shawn Barnes of the U.S. Attorney’s Office Organized Crime Drug Enforcement Task Force/Narcotics Unit.

NEWARK, N.J. – A Colorado man today admitted his role in a conspiracy to offer and sell unregistered securities and tax evasion in connection with a $722 million cryptocurrency mining scheme, U.S. Attorney Craig Carpenito announced. 

Jobadiah Sinclair Weeks, 39, of Arvada, Colorado, pleaded guilty by videoconference before U.S. District Judge Claire C. Cecchi to Count Two of an indictment, charging him with conspiracy to offer and sell unregistered securities. Weeks also pleaded guilty to a separate information charging him with tax evasion for the tax years 2015 through 2018.

Weeks and four co-defendants – Matthew Brent Goettsche, Russ Albert Medlin, Catalin Balaci, and Joseph Frank Abel – were charged by indictment in December 2019 in connection with the scheme.

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

From April 2014 through December 2019, the BitClub Network was a fraudulent scheme that solicited money from investors in exchange for shares of purported cryptocurrency mining pools and rewarded investors for recruiting new investors into the scheme. Weeks operated as a large-scale promoter of the BitClub Network, and sold shares despite knowing that the BitClub Network and its operators did not file a registration statement with the U.S. Securities and Exchange Commission.

Weeks admitted taking money from investors in exchange for shares of the BitClub Network’s purported mining pools. He admitted that in order to promote shares, he created and posted videos to the internet and gave presentations and speeches about the BitClub Network throughout the United States and in numerous countries throughout the world. Weeks instructed investors in the United States to use a virtual private network, or “VPN,” to hide their U.S.-based IP addresses and evade detection and regulation by U.S. law enforcement.

Weeks also admitted not filing tax returns and failing to report at least $10 million in income, including cryptocurrency income earned from his association with the BitClub Network, for the tax years 2015 through 2018.

The conspiracy charge to which Weeks pleaded guilty carries a maximum penalty of five years in prison and a fine of $250,000, or twice the pecuniary gain to the defendant or loss to the victims. The tax charge to which Weeks pleaded guilty carries a maximum penalty of five years in prison and a fine of $100,000.  Sentencing is scheduled for March 17, 2021.

U.S. Attorney Carpenito credited special agents and task force officers of the FBI Los Angeles Division’s West Covina Resident Agency, under the direction of Assistant Director in Charge Kristi K. Johnson; special agents of IRS - Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez in Newark and special agents of the IRS Los Angeles Field Office, under the direction of Special Agent in Charge Ryan L. Korner, who conducted this investigation under the initiative of the Joint Chiefs of Global Tax Enforcement; the FBI Criminal Investigative Division, under the supervision of Assistant Director Calvin A. Shivers, and the Financial Crimes Section, under the leadership of Section Chief Steven Merrill; and members of the Ventura Police Department with the investigation leading to today’s guilty plea.

Anyone who believes they may be a victim may visit www.justice.gov/usao-nj/bitclub or the Department of Justice’s large case website www.justice.gov/largecases. Victims can find more information about the case, including a questionnaire for victims to fill out and submit.

The government is represented by Unit Chief David W. Feder, Assistant U.S. Attorneys Jamie L. Hoxie and Anthony P. Torntore of the Cybercrime Unit, and Unit Chief Sarah Devlin and Assistant U.S. Attorney Joseph Minish of the Asset Recovery and Money Laundering Unit, of the U.S. Attorney’s Office in Newark.

NEWARK, N.J. –U.S. Attorney Craig Carpenito today announced more than $2.9 million in Department of Justice grants to fight and prevent violent crime in the District of New Jersey. The grants, awarded by the Department’s Office of Justice Programs, are part of more than $458 million in funding to support state, local and tribal law enforcement efforts to combat violent crime in jurisdictions across the United States.

“One of the fundamental missions of government is to protect its citizens and safeguard the rule of law,” said Attorney General William P. Barr. “The Department of Justice will continue to meet this critical responsibility by doing everything within its power to help our state, local and tribal law enforcement and criminal justice partners fight crime and deliver justice on behalf of all Americans.”

“Combatting violent crime has been a top priority of our office,” U.S. Attorney Carpenito said. “It’s a job that requires resources and cooperation among all levels of law enforcement. We have worked incredibly hard to develop strategies that allow us to combine the efforts of our local, state and federal partners to keep our citizens safe. The grants announced today will provide us with additional tools in that effort.”

The funding announced today continues the Justice Department’s commitment to reducing crime and improving public safety. Recent data from the FBI and the Bureau of Justice Statistics for 2019 show a drop in crime and serious victimization for the third year in a row. However, a number of cities are experiencing conspicuous countertrends. Today’s grants will bolster crime-fighting efforts in those communities and in jurisdictions throughout the United States.

“Violence has become a tragic reality in too many of America’s communities,” OJP Principal Deputy Assistant Attorney General Katharine T. Sullivan said. “Working with officials across the Trump Administration and with thousands of state, local and tribal crime-fighters across the country, the Department of Justice is leading the response to this urgent challenge. OJP is pleased to make these resources available to support innovative, tested and diverse solutions to violent crime.”

Of the more than $458 million awarded nationwide, OJP’s Bureau of Justice Assistance (BJA) made 1,094 grants totaling more than $369 million to support a broad range of initiatives, including efforts in enforcement, prosecution, adjudication, detention and rehabilitation.

OJP’s Office of Juvenile Justice and Delinquency Prevention awarded more than $10 million across 24 jurisdictions to intervene in and suppress youth gang activity as well as $1 million to the Institute for Intergovernmental Research to continue operating the National Gang Center. OJP’s National Institute of Justice awarded $7.8 million to fund research and evaluation on the prevention and reduction of violent crime. OJP’s Bureau of Justice Statistics provided more than $69 million to strengthen the quality and accessibility of records within the National Instant Criminal Background Check System.

The following organizations received funding:

BJA Community-Based Crime Reduction

CBCR leverages community knowledge and expertise to focus enforcement efforts on

crime “hot spots” ‒ neighborhoods where crime is concentrated. To generate long-term impacts, the program addresses a range of challenges.

• Newark Community Street Team, $915,000

 

BJA Strategies for Policing Innovation

Through SPI, BJA works with state and local law enforcement agencies and researchers to identify innovative and evidence-based strategies to tackle chronic crime in their jurisdictions.

• City of Atlantic City, $699,990

 

BJA Innovative Prosecution Solutions for Combatting Violent Crime

The program provides state, local and tribal prosecutors with resources, training and technical assistance to implement technology and develop strategies and programs to address and prosecute individuals who commit violent crime.

• Cumberland County, $135,000

 

OJJDP Gang Prevention, Intervention, and Suppression

More than $10 million was awarded to 24 jurisdictions under OJJDP’s Comprehensive Anti-Gang Programs for Youth. These programs provide funding for communities to develop youth gang intervention or suppression programs that aim to reduce violence.

Category I: Intervention

• Cumberland County, $499,791

 

National Criminal History Improvement Program

NCHIP enhances the quality, completeness, and accessibility of criminal history record information to state, territory and federal systems used by the NICS and ensures the nationwide implementation of criminal justice and noncriminal justice background check systems.

• N.J. Department of Law and Public Safety, $666,616

 

For a complete list of individual grant programs, award amounts, and jurisdictions that will receive funding, click here. More information about OJP and its components can be found at www.ojp.gov

CAMDEN, N.J. – The leader of an Atlantic City drug-trafficking organization was sentenced today to 135 months in prison for conspiring to distribute one kilogram or more of heroin, U.S. Attorney Craig Carpenito announced.

Khalif Toombs, 31, of Egg Harbor Township, New Jersey, previously pleaded guilty before U.S. District Judge Robert B. Kugler to an information charging him with one count of conspiracy to distribute and possess with intent to distribute more than one kilogram of heroin. Judge Kugler imposed the sentence today in Camden federal court.

Toombs guilty plea was charged as part of a federal drug investigation that culminated in the arrest of 22 individuals. Thirteen other members of the drug trafficking conspiracy – Wilbert Toombs, Quadir Stanley, Dean Johnson, Khalif Davis, Joseph Aversa, Thomas Randall, Mayda Hernandez, Sarah Taliaferro, James Blackwell, Philip Surace, Nasir Brown, Karon Carey, and David Ramirez – previously pleaded guilty to their respective roles in the conspiracy. Eight other defendants have been indicted for their roles in the conspiracy and their cases remain pending.  

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

Toombs and other members of the drug conspiracy trafficked heroin from Paterson, New Jersey, into Atlantic City, New Jersey. Toombs admitted in court to conspiring with others to traffic between three and 10 kilograms of heroin during the period of the investigation and to being a manager and supervisor of the drug trafficking conspiracy, which operated throughout Atlantic County. An investigation led by the FBI used physical and video surveillance, confidential informants, consensual recordings, and two court-authorized wiretaps to uncover the operation. The investigation tracked multiple stamps of heroin being distributed by Toombs and others, including, “AK-47,” “Apple,” “Fortnite,” “Rolex,” “Frank Lucas,” “Bentley,” “Pandora,” and “9 ½.” Between Jan. 1, 2017, and June 21, 2019, these stamps have accounted for 48 deaths and 84 non-fatal overdoses in New Jersey.

In addition to the prison term, Judge Kugler sentenced Toombs to five years of supervised release.

U.S. Attorney Carpenito credited special agents of the FBI’s Safe Streets South Jersey Violent Incident and Gang Task Force, Atlantic City Resident Agency, and FBI, Newark, under the direction of Special Agent in Charge George M. Crouch Jr.; officers of the Atlantic City Police Department, under the direction of Chief James Sarkos; the Atlantic County Prosecutor’s Office, under the direction of Prosecutor Damon Tyner; the Atlantic County Sheriff’s Department, under the direction of Sheriff Eric Scheffler; and the Pleasantville Police Department, under the direction of Chief Sean Riggin, with the investigation leading to today’s sentencing. He also thanked the U.S. Department of Homeland Security, Homeland Security Investigations; the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives; the Drug Enforcement Administration; and the N.J. State Police for their assistance.

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.

The government is represented by Assistant U.S. Attorney Martha K. Nye of the U.S. Attorney’s Office Criminal Division in Trenton.

For the eight defendants whose charges remain pending, the charges and allegations are merely accusations, and they are presumed innocent unless and until proven guilty.

CAMDEN, N.J. – A Gloucester County, New Jersey, man pleaded guilty today to producing and distributing images of child sexual abuse, U.S. Attorney Craig Carpenito announced.

Andrew Nicholas, 24, of Williamstown, New Jersey, entered a guilty plea before U.S. District Judge Robert B. Kugler to an information charging him with one count of sexually exploiting children and one count of distributing child pornography.

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

On Feb. 26, 2019, an undercover officer entered a public Kik Messenger group and began communicating with Nicholas, who sent the officer images of child sexual abuse involving a prepubescent minor. Nicholas admitted to producing those images of child sexual abuse and sending them to the officer through Kik Messenger.

The count of sexually exploiting children carries a mandatory minimum penalty of 15 years in prison, a maximum potential penalty of 50 years in prison and a $250,000 fine. The distribution of child pornography count carries a mandatory minimum penalty of five years in prison, a maximum possible penalty of 40 years in prison and fine of $250,000 per count. Sentencing is scheduled for March 9, 2021.

U.S. Attorney Carpenito credited special agents of the FBI, Philadelphia Division, under the direction of Special Agent in Charge Michael J. Driscoll, and the Washington, D.C., FBI Field Office, under the direction of Assistant Director in Charge Steven D’Antuono, with the investigation leading to today’s guilty plea. This case was initiated by the FBI, Washington Field Office’s Child Exploitation and Human Trafficking Task Force and worked in partnership with the FBI, Philadelphia Field Office, and local assisting agencies. 

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

NEWARK, N.J. – The former president of the Jersey City Board of Education (JCBOED) and former Acting Executive Director of the Jersey City Employment and Training Program (JCETP) and an Ocean County, New Jersey, attorney were indicted today for embezzlement, money laundering, and fraud in connection with multiple criminal schemes, U.S. Attorney Craig Carpenito announced.

The former president of the Jersey City Board of Education (JCBOED) and former Acting Executive Director of the Jersey City Employment and Training Program (JCETP) and an Ocean County, New Jersey, attorney were indicted today for embezzlement, money laundering, financial fraud in connection with multiple criminal schemes, U.S. Attorney Craig Carpenito announced.

Sudhan M. Thomas, 45, of Jersey City, New Jersey, was charged in a 26-count indictment with embezzling funds from JCETP, an organization receiving federal funds (Count 1), and wire fraud (Counts 2 to 6) and money laundering (Counts 7 to 9) in connection with the JCETP theft. In connection with other schemes, Thomas was charged with wire fraud for embezzling money from his 2016 JCBOED campaign (Count 10); wire fraud for embezzling money from his 2019 JCBOED campaign (Counts 11 and 12); bank fraud for stealing checks issued by and to another JCBOED candidate’s campaign in 2018 (Counts 13 and 14); and mail and wire fraud for schemes to defraud two separate Florida companies (Counts 15 to 26). Thomas was charged by criminal complaint in January 2020 with embezzling funds from JCETP and was released on a $75,000 unsecured bond.

Paul H. Appel, 78, of Point Pleasant, New Jersey, also is charged as Thomas’ accomplice in Counts 1, 7 to 10, and 15 to 26 of the indictment.

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

Thomas served as JCETP’s acting executive director from January 2019 until his resignation in July 2019. JCETP is a nonprofit organization that operates to assist Jersey City residents to prepare for and enter the workforce. JCETP received substantial amounts of funding from federal grants from the U.S. Department of Labor and the U.S. Department of Housing and Urban Development.

Using his access to JCETP funds and control of JCETP’s bank accounts, from March 2019 through July 2019, Thomas embezzled more than $45,000 from JCETP. Thomas caused checks to be drawn from JCETP accounts that were made payable to others, but ultimately received by Thomas or used to pay his debts and expenses. For example, Thomas caused certain checks to be issued to Appel, who is an attorney, and Appel then redirected the funds to Thomas, including by issuing checks made payable to Next Glocal, an entity for which Thomas was a director, which were then deposited into a bank account for Next Glocal that Thomas controlled. Thomas also embezzled JCETP funds by issuing JCETP checks made out to cash that Thomas either cashed himself or used to obtain bank checks that Thomas made payable to Next Glocal, which were deposited into a bank account for Thomas’ personal use.

Thomas ran for and was elected to a seat on the JCBOED in 2016, ultimately serving as vice president and then president of the JCBOED. Appel served as treasurer for Thomas’s 2016 campaign. From September 2016 to November 2016, Thomas and Appel collected campaign contributions and deposited them into a bank account opened for the 2016 campaign that they both controlled. Under the guise of collecting repayments for loans to the campaign or reimbursement for other purported campaign-related expenses, Thomas and Appel embezzled more than $8,000 from Thomas’s 2016 campaign for their own personal use.

Thomas ran for re-election to the JCBOED in 2019. From June 2018 to August 2019, Thomas collected campaign contributions and deposited them into two bank accounts opened for the 2019 campaign. Under the guise of collecting repayments for loans to the campaign, Thomas embezzled approximately $6,000 from the 2019 campaign by causing checks to be issued from the campaign bank accounts made payable to Thomas, and then cashed those checks or deposited them into a bank account for Thomas’s personal use. 

In November 2018, Thomas informally advised a candidate in the 2018 JCBOED election. He falsely represented to that candidate’s campaign that he required $100 checks to pay eight separate individuals who worked on the candidate’s campaign. When the campaign provided Thomas with the requested checks, Thomas fraudulently endorsed the checks and deposited them into a bank account for his personal use. In addition, Thomas obtained a $1,000 contribution check made payable to the candidate’s 2018 campaign committee; Thomas fraudulently endorsed that check and deposited it into a bank account for his personal use.

In 2016, Thomas and Appel entered into an agreement with a Florida-based technology company to purportedly expand the company’s business through a debit card program. Between May 2016 and October 2016, Thomas and Appel made false representations regarding work they were allegedly undertaking pursuant to the agreement and induced the technology company to wire them a total of $48,500. Thomas and Appel ultimately diverted the company’s funds to their own bank accounts and used them to pay personal expenses (including payments to Thomas’ landlord, tuition for Thomas’s relative, and payments for Appel’s credit and debit card expenses) without providing any meaningful services or generating any business as required under the agreement, or spending any substantial parts of the funds provided by the technology company towards fulfilment of the agreement. 

In 2016, Thomas and Appel entered into another agreement with a Florida-based housing company in connection with the purported sale of modular homes to veterans and the homeless.  Between October 2016 and April 2017, Thomas and Appel made false representations regarding work they would undertake pursuant to the agreement in order to collect monthly $2,000   payments from the housing company. The housing company made five $2,000 payments to Thomas and Appel between November 2016 and March 2017. Thomas and Appel misappropriated the funds without providing any meaningful services or generating any business as required under the agreement, or spending any substantial part of the funds towards fulfilment of the agreement.

The charges in the indictment carry the following maximum penalties:

Offenses Charged

Maximum Term of Imprisonment

Maximum Fine

Theft from a federally-funded organization

10 years

$250,000

Wire fraud

20 years

$250,000

Mail fraud

20 years

$250,000

Bank fraud

30 years

$1 million

Money laundering

20 years

$500,

U.S. Attorney Carpenito credited special agents with the FBI, under the direction of Special Agent in Charge George M. Crouch Jr., and special agents of the U.S. Department of Labor, Office of Inspector General, New York Region, under the direction of Special Agent in Charge Michael C. Mikulka with the investigation leading to the charges.

The government is represented by Assistant U.S. Attorney Tazneen Shahabuddin of the Special Prosecutions Division in Newark.

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

CAMDEN, N.J. – A Salem County, New Jersey, man made his initial appearance today after being charged with illegally possessing a handgun, U.S. Attorney Craig Carpenito announced.

Donyell M. Stewart, 48, of Salem, New Jersey, is charged by complaint with one count of possession of a firearm and ammunition by a convicted felon. He appeared by videoconference before U.S. Magistrate Judge Ann Marie Donio and was detained pending a bail hearing next week.

According to documents filed in this case:

On Aug. 31, 2020, an officer with the Salem County Sheriff’s Office attempted to conduct a stop of Stewart’s car after a 911 caller reported that Stewart’s car fled from a car accident. Stewart disregarded the officer’s signals to stop and proceeded to drive multiple blocks before pulling into the parking lot of a laundromat. Stewart exited his car with a brown handbag, from which officers later recovered a Springfield Armory XD .40 caliber pistol loaded with 10 rounds of ammunition, as well as 5.5 ounces of suspected cocaine and drug paraphernalia.  Stewart has at least five prior New Jersey felony convictions for controlled substance offenses, including a New Jersey conviction for being the leader of a narcotics trafficking network. 

The charge of possession of a weapon by a convicted felon is punishable by 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.

U.S. Attorney Carpenito credited special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Charlie J. Patterson, Newark Field Division, Camden Field Office, with the investigation leading to today’s charge.  He also thanked the Salem City Police Department, under the direction of Chief John A. Pelura, III; the Salem County Sheriff’s Office, under the direction of Sheriff Charles M. Miller; and the Salem County Prosecutor’s Office, under the direction of Prosecutor John T. Lenahan, for their assistance. 

The government is represented by Assistant U.S. Attorney Jeffrey Bender of the U.S. Attorney’s Office 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 Philadelphia man today admitted his role in a fentanyl distribution conspiracy, U.S. Attorney Craig Carpenito announced. 

Jonathan Rivera Pagan, 37, pleaded guilty by videoconference before U.S. District Judge Noel L. Hillman to an information charging him with conspiring to distribute and possess with intent to distribute 400 grams or more of fentanyl. 

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

In early 2020, Rivera Pagan and his conspirator, Ronal Alberto Hernandez Pinales, met and communicated about fentanyl trafficking and firearms. On March 2, 2020, Rivera Pagan and Hernandez Pinales arranged to deliver fentanyl to another individual.

On March 2, 2020, Rivera Pagan and Hernandez Pinales drove separately to the parking lot of a building in Gloucester County to conduct the planned fentanyl transaction. Shortly thereafter, Rivera Pagan and Hernandez Pinales fled from the parking lot, after seeing what they believed to be law enforcement presence in the area. Rivera Pagan was later arrested in the parking lot of a nearby bar, and Hernandez Pinales was arrested near a highway. Law enforcement officers recovered approximate 900 grams of fentanyl from Hernandez Pinales’ car, as well as cellphones from Rivera Pagan and Hernandez Pinales that contained drug-related communications.

The charge to which Pagan pleaded guilty carries a mandatory minimum penalty of 10 years in prison, a maximum penalty of life in prison and a fine of up to $10 million. Sentencing is scheduled for March 5, 2021.

U.S. Attorney Carpenito credited special agents and task force officers with the Drug Enforcement Administration, under the direction of Special Agent in Charge Susan A. Gibson in Newark, with the investigation leading to today’s plea. He also thanked the Gloucester County Prosecutors Office, the East Greenwich Police Department, and the N.J. State Police Canine Tactical Applications Group for their assistance.

The government is represented by Assistant U.S. Attorney Sara A. Aliabadi of the U.S. Attorney’s Office Criminal Division in Camden.

The count of conspiracy to distribute and possess with intent to distribute 400 grams or more of fentanyl against Hernandez Pinales remains pending, and he is presumed innocent unless proven guilty.

TRENTON, N.J. – A Passaic County, New Jersey, man today admitted to assaulting with a dangerous weapon two people who were swimming in the Delaware River, U.S. Attorney Craig Carpenito announced.

Jeffrey A. Mulcahy, 58, of Wayne pleaded guilty by videoconference before U.S. District Judge Michael A. Shipp to an information charging him with one count of assault with a dangerous weapon with intent to do bodily harm.

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

On Sept. 2, 2019, two individuals (Victim 1 and Victim 2) were swimming in the Delaware River in the Kittatinny Point area of the Delaware Water Gap in Warren County, New Jersey. Mulcahy approached them and began speaking to them about fishing. After a few minutes, Mulcahy departed the area, returning approximately 15 minutes later, holding a can of beer. He continued to talk to Victim 1 and Victim 2 about fishing, however, Mulcahy appeared agitated. Victim 1 and Victim 2 had gotten out of the river and were standing near the riverbed.    Mulcahy removed what appeared to be a handgun from his waistband and pointed it at Victim 2’s head. While pointing the gun at Victim 2, Mulcahy ordered Victims 1 and 2 to the ground.  Mulcahy then pointed the gun at Victim 1 and stated that he was going to kill Victim 1 if Victim 1 did not listen to him. Mulcahy struck Victim 1 in the head and neck area with the handgun.  Mulcahy then began pulling rope out of his pocket and attempted to get Victim 1’s hands behind Victim 1’s back. Victim 1 resisted and was able to take Mulcahy to the ground, where the two began a physical struggle. Mulcahy’s handgun fell to the ground and Victim 2 recovered it and left to contact law enforcement. After the brief physical altercation, Victim 1 ran off to a nearby picnic area to locate Victim 2. Mulcahy departed the area and was later apprehended by law enforcement officers in Hackettstown, New Jersey. Subsequent investigation of the handgun that Victim 2 recovered from Mulcahy revealed that it was a pellet gun. 

The charge of assault with a dangerous weapon with intent to do bodily harm carries a maximum punishment of 10 years in prison and a fine of up to $250,000. Sentencing is scheduled for March 4, 2021.

U.S. Attorney Carpenito credited park rangers of the U.S. National Park Service, under the direction of Chief Ranger Eric Lisnik, the Hackettstown Police Department, under the direction of Chief James A. Macaulay, and the N.J. State Police, under the direction of Col. Patrick J. Callahan, with the investigation leading to today’s guilty plea. 

The government is represented by Assistant U.S. Attorney Nicholas P. Grippo, Deputy Chief of the Criminal Division in Newark.

NEWARK, N.J. – A Bergen County, New Jersey, doctor today admitted participating in a conspiracy to violate the federal anti-kickback statute, U.S. Attorney Craig Carpenito announced.

Mark A. Filippone, 72, of Wallington, New Jersey, pleaded guilty today by videoconference before U.S. District Judge Susan D. Wigenton to an information charging him with conspiring to violate the anti-kickback statute with three individuals: Joseph Vangelas, a/k/a “Joseph Miller,” 34, of Fort Lee, New Jersey; Marlene Vangelas, 59, of River Vale, New Jersey; and Zachary Ohebshalom, 34, of Fort Lee, New Jersey. Criminal charges against Miller and Marlene Vangelas remain pending. Ohebshalom previously pleaded guilty for his role in the conspiracy, and Estela Blaustein, 55 of Mahwah, New Jersey, also previously pleaded guilty for her role in a related conspiracy to commit health care fraud. 

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

Beginning in May 2016, Filippone participated in a kickback conspiracy scheme to obtain millions of dollars in health benefits from the federal workers’ compensation program by prescribing and dispensing expensive, but medically unnecessary, pain creams. Filippone treated hundreds of now-former U.S. Postal Service employees for injuries they purportedly suffered on the job. He allegedly facilitated their disability claims by submitting forms and medical reports to the Department of Labor, Office of Workers’ Compensation Program, for patients who were not, in fact, disabled.

Filippone also prescribed expensive topical pain creams, which were not needed or wanted by many of his patients. Filippone steered these prescriptions to a pharmacy in Fair Lawn, New Jersey, which was owned and operated by Miller and Marlene Vangelas. Miller and Marlene Vangelas, along with Ohebshalom, directed pharmacy employees to mine reimbursement rates within the federal workers’ compensation program for the ingredients of the pain creams in order to determine the most lucrative formulations. Miller, Marlene Vangelas, and Ohebshalom also directed pharmacy employees to print prescription labels for Filippone to use with his patients. Filippone used the pre-printed labels and sent the prescriptions back to the Fair Lawn Pharmacy. In order to induce Filippone to prescribe the medically unnecessary pain creams in the exact formulations they wished to obtain, Miller and Marlene Vangelas orchestrated the purchase of Filippone’s medical office and then permitted Filippone to continue to use the premises, for which he routinely failed to pay rent. Miller, Marlene Vangelas, and Ohebshalom conspired to leverage the property to force Filippone to continue to send prescriptions to their pharmacy. Filippone continued to feed prescriptions to the pharmacy, so long as Miller and Vangelas permitted him to remain rent-free in the property.

The count of conspiracy to violate the federal anti-kickback statute 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 March 3, 2021.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark; the U.S. Postal Service, Office of Inspector General, under the direction of Special Agent in Charge of the Northeast Area Field Office Matthew M. Modafferi; the Department of Labor, Office of Inspector General, New York Region, under the direction of Special Agent in Charge Michael C. Mikulka; 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.

The government is represented by Assistant U.S. Attorneys Joshua L. Haber and Nicole F. Mastropieri of the Health Care Fraud Unit in the Criminal Division, Newark.

The charges and allegations in the information pertaining to Miller and Marlene Vangelas are merely accusations, and they are presumed innocent unless and until proven guilty.

NEWARK, N.J. – A Morris County, New Jersey, man was arrested and three co-defendants pleaded guilty today in connection with a conspiracy to commit bank fraud and bank bribery, U.S. Attorney Craig Carpenito announced.

Kurt Phelps, 52, of Flanders, New Jersey, was charged by complaint with one count of conspiracy to commit bank fraud and one count of bank bribery. He made his initial appearance by videoconference today before U.S. Magistrate Judge Mark Falk and was released on $100,000 unsecured bond.

Three co-defendants pleaded guilty by videoconference before U.S. District Judge Kevin McNulty to their respective roles in the scheme: Douglas Arbolino, 59, of Central Valley, New York, and Gary Swenson, 59, of Hardyston, New Jersey, each pleaded guilty to informations charging them with one count of conspiracy to commit bank fraud and one count of bribery of a bank official; and John Scott Brink, 59, of Jackson, New Jersey, pleaded guilty to an information charging him with one count of conspiracy to commit bank fraud.

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

From 2013 through 2019, Phelps, Arbolino, Swenson, and Brink, conspired to defraud Victim Bank-1, Phelps’s employer. The defendants obtained millions of dollars of credit from Victim Bank-1 for Starnet Business Solutions Inc. (Starnet), a now-defunct New Jersey-based printing company where Arbolino, Swenson, and Brink worked. Arbolino, Swenson, and Brink paid Phelps large cash bribes in connection with the fraud scheme

In 2013, Starnet provided materially false financial information to Victim Bank-1 and received a line of credit. Brink sent Victim Bank-1 inflated accounts receivable information, and Arbolino and Swenson provided other materially false financial information, such as semi-annual financial reports. Victim Bank-1 not only allowed Starnet to maintain the line of credit, it increased the credit available at various times. By 2018, the line of credit available to Starnet was worth approximately $8 million, and Starnet has not repaid it.

Phelps was aware that financial information Starnet provided to Victim Bank-1 was materially false. Phelps coached Starnet on how to defraud Victim Bank-1. Phelps would review draft financial information for Starnet and provide feedback on how his conspirators should falsify the information before submitting it. Phelps also worked to ensure that Victim Bank-1 did not detect the fraud scheme by helping Starnet avoid audits and other quality control measures employed by Victim Bank-1. 

Phelps solicited large cash bribes – tens of thousands of dollars at a time – from Starnet in connection with the fraud scheme. Arbolino, Swenson, and Brink pooled cash to pay Phelps bribe payments, which were hand-delivered, and totaled hundreds of thousands of dollars. 

The conspiracy to commit bank fraud, bribery of a bank official, and bank bribery charges each carry a maximum potential penalty of 30 years in prison and a $1 million fine, or twice the gross gain or loss from the offense.

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

U.S. Attorney Carpenito 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 arrest and guilty pleas.

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

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

NEWARK, N.J. – A federal grand jury today indicted a Union County, New Jersey, man for allegedly persuading, inducing and enticing numerous female victims, usually commercial sex workers, to travel in interstate or foreign commerce to engage in prostitution and other sexual acts, often by use of force, violence and threats, U.S. Attorney Craig Carpenito announced.

Jose Torres, 43, of Elizabeth, New Jersey, was charged in a second superseding indictment with his fifth and sixth counts of coercing and enticing commercial sex workers, and will be arraigned on those counts on a date to be determined. Torres was originally charged by complaint in February 2020 with two counts of coercing and enticing commercial sex workers. On May 29, 2020, he was indicted on three counts, including a third count involving another victim. On July 31, 2020, he was indicted on a fourth count involving another victim.

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

From May 2015 to October 2019, Torres persuaded, induced and enticed female victims, often commercial sex workers, to travel from various out of state locations, including Canada, New York, and Pennsylvania, in order to engage in prostitution with him. In each instance, Torres lured a female victim to New Jersey with promises of large payments. In three of the previously charged instances, when the victim asked for payment, Torres became aggressive, often assaulting and raping victim. Torres never paid the women. The two recently charged counts involve allegations that in December and November of 2015, Torres lured Victim-5 and Victim-6, respectively, to travel from New York to New Jersey to engage in prostitution.

The coercion and enticement charge carries a maximum term of 20 years in prison and a fine of up to $250,000 fine for each count.

U.S. Attorney Carpenito 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 Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Jason J. Molina, with the investigation leading to the charges.

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

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

TRENTON, N.J. – A Texas man was sentenced today to 24 months in prison for conspiring to distribute heroin, fentanyl and methamphetamine, U.S. Attorney Craig Carpenito announced.

Juan Macias Prieto, 53, of El Paso, Texas, previously pleaded guilty before U.S. District Judge Anne E. Thompson in Trenton federal court to one count of conspiracy to distribute and possess with the intent to distribute one kilogram or more of heroin, 400 grams or more of fentanyl, and five grams or more of methamphetamine, and one count of possession with intent to distribute one kilogram or more of heroin, 400 grams or more of fentanyl, and five grams or more of methamphetamine. Judge Thompson imposed the sentence by videoconference today.

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

On Sept. 17, 2019, Macias Prieto conspired with others to distribute narcotics. Macias Prieto, a commercial truck driver, transported approximately 21 kilograms of narcotics into New Jersey with the intent to distribute the narcotics to conspirators. 

In addition to the prison term, Judge Thompson sentenced Macias Prieto to three years of supervised release.

U.S. Attorney Craig Carpenito credited special agents of the Drug Enforcement Administration, under the direction of Special Agent in Charge Ray Donovan in New York, with the investigation leading to today’s sentencing. 

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

CAMDEN, N.J. – The owner of a Wildwood Crest, New Jersey, pizzeria was sentenced today to 15 months in prison for filing false income tax returns, U.S. Attorney Craig Carpenito announced.

Giuseppe D’Arancio, 61, of Cape May Court House, New Jersey, previously pleaded guilty before U.S. District Judge Joseph H. Rodriguez to an information charging him with five counts of filing a false income tax return for tax years 2012 through 2016. Judge Rodriguez imposed the sentence today in Camden federal court.

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

D’Arancio and another individual owned and operated a pizzeria and kept two sets of accounting books. For tax years 2012 through 2016, D’Arancio knowingly filed false tax returns which underreported the pizzeria’s taxable income by approximately $1.2 million. As a result, D’Arancio failed to pay more than $425,000 in income taxes.

In addition to the prison term, Judge Rodriguez sentenced D’Arancio to one year of supervised release and ordered him to pay $507,246 in restitution to the IRS.

U.S. Attorney Carpenito credited special 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 Diana Vondra Carrig of the U.S. Attorney's Office Criminal Division in Camden.

NEWARK, N.J. – A Bergen County, New Jersey, man made his initial court appearance today on charges of conspiring to commit money laundering, U.S. Attorney Craig Carpenito announced.

Ramfis Minaya, 23, of Englewood, New Jersey, is charged by complaint with one count of conspiracy to commit money laundering. He appeared by videoconference today before U.S. Magistrate Judge Leda Dunn Wettre.

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

Since 2019, the U.S. Drug Enforcement Administration (DEA) has been investigating a drug trafficking and money laundering organization (“DTO/MLO”) operating in Mexico, New York, New Jersey, and elsewhere. During the course of this investigation, law enforcement learned that the organization conducts money laundering transactions through the use of couriers with the objective of repatriating narcotics proceeds to narcotics source countries.

In August 2020, law enforcement identified Minaya as a member of the organization, responsible for the transportation and delivery of significant quantities of narcotics proceeds. Since August 2020, law enforcement has seized more than $5 million from money laundering transactions and stashes of narcotics proceeds in which Minaya was directly involved.

For example, on Oct. 27, 2020, law enforcement officers observed Minaya exit his residence and provide another individual (Individual-2) a bag that was eventually determined to contain approximately $100,000 in narcotics proceeds. Officers later saw Minaya exit his home with a bag that was determined to contain another $100,000 in narcotics proceeds.

The charge of conspiracy to commit money laundering, carries a maximum penalty of 20 years in prison, and a $500,000 fine, or twice the amount of money involved in the offense, whichever is greater.

U.S. Attorney Carpenito credited special agents and Task Force Officers with the DEA, under the direction of Special Agent in Charge Susan A. Gibson, with the investigation leading to these 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 charge and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

NEWARK, N.J. – Three men have been charged with various sex offenses after attempting to have sexual contact with individuals they believed to be children they met online, U.S. Attorney Craig Carpenito announced today.

Quentin Anthony Blount, 28, of Easton, Pennsylvania, Jesus Modesto Sanchez, 29, of New York City, and Ryan Lee, 35, of Trenton, New Jersey, are charged in separate complaints: Blount is charged with interstate travel with the intent to engage in illicit sexual conduct and attempted sex trafficking of a minor; Modesto Sanchez is charged with interstate travel with the intent to engage in illicit sexual conduct and possession of child pornography; and Lee is charged with attempted online enticement and attempted transfer of obscene materials to minors. Blount and Lee made their initial appearances by videoconference before U.S. Magistrate Judge James B. Clark III on Oct. 23, 2020, and were detained. Modesto Sanchez is expected to make his initial appearance later this week.

“Sexual crimes against children are among the most difficult cases we handle,” U.S. Attorney Carpenito said. “I am proud my office is working hand in hand with our partners at the FBI and the Somerset County Prosecutor’s Office to make sure these predators are identified and prosecuted with all the tools at our disposal.”

“Our children and their online safety is the utmost concern to us at the Somerset County Prosecutor’s Office,” Somerset County Prosecutor Michael Robertson said. “Social media apps allow predators into our homes and as law enforcement, we must do what we can to make it a safer environment. We hope that this operation will continue to be eye-opening for parents. Although, 12 online child predators have been arrested, parents must learn the apps that their children are using and the inherent dangers within.”

“Children are our most vulnerable population, and crimes such as these are unthinkable,” Special Agent in Charge George M. Crouch Jr. of the FBI Newark Division said. The FBI and our law enforcement partners will stop at nothing to prevent these heinous crimes, safeguard our children, and bring justice to all.”

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

Special agents of the FBI and local law enforcement engaged in an operation targeting individuals who use the internet to exploit children. Blount, Modesto Sanchez and Lee were among several individuals identified and arrested.

On Oct. 15, 2020, Blount used an internet-based application to communicate with an individual who he believed was offering her 14-year-old daughter for sex in exchange for money. Unbeknownst to Blount, he was communicating with an undercover law enforcement officer. Blount travelled from Easton to a location in Somerset County, New Jersey, to meet with the mother and the minor. Upon his arrival, he provided a sum of cash to the undercover officer, who Blount believed was the child’s mother, and was arrested by law enforcement.

In mid-October 2020, Modesto Sanchez used an internet-based application to communicate with an undercover officer who Modesto Sanchez believed was a 13-year-old child. During the conversation, Modesto Sanchez offered to perform various sex acts. On Oct. 17, 2020, Modesto Sanchez travelled from New York to a location in Somerset County to meet with the child. Law enforcement identified Modesto Sanchez as he approached the location where he believed the minor to be, at which time he was arrested by law enforcement. A search of Modesto Sanchez’ cellular telephone revealed over 200 videos depicting the graphic sexual exploitation of children.

In mid-October 2020, Lee used an internet-based application to communicate with an undercover officer, who Lee believed was a 13-year-old child. During the conversations, which were sexual in nature, Lee repeatedly asked the individual who he believed was 13 to send him nude photographs, while also sending multiple photographs of his penis to the undercover officer. On Oct. 17, 2020, Lee travelled from Trenton to a location in Somerset County where he believed the minor was located. Law enforcement identified Lee as he approached the location and arrested him.

The charges of attempted sex trafficking of a minor and attempted online enticement each carry a mandatory minimum of 10 years in prison and a maximum penalty of life in prison. The charge of interstate travel with the intent to engage in illicit sexual conduct carries a maximum penalty of 30 years in prison. The charge of transferring obscene materials to a minor carries a maximum term of 10 years in prison. The charge of possession of child pornography carries a maximum penalty of 10 years in prison. Each count carries a fine of up to $250,000.

U.S. Attorney Carpenito credited special agents with the FBI, under the direction of Special Agent in Charge George M. Crouch Jr.; detectives with the Somerset County Prosecutor’s Office, under the direction of Prosecutor Michael H. Robertson and Chief John W. Fodor, and officers with the Somerville, Bound Brook, and Hillsborough Police Departments with the investigation leading to these charges.

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

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

Defense counsel: Blount and Lee: Rahul Sharma Esq., Assistant Federal Public Defender, Newark

NEWARK, N.J. – A Passaic County, New Jersey, woman today admitted participating in a scheme that involved the creation of false documentation to secure over $4 million in bank loans, U.S. Attorney Craig Carpenito announced.

Gladys Collins, 43, of Wayne, New Jersey, pleaded guilty by videoconference before U.S. District Judge Kevin McNulty to an information charging her with one count of conspiracy to commit bank fraud.

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

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

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

The conspiracy to commit bank fraud charge carries a maximum potential penalty of 30 years in prison and a $1 million fine. Sentencing is scheduled for March 8, 2021.

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

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

The government is represented by Assistant U.S. Attorneys J. Stephen Ferketic of the Opioids Unit and Ari B. Fontecchio of the U.S. Attorney’s Office Economic Crimes Unit in Newark.

Defense counsel: Lawrence M. Fisher Esq., New York

NEWARK, N.J. – A Bergen County, New Jersey, man was charged with distributing images of child sexual abuse, U.S. Attorney Craig Carpenito announced today.

Joseph Ganaro, 42, Lodi, New Jersey, is charged by complaint with one count of distribution of child pornography. He appeared by videoconference today before U.S. District Judge Leda Dunn Wettre and was detained.

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

From Feb. 1, 2019 through Oct. 27, 2020, Ganaro received and distributed material containing images of child sexual abuse, via the BitTorrent Network, a publicly available online peer-to-peer (P2P) file-sharing network of linked computers. Users must download P2P software, which is widely available for free on the Internet. The software allows the user to place files into a designated “shared” folder on his or her hard drive, from which other BitTorrent users can then download those files directly to the “shared” folders of their own computers. Users can then browse, search, select, and directly download, those files. The software typically keeps a log of each download event.

Law enforcement used special software to access the BitTorrent Network and downloaded 10 video files containing child pornography from an IP address assigned to an internet service provider account associated with Ganaro’s residence. 

The count with which Ganaro is charged carries a mandatory minimum penalty of five years of in prison, a potential maximum penalty of 20 years in prison and a maximum fine of $250,000.

U.S. Attorney Carpenito credited special agents of the U.S. Department of Homeland Security, Homeland Security Investigations, New Jersey Division, under the direction of Special Agent in Charge Jason J. Molina, and inspectors with the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Raimundo Marrero, with the investigation leading to today’s charges. He also thanked the Lodi Police Department for its assistance with the investigation.

The government is represented by Assistant U.S. Attorney Katherine Calle of the Organized Crime and Drug Enforcement Task Force/Narcotics Unit in Newark.

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

NEWARK, N.J. – U.S. Attorney Craig Carpenito announced today that Assistant U.S. Attorneys Allan Urgent, Mark McCarren and Gabriel Vidoni will lead the efforts of his Office in connection with the Justice Department’s nationwide Election Day Program.

“The right to vote without interference or discrimination, and to have that vote counted, is a cornerstone of our democracy,” U.S. Attorney Carpenito said. “We will not tolerate voter intimidation, voter bribery, election fraud or theft of ballots. We take seriously our responsibility to maintain the integrity of the election process.”

In order to respond to complaints of election fraud or voting rights concerns, and to ensure that such complaints are directed to the appropriate authorities, the public can call the Election Day Hotline – 888-636-6596. This number will be active Oct. 30, 2020, through Nov. 6, 2020, and will be staffed live on Election Day, Nov. 3, 2020.

Federal law protects against such crimes as intimidating or bribing voters, buying and selling votes, impersonating voters, altering vote tallies, stuffing ballot boxes, and marking ballots for voters against their wishes or without their input. It also contains special protections for the rights of voters, and provides that they can vote free from acts that intimidate or harass them. For example, actions of persons designed to interrupt or intimidate voters at polling places by questioning or challenging them, or by photographing or videotaping them, under the pretext that these are actions to uncover illegal voting may violate federal voting rights law. Further, federal law protects the right of voters to mark their own ballot or to be assisted by a person of their choice (where voters need assistance because of disability or illiteracy).

AUSAs Urgent, McCarren and Vidoni serve as the District Election Officers (DEOs) for the District of New Jersey, and in that capacity are responsible for overseeing the District’s handling of complaints of election fraud and voting rights concerns in consultation with Justice Department Headquarters in Washington.

The Department of Justice has an important role in deterring election fraud and discrimination at the polls, and combating these violations whenever and wherever they occur.  The Department’s long-standing Election Day Program furthers these goals, and also seeks to ensure public confidence in the integrity of the election process by providing local points of contact within the Department for the public to report possible election fraud and voting rights violations while the polls are open through Election Day.

In addition to the U.S. Attorney’s Office’s Hotline, the FBI will have special agents available in each field office and resident agency throughout the country to receive allegations of election fraud and other election abuses on Election Day. The FBI Newark field office can be reached by the public at 973-792-3000. The public may also call the FBI’s national tip line – 1-800-CALL-FBI (1-800-225-5324), and calls will be routed as appropriate.  The public may also submit online tips or complaints to the FBI via https://www.fbi.gov/tips .

Complaints about possible violations of the federal voting rights laws can be made directly to the Civil Rights Division in Washington, DC by phone at 800-253-3931 or by complaint form at https://civilrights.justice.gov/ .

In the case of a crime of violence or intimidation, please call 911 immediately and before contacting federal authorities. State and local police have primary jurisdiction over polling places, and almost always have faster reaction capacity in an emergency.

U.S. Attorney Carpenito said, “Ensuring free and fair elections depends in large part on the cooperation of the American electorate. It is imperative that those who have specific information about discrimination or election fraud make that information available to my Office, the FBI, or the Civil Rights Division.”

The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.

NEWARK, N.J. – A Colorado man will make his initial appearance today on charges that he smuggled approximately two kilograms of cocaine into the United States, U.S. Attorney Craig Carpenito announced.

Leandre Kemont Jefferson, 23, of Denver, Colorado, was arrested on Oct. 23, 2020. He is charged by complaint with one count of importation of controlled substances and is scheduled to appear by videoconference today before U.S. Magistrate Judge Leda Dunn Wettre.

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

On Oct. 23, 2020, Jefferson arrived at Newark Liberty International Airport aboard a flight from Puerto Plata, Dominican Republic. During a screening, law enforcement officers discovered that Jefferson possessed approximately two kilograms of cocaine concealed inside of 12 vacuum packed bags, which were themselves wrapped in foil, and which was further concealed inside of clothing.

The count with which Jefferson is charged carries a mandatory minimum penalty of five years in prison, a potential maximum penalty of 40 years in prison, and a $5 million fine.

U.S. Attorney Carpenito credited special agents of the U.S. Department of Homeland Security, Homeland Security Investigations, New Jersey Division, under the direction of Special Agent in Charge Jason J. Molina; and officers of U.S. Customs and Border Protection, under the direction of Troy Miller, director of Field Operations, New York Field Office, with the investigation leading to the charges.

The government is represented by Assistant U.S. Attorney Sean M. Sherman of the Criminal Division in Newark.

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

20-381

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

NEWARK, N.J. – Fourteen people have been charged with scheming to defraud banks and individuals with counterfeit economic stimulus checks purportedly issued by the Treasury Department pursuant to the Coronavirus Aid, Relief, and Economic Security (CARES) Act, U.S. Attorney Craig Carpenito announced today.

Charged by complaint with conspiracy to commit bank fraud are:

Defendant

Age

Residence

Justin Ezeiruaku

23

Berlin, New Jersey

Torri Pedro

24

Sicklerville, New Jersey

*Akume Ehoggi

25

Glassboro, New Jersey

Kassan Knight

23

Newark

Nakirah Matthews

21

Paulsboro, New Jersey

*Qwan Taylor

22

Pennsauken, New Jersey

*Kwaeson Watts

24

Lindenwold, New Jersey

*Nasir Johnson

23

Newark

*Daeson Monroe

25

Philadelphia

Daron Curry

24

Westville, New Jersey

Talib Crump

26

Philadelphia

*Noah Brent-Magri

21

Somerset, New Jersey

Isaiah White

23

Virginia Beach, Virginia

Ali Shoultz

23

Clementon, New Jersey

*denotes at-large

Knight, Pedro, Shoultz, Matthews and Curry made their initial appearances Oct. 22, 2020, by videoconference before U.S. Magistrate Judge Ann Marie Donio. Ezeiruako will make his appearance on Oct. 26, 2020. Crump is in custody in Philadelphia. White was arrested in Virginia and will have an initial appearance at a date to be determined.

According to documents filed in this case:

U.S. Postal Inspection Service (USPIS) postal inspectors and special agents with the U.S. Department of Homeland Security, Homeland Security Investigations (HSI), uncovered a nationwide scheme involving counterfeit economic stimulus checks deposited into bank accounts with the intent to defraud the banks. A network of individuals posted advertisements on Instagram and Snapchat offering people the ability to make “quick cash” if they banked at certain institutions. Some members of the conspiracy acquired individuals’ banking information using a ruse, while others printed the counterfeit stimulus checks that they deposited into the accounts. Members of the conspiracy used ATM machines, and peer-to-peer bank transfers, as well as debit cards, to make large purchases and large cash withdrawals. Individuals financed purchases of luxury cars and paid for their apartments with the stolen funds. In many cases, the individuals whose accounts were compromised suffered financial losses and credit problems, while others were complicit in the fraud.

The count of bank fraud conspiracy is punishable by a maximum sentence of 30 years in prison and a $1 million fine.

U.S. Attorney Carpenito credited inspectors with the USPIS Philadelphia Division, under the direction of Inspector in Charge Damon Wood, and Eastern Area, under the direction of Inspector in Charge Kenneth Cleevely; special agents of HSI, Cherry Hill, New Jersey, under the direction of Special Agent in Charge Jason J. Molina in Newark; special agents of HSI, Norfolk, Virginia, under the direction of Special Agent in Charge Raymond Villanueva, in Washington, D.C.; special agents of IRS - Criminal Investigations, under the direction of Special Agent in Charge Michael Montanez in Newark; the U.S. Marshals Service, District of New Jersey, under the direction of U.S. Marshal Juan Mattos; the office of the Treasury Inspector General for Tax Administration, under the direction of Special Agent in Charge Andrew McKay; the Pennsylvania Attorney General’s Office, under the direction of Attorney General Josh Shapiro; the Glassboro Police Department, under the direction of Chief John Polillo; the Winslow Township Police Department, under the direction of Chief George M. Smith; the Gloucester Township Police Department, Special Investigations Unit, under the direction of Chief David J. Harkins; the Pennsauken Police Department, under the direction of Chief Jon Nettleton; the Paulsboro Police Department, under the direction of Chief Gary Kille; the Lindenwold Police Department, under the direction of Chief Michael McCarthy; the West Whiteland Township Police Department, under the direction of Chief Lee Benson; the Pennsylvania State Police, under the direction of Capt. James Kemm; the Pennsylvania State Police Bureau of Gaming Enforcement, under the direction of Lt. Kevin Conrad; and the New Jersey State Police, under the direction of Col. Patrick J. Callahan, with the investigation leading to the charges.

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 defendants are presumed innocent unless and until proven guilty.

NEWARK, N.J. – Twelve people have been charged for their participation in a scheme to steal and alter checks from the mail and engage in bank fraud, U.S. Attorney Craig Carpenito announced today.

Aaron Llody Northern, a/k/a “Bossdon Butta,” 28, of Reisterstown, Maryland; Corey Bond, a/k/a “Teddy Brown,” 27, of New York, New York; Tyrell Baker, 23, of the Bronx, New York; Andre Tyrone Wallace, 31, of the Bronx, New York; Michellian Thompson, 34, of the Bronx, New York; Achiel Morgan, a/k/a “Ace Skrap,” 22, of the Bronx, New York; Quinton Sessions, a/k/a “Q Doggy Widda Hoddie,” 27, of the Bronx, New York; Brian Adjavon, a/k/a “CarlosSlimm,” a/k/a “sasuforever,” 30, of the Bronx, New York; Dashawn Danforth, a/k/a “Shawn Moneyy Marley,” 31, of Staten Island, New York; Simone Cordero, 29, of the Bronx, New York; Stephanie Lee Sanchez, 25, of New York, New York; and Hans Pierre, a/k/a “hustlehans,” 32, of Brooklyn, New York; were each charged with one count of bank fraud conspiracy (Count One), one count of conspiracy to receive and possess stolen mail (Count Two); and one count of conspiracy to possess and receive interstate altered securities (Count Three).

Northern, Sessions, Adjavon, Danforth, and Pierre were also charged with one count of money laundering conspiracy (Count Four), and Northern and Cordero were additionally charged with one count of aggravated identity theft (Count Five).

Baker, Thompson, Morgan, Adjavon, Danforth, Sanchez, Cordero, and Wallace were arrested today and are scheduled to appear by videoconference before the U.S. Magistrate Judge James B. Clark III this afternoon. Northern was arrested this morning in Maryland and is scheduled to appear in the District of Maryland on Oct. 23, 2020. Bond, Sessions, and Pierre have not yet been arrested.         

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

In 2018 and 2019, the defendants and others conspired to steal checks from the mail, alter the payee and/or amount written on the stolen checks, possess and transport the stolen and altered checks outside of, or into, New Jersey, through interstate commerce, and deposit the checks into bank accounts to take money that did not belong to them. Some of the defendants then laundered the stolen money by concealing it through different financial accounts. 

Surveillance footage shows certain defendants and others stealing mail from U.S. Postal Service collection boxes in Newark. After stealing checks from the mail, defendants and others, including Adjavon and Cordero, altered and deposited the checks into other people’s bank accounts. The stolen money was then transferred to another account or withdrawn as cash. The victims include the New Jersey branch of a non-profit network of public charter schools, which experienced fraudulent activity on its bank accounts after placing checks in the mail.            

Count One carries a maximum sentence of 30 years in prison and a fine of $1 million. Counts Two and Three each carry a maximum sentence of five years in prison and a fine of $250,000, or twice the pecuniary gain to the defendant or loss to the victim, whichever is greater.  Count Four carries a maximum sentence of 20 years in prison and a fine of $500,000, or twice the value of the property involved in the transaction, whichever is greater. Count Five carries a mandatory term of two years in prison, which must run consecutively to any other sentence imposed, along with a maximum fine of $250,000 or twice to pecuniary gain to the defendant or loss to the victim, whichever is greater.

U.S. Attorney Carpenito credited special agents of the U.S. Postal Inspection Service Newark Division, under the direction of Acting Inspector in Charge Raimundo Marrero; the U.S Postal Inspection Service New York Division, under the direction of Inspector in Charge Phil Bartlett; the U.S. Secret Service Long Island Resident Office, under the direction of Resident Agent in Charge Steven Choma; the U.S. Postal Inspection Service Washington Division, under the direction of Inspector in Charge Peter Rendina; the U.S. Department of Homeland Security, Homeland Security Investigations Newark Division, under the direction of Special Agent in Charge Jason J. Molina, the Co-Op City Department of Public Safety, under the direction of Chief Joseph R. Riley; and the New York City Police Department, under the direction of Commissioner Dermot Shea; with the investigation and arrests.      

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

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

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Defense counsel:

Tyrell Baker: Michael V. Calabro Esq., Newark 

Andre Tyrone Wallace: Geoffrey St. Andrew Stewart Esq., New York   

Michellian Thompson: James A. Plaisted Esq., Hackensack, New Jersey

Achiel Morgan:  Blair R. Zwillman Esq., Morristown, New Jersey

Brian Adjavon:   Gary Mizzone Esq., Little Falls, New Jersey

Dashawn Danforth:  Adalgiza A. Nunez Esq., Newark

Simone Cordero:  Jacqueline E. Cistaro Esq., Red Bank, New Jersey

Stephanie Lee Sanchez:  Joseph Rubino Esq., Union, New Jersey

CAMDEN, N.J. – A Cape May, New Jersey, man was sentenced today to 180 months in prison for distributing approximately 300 grams of crystal methamphetamine and thousands of pills containing heroin and/or fentanyl, U.S. Attorney Craig Carpenito announced.

Joseph Servidio, a/k/a “Joey Electric,” 60, of Marmora, New Jersey, previously pleaded guilty before U.S. District Judge Robert Kugler to an information charging him with one count of conspiracy to distribute controlled substances, including 50 grams or more of crystal methamphetamine. Judge Kugler imposed the sentence today in Camden federal court.

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

Law enforcement sources have identified Servidio as a member of La Cosa Nostra (LCN), the Mafia. Servidio distributed pills that contained heroin and/or fentanyl along with conspirator Carl Chianese. The pills they distributed were stamped with markings that made them look similar to prescription opioid pills (Oxycodone or Percocet). Servidio and Chianese were also involved in the distribution of multiple-ounce quantities of crystal methamphetamine. Servidio and Chianese sold the pills and crystal methamphetamine on multiple occasions to an FBI undercover agent in exchange for cash payments. In total, Servidio was responsible for the distribution of over 200 grams of fentanyl and heroin and approximately 300 grams of crystal methamphetamine.

Chianese, 80, was sentenced by Judge Kugler in March 2020 to 10 years in prison and ordered to forfeit the firearm and United States currency, as part of the sentence imposed. Salvatore Piccolo, 68, another member of the Philadelphia LCN who sold crystal methamphetamine to the FBI undercover agent, was sentenced by Judge Kugler in November 2019 to 150 months in prison. 

In addition to the prison term, Judge Kugler sentenced Servidio to five years of supervised release.

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

The government is represented by Assistant U.S. Attorney Patrick C. Askin of the U.S. Attorney’s Office’s Camden Office.

NEWARK, N.J. – A South Carolina man today admitted defrauding at least 20 individuals by soliciting investments in what he claimed were highly successful, algorithm-based trading pools in foreign currency derivatives (“forex”) and other financial instruments, and then using the bulk of the money for personal expenditures and to pay off other victims, Attorney for the United States Rachael Honig announced.

Thomas Lanzana, 51, of Pawleys Island, South Carolina, and formerly of New Jersey, pleaded guilty by videoconference before U.S. District Judge John Michael Vazquez Count 1 of the indictment returned against him in August 2019, charging him with wire fraud.

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

Lanzana fraudulently solicited approximately $900,000 from at least 20 customers to invest in forex pools beginning as early as 2013. Lanzana misrepresented to prospective customers that he was a successful forex trader when, in fact, he was not. To keep his customers’ trust, Lanzana, among other things, (1) sent false account statements to his customers, (2) posted false monthly account statements to his companies’ websites showing balances and trading activity for forex trading accounts that did not exist, and (3) generated and sent false tax documents to customers reporting earnings that did not exist. Lanzana misappropriated approximately $350,000 in customer funds, using some to repay earlier investors in the manner of a Ponzi scheme, and to pay for his personal expenses, including purchases on Amazon.com, payments to a luxury car dealer and a jewelry retailer, and golf expenses. 

The count of wire fraud to which Lanzana pleaded guilty carries a maximum potential penalty of 20 years in prison and a fine of $250,000, or twice the pecuniary gain to the defendant or loss to the victims. Sentencing is scheduled for Feb. 23, 2021.

Attorney for the United States Honig credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr., and special agents of IRS-Criminal Investigation, under the direction of Michael Montanez, with the investigation leading to today’s guilty plea. He also thanked the U.S. Commodity Futures Trading Commission’s Division of Enforcement for its role in the investigation.

The government is represented by Assistant U.S. Attorney Anthony P. Torntore, of the U.S. Attorney’s Office’s Cybercrime Unit.

TRENTON, N.J. – A Monmouth County, New Jersey, man today admitted to being a felon in possession of a firearm, U.S. Attorney Craig Carpenito announced.

Jakim Stradford, 27, of Neptune City, New Jersey, pleaded guilty by videoconference before Chief U.S. District Judge Freda L. Wolfson to an indictment charging him with one count of being a felon in possession of a firearm.

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

On Feb. 26, 2020, officers from the Neptune City Police Department responded to the home of a local resident who reported trespassers in her patio. Officers found Stradford – a convicted felon prohibited from possessing a firearm – and another man in the enclosed patio of an apartment. The officers ordered the men to stop, but Stradford attempted to run. Officers arrested and searched Stradford, finding marijuana, pills and a Hi-Point 9mm caliber pistol. Examination of the pistol revealed that the serial number had been obliterated.

The felon in possession of a firearm charge carries a maximum potential penalty of 10 years in prison and a $250,000 fine. Sentencing is scheduled for Feb. 25, 2021.

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.

U.S. Attorney Carpenito credited special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Charlie J. Patterson, Newark Field Division, Trenton Field Office, with the investigation leading to today’s guilty plea. He also thanked the Monmouth County Prosecutor’s Office, under the direction of Prosecutor Christopher J. Gramiccioni, and the Neptune City Police Department, under the direction of Chief Matthew Quagliato for their assistance with the investigation.

The government is represented by Special Assistant U.S. Attorney Christopher Matthews of the Criminal Division in Trenton.

NEWARK, N.J. – A Union County, New Jersey, man has been charged with conspiring to use drones to smuggle contraband, including tobacco, cell phone chargers, and a cell phone, into the federal correctional facility at Fort Dix, U.S. Attorney Craig Carpenito announced today.

Johansel Moronta, 27, of Linden, New Jersey, an inmate at Fort Dix from April 2018 to March 2019, was charged by complaint, unsealed today, with one count of conspiring to smuggle contraband into the prison and to defraud the United States and one count of being a federal inmate possessing and obtaining, and attempting to possess and obtain, contraband. Moronta will be scheduled to appear on a date to be determined by the court.

Three other men, Adrian Goolcharran, a/k/a “Adrian Ahoda” and “Adrian Ajoda,” Nicolo Denichilo, and Jason Arteaga Loayza, a/k/a “Juice,” previously have been charged with participating in the scheme to use drones to smuggle contraband into Fort Dix.

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

The U.S. Department of Justice, Office of Inspector General (DOJ-OIG) obtained evidence that in October 2018, while incarcerated at the federal prison at Fort Dix, Moronta participated, along with Arteaga, a former Fort Dix inmate, Goolcharran, and others, in a scheme to use unmanned aircrafts, or drones, to deliver contraband to inmates. Moronta’s role in the scheme was to coordinate the drone drops with Goolcharran and Arteaga from within the prison, and then retrieve the contraband after the drone, piloted by Goolcharran, had dropped the contraband inside the facility.

On Oct. 30, 2018, at approximately 1:40 a.m., Fort Dix officers observed a drone with fishing line hovering above the rooftop of an inmate housing unit. Officers found Moronta leaving a bathroom in the area where the bag of contraband dropped from the drone had been found, along with bolts that secured an open rooftop hatch used to access the delivery. Officers also found a cell phone that Moronta used to coordinate drone drops with Arteaga and Goolcharran. The phone contained numerous text messages and phone calls exchanged between Moronta, Goolcharran and Arteaga in the days leading up to the drop. On Oct. 27, 2018, Moronta sent a text message to Goolcharran referring to himself as “Joe [expletive] in fort dix on the rooftop.” On Oct. 30, 2018, at 12:07 a.m., Moronta sent a text message to Goolcharran asking “U in the area,” and Goolcharran responded “Yea.,” likely meaning that Goolcharran was near Fort Dix and available to make the drone drop. At 12:36 a.m., Goolcharran messaged Moronta “How we lookin,” and Moronta responded a few minutes later with “It ok.” Moronta also sent messages to Arteaga at 12:57 a.m., stating “Two trip,” likely referring to the number of drone flights planned, and “Same cop from last week,” likely referring to the corrections officer on duty.

Moronta also coordinated other drone drops with Arteaga and Goolcharran. Location data from Goolcharran’s cell phone confirmed that Goolcharran’s cell phone was in the Fort Dix area during the early morning hours of October 24, 2018, and began to depart the area by about 1:54 a.m. that same morning. In addition, evidence obtained from Moronta’s cell phone revealed numerous communications between Moronta, Arteaga, and Goolcharran on Oct. 23 and Oct. 24, 2018, showing the three men coordinating multiple drone drops.

The offenses charged in the complaint carry a maximum penalty of five years in prison and maximum fine of $250,000 for the conspiracy count and one year in prison and $100,000 maximum fine for the possessing or obtaining contraband count. 

U.S. Attorney Carpenito credited agents of DOJ-OIG, New York Field Office, under the direction of Special Agent in Charge Guido Modano; DOJ-OIG’s Cyber Investigations Office, under the direction of Special Agent in Charge Keith Bonanno; the U.S. Air Force Office of Special Investigations, Detachment 307 under the direction of Superintendent Jonathan Jackson; and the U.S. Department of Transportation – Office of Inspector General, Northeast Region, under the direction of Special Agent in Charge Douglas Shoemaker, with the investigation leading to the charges.

He also thanked Federal Bureau of Prisons personnel at Fort Dix, under the direction of Warden David Ortiz; agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr.; investigating agents of the U.S. Attorney’s Office, under the direction of Supervisory Special Agent Thomas J. Mahoney; and officers with the Pemberton Borough Police Department, under the direction of Chief Edward Hunter; the Pemberton Township Police Department, under the direction of Chief David Jantas; and Chesterfield Township Police Department, under the direction of Chief Kyle Wilson, for their assistance.

The government is represented by Assistant U.S. Attorneys Cari Fais and Jeffrey J. Manis of the Office’s Special Prosecutions Division in Newark.

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

TRENTON, N.J. – An alleged crime family associate today admitted possessing cocaine with the intent to distribute, U.S. Attorney Craig Carpenito announced.

Jason Vella, 39, of Toms River, New Jersey, pleaded guilty before U.S. District Judge Anne E. Thompson in Trenton federal court to an information charging him with one count of possession of cocaine with intent to distribute. 

On Sept. 19, 2019, investigators from the Ocean County Prosecutors Office executed a search warrant on Vella’s residence and recovered in excess of 150 grams of cocaine, drug paraphernalia, $2,295 in cash and pieces of jewelry. 

The charge of possession of cocaine with intent to distribute is punishable by a maximum of 20 years in prison and a $250,000 fine. Sentencing is scheduled for Feb. 26, 2021.

U.S. Attorney Carpenito credited the members of the FBI’s Organized Crime Task Force under the direction of Special Agent in Charge George M. Crouch Jr. in Newark; and investigators from the Ocean County Prosecutor’s Office, under the direction of Prosecutor Bradley Billhimer, 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 in Newark.

NEWARK, N.J. – A Bronx, New York, man was sentenced today to 60 months in prison for conspiring to distribute 500 grams or more of cocaine, U.S. Attorney Craig Carpenito announced.

Steven Justo, 33, previously pleaded guilty before U.S. District Judge Susan D. Wigenton in Newark federal court to an information charging him with one count of conspiracy to distribute and possess with the intent to distribute 500 grams or more of cocaine. Judge Wigenton imposed the sentence today in Newark federal court.

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

In August 2019, Justo conspired with others to distribute cocaine in New Jersey. Justo and a conspirator travelled from the Bronx into Bergen County, New Jersey, to deliver approximately two kilograms of cocaine before being identified and arrested by agents with the U.S. Drug Enforcement Administration.

In addition to the prison term, Judge Wigenton sentenced Justo to four years of supervised release.  

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

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

NEWARK, N.J. – A Passaic County, New Jersey, man is scheduled to make his initial appearance today after being charged with possession of child pornography, U.S. Attorney Craig Carpenito announced.

Robert Klemt, 34, of Wayne, New Jersey, is charged by complaint with one count of possession of child pornography. He is scheduled to make his initial appearance 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:

In June 2020, agents with the U.S. Department of Homeland Security – Homeland Security Investigations, approached Klemt at his residence after receiving information suggesting that Klemt had accessed a website containing child pornography. Law enforcement subsequently discovered over 70 images and videos depicting the sexual exploitation of children on Klemt’s laptop computer.

Klemt was previously convicted of endangering the welfare of a child/distribution of child pornography in Essex County in 2014. The charge of possession of child pornography, for a repeat offender, carries a mandatory minimum of 10 years in prison, a maximum of 20 years in prison, and a $250,000 fine.

U.S. Attorney Carpenito credited special agents with HSI, under the direction of Special Agent in Charge Jason J. Molina, with the investigation leading to the charges.

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

NEWARK, N.J. – A Newark man made his initial appearance today on charges of engaging in fraud by illegally obtaining unemployment insurance benefits, U.S. Attorney Craig Carpenito announced today.

Jefferson Robert, 30, was arrested on Oct. 20, 2020, by inspectors of the U.S. Postal Inspection Service and special agents of the U.S. Department of Labor, Office of Inspector General, and the FBI. He is charged by complaint with one count of wire fraud and appeared by videoconference for his initial appearance today before U.S. Magistrate Judge James B. Clark III.

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

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law. The CARES Act created a new temporary federal unemployment insurance program called Pandemic Unemployment Assistance (PUA), which provided unemployment insurance benefits for individuals who were not eligible for other types of unemployment (e.g., self-employed, independent contractors, gig economy workers). The CARES Act also created a new temporary federal program called Federal Pandemic Unemployment Assistance (FPUC) that provided an additional $600 weekly benefit to those eligible for PUA and regular unemployment insurance benefits.  The Washington State Employment Security Department (ESD) administered and managed the regular unemployment and PUA programs in the State of Washington.

On Aug. 6, 2019, Robert opened a bank account at Bank 1 in the name of “Johny Eto” using a fake United Kingdom passport. On May 8, 2020, an application was made to ESD for unemployment benefits in the name of an individual (Victim 1) using Victim 1’s personal identification information. On May 12, 2020, pursuant to instructions by the individual purporting to be Victim 1, the State of Washington sent a wire transfer into a bank account in the amount of $7,930.

This bank account received additional funds from a Business Enterprise Compromise scheme as well as IRS payments resulting from fraudulent activity. Between March 11, 2020, and May 1, 2020, a debit card associated with the bank account was used to purchase approximately 57 U.S. Postal Service money orders totaling $52,000. The “from” information on most of the money orders listed the name “Jefferson Robert” and an address in Newark. Records from New Jersey Motor Vehicle Commission reflect that Robert provided that address when obtaining a driver’s license.

Robert also used the fraudulent UK passport to open bank accounts at three other banks. These accounts were all frozen or closed due to suspicious activity. For example, on Sept. 19, 2019, a check payable to “Johny Eto” in the amount of $27,400 was deposited into one of those bank accounts. The check was drawn on an account in the name of an individual, who stated that he  did not open the account and does not know either Johny Eto or Robert.

Robert and his conspirators caused losses of more than $500,000.

U.S. Attorney Carpenito credited inspectors of the United States Postal Inspection Service, under the direction of Acting Inspector in Charge Raimundo Marrero, in Newark; special agents of the U.S. Department of Labor, Office of Inspector General, under the direction of Special Agent in Charge Michael C. Mikulka, in New York, and special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr., in Newark, with the investigation leading to today’s arrest.

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

Please report COVID-19 fraud, hoarding or price-gouging to the National Center for Disaster Fraud’s National Hotline at (866) 720-5721, or e-mail: disaster@leo.gov.

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

Today, the Department of Justice announced a global resolution of its criminal and civil investigations into the opioid manufacturer Purdue Pharma LP (Purdue), and a civil resolution of its civil investigation into individual shareholders from the Sackler family.  The resolutions with Purdue are subject to the approval of the bankruptcy court. 

“The abuse and diversion of prescription opioids has contributed to a national tragedy of addiction and deaths, in addition to those caused by illicit street opioids,” said Deputy Attorney General Jeffrey A. Rosen.  “With criminal guilty pleas, a federal settlement of more than $8 billion, and the dissolution of a company and repurposing its assets entirely for the public’s benefit, the resolution in today’s announcement re-affirms that the Department of Justice will not relent in its multi-pronged efforts to combat the opioids crisis.”

“Today’s resolution is the result of years of hard work by the FBI and its partners to combat the opioid crisis in the U.S.,” said Steven M. D’Antuono, Assistant Director in Charge of the FBI Washington Field Office.  “Purdue, through greed and violation of the law, prioritized money over the health and well-being of patients.  The FBI remains committed to holding companies accountable for their illegal and inexcusable activity and to seeking justice, on behalf of the victims, for those who contributed to the opioid crisis.”

“The opioid epidemic remains a significant public health challenge that impacts the lives of men and women across the country,” said Gary L. Cantrell Deputy Inspector General for Investigations at the U.S. Department of Health and Human Services’ Office of Inspector General.  “Unfortunately, Purdue’s reckless actions and violation of the law senselessly risked patients’ health and well-being.  With our law enforcement partners, we will continue to combat the opioid crisis, including holding the pharmaceutical industry and its executives accountable.”

“This resolution closes a particularly sad chapter in the ongoing battle against opioid addiction,” said Drug Enforcement Administration (DEA) Assistant Administrator Tim McDermott.  “Purdue Pharma actively thwarted the United States’ efforts to ensure compliance and prevent diversion.  The devastating ripple effect of Purdue’s actions left lives lost and others addicted.  DEA will continue to work tirelessly with our partners and the pharmaceutical industry to address the damage that has been done, and bring an end to this epidemic that has gripped the nation for far too long.” 

Purdue Pharma has agreed to plead guilty in federal court in New Jersey to a three-count felony information charging it with one count of dual-object conspiracy to defraud the United States and to violate the Food, Drug, and Cosmetic Act, and two counts of conspiracy to violate the Federal Anti-Kickback Statute.  The criminal resolution includes the largest penalties ever levied against a pharmaceutical manufacturer, including a criminal fine of $3.544 billion and an additional $2 billion in criminal forfeiture.  For the $2 billion forfeiture, the company will pay $225 million on the effective date of the bankruptcy, and, as further explained below, the department is willing to credit the value conferred by the company to State and local governments under the department’s anti-piling on and coordination policy.  Purdue has also agreed to a civil settlement in the amount of $2.8 billion to resolve its civil liability under the False Claims Act.  Separately, the Sackler family has agreed to pay $225 million in damages to resolve its civil False Claims Act liability.

The resolutions do not include the criminal release of any individuals, including members of the Sackler family, nor are any of the company’s executives or employees receiving civil releases.

While the global resolution with the company is subject to approval by the bankruptcy court in the Southern District of New York, one important condition in the resolution is that the company would cease to operate in its current form and would instead emerge from bankruptcy as a public benefit company (PBC) owned by a trust or similar entity designed for the benefit of the American public, to function entirely in the public interest.  Indeed, not only will the PBC endeavor to deliver legitimate prescription drugs in a manner as safe as possible, but it will aim to donate, or provide steep discounts for, life-saving overdose rescue drugs and medically assisted treatment medications to communities, and the proceeds of the trust will be directed toward State and local opioid abatement programs.  Based on the value that would be conferred to State and local governments through the PBC, the department is willing to credit up to $1.775 billion against the agreed $2 billion forfeiture amount.  The department looks forward to working with the creditor groups in the bankruptcy in charting the path forward for this PBC so that its public health goals can be best accomplished.

The Criminal Pleas

As part of the plea, Purdue will admit that from May 2007 through at least March 2017, Purdue conspired to defraud the United States by impeding the lawful function of the DEA by representing to the DEA that Purdue maintained an effective anti-diversion program when, in fact, Purdue continued to market its opioid products to more than 100 health care providers whom the company had good reason to believe were diverting opioids and by reporting misleading information to the DEA to boost Purdue’s manufacturing quotas.  The misleading information comprised prescription data that included prescriptions written by doctors that Purdue had good reason to believe were engaged in diversion.  The conspiracy also involved aiding and abetting violations of the Food, Drug, and Cosmetic Act by facilitating the dispensing of its opioid products, including OxyContin, without a legitimate medical purpose, and thus without lawful prescriptions.

In addition, Purdue will admit to conspiring to violate the Federal Anti-Kickback Statute.  Between June 2009 and March 2017, Purdue made payments to two doctors through Purdue’s doctor speaker program to induce those doctors to write more prescriptions of Purdue’s opioid products.  Similarly, from approximately April 2016 through December 2016, Purdue made payments to Practice Fusion Inc., an electronic health records company, in exchange for referring, recommending, and arranging for the ordering of Purdue’s extended release opioid products – OxyContin, Butrans, and Hysingla.

The Civil Settlements

The department’s civil settlements resolve the United States’ claims as to both Purdue and its individual shareholders, members of the Sackler family.

The civil settlement with Purdue provides the United States with an allowed, unsubordinated, general unsecured bankruptcy claim for recovery of $2.8 billion.   This settlement resolves allegations that from 2010 to 2018, Purdue caused false claims to be submitted to federal health care programs, specifically Medicare, Medicaid, TRICARE, the Federal Employees Health Benefits Program, and the Indian Health Service.  The government alleged that Purdue promoted its opioid drugs to health care providers it knew were prescribing opioids for uses that were unsafe, ineffective, and medically unnecessary, and that often led to abuse and diversion.  For example, Purdue learned that one doctor was known by patients as “the Candyman” and was prescribing “crazy dosing of OxyContin,” yet Purdue had sales representatives meet with the doctor more than 300 times.  It also resolves the government’s allegations that Purdue engaged in three different kickback schemes to induce prescriptions of its opioids.  First, Purdue paid certain doctors ostensibly to provide educational talks to other health care professionals and serve as consultants, but in reality to induce them to prescribe more OxyContin.  Second, Purdue paid kickbacks to Practice Fusion, as described above.  Third, Purdue entered into contracts with certain specialty pharmacies to fill prescriptions for Purdue’s opioid drugs that other pharmacies had rejected as potentially lacking medical necessity.

Under a separate civil settlement, individual members of the Sackler family will pay the United States $225 million arising from the alleged conduct of Dr. Richard Sackler, David Sackler, Mortimer D.A. Sackler, Dr. Kathe Sackler, and Jonathan Sackler (the Named Sacklers).  This settlement resolves allegations that, in 2012, the Named Sacklers knew that the legitimate market for Purdue’s opioids had contracted.  Nevertheless, they requested that Purdue executives recapture lost sales and increase Purdue’s share of the opioid market.  The Named Sacklers then approved a new marketing program beginning in 2013 called “Evolve to Excellence,” through which Purdue sales representatives intensified their marketing of OxyContin to extreme, high-volume prescribers who were already writing “25 times as many OxyContin scripts” as their peers, causing health care providers to prescribe opioids for uses that were unsafe, ineffective, and medically unnecessary, and that often led to abuse and diversion.     

The civil settlement also resolves the government’s allegations that from approximately 2008 to 2018, at the Named Sacklers’ request, Purdue transferred assets into Sackler family holding companies and trusts that were made to hinder future creditors, and/or were otherwise voidable as fraudulent transfers.

Today’s resolution does not resolve claims that states may have against Purdue or members of the Sackler family, nor does it impede the debtors’ ability to recover any fraudulent transfers.

Today’s announcement was made by Deputy Attorney General Jeffrey A. Rosen; Acting Assistant Attorney General of the Civil Division Jeffrey Clark; U.S. Attorney for the District of Vermont Christina Nolan; and First Assistant U.S. Attorney for the District of New Jersey Rachael Honig.  The criminal investigation was conducted by the U.S. Attorney’s Offices for the Districts of New Jersey and Vermont, the Consumer Protection Branch of the Department of Justice’s Civil Division, and the FBI’s Washington, D.C. and Newark Field Offices, with assistance by the DEA and the U.S. Attorney’s Office for the Northern District of Ohio.  The civil settlements were handled by the Fraud Section of the Commercial Litigation Branch of the Department of Justice’s Civil Division, and the U.S. Attorney’s Offices for the Districts of New Jersey and Vermont, with assistance from the Department of Health and Human Services, Office of General Counsel and Office of Counsel to the Inspector General; the Defense Health Agency; and the Office of Personnel Management.  The Purdue bankruptcy matter is being handled by the U.S. Attorney’s Office for the Southern District of New York and the Civil Division’s Commercial Litigation Branch, Corporate/Finance Section.

Except to the extent of Purdue’s admissions as part of its criminal resolution, the claims resolved by the civil settlements are allegations only.  There has been no determination of liability in the civil matters.

NEWARK, N.J. – Today, the Department of Justice announced a global resolution of its criminal and civil investigations into the opioid manufacturer Purdue Pharma LP (Purdue) and a civil resolution of its civil investigation into individual shareholders from the Sackler family.  The resolutions with Purdue are subject to the approval of the bankruptcy court. 

“For years, Purdue placed profits over patient safety by marketing and selling its dangerous opioid products to healthcare providers that it had good reason to believe were diverting those opioids to abusers,” Attorney for the United States Rachael A. Honig, District of New Jersey, said. “Purdue deceived the DEA about its measures to prevent such diversion, and it used that deception to gain higher limits on the amount of its products it was legally permitted to sell. Purdue also paid kickbacks to providers to encourage them to prescribe even more of Purdue’s products. Purdue is in bankruptcy now, but it still must be held responsible for these actions. The resolution we announce today does just that.” 

“The abuse and diversion of prescription opioids has contributed to a national tragedy of addiction and deaths, in addition to those caused by illicit street opioids,” Deputy Attorney General Jeffrey A. Rosen said. “With criminal guilty pleas, a federal settlement of more than $8 billion, and the dissolution of a company and repurposing its assets entirely for the public’s benefit, the resolution in today’s announcement re-affirms that the Department of Justice will not relent in its multi-pronged efforts to combat the opioids crisis.”

“Purdue’s expansive criminal conduct included paying a kickback in exchange for designing medical software to influence unwitting physicians,” Christina E. Nolan, United States Attorney for the District of Vermont, said. “Purdue’s drug marketers paid to invade the sanctity of the physician-patient relationship so that it could influence medical decisions and increase prescriptions of its most potent opioids. As it is now prepared to plead guilty for a second time to conduct involving unlawful marketing of highly addictive opioid pills, this resolution will serve as a reminder that the company put profits before people during the height of the opioid crisis.”

Purdue Pharma has agreed to plead guilty in federal court in New Jersey to a three-count felony information charging it with one count of dual-object conspiracy to defraud the United States and to violate the Food, Drug, and Cosmetic Act, and two counts of conspiracy to violate the Federal Anti-Kickback Statute. The criminal resolution includes the largest penalties ever levied against a pharmaceutical manufacturer, including a criminal fine of $3.544 billion and an additional $2 billion in criminal forfeiture. For the $2 billion forfeiture, the company will pay $225 million on the effective date of the bankruptcy, and, as further explained below, the Department is willing to credit the value conferred by the company to State and local governments under the Department’s anti-piling on and coordination policy. Purdue has also agreed to a civil settlement in the amount of $2.8 billion to resolve its civil liability under the False Claims Act. Separately, the Sackler family has agreed to pay $225 million in damages to resolve its civil False Claims Act liability.

The resolutions do not include the criminal release of any individuals, including members of the Sackler family, nor are any of the company’s executives or employees receiving civil releases.

While the global resolution with the company is subject to approval by the bankruptcy court in the Southern District of New York, one important condition in the resolution is that the company would cease to operate in its current form and would instead emerge from bankruptcy as a public benefit company (PBC) owned by a trust or similar entity designed for the benefit of the American public, to function entirely in the public interest. Indeed, not only will the PBC endeavor to deliver legitimate prescription drugs in a manner as safe as possible, but it will aim to donate, or provide steep discounts for, life-saving overdose rescue drugs and medically assisted treatment medications to communities, and the proceeds of the trust will be directed toward State and local opioid abatement programs. Based on the value that would be conferred to State and local governments through the PBC, the Department is willing to credit up to $1.775 billion against the agreed $2 billion forfeiture amount. The Department looks forward to working with the creditor groups in the bankruptcy in charting the path forward for this PBC so that its public health goals can be best accomplished.

The Criminal Pleas

As part of the plea, Purdue will admit that from May 2007 through at least March 2017, Purdue conspired to defraud the United States by impeding the lawful function of the Drug Enforcement Administration (DEA) by representing to the DEA that Purdue maintained an effective anti-diversion program when, in fact, Purdue continued to market its opioid products to more than 100 health care providers whom the company had good reason to believe were diverting opioids and by reporting misleading information to the DEA to boost Purdue’s manufacturing quotas. The misleading information comprised prescription data that included prescriptions written by doctors that Purdue had good reason to believe were engaged in diversion. The conspiracy also involved aiding and abetting violations of the Food, Drug, and Cosmetic Act by facilitating the dispensing of its opioid products, including OxyContin, without a legitimate medical purpose, and thus without lawful prescriptions.

In addition, Purdue will admit to conspiring to violate the Federal Anti-Kickback Statute. Between June 2009 and March 2017, Purdue made payments to two doctors through Purdue’s doctor speaker program to induce those doctors to write more prescriptions of Purdue’s opioid products. Similarly, from approximately April 2016 through December 2016, Purdue made payments to Practice Fusion Inc., an electronic health records company, in exchange for referring, recommending, and arranging for the ordering of Purdue’s extended release opioid products – OxyContin, Butrans, and Hysingla.

The Civil Settlements

The Department’s civil settlements resolve the United States’ claims as to both Purdue and its individual shareholders, members of the Sackler family.

The civil settlement with Purdue provides the United States with an allowed, unsubordinated, general unsecured bankruptcy claim for recovery of $2.8 billion. This settlement resolves allegations that from 2010 to 2018, Purdue caused false claims to be submitted to federal health care programs, specifically Medicare, Medicaid, TRICARE, the Federal Employees Health Benefits Program, and the Indian Health Service. The government alleged that Purdue promoted its opioid drugs to health care providers it knew were prescribing opioids for uses that were unsafe, ineffective, and medically unnecessary, and that often led to abuse and diversion. For example, Purdue learned that one doctor was known by patients as “the Candyman” and was prescribing “crazy dosing of OxyContin,” yet Purdue had sales representatives meet with the doctor more than 300 times. It also resolves the government’s allegations that Purdue engaged in three different kickback schemes to induce prescriptions of its opioids. First, Purdue paid certain doctors ostensibly to provide educational talks to other health care professionals and serve as consultants, but in reality to induce them to prescribe more OxyContin. Second, Purdue paid kickbacks to Practice Fusion, as described above. Third, Purdue entered into contracts with certain specialty pharmacies to fill prescriptions for Purdue’s opioid drugs that other pharmacies had rejected as potentially lacking medical necessity.

Under a separate civil settlement, individual members of the Sackler family will pay the United States $225 million arising from the alleged conduct of Dr. Richard Sackler, David Sackler, Mortimer D.A. Sackler, Dr. Kathe Sackler, and Jonathan Sackler (the Named Sacklers).  This settlement resolves allegations that, in 2012, the Named Sacklers knew that the legitimate market for Purdue’s opioids had contracted. Nevertheless, they requested that Purdue executives recapture lost sales and increase Purdue’s share of the opioid market. The Named Sacklers then approved a new marketing program beginning in 2013 called “Evolve to Excellence,” through which Purdue sales representatives intensified their marketing of OxyContin to extreme, high-volume prescribers who were already writing “25 times as many OxyContin scripts” as their peers, causing health care providers to prescribe opioids for uses that were unsafe, ineffective, and medically unnecessary, and that often led to abuse and diversion.    

The civil settlement also resolves the government’s allegations that from approximately 2008 to 2018, at the Named Sacklers’ request, Purdue transferred assets into Sackler family holding companies and trusts that were made to hinder future creditors, and/or were otherwise voidable as fraudulent transfers.

Today’s resolution does not resolve claims that States may have against Purdue or members of the Sackler family, nor does it impede the Debtors’ ability to recover any fraudulent transfers.

Today’s announcement was made by Deputy Attorney General Rosen; Acting Assistant Attorney General of the Civil Division Clark; United States Attorney for the District of Vermont Nolan; and First Assistant U.S. Attorney for the District of New Jersey Honig. The criminal investigation was conducted by the United States Attorney’s Offices for the Districts of New Jersey and Vermont, the Consumer Protection Branch of the Department of Justice’s Civil Division, and the Federal Bureau of Investigation’s Washington, DC and Newark Field Offices, with assistance by DEA. The civil settlements were handled by the Fraud Section of the Commercial Litigation Branch of the Department of Justice’s Civil Division, and the United States Attorney’s Offices for the Districts of New Jersey and Vermont, with assistance from the Department of Health and Human Services, Office of General Counsel and Office of Counsel to the Inspector General; the Defense Health Agency; and the Office of Personnel Management.  The Purdue bankruptcy matter is being handled by the United States Attorney’s Office for the Southern District of New York and the Civil Division’s Commercial Litigation Branch, Corporate/Finance Section.

The government is represented in the District of New Jersey by Deputy Chief of the Criminal Division Nicholas Grippo, Chief of the Health Care Fraud Unit Lee M. Cortes Jr., Chief of the Opioids Unit Melissa Wangenheim, and assistant U.S. Attorneys Stephen Ferketic, Sean Sherman, Marihug P. Cedeño and Nicole Mastropieri.

Except to the extent of Purdue’s admissions as part of its criminal resolution, the claims resolved by the civil settlements are allegations only. There has been no determination of liability in the civil matters.

NEWARK, N.J. – An IRS supervisory revenue agent was arrested today on charges of conspiracy to distribute cocaine, U.S. Attorney Craig Carpenito announced.

Michael Shelli, 41, of Albany, New York, was arrested at his home by agents of the Drug Enforcement Administration (DEA). He is charged by complaint with one count of conspiracy to distribute five kilograms or more of cocaine and appeared by videoconference today before U.S. Magistrate Judge James B. Clark III and was released on $100,000 unsecured bond.

According to the complaint:

Since March 2020, officials of the DEA have been investigating a drug trafficking organization (DTO) operating in New Jersey and elsewhere. In April 2020, law enforcement identified a residence in Saddle Brook, New Jersey, as a location from which members of the DTO were dealing cocaine.  The investigation revealed that Shelli had a courier pick up cocaine from the residence and deliver it to his residence in Albany. Shelli would then repackage the cocaine for sale in the area. 

The conspiracy to distribute cocaine charge is punishable by a maximum penalty of life in prison and a fine of up to $10 million.

U.S. Attorney Carpenito credited special agents of the DEA-New York Division and DEA-Albany District Office, under the direction of Special Agent in Charge Raymond Donovan; the U.S. Attorney’s Office for the Northern District of New York, under the direction of Acting U.S. Attorney Antoinette T. Bacon; the office of the Treasury Inspector General for Tax Administration, under the direction of William Kalb; the New York State Police, under the direction of Superintendent Keith M. Corlett; officers of Troop K, Danbury, Connecticut, Police Department, under the direction of Chief Patrick Ridenhour; officers of the Hasbrouck Heights Police Department, under the direction of Chief Michael J. Colaneri; and officers of the Saddle Brook Police Department, under the direction of Chief Robert Kugler, with the investigation leading to the charges.

The government is represented by Assistant U.S. Attorney Naazneen Khan of the U.S. Attorney’s Office Organized Crimes and Gangs Unit in Newark.

CAMDEN, N.J. – A Gloucester County, New Jersey, man today admitted to stealing gift cards and cash from mail that passed through post offices where he was employed, U.S. Attorney Craig Carpenito announced.

Daniel Talorico, 40, of Sewell, New Jersey, pleaded guilty by videoconference today before U.S. District Judge Joseph H. Rodriguez to an information charging him with one count of theft of mail by a postal employee.

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

Talorico was employed by the U.S. Postal Service as a laborer custodian in post offices in Burlington County and Camden County, New Jersey. Between May 2019 and October 2019, Talorico stole gift cards and cash from greeting cards and other mail that passed through the post offices where he worked.

The theft of mail by a postal employee charge carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for March 1, 2021.

U.S. Attorney Carpenito credited special agents of the U.S. Postal Service Office of Inspector General, Eastern Area Field Office, under the direction of Special Agent in Charge Kenneth Cleevely, with the investigation leading to today’s guilty plea.

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

NEWARK, N.J. – A member of the Newark Municipal Council and Board of Directors of the Newark Community Economic Development Corporation (NCEDC) was charged today with scheming to obtain bribes and kickbacks, U.S. Attorney Craig Carpenito announced.

Joseph A. McCallum Jr., 65, of Newark, is charged by complaint with one count of wire fraud for allegedly devising a scheme, using interstate wire communications, to defraud Newark and the NCEDC of the right to McCallum’s honest services. McCallum is scheduled to appear on a date that will be determined by the court.

Malik Frederick, 60, of Newark, a participant in the scheme, pleaded guilty today by videoconference before U.S. District Judge William J. Martini to Count 1 of a four-count information, charging conspiracy to commit honest services wire fraud, and Count 3, charging him with subscribing to a false personal federal tax return for 2017 for intentionally not reporting over $100,000 in income.

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

As a member of the Newark city council, representing the West Ward, and of the NCEDC (now known as Invest Newark!), from 2017 through February 2020, McCallum schemed to receive concealed bribes and kickbacks from Frederick, funded by developers, contracting companies, and other businesses seeking contracts and approvals principally related to development, construction, and real estate projects and deals in Newark. These developers and others were solicited by Frederick to hire his consulting company for “access,” and were introduced to McCallum as the councilman behind the particular project or deal of interest to them. McCallum then received and planned to receive concealed bribes and kickbacks derived from the fees that Frederick obtained from those who retained his company.

In exchange, McCallum used his official positions to provide assistance to those who retained Frederick’s company. For those who refused or hesitated to pay, McCallum and Frederick intended to prevent them from obtaining contracts and work from the NCEDC and the City of Newark. McCallum and Frederick used interstate emails and phone calls to further this scheme and took significant steps to conceal these bribes and kickbacks.

The bribes and kickbacks received and sought by McCallum through Frederick included the following:

• A $16,000 bribe funded by a payment from a contracting company;
• a $25,000 bribe and kickback funded by a payment from a developer’s  company;
• $500 in cash to cover travel expenses for an out-of-country trip and an attempt to receive part of a $50,000 payment from a second developer;
• and an attempt to obtain payments from a seller of property in the West Ward and a developer who was seeking to buy and develop the property.

 

Frederick also sought to have a modular home company that was in negotiations with the NCEDC on a development project in Newark retain Frederick’s company and obtain a $40,000 payment from the company. Frederick intended to share the $40,000 payment with an NCEDC official (Co-Conspirator 2) who referred Frederick to the modular home company and expected a portion of whatever Frederick would be paid. After the modular home company refused to retain Frederick’s company, it did not receive a contract from the NCEDC. 

The honest services wire fraud charge alleged in the criminal complaint against McCallum and the wire fraud conspiracy charged in Count 1 of the information to which Frederick pleaded guilty carries a maximum penalty of 20 years in prison and a fine of $250,000, or twice the pecuniary gain to the defendant or loss to the victims, whichever is greater. The false tax return charge to which Frederick pleaded guilty carries a maximum potential penalty of three years in prison and a maximum $250,000 fine, or twice the pecuniary gain to the defendant or loss to the victim, whichever is greater. Sentencing for Frederick is scheduled for March 2, 2021.

U.S. Attorney Carpenito credited special agents of the FBI’s Newark Field Office, under the direction of Special Agent in Charge in Newark George M. Crouch Jr. in Newark; special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez, and special agents of the U.S. Department of Housing and Urban Development, Office of Inspector General, under the direction of Special Agent in Charge Christina Scaringi, with the investigation leading to today’s charges against McCallum and guilty plea by Frederick.

The government is represented by Assistant U.S. Attorneys Jihee G. Suh, Jeffrey Manis, and Elaine K. Lou of the U.S. Attorney’s Office’s Special Prosecutions Division.

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

NEWARK, N.J. – A Pennsylvania medical assistant today admitted participating in a conspiracy to receive bribes and kickbacks in exchange for ordering genetic tests, U.S. Attorney Craig Carpenito announced.

Shanelyn Kennedy, 25, of Scranton, Pennsylvania, pleaded guilty by videoconference before U.S. District Judge Anne E. Thompson to an information charging her with one count of conspiring to violate the anti-kickback statute. Kennedy is the second 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:

Kennedy worked as a medical assistant for Yitzachok “Barry” Kurtzer, a primary care physician with separate offices in the Scranton area. From at least 2018, Kurtzer and his wife, Robin Kurtzer accepted 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 up to $5,000, and the Kurtzers typically accepted the cash in one of Kurtzer’s offices, at times behind locked doors.

Even as the ongoing COVID-19 pandemic substantially reduced in-patient visits, the Kurtzers continued with their scheme. They went from receiving hand-delivered cash kickbacks and bribes to accepting payments by wire and through a mobile phone money-transfer application.

Kennedy participated in the conspiracy with another employee, Amber Harris, who has previously pleaded guilty for her role in the scheme. They both helped collect the DNA swabs in exchange for also receiving kickbacks and bribes, both in cash and later using the money-transfer application.

As a result of the scheme, Medicare paid $755,241 for genetic tests generated from Kurtzer’s practice.

The count of conspiracy to violate the federal anti-kickback statute 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 Feb. 23, 2021.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark; IRS-Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez in Newark; and U.S. Department of Health and Human Services, Office of Inspector General, Philadelphia Regional Office, under the direction of Special Agent in Charge Maureen Dixon, with the investigation leading to the charges. He 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 in the Criminal Division, Newark.

The charges against and allegations in the information pertaining to the Kurtzers are merely accusations, and those defendants are presumed innocent unless and until proven guilty.

TRENTON, N.J. – A Monmouth County, New Jersey, man today admitted to being a felon in possession of a firearm, U.S. Attorney Craig Carpenito announced.

Rashon Alexander, 42, of Long Branch, New Jersey, pleaded guilty by videoconference before U.S. District Judge Michael A. Shipp to an indictment charging him with one count of being a felon in possession of a firearm.

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

On Jan. 13, 2020, officers from the Eatontown Police Department received information that a man fitting Alexander’s description was staying in a local hotel and was in possession of a firearm. The officers observed Alexander – a convicted felon prohibited from possessing a firearm – and another man approaching the hotel. Officers approached Alexander, who admitted to being in possession of marijuana. Officers searched Alexander and found a quantity of marijuana in his sweatshirt pocket. Officers placed Alexander under arrest and searched him, recovering an RG Industries .22 caliber revolver from his pants pocket.

The felon in possession of a firearm charge carries a maximum potential penalty of 10 years in prison and a $250,000 fine. Sentencing is scheduled for February 22, 2021.

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.

U.S. Attorney Carpenito credited special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Charlie J. Patterson, Newark Field Division, Trenton Field Office, with the investigation leading to today’s guilty plea. He also thanked the Monmouth County Prosecutor’s Office, under the direction of Prosecutor Christopher J. Gramiccioni, the Eatontown Police Department, under the direction of Chief William P. Lucia, III, and the New Jersey State Police, under the direction of Col. Patrick J. Callahan for their assistance.

The government is represented by Special Assistant U.S. Attorney Christopher Matthews of the Criminal Division in Trenton.                                                        

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

NEWARK, N.J. – A Bergen County, New Jersey, man was arrested Oct. 18, 2020, for threatening to injure a federal judge, U.S. Attorney Craig Carpenito announced today.

William Kaetz, 56, of Paramus, New Jersey, was charged by criminal complaint with making an interstate communication containing a threat to injure a person and with threatening to assault and murder a federal judge. Kaetz is scheduled to have his initial appearance this afternoon by videoconference before U.S. Magistrate Judge Cathy L. Waldor.   

According to the criminal complaint filed in this case:

On Sept. 24, 2020, Kaetz sent a communication via U.S. Mail to a federal district judge’s house, claiming to have a pending civil matter before the judge and requesting that the judge expedite the case. Kaetz was interviewed that day by investigators and admitted to being concerned about the status of his pending lawsuit before the judge. Kaetz also asked for the judge to be recused and stated that he had acquired the judge’s home address using a paid internet-based service. Kaetz further stated that the excessive delay on his pending case was unacceptable to him.

On Sept. 30, 2020, Kaetz left a voicemail for the judge, at the judge’s office, stating that he had cases pending before the judge, that the judge should have decided his matters weeks ago, and that he wanted the judge off his cases and off the bench. Kaetz further stated that he would not take “no” for an answer.

On Oct. 18, 2020, Kaetz sent an email to the judge’s personal email account and to others, including general email address for the U.S. Marshals Service. In that email, Kaetz claimed that the judge had been “avoiding and stonewalling” his case, that the judge was a “traitor,” that being a traitor “has a death sentence,” and that “there will come a time to take down those people that fail to do their job.” Kaetz further stated that he had pending motions before the judge and that he would try his best “not to harm the traitor” judge but that the “traitor” judge needed to be dealt with. Kaetz then threatened to publicly reveal the judge’s home address and stated: “God knows who has a grievance and what will happen after that.”

The charge of making an interstate communication containing a threat to injure a person carries a maximum penalty of five years in prison. The charge of threatening to assault and murder a federal judge carries a maximum penalty of 10 years in prison. Both charges also carry a maximum fine of $250,000. 

U.S. Attorney Carpenito credited special agents of the FBI and the Joint Terrorism Task Force, under the direction of Special Agent in Charge George M. Crouch Jr., and deputy U.S. Marshals for the District of New Jersey, under the direction of U.S. Marshal Juan Mattos Jr., with the investigation leading to today’s charges.

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

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

NEWARK, N.J. – Two alleged ranking members off the Bloods street gang have been charged with conspiring to distribute fentanyl and heroin in Newark, U.S. Attorney Craig Carpenito announced today.

Leonard Wade, a/k/a “Clap,” 49, of New Brunswick, New Jersey, and Ezra A. Strong, a/k/a “Doonka,” 30, of Brick, New Jersey, are charged in separate complaints with conspiracy to distribute more than 400 grams of fentanyl and more than 100 grams of heroin. Wade is also charged with possession of ammunition by a convicted felon. 

Wade appeared for an initial appearance by videoconference today before U.S. Magistrate Judge Michael A. Hammer. Strong appeared for an initial appearance by videoconference on Oct. 14, 2020, before Judge Hammer. Both men are currently detained.

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

Law enforcement officials have seized 831 grams of suspected fentanyl and 612 grams of suspected heroin, as part of an investigation into a drug trafficking organization (DTO) operating in Monmouth and Middlesex counties, Pennsylvania, and elsewhere.

The investigation has revealed that Wade, allegedly a ranking member of the Sex Money Murder (SMM) subset of the Bloods street gang, is a leader of the DTO. Strong, allegedly a ranking member of the Fruit Town Brims, also a subset of the Bloods street gang, distributes fentanyl and heroin on behalf of the DTO. 

On Oct. 1, 2020, law enforcement officers executed a search warrant of Wade’s residence and recovered a 9mm caliber semi-automatic polymer “privately made” handgun, along with 50 rounds of 9mm ammunition and five rounds of .45 caliber ammunition.

The count of conspiracy to distribute and possess with intent to distribute over 400 grams of fentanyl carries a maximum penalty of life imprisonment and a $10 million fine. The ammunition offense carries a maximum potential penalty of 10 years in prison and a $250,000 fine.

U.S. Attorney Carpenito credited special agents of the Drug Enforcement Administration’s Monmouth/Ocean HIDTA Task Force, under the direction of Special Agent in Charge Susan A. Gibson, with the assistance of the Monmouth County Prosecutor’s Office Gang and Criminal Enterprise Unit, with the investigation leading to the arrests.

The government is represented by Assistant U.S. Attorney Lauren E. Repole of the U.S. Attorney’s Office 4OCDETF/Narcotics Unit.

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

NEWARK, N.J. – A Hudson County, New Jersey man was arraigned today after being indicted by a federal grand jury on multiple narcotics and weapons offenses, U.S. Attorney Craig Carpenito announced.

Hector Gonzalez, 68, of Jersey City, New Jersey, was indicted on Oct. 5, 2020, on one count of possessing with intent to distribute heroin and cocaine; one count of being a prior felon in possession of a firearm and ammunition; and one count of possessing a firearm in furtherance of a drug trafficking crime. Gonzalez had been charged by criminal complaint on Oct. 24, 2019. He appeared for his arraignment by videoconference before U.S. Magistrate Judge Michael A. Hammer and pleaded not guilty.

According to documents filed in this case:

On June 22, 2019, members of the Jersey City Police Department executed a search warrant at Gonzalez’s apartment and discovered three firearms, ammunition, 148 glassine folds of heroin, cocaine, and over $1,300. 

The narcotics charge carries a maximum potential penalty of 20 years in prison. The felon-in-possession charge carries a maximum potential penalty of 10 years in prison. The charge of possessing a firearm in furtherance of a drug trafficking crime carries a maximum potential penalty of life in prison.

U.S. Attorney Carpenito credited members of the Jersey City Police Department, under the direction of Public Safety Director James Shea; the Hudson County Prosecutor’s Office, under the direction of Prosecutor Esther Suarez; and special agents and task force officers of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Charlie J. Patterson, Newark Field Division, with the investigation leading to the indictment.

The government is represented by Assistant U.S. Attorney Andrew M. Trombly of the Cybercrime Unit in Newark.

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

TRENTON, N.J. – A former employee of Tax Pro’s and Tax Solutions & Associates, tax preparation businesses located in Essex and Union counties, was sentenced today to 27 months in prison for conspiring to defraud the United States by filing false income tax returns, U.S. Attorney Craig Carpenito announced.

Angelo Thompson, 39, of Reistertown, Maryland, previously pleaded guilty before U.S. District Judge Michael A. Shipp in Trenton federal court to Count 1 of an indictment charging him with conspiracy to defraud the IRS.

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

From at least 2009 to April 2015, Joseph Kenny Batts was co-owner, along with Damien Askew, of Tax Pro’s, a tax return preparation and payroll business in Essex County, where Thompson, Tony V. Russell, Rudolph Sanders, Batts, and Askew prepared tax returns. In order to boost their business, Thompson and these others conspired to falsify their clients’ federal income tax returns for the purpose of generating refunds from the IRS in amounts that their clients were not entitled to receive. The fraudulent practices that Thompson, Russell, Sanders, Batts, and Askew used to inflate tax refunds included fabricating and inflating credits for education and child care; deductions, such as charitable contributions and unreimbursed employee expenses; and Schedule C business losses. 

Thompson and other members of the conspiracy also permitted Batts to use their Paid Taxpayer Identification Numbers (PTIN) – the identification number that paid tax preparers are required to place on tax returns that they have prepared – when preparing tax returns to conceal Batts’ identity as the actual tax return preparer, due to, among other things, Batts’ prior federal tax fraud conviction.

After law enforcement executed a search warrant at Tax Pro’s in or about April 2015, Batts discontinued Tax Pro’s and opened Tax Solutions and Associates in Union, where Thompson, Russell, and Batts continued preparing false federal income tax returns.

By fraudulently inflating the amounts of the tax refunds, Thompson and his co-conspirators caused a total tax loss to the IRS in excess of $1.6 million.

Askew, Sanders, and Russell, have pleaded guilty to their roles in the scheme. Batts was convicted at trial in September 2019 of one count of conspiracy to defraud the United States and five counts of aiding and assisting in the preparation of false federal income tax returns. Russell has been sentenced to four years in prison; Askew, Sanders and Batts are awaiting sentencing.

In addition to the prison term, Judge Shipp sentenced Thompson to three years of supervised release and ordered him to pay restitution of $103,320. 

U.S. Attorney Carpenito credited special 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. Attorneys Cari Fais and Jihee Suh of the Special Prosecutions Division.

NEWARK, N.J. – An Essex County, New Jersey, man working as a contract custodian at a U.S. Post Office in Maplewood, New Jersey, was arrested today for bank fraud and theft of government property, including stealing nearly $15,000 in checks and cash from the Maplewood Post Office and fraudulently depositing the checks, U.S. Attorney Craig Carpenito announced.

Mark Gregory Jr., 27, of East Orange, New Jersey, is charged by complaint with one count of bank fraud and two counts of theft of government property. He is scheduled to appear this afternoon by videoconference before U.S. Magistrate Judge Michael A. Hammer.

According to documents filed in this case:

Between March 2019 and July 2019, Gregory stole certain checks placed into the stream of mail by customers at the Maplewood Post Office, and cash paid by customers and held at the Maplewood Post Office, and subsequently deposited those checks, in New Jersey and elsewhere, into bank accounts that he controlled.

The bank fraud charge is punishable by a maximum potential penalty of 30 years in prison and a fine of up to $1 million. The theft of government property charges are punishable by a maximum potential penalty of 10 years in prison and a maximum $250,000 fine.

U.S. Attorney Carpenito credited special agents with the U.S. Postal Service – Office of Inspector General, under the direction of Special Agent in Charge Matthew Modafferi, Northeast Area Field Office, and postal inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Raimundo Marrero, with the investigation leading to today’s arrest.

The government is represented by Assistant U.S. Attorney Tazneen Shahabuddin of the 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 Union County, New Jersey, man today admitted making corrupt payments to a public official of the City of Orange Township, New Jersey, as a reward for that public official’s favorable treatment in connection with an Orange municipal project, U.S. Attorney Craig Carpenito announced.

Jeanmarie Zahore, 56, of Rahway, New Jersey, pleaded guilty by videoconference before U.S. District Judge Kevin McNulty to Count 1 of an indictment against him, charging Zahore with making corrupt payments to an agent of a local government receiving federal funds, whom Zahore identified as Willis Edwards III. 

On Sept. 29, 2020, Edwards, the former acting business administrator for Orange, was charged in a superseding indictment in connection with payments allegedly made by Zahore, as well as other charges.

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

Zahore was the sole owner of JZ Nettech, a computer consulting business which he operated out of his residence in Rahway. On Sept. 15, 2015, the Orange City Council passed a resolution awarding JZ Nettech, without competitive bidding, a $350,000 emergency contract to install a computer networking system at a municipal complex that housed the Orange Municipal Court and the Orange Police Department (the “Municipal Complex Project”).

Edwards, as an Orange public official, assisted Zahore in obtaining the contract for the Municipal Complex Project and facilitated the payment of money from Orange to JZ Nettech in connection with the Municipal Complex Project.

Edwards agreed to arrange an advance on the money from Orange for Zahore because Zahore did not have the money to begin working on the Municipal Complex. At Edwards’s instruction, on Sept. 18, 2015, Zahore emailed an Orange employee an invoice for $115,000 in connection with Municipal Complex Project to obtain an advance payment for himself. Typically, vendors are not pre-paid by Orange to purchase supplies for a project.

On Sept. 18, 2015, Zahore received a check from Orange for $115,000 payable to JZ Nettech and deposited that check into JZ Nettech's bank account. Shortly after receiving the $115,000 Orange check, Zahore and Edwards went out together at night to celebrate the award of the $350,000 contract to JZ Nettech.

In October and November 2015, Zahore received two additional payments from Orange in connection with the Municipal Complex Project, one for $140,000 and the other for $95,000.

On more than one occasion Edwards told Zahore, in substance, that Edwards had taken care of Zahore and that Zahore should consider that and do something. Zahore understood those comments by Edwards to be solicitations and demands that Zahore pay Edwards to reward Edwards for Edwards’s assistance in connection with the Municipal Complex Project.

In November 2015, Zahore gave Edwards approximately $10,000 in cash. After accepting the cash payment, Edwards indicated that he was disappointed with the amount and expected more. Zahore made a second cash payment to Edwards for approximately $10,000. Zahore made those two cash payments with the intent to reward Edwards for his assistance.

The charge to which Zahore pleaded guilty carries a maximum penalty of 10 years in prison and a fine of $250,000, or twice the pecuniary gain to the defendant or loss to the victims. Sentencing is scheduled for March 3, 2021.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark; special agents of the U.S. Department of Housing and Urban Development, Office of Inspector General, under the direction of Special Agent in Charge Christina Scaringi; and special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Michael Montanez, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorneys Cari Fais and J Fortier Imbert of the U.S. Attorney’s Office’s Special Prosecutions Division.

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

TRENTON, N.J. – A Passaic County, New Jersey, man was sentenced today to 60 months in prison for his role in a business email compromise (BEC) scheme in which he and others opened bank accounts to function as conduits for stolen funds, U.S. Attorney Craig Carpenito announced.

Lawrence Espaillat, 42, of Clifton, New Jersey, previously pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton federal court to an information charging him with one count of conspiracy to commit wire fraud. Judge Sheridan imposed the sentence today in Trenton federal court.

According to documents filed in this and other cases and statements made in court:

From March 2017 to June 2018, Espaillat, conspirators Corry Pringley and Amanda Suazo, and others, participated in a scheme to steal more than $1 million dollars from individual and corporate victims. The scheme involved recruiting “mules” – including Espaillat, before he rose to the level of recruiter – Suazo and Pringley, to provide their personal identifying information. This information was used to incorporate sham businesses with the N.J. Department of the Treasury under the mules’ names. The mules eventually opened bank accounts in the names of the sham corporations.

A related cyberattack aspect of the scheme involved creating email addresses mimicking – but differing slightly from – legitimate email addresses of supervisory employees at various companies, vendors that did business with those victim companies, mortgage lenders that dealt with individuals in connection with real estate purchases, and brokerage firms and accountants who provided financial services. The conspirators used these deceptive email addresses to send emails that appeared to be requests for payment of legitimate invoices or debts owed by the victims. The victims were deceived into transferring funds by wire into the bogus bank accounts opened by the money mules and controlled by the conspirators. After the victims complied with the fraudulent wiring instructions, Espaillat, Suazo and Pringley, under the direction of other conspirators, quickly debited thousands of dollars from the accounts through in-person and ATM withdrawals and debit card purchases. They also transferred the funds to foreign bank accounts they controlled. Espaillat, Suazo and Pringley kept a fraction of the proceeds as payment.

For example, over a three-day period in April 2018, a corporate victim in Texas deposited $3.8 million dollars in a bank account opened by Pringley and controlled by Espaillat, Pringley and Suazo, who withdrew or transferred more than $1 million from the account.

In addition to the prison term, Judge Sheridan sentenced Espaillat to three years of supervised release, ordered him to pay restitution of $1.7 million and forfeit $12,000.

Suazo and Pringley pleaded guilty on Jan. 17, 2019, and Feb. 14, 2019, respectively, to separate informations charging each with one count of conspiracy to commit wire fraud. Today, Pringley was sentenced by Judge Sheridan to one year and one day in prison, three years of supervised release, restitution of $1.28 million and forfeiture of $8,000. Suazo is awaiting sentencing.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, and special agents of the U.S. 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 Assistant U.S. Attorney Eric A. Boden of the U.S. Attorney’s Trenton office.

NEWARK, N.J. – A medical device maker has agreed to pay $18 million to resolve allegations that the company caused the submission of false claims to the Medicare, Medicaid, and TRICARE programs by paying kickbacks to physicians and hospitals to induce the use of its products, the U.S. Attorney’s Office for the District of New Jersey and the Department of Justice announced today. 

The settlement resolves allegations that, for over six years, Merit Medical Systems Inc. (MMSI), of South Jordan, Utah, engaged in a kickback scheme to pay physicians, medical practices, and hospitals to induce their use of MMSI products in medical procedures performed on Medicare, Medicaid, and TRICARE beneficiaries. The federal Anti‑Kickback Statute prohibits offering or paying anything of value to induce the referral of items or services covered by Medicare, Medicaid, TRICARE, and other federal healthcare programs. The statute is intended to ensure that medical providers’ judgments are not compromised by improper financial incentives.

“Merit Medical provided millions of dollars of advertising and other marketing support to healthcare providers to induce sales of its products,” Attorney for the United States Rachael A. Honig said. “Unlawful kickbacks like these distort the market for medical devices upon which our healthcare system depends. For years, Merit Medical ignored internal warnings and refused to abide by the rules that apply to every other medical device company. With today’s settlement, they are paying the price for that refusal.”

“Paying kickbacks to doctors in exchange for referrals undermines the integrity of federal healthcare programs,” Acting Assistant Attorney General Jeffrey Bossert Clark of the Department of Justice’s Civil Division said. “When medical devices are used in surgical procedures, patients deserve to know that their device was selected based on quality of care considerations and not because of improper payments from manufacturers.”

Under the guise of an internal program known as the Local Advertising Program, MMSI allegedly provided remuneration to healthcare providers in the form of millions of dollars in free advertising assistance, practice development, practice support, and purported unrestricted “educational” grants to induce the healthcare providers to purchase and use a wide variety of MMSI products. These products included MMSI’s EmboSphere devices, which generally were used for uterine fibroid embolization procedures, and its QuadraSphere devices, which generally were used for other types of embolization procedures. Despite publicly claiming that its financial assistance was designed to “increase th[e] awareness” of medical treatments, MMSI allegedly provided it only to select healthcare providers to reward past sales, induce future sales, and steer business to MMSI and away from MMSI’s competitors. The government alleged that MMSI disregarded numerous warnings that its conduct may violate the Anti-Kickback Statute, including warnings from MMSI’s own Chief Compliance Officer, during the course of the alleged kickback scheme. Of the $18 million to be paid by MMSI, $15.21 million will be returned to the federal government, and a total of $2.79 million will be returned to individual states, which jointly funded claims involving MMSI devices that were submitted to state Medicaid programs.

Along with the civil settlement, MMSI entered into a five-year Corporate Integrity Agreement (CIA) with the Department of Health and Human Services-Office of Inspector General (HHS-OIG). The CIA requires MMSI to hire a compliance expert and an independent review organization to analyze its systems and transactions.  

“No health care company’s compliance program can be effective without commitment and support from the company’s leaders,” HHS-OIG Chief Counsel Gregory Demske said. “As happened here, ignoring your compliance officer’s concerns about payments to referral sources is a great way to become a defendant in a kickback case.”

The allegations were originally made in a lawsuit filed under the whistleblower provisions of the False Claims Act by Charles J. Wolf M.D., the former chief compliance officer of MMSI. The act permits private parties to sue for false claims on behalf of the United States and to share in any recovery. Wolf will receive $2.65 million 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).   

The settlement with Merit Medical was the result of a coordinated effort by the U.S. Attorney’s Office for the District of New Jersey and the Commercial Litigation Branch of the Justice Department’s Civil Division, with investigative support from the Department of Health and Human Services, Office of Inspector General and the FBI.

The government is represented in the District of New Jersey by Assistant U.S. Attorney Andrew Caffrey of the U.S. Attorney’s Office’s Healthcare Fraud Unit.

The lawsuit is captioned United States ex rel. Wolf v. Merit Medical Systems, Inc. The claims resolved by the settlement are allegations only and there has been no determination of liability.

NEWARK, N.J. – A federal grand jury today indicted an Essex County, New Jersey, man for his role in three armed robberies of pharmacies in West Orange, Belleville and East Orange, New Jersey, U.S. Attorney Craig Carpenito announced. 

Malik Conley, 27, of Newark, is charged with three counts of Hobbs Act robbery, three counts of brandishing firearms in furtherance of the robberies and one count of possession of a firearm by a convicted felon. He will be arraigned on a date to be determined. 

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

On Oct. 21, 2019, Conley and a conspirator entered a pharmacy in West Orange, New Jersey, while wearing face masks. One of the men entered the pharmacy holding a silver handgun pointed at employees. The men demanded cash from the register as well as prescription medication. Conley and his conspirator fled the pharmacy with stolen medication and cash.

On Dec. 3, 2019, Conley entered a pharmacy in Belleville, New Jersey, while wearing a face covering and pointing a silver gun at employees. He demanded cash from the register as well as prescription medication, and ultimately fled the pharmacy with stolen medication and cash. Law enforcement recovered the firearm believed to be used in this robbery later that day in Conley’s girlfriend’s car.

On Jan. 13, 2020, Conley and a conspirator entered a pharmacy in East Orange, New Jersey, while both wearing face masks. One of the men entered the pharmacy holding a gun pointed at employees. Both men demanded cash and prescription medication, and ultimately fled the pharmacy with stolen medication and cash. Conley was arrested later that evening with the car keys to the vehicle believed to be used in the East Orange robbery in his pocket. Law enforcement searched the vehicle and recovered prescription medication traceable to the East Orange Pharmacy.         

Each count of Hobbs Act robbery carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. The count of possession of a firearm by a convicted felon 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. Each count of brandishing a firearm in furtherance of a bank robbery carries a mandatory minimum of seven years in prison and a $250,000 fine, or twice the gross gain or loss from the offense.  

U.S. Attorney Carpenito credited special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Charlie Patterson in Newark; the West Orange Police Department, under the direction of Chief James P. Abbott; the Belleville Police Department, under the direction of Chief Mark Minichini; and the East Orange Police Department, under the direction Chief William C. Robinson, with the investigation leading to today’s indictment.

The government is represented by Assistant U.S. Attorney Emma Spiro of the U.S. Attorney’s Office in Newark.

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