District of New Jersey

NEWARK, N.J. – A Middlesex County, New Jersey, man has been charged with bank fraud, theft, and identity theft U.S. Attorney Craig Carpenito announced today.

Bernard Lopez, 40, of Sayreville, New Jersey, is charged by complaint with one count of bank fraud, one count of theft of government funds, and one count of aggravated identity theft. He was arrested on July 6, 2020, appeared today by teleconference before U.S. Magistrate Judge Lauren F. Louis in the Southern District of Florida, and is expected to appear by videoconference before U.S. Magistrate Judge Leda Dunn Wettre later this week.

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

On Oct. 5, 2019, Lopez used a victim’s Social Security number and business documents pertaining to a sham business that he had created to open a fraudulent bank account in that business’ name.  Lopez then fraudulently obtained a U.S. Treasury check, which was fraudulently altered to be made payable to the sham business in the amount of $211,887 and deposited it into the account. Lopez then either withdraw or transfer the stolen proceeds from the fraudulent business bank account before anyone could detect the fraud.

The bank fraud charge carries a maximum penalty of 30 years in prison and a fine of the greatest of $1 million or twice the gain derived from, or loss caused by, the offense. The theft of government funds charge carries a maximum penalty of 10 years in prison and a fine of the greatest of $250,000 or twice the gain derived from, or loss caused by, the offense. The aggravated identity theft charge carries a mandatory term of imprisonment of two years, which must run consecutively to any other term of imprisonment imposed.

U.S. Attorney Carpenito credited special agents and task force officers of the U.S. Department of the Treasury-Office of Inspector General, under the direction of Assistant Inspector General for Investigations Sally D. Luttrell, with the investigation leading to the charges. He also thanked the U.S. Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Jason J. Molina, for assistance in the investigation.

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

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

NEWARK, N.J. – The Department of Justice today announced $2.2 million in grant funding to law enforcement agencies and stakeholders through the Department’s Office of Community Oriented Policing Services (COPS Office) Community Policing Development (CPD) Microgrants Program. COPS Office Director Phil Keith announced 29 awards with award amounts ranging from $15,090 to $100,000. 

In the District of New Jersey, the state Department of Law and Public Safety is receiving a $34,350 grant for its Officer Safety and Wellness Program and Howell Township is receiving a $93,357 grant for its Youth Engagement Program.

“These funds will provide additional resources for the development of policing strategies that will improve the way law enforcement interacts with the people they are sworn to protect,” U.S. Attorney Carpenito said. “This comes at a crucial time, as we work to refine and enhance community policing strategies.”

“The CPD Microgrants Program is a critical resource to advance innovative community policing projects across the country,” Director Keith said. “These strategic investments from the COPS Office pay huge dividends to state and local law enforcement agencies and the communities that they serve.”

CPD Microgrants Program funds are used to develop the capacity of local, state, and tribal law enforcement agencies to implement community policing strategies. Applicants were invited to propose demonstration or pilot projects to be implemented in their agency that offer creative ideas to advance crime fighting, community engagement, problem solving, or organizational changes to support community policing in one of the following areas:

• Human Trafficking
• Meeting Rural Law Enforcement Challenges
• Officer Safety and Wellness
• Recruitment, Hiring, and Retention

• School Safety
• Staffing and Allocation Studies
• Victim-Centered Approaches
• Violent Crime
• Youth Engagement

Funding through this program is available for the first time since 2018, following the successful removal of a nationwide injunction. These awards are being announced at a critical time for our country, when community policing strategies are very much needed to improve police and community relations.

The complete list of awards can be found here: https://cops.usdoj.gov/pdf/2020AwardDocs/cpdmicrogrants/Award_List.pdf. To learn more about CPD Microgrants, please visit https://cops.usdoj.gov/cpdmicrogrants.  For additional information about the COPS Office, please visit www.cops.usdoj.gov.

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.

CAMDEN, N.J. – A Camden County, New Jersey, man today admitted buying and reselling 80 milligram oxycodone pills as part of his role in drug trafficking operations based in Gloucester City and Camden, U.S. Attorney Craig Carpenito announced.

Wayne Muse, 73, of Lindenwold, New Jersey, pleaded guilty by videoconference before U.S. District Judge Renée Marie Bumb to an information charging him with one count of conspiracy to distribute and possess with intent to distribute a quantity of oxycodone and one count of distributing and possessing with intent to distribute a quantity of oxycodone.

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

Muse and others, including Rocco DePoder and Erick Bell, allegedly agreed to distribute oxycodone in South Jersey between January and March 2020. On Feb. 13 and 14, 2020, Muse communicated with DePoder using the telephone – in communications that were intercepted during a wiretap investigation led by the FBI – and arranged to sell DePoder 60 80 mg. oxycodone pills, which Muse planned to purchase from an individual identified as “Seller-1.” On Feb. 14, 2020, DePoder paid Muse $600, and Muse used $300 of that money to buy the 60 oxycodone pills from Seller-1. Muse then provided the 60 oxycodone pills to DePoder, keeping the remaining $300. Between January and March 2020, Muse also sold oxycodone pills to Bell.

Each count of the information carries a maximum prison term of 20 years and a maximum fine of $1 million.

Others, including DePoder and Bell, were charged in criminal complaints in March 2020.  Their cases are pending, and they are presumed innocent unless and until proven guilty.

U.S. Attorney Carpenito credited special agents of FBI Philadelphia Division, South Jersey Resident Agency, under the direction of Special Agent in Charge Michael J. Driscoll; the U.S. Department of Health and Human Services-Office of the Inspector General, under the direction of Special Agent in Charge Scott J. Lampert; the Camden County Sheriff's Office, under the direction of Sheriff Gilbert L. Wilson; the New Jersey Office of Homeland Security and Preparedness, under the direction of Director Jared M. Maples; the Camden County Police Department, under the direction of Chief Joseph Wysocki; and the U.S. Department of Agriculture-Office of Inspector General, under the direction of Special Agent in Charge Bethanne M. Dinkins, with the investigation leading to today’s guilty plea. He also thanked the FBI Newark Division, New Jersey State Police, Camden County Prosecutor’s Office, and U.S. Drug Enforcement Administration (DEA) for their assistance.

The government is represented by Assistant U.S. Attorneys Gabriel J. Vidoni of the Office’s Camden branch and Sara F. Merin of the Newark Office.

TRENTON, N.J. – Seven people have been charged for their alleged roles in a large-scale conspiracy to commit bank fraud in New Jersey, New York, Pennsylvania, Maryland, Virginia, and Michigan over the course of two years, U.S. Attorney Craig Carpenito announced today.

The criminal complaint unsealed today in Trenton federal court charges the defendants with conspiracy to commit bank fraud, in connection with a fraudulent scheme that used hundreds of fraudulent accounts to defraud several major banks causing losses of over $3.5 million. Today’s arrests of five of the defendants were made in coordination with two other federal investigations conducted by the U.S. Attorney’s Offices for the Eastern District of Virginia and the District of Maryland, which led to the filing of separate criminal complaints, also unsealed today, that charged five defendants in the Eastern District of Virginia and two defendants in the District of Maryland.

According to documents filed in the District of New Jersey and statements made in court:

From 2018 through April 2020, the defendants conspired with each other and others to defraud several major banks and electronic merchant processors. To accomplish the conspiracy’s unlawful objective, the defendants established bank accounts associated with sham entities that had no legitimate purpose, and thereafter would issue checks payable to other sham entities associated with the criminal organization, knowing that the accounts on which the checks were drawn contained insufficient funds. The defendants would also conduct numerous fraudulent credit card and debit card transactions between shell companies to fraudulently credit payee accounts and fraudulently overdraw payor accounts. Alternatively, the defendants would use these shell companies to execute temporary refund credits, commonly referred to as “charge-backs,” to checking accounts associated with the criminal organization, where no prior legitimate transaction had occurred. 

In each one of these instances, members of the criminal organization withdrew the funds (through ATMs or bank tellers) that banks and/or merchant processors had credited to the payee bank accounts at the time of the fraudulent transaction. Because the defendants withdrew the credited funds from the payee accounts before the banks could recognize the fraudulent transactions, the banks and merchant processors were left with substantial losses.

The investigation has identified approximately 200 bank accounts and 75 merchant credit card processing accounts used to facilitate the schemes. The defendants’ unlawful activities have caused an aggregate loss to banks and merchant processing companies of at least $3.5 million.

The bank fraud conspiracy count carries a maximum potential penalty of 30 years in prison and a maximum fine of $1 million.

U.S. Attorney Craig Carpenito credited postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge James Buthorn, Newark Division, and Acting Inspector in Charge Felicia George, Michigan Division; special agents of the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Jason Molina in Newark; the Social Security Administration Office of the Inspector General, under the direction of Special Agent in Charge John F. Grasso; 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 charges. He also thanked the Department of Homeland Security, Homeland Security Investigations, Michigan Division, and the U.S. Attorneys for the Eastern District of Virginia and the District of Maryland for coordinating the investigation.

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

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

The defendants charged in the New Jersey complaint unsealed today are listed below:

Name

Age

Residence

*Rana Sharif

36

Dearborn Heights, Michigan

Awaise Dar

32

Dearborn, Michigan

*Shamsher Farooq

26

Dearborn, Michigan

Habib Majid

34

North Brunswick, New Jersey

Naveed Arif

42

Port Reading, New Jersey

Ali Abbas

38

Carteret, New Jersey

Erm Ayaz

36

Bayside, New York

*denotes at large

NEWARK, N.J. – A Monmouth County, New Jersey, man was charged today for subscribing to a false tax return, U.S. Attorney Craig Carpenito announced.

Steven Bryce, 50, of Monmouth County, New Jersey, is charged by complaint with subscribing to a false tax return for tax year 2013. A summons was issued for Bryce to appear before a U.S. Magistrate Judge in Newark federal court at a time to be scheduled.

According to the complaint:

In 2013, Bryce operated a gambling business. On July 14, 2014, Bryce filed with the IRS U.S. Individual Income Tax Return, Form 1040, for the calendar year 2013 on behalf of himself and his spouse, which falsely stated that they had total income of $112,899. The 2013 Tax Return was not true and correct: Bryce received tens of thousands of dollars from his gambling business, and, as a result, had income substantially in excess of the amount he reported.

The charge of subscribing to a false tax return carries a maximum potential penalty of three years in prison and a maximum $250,000 fine.    

U.S. Attorney Carpenito credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez and special agents of the FBI, under the direction of Acting Special Agent in Charge Joe Denahan in Newark with the investigation leading to today’s charges.

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

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

NEWARK, N.J. – A Jersey City police officer was charged today with conspiring to defraud Jersey City by obtaining compensation for off-duty work that she did not perform, U.S. Attorney Craig Carpenito announced.    

Gicella Sanchez, 36, of Jersey City, is charged by complaint with one count of conspiracy to defraud a local government. She is expected to appear today by videoconference before U.S. Magistrate Judge Cathy L. Waldor.  

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

Private contractors and businesses sometimes require the services of off-duty Jersey City police officers for certain projects, including work that could obstruct the flow of traffic. The off-duty assignments were made by a Jersey City Police Department-designated coordinator for the district in which the assignment was to be carried out. Officers receiving these off-duty assignments were required to complete and provide to the coordinator a voucher that indicated, among other things, the hours worked on particular off-duty assignments.  

From November 2014 through June 2016, Sanchez conspired with another Jersey City police officer who was authorized to assign off-duty work and sign vouchers. That officer – with Sanchez’s knowledge and consent – submitted phony vouchers to Jersey City indicating that Sanchez had completed certain off-duty assignments that she never actually performed. As a result, Sanchez was compensated well over $5,000 for off-duty work she never performed.

Sanchez faces a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense.

U.S. Attorney Craig Carpenito credited special agents of the FBI, under the direction of Acting Special Agent in Charge Joe Denahan in Newark, with the investigation leading to today’s charge.    

The Jersey City Police Department is cooperating with the investigation.   

The government is represented by Assistant U.S. Attorney Sean Farrell of the U.S. Attorney’s Office’s Special Prosecutions Division in Newark.

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

NEWARK, N.J. – A Bergen County, New Jersey, man was arrested today for his alleged role in an investment scheme that fraudulently obtained $1.525 million from at least three families from 2017 through 2019, U.S. Attorney Craig Carpenito announced.

Matthew Benjamin, 53, of Englewood, New Jersey, is charged by complaint with two counts of wire fraud and one count of securities fraud. He is scheduled to make his initial appearance today by videoconference before U.S. Magistrate Judge Cathy L. Waldor.

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

From May 2017 through August 2019, Benjamin falsely represented to at least three families that his company, Clear Solutions Group LLC, had lucrative contracts to purchase closeout or excess cosmetic inventory from Company A, which he would then resell at a mark-up to Company B. Benjamin told the victims that he had access to these closeout goods through his contacts in the cosmetics and fragrance industry, which he purportedly made through his work at his family’s cosmetic wholesale and distribution business prior to starting Clear Solutions Group. Benjamin induced the victims to provide him with money to purchase the inventory from Company A and promised significant profits in return. Instead of investing the money as he promised, Benjamin misappropriated the investor’s money for his own use and benefit.

Benjamin provided the victims with falsified documents, including fake purchase orders, invoices, promissory notes and bank records showing inflated assets of Clear Solutions Group. To lull victims and induce them to continue investing, Benjamin provided them with documents that purported to detail the investors’ profits.

Benjamin misrepresented to certain investors that portions of their profits on the investment contracts were being reinvested in additional deals to purchase and sell cosmetics, which in turn would generate more profits. From time to time, Benjamin made payments to the investors that were purportedly their profits on certain cosmetics contracts. 

In reality, Benjamin did not purchase or sell cosmetics with the money invested by the victims. Instead, Benjamin misappropriated the investors’ money by making payments to other investors in Clear Solutions Group, which were characterized as those investors’ profits from the nonexistent cosmetic contracts, thereby enabling Benjamin to continue to perpetuate his fraudulent scheme; and by funding Benjamin’s and his family’s lifestyle, including paying for car and house rental payments, food, international travel, legal fees, technology equipment, and summer camp tuition for his family members. The victims’ losses from the fraud perpetrated by Benjamin collectively totaled approximately $1 million.

The wire fraud counts are each punishable by a maximum of 20 years in prison and a fine of $250,000, or twice the gross amount of gain or loss from the offense, whichever is greater. The securities fraud count is punishable by a maximum of 20 years in prison and a fine of $5 million.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Acting Special Agent in Charge Joe Denahan in Newark, with the investigation leading to today’s charges. He also thanked the U.S. Securities and Exchange Commission’s New York Regional Office, under the direction of Director Marc Berger, for its assistance. The U.S. Securities and Exchange Commission (SEC) also filed a civil complaint against Benjamin today based on the same conduct.

The government is represented by Assistant U.S. Attorney Jennifer Kozar of the Economic Crimes 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. – The ex-husband of one of the stars of the Bravo television show “The Real Housewives of New Jersey,” and an organized crime soldier were arrested today on charges of planning and carrying out an assault of the Bravo star’s current husband in exchange for a lavish wedding reception, U.S. Attorney Craig Carpenito announced.

Thomas Manzo, 55, of Franklin Lakes, New Jersey, and John Perna, 43, of Cedar Grove, New Jersey, are each charged by indictment with committing a violent crime in aid of racketeering activity and conspiracy to commit a violent crime in aid of racketeering activity. The indictment also charges Perna – identified in the indictment as a soldier in the Lucchese Crime Family – with conspiracy to commit wire and mail fraud related to the submission of a false car insurance claim, and Manzo with falsifying and concealing records related to the federal investigation of the violent crime. Both defendants will make their initial appearances today by videoconference before U.S. Magistrate Judge Cathy L. Waldor.

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

In the spring of 2015, Manzo, one of the owners of the Brownstone Restaurant in Paterson, New Jersey, allegedly hired Perna to assault his ex-wife’s then-boyfriend in exchange for a deeply discounted wedding reception for Perna held at the upscale venue. Perna, who is a “made man” in the Lucchese Crime Family with his own crew, worked with his associates to plan and carry out the assault, which took place in July of 2015. In exchange for committing the assault, Perna held a lavish wedding reception at Manzo’s restaurant for a fraction of the price, which was paid by another Lucchese associate and close friend of Manzo’s. The wedding and reception, held in August 2015, were attended by approximately 330 people, and included many members of the Lucchese Crime Family.

Separately, prior to the date that Perna was scheduled to begin serving a state prison sentence in January 2016, he falsely reported that his Mercedes Benz was stolen and destroyed. Perna filed an insurance claim for the destruction of the Mercedes Benz in order for the balance due on the Mercedes Benz. However, Perna had staged the vehicle theft and arson with other members of the Lucchese Crime Family.

The charge against Manzo for allegedly falsifying and concealing records related to the federal investigation of the July 2015 assault relates to federal grand jury subpoenas that were sent to the Brownstone Restaurant seeking documents related to the August 2015 Perna wedding reception. Manzo failed to turn over relevant documents in response to those subpoenas and deliberately submitted a false document regarding the reception to the government, along with a false certification. In November 2019, agents with the FBI executed a search warrant at the Brownstone Restaurant and seized invoices for the August 2015 Perna wedding reception and other relevant documents that were not previously turned over.

The violent crime in aid of racketeering activity count against both defendants carries a maximum potential penalty of 20 years in prison and a $250,000 fine. The conspiracy to commit the violent crime in aid of racketeering activity count against both defendants carries a maximum potential penalty of three years in prison and a $250,000 fine. The conspiracy to commit mail and wire fraud count against Perna carries a maximum potential penalty of 20 years of in prison and a $250,000 fine. The falsifying and concealing records related to a federal investigation count against Manzo carries a maximum potential penalty of 20 years in prison and a $250,000 fine.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Acting Special Agent in Charge Joe Denahan in Newark, with the investigation leading to the charges and arrest.

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

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

CAMDEN, N.J. – An Atlantic County, New Jersey, tax preparer was arrested today for allegedly using false information to increase her clients’ tax refunds and filing her own false tax returns, U.S. Attorney Craig Carpenito announced.

Michele Griffin, 40, of Galloway, New Jersey, is charged by indictment with 19 counts of aiding and assisting in the preparation and filing of false tax returns. Griffin is also charged with three counts of filing her own false tax returns. Griffin will be arraigned today by video conference before U.S. Magistrate Judge Joel Schneider.

According to the indictment:

Griffin allegedly prepared multiple fraudulent tax returns on behalf of her clients by falsifying their education expenses, dependent care expenses, business income, dependent information, and unemployment income. As a result, her clients’ returns requested higher tax credits and higher refunds than the clients were entitled to receive. Griffin received substantial income by preparing tax returns for others that she failed to report on her own tax returns.  Griffin also included false education expenses on her own tax returns, which led her to request higher education credits and a higher refund than she was entitled to receive. 

Griffin allegedly prepared 19 false tax returns on behalf of six clients for tax years 2013 through 2016 and filed three false tax returns for herself for tax years 2013 through 2015.

Each count carries a maximum penalty of three years in prison and a $250,000 fine.

U.S. Attorney Carpenito credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez in Newark, with the investigation leading to the charges.

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

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

CAMDEN, N.J. – A federal grand jury has returned a 33-count indictment charging three individuals, including a doctor and an advanced practice nurse, with defrauding New Jersey state health benefits programs and other insurers out of more than $6 million by submitting fraudulent claims for medically unnecessary prescriptions, U.S. Attorney Craig Carpenito announced today.  A fourth individual, a Mt. Laurel, New Jersey, doctor, pleaded guilty to signing four false prescriptions for patients he never met.

Brian Sokalsky, D.O., 42, of Margate, New Jersey, and Vincent Tornari, 46, of Linwood, New Jersey, were charged with conspiracy to commit health care fraud and wire fraud. Sokalsky was charged with a second conspiracy to commit health care fraud and wire fraud. Ashley Lyons-Valenti, 63, of Swedesboro, New Jersey, and Tornari were charged with a third conspiracy to bribe Lyons-Valenti and deprive her patients and employer of her honest services.  Sokalsky and Tornari also were each charged with individual acts of health care fraud and wire fraud, and Lyons-Valenti was charged with individual acts of wire fraud and five false statement counts. Lyons-Valenti was also charged with obstruction of justice for tampering with a grand jury witness. 

The cases are assigned to U.S. District Judge Robert B. Kugler in Camden. The indicted defendants are expected to appear today by videoconference before U.S. Magistrate Judge Joel Schneider.

According to the indictment:

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

The conspirators recruited individuals in New Jersey to obtain very expensive and medically unnecessary compounded medications from a Louisiana pharmacy, identified in the indictment as “Compounding Pharmacy 1,” and a Pennsylvania pharmacy, identified in the indictment as “Compounding Pharmacy 2.” The conspirators learned that certain compound medication prescriptions – including pain, scar, antifungal, and libido creams, as well as vitamin combinations – were reimbursed for thousands of dollars for a one-month supply.

The conspirators also learned that some New Jersey state and local government and education employees, including teachers, firefighters, municipal police officers, and state troopers, had insurance coverage for these particular compound medications. An entity referred to in the indictment as the “Pharmacy Benefits Administrator” provided pharmacy benefit management services for the State Health Benefits Program, which covers qualified state and local government employees, retirees, and eligible dependents, the School Employees’ Health Benefits Program, which covers qualified local education employees, retirees, and eligible dependents, and other insurance plans. The Pharmacy Benefits Administrator would pay prescription drug claims and then bill the State of New Jersey or the other insurance plans for the amounts paid.

In the first charged conspiracy, Matthew Tedesco, who previously pleaded guilty to conspiracy to commit health care fraud, had an arrangement with Sokalsky – if Tedesco sent new patients to Sokalsky’s medical practice, Sokalsky would prescribe Compounding Pharmacy 1 medications for the patients. Tedesco received a percentage of the amount that Compounding Pharmacy 1 received for prescriptions obtained by Tedesco and his associates. Tedesco and his conspirators recruited public employees and others covered by the Pharmacy Benefits Administrator to agree, in exchange for money, to obtain compounded medications from Compounding Pharmacy 1. Tedesco sent the recruited individuals to Sokalsky and often tipped him off that they were coming. Sokalsky prescribed Compounding Pharmacy 1 medications for the patients, including medications that patients did not need or discuss with him. Sokalsky profited by billing insurance for over 30 new patients.

The completed prescriptions were faxed to Compounding Pharmacy 1, which filled the prescriptions and billed the Pharmacy Benefits Administrator. The Pharmacy Benefits Administrator paid Compounding Pharmacy 1 over $5 million for compounded medications prescribed by Sokalsky. 

The indictment charges Sokalsky and Tornari with a similar scheme to write fraudulent prescriptions for Compounding Pharmacy 2. Tornari’s company had an agreement with Compounding Pharmacy 2 to receive 50 percent of the insurance payment for prescriptions they arranged. Tornari then hired Mark Bruno to find patients who would agree to receive Compounding Pharmacy 2 medications in exchange for cash payments. Bruno pleaded guilty in 2019 to conspiracy to commit health care fraud for his participation in the scheme. Tornari had Sokalsky agree to write Compounding Pharmacy 2 prescriptions for new patients sent to him.  Bruno found patients and sent them to Sokalsky, often after letting Sokalsky know that they were coming. Sokalsky wrote Compounding Pharmacy 2 prescriptions that the patients did not need or discuss with Sokalsky, sometimes without even seeing the patients. These prescriptions cost insurers over $500,000.

In a third charged scheme, Tornari hired Lyons-Valenti’s boyfriend and agreed to pay him commissions on each Compounding Pharmacy 2 prescription that Lyons-Valenti wrote.  Lyons-Valenti then started writing Compounding Pharmacy 2 prescriptions and Tornari paid commissions to the boyfriend, who gave Lyons-Valenti half of the commission payments.  Lyons-Valenti persuaded her workers and subordinates at her medical office to receive Compounding Pharmacy 2 prescription medications that they did not need, often without giving them a medical examination or recording the prescriptions in their medical records. Lyons-Valenti wrote Compounding Pharmacy 2 prescriptions for which insurance paid over $1.25 million and received over $90,000 in kickbacks in return. 

In a fourth scheme, Lyons-Valenti signed five Compounding Pharmacy 1 prescriptions for Judd Holt, who previously pleaded guilty to conspiracy to commit health care fraud for his role in the scheme. On each of the five prescriptions, Lyons-Valenti falsely stated that she had examined the patient’s medical records, conducted a face-to-face examination of the patient, and determined that the prescribed medications were medically necessary, when in fact she had never met or examined any of the five patients. 

Lyons-Valenti also was charged with witness tampering for making false and misleading statements to a co-worker who was a federal grand jury witness. Lyons-Valenti called and texted the witness before and after the witness talked to the FBI and before the witness was scheduled to testify in the grand jury. Lyons-Valenti told the witness to tell the FBI that Lyons-Valenti had examined the witness before prescribing medications for the witness, which was false. Lyons-Valenti also falsely told the witness that Lyons-Valenti had never received any money for writing the prescriptions.

The health care fraud and wire fraud conspiracy count with which defendants Sokalsky and Tornari are charged carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gain or loss from the offense. Each wire fraud count carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gain or loss from the offense. Each health care fraud count carries a maximum penalty of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. The honest services conspiracy count and the false statement counts each carry a maximum penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. The witness tampering charge carries a maximum penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense

Also today, Michael Goldis, D.O., 64, who had a medical practice in Stratford, New Jersey, pleaded guilty by videoconference before Judge Kugler to four counts of making false statements relating to health care matters. According to admissions made in court, Goldis signed four prescriptions for individuals who were not his patients at the request of Richard Zappala, who previously pleaded guilty to conspiracy to commit health care fraud. On each of the four prescriptions, Goldis falsely certified that he had examined the patient’s medical records, conducted a face-to-face examination of the patient, and determined that the prescribed medications were medically necessary, when in fact Goldis had never met or examined any of the four patients.  Goldis admitted that he received $1,000 checks on the same days he signed two of the prescriptions and received a total of $4,700 from Zappala. The Pharmacy Benefits Administrator paid approximately $1 million for prescriptions Goldis signed at Zappala’s request. 

Goldis was previously charged in an indictment with conspiracy to commit health care fraud and other offenses with Steven Monaco, Daniel Oswari, and Aaron Jones. Oswari pleaded guilty in December 2019 to fraud and kickback charges. The indictment remains pending against Monaco and Jones.

Goldis faces a maximum penalty on each count of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for Nov. 6, 2020.

U.S. Attorney Carpenito credited agents of the FBI’s Atlantic City Resident Agency, under the direction of Acting Special Agent in Charge Douglas Korneski in Newark; IRS – Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez in Newark; and 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 indictment and guilty plea. He also thanked the Division of Pensions and Financial Transactions in the State Attorney General’s Office, under the direction of Attorney General Gurbir S. Grewal and Division Chief Aimee Nason, for its assistance in the investigation.

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

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

NEWARK, N.J. – A Monsey, New York, man who was previously convicted of assaulting a woman on a flight from Israel to Newark Liberty International Airport was sentenced today to additional prison time for violating the terms of his supervised release by sexually abusing a minor, U.S. Attorney Craig Carpenito announced.

Yoel Oberlander, 39, appeared by videoconference for a hearing before U.S. District Judge Esther Salas and pleaded guilty to violating the terms of his supervised release by committing another crime. He was sentenced today to 12 months in prison, representing time served, and an additional term of supervised release of two years, which includes a 12-month term of home detention with a GPS bracelet. He will be required to quarantine on house arrest for a period of 14 days once released from Essex County Jail.

On July 20, 2017, Oberlander was sentenced to 12 months in prison and three years of supervised release after pleading guilty to committing the offense of assault with the intent to stalk. On June 24, 2019, while serving his probationary term, Oberlander was arrested by the Ramapo Police Department in New York for picking up a minor victim in his car and assaulting the victim. Oberlander was charged by the Rockland County District Attorney with three misdemeanor offenses: sexual abuse in the third degree, forcible touching, and endangering the welfare of a child. 

Oberlander is a registered sex offender; he was convicted in 2002 in New York for sexual abuse in the second degree, arising from his sexual assault of a minor. In his prior federal prosecution by this office, Oberlander was convicted of assaulting a 22-year old woman who was seated next to him on a May 2016 El Al flight from Tel Aviv to Newark by touching her in the area of her chest, upper thigh, and hand without her consent. 

The government is represented by Assistant U.S. Attorneys Melissa M. Wangenheim and Adam Baker of the U.S. Attorney’s Criminal Division in Newark.

Novartis Hellas S.A.C.I. (Novartis Greece), a subsidiary of Novartis AG, a Switzerland-based global pharmaceutical company, and Alcon Pte Ltd, a former subsidiary of Novartis AG and current subsidiary of Alcon Inc., a multinational eye care company, have agreed to pay a combined total of more than $233 million in criminal monetary penalties to resolve the department’s investigation into violations of the Foreign Corrupt Practices Act (FCPA). 

The resolutions arise out of a Novartis Greece scheme to bribe employees of state-owned and state-controlled hospitals and clinics in Greece and to falsely record improper payments relating to the corrupt scheme and similar conduct, and an Alcon Pte Ltd scheme to make and falsely record improper payments in Vietnam.  Novartis AG has also agreed to pay over $112 million to the U.S. Securities and Exchange Commission (SEC) in a related matter.

Novartis Greece entered into a deferred prosecution agreement with the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the District of New Jersey in connection with a criminal information filed today in the District of New Jersey charging Novartis Greece with one count of conspiracy to violate the anti-bribery provisions of the FCPA and one count of conspiracy to violate the books and records provision of the FCPA.  Pursuant to the deferred prosecution agreement, Novartis Greece has committed to pay a total criminal monetary penalty of $225 million. 

Alcon Pte Ltd, a subsidiary of Novartis AG at the time of the misconduct, separately entered into a deferred prosecution agreement in connection with a criminal information filed today in the District of New Jersey charging Alcon Pte Ltd with conspiracy to violate the books and records provision of the FCPA.  Pursuant to the deferred prosecution agreement, Alcon Pte Ltd has committed to pay a total criminal monetary penalty of approximately $8.9 million. 

“Novartis AG’s subsidiaries profited from bribes that induced medical professionals, hospitals, and clinics to prescribe Novartis-branded pharmaceuticals and use Alcon surgical products, and they falsified their books and records to conceal those bribes,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division.  “The resolutions announced today reflect the paramount importance of effective compliance programs and the department’s commitment to holding companies accountable when they fall short.”

“The agreement we’re announcing today shows that there will be a heavy price paid by companies that violate our laws, whether at home or overseas,” said U.S. Attorney Craig Carpenito for the District of New Jersey.  “Just as importantly, it includes a framework for compliance reforms that should ensure that these companies conduct their business legally moving forward.”

“The FBI is committed to fighting any corrupt acts that adversely impact our economy, our citizenry, or our way of life,” said Acting Special Agent in Charge Douglas Korneski of the FBI’s Newark Field Office. “I say this to every company doing business on the stock exchange –  if you think you can ignore the rules or make up your own, if your business model includes bribery or a quid pro quo, you can count the days until we show up on your company's doorstep. We will protect our citizens, our economy, our way of life, and bring to justice anyone who breaks the law.”

According to its admissions, between 2012 and 2015, Novartis Greece conspired with others to violate the FCPA by engaging in a scheme to bribe employees of state-owned and state-controlled hospitals and clinics in Greece in order to increase the sale of Novartis-branded pharmaceutical products.  Specifically, Novartis Greece paid for employees of state-owned and state-controlled hospitals and clinics to travel to international medical congresses, including events held in the United States, as a means to bribe these officials in exchange for increasing the number of prescriptions they wrote for Lucentis, a prescription drug that Novartis Greece sold.  In furtherance of the scheme, Novartis Greece employees traveled to the United States, and, while located in the United States, facilitated the provision of the improper benefits to publicly-employed Greek health care providers.  

In connection with the resolution, Novartis Greece also admitted that between 2009 and 2010, Novartis Greece made improper payments to health care providers in connection with an epidemiological study that was intended to increase sales of certain Novartis-branded prescription drugs.  The epidemiological study was used as a vehicle to make improper payments to the health care providers in order to increase sales of certain Novartis-branded prescription drugs, and Novartis Greece employees recognized that many participating health care providers believed that they were being paid in exchange for writing prescriptions of Novartis products and not for providing data as part of a clinical study. 

In furtherance of both schemes, Novartis Greece, through its employees and agents, knowingly and willfully conspired with others to cause Novartis AG to mischaracterize and falsely record improper payments related to the international medical congresses and the epidemiological study in Novartis AG’s books, records, and accounts. 

According to its admissions, from 2011 through 2014, Alcon Pte Ltd knowingly and willfully conspired with others to cause Novartis AG to maintain false books, records and accounts, as a result of a scheme to bribe employees of state-owned and state-controlled hospitals and clinics in Vietnam.  Specifically, the false books and records resulted from a scheme in which Alcon employees in Vietnam made corrupt payments through a third-party distributor to employees of state-owned and state-controlled hospitals and clinics in Vietnam in order to increase sales of intraocular lenses.  Intraocular lenses are artificial replacement lenses that are implanted in the eye as part of a treatment for a variety of ailments such as cataracts.  Alcon employees in Vietnam, reimbursed the distributor for up to 50 percent of the cost of the corrupt payments, and these reimbursements were falsely recorded as, among other things, consulting expenses, marketing expenses, and human resource expenses.

As part of the agreement with Novartis Greece, Novartis Greece agreed to continue to cooperate with the U.S. government in any ongoing or future criminal investigations concerning Novartis Greece, its executives, employees, or agents.  In addition, under the agreement, Novartis Greece and its parent company, Novartis AG, agreed to enhance their compliance programs and to report to the government on the implementation of their enhanced compliance programs.  

As part of the agreement with Alcon Pte Ltd, Alcon Pte Ltd agreed to continue to cooperate with the government in any ongoing or future criminal investigations concerning Alcon Pte Ltd, its executives, employees, or agents.  In addition, under the agreement, Alcon Pte Ltd and its parent company, Alcon Inc., agreed to enhance their compliance programs and to report to the government on the implementation of their enhanced compliance programs.  

The government reached these resolutions with Novartis Greece and Alcon Pte Ltd based on a number of factors, including the failure to timely disclose the conduct that triggered the investigations; the nature and seriousness of the offenses, which spanned multiple years and involved high level employees; the lack of an effective compliance and ethics program at the time of the misconduct; and credit for each company’s respective cooperation.  The companies also engaged in remedial measures, including terminating and disciplining individuals who orchestrated the misconduct, adopting heightened controls and anti-corruption protocols, and significantly increasing the resources devoted to compliance.

The criminal monetary penalty for Novartis Greece reflects a 25 percent reduction off a point near the midpoint of the U.S. Sentencing Guidelines range because, although Novartis Greece fully cooperated and remediated, its parent company Novartis AG was involved in similar conduct for which it previously reached a resolution with the SEC in March 2016.

The criminal monetary penalty for Alcon Pte Ltd reflects a 25 percent reduction off the bottom of the U.S. Sentencing Guidelines fine range because of Alcon Pte Ltd’s full cooperation with the government’s investigation.

In a related matter with the SEC, Novartis AG agreed to pay the SEC disgorgement and prejudgment interest totaling approximately $112 million for the conduct in Greece and Vietnam, as well as additional conduct.  

The FBI’s Garrett Mountain, New Jersey Field Office is investigating the case.  Trial Attorney Della Sentilles of the Criminal Division’s Fraud Section and Senior Trial Counsel Bernard J. Cooney and Assistant U.S. Attorney Joshua L. Haber of the U.S. Attorney’s Office Health Care Fraud Unit are prosecuting the case.

The department appreciates the assistance of the Criminal Division’s Office of International Affairs and the significant cooperation provided by the SEC in this case.

The Fraud Section is responsible for investigating and prosecuting all FCPA matters.  Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal-fraud/foreign-corrupt-practices-act.

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. – Switzerland-based global pharmaceutical company Novartis AG and a current and former subsidiary will pay $345 million in criminal and regulatory penalties to resolve violations of the Foreign Corrupt Practices Act (FCPA), U.S. Attorney Craig Carpenito, Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, and FBI Acting Special Agent in Charge Douglas Korneski, Newark Field Office, announced today.

Novartis Hellas S.A.C.I. (Novartis Greece), a subsidiary of Novartis AG, and Alcon Pte Ltd, a former subsidiary of Novartis AG and current subsidiary of Alcon Inc., a multinational eye care company, have agreed to pay $233 million in criminal penalties to resolve the Department’s investigation into FCPA violations. The resolutions arise out of a Novartis Greece scheme to bribe employees of state-owned and state-controlled hospitals and clinics in Greece and to falsely record improper payments relating to the corrupt scheme and similar conduct, and an Alcon Pte Ltd scheme to make and falsely record improper payments in Vietnam. Novartis AG has also agreed to pay $112 million to the U.S. Securities and Exchange Commission (SEC) in a related matter.

Novartis Greece entered into a deferred prosecution agreement with the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the District of New Jersey in connection with a criminal information filed today in the District of New Jersey charging Novartis Greece with one count of conspiracy to violate the anti-bribery provisions of the FCPA and one count of conspiracy to violate the books and records provision of the FCPA. Pursuant to the deferred prosecution agreement, Novartis Greece has committed to pay a criminal penalty of $225 million. 

Alcon Pte Ltd, a subsidiary of Novartis AG at the time of the misconduct, separately entered into a deferred prosecution agreement in connection with a criminal information filed today in the District of New Jersey charging Alcon Pte Ltd with conspiracy to violate the books and records provision of the FCPA. Pursuant to the deferred prosecution agreement, Alcon Pte Ltd has committed to pay a criminal penalty of approximately $8.9 million. 

“The agreement we’re announcing today shows that there will be a heavy price paid by companies that violate our laws, whether at home or overseas,” U.S. Attorney Carpenito said. “Just as importantly, it includes a framework for compliance reforms that should ensure that these companies conduct their business legally moving forward.”

“Novartis AG’s subsidiaries profited from bribes that induced medical professionals, hospitals, and clinics to prescribe Novartis-branded pharmaceuticals and use Alcon surgical products, and they falsified their books and records to conceal those bribes,” Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division said. “The resolutions announced today reflect the paramount importance of effective compliance programs and the department’s commitment to holding companies accountable when they fall short.”

“The FBI is committed to fighting any corrupt acts that adversely impact our economy, our citizenry, or our way of life,” Acting Special Agent in Charge Douglas Korneski said. “I say this to every company doing business on the stock exchange –  if you think you can ignore the rules or make up your own, if your business model includes bribery or a quid pro quo, you can count the days until we show up on your company's doorstep. We will protect our citizens, our economy, our way of life, and bring to justice anyone who breaks the law.”

According to its admissions:

Between 2012 and 2015, Novartis Greece conspired with others to violate the FCPA by engaging in a scheme to bribe employees of state-owned and state-controlled hospitals and clinics in Greece in order to increase the sale of Novartis-branded pharmaceutical products. Novartis Greece paid for those employees to travel to international medical congresses, including events held in the United States, as a means to bribe these officials in exchange for increasing the number of prescriptions they wrote for Lucentis, a prescription drug that Novartis Greece sold.  Novartis Greece employees traveled to the United States facilitated the provision of the improper benefits to publicly employed Greek health care providers. 

Novartis Greece also admitted that between 2009 and 2010, Novartis Greece made improper payments to health care providers in connection with an epidemiological study that was intended to increase sales of certain Novartis-branded prescription drugs. The epidemiological study was used as a vehicle to make improper payments to the health care providers in order to increase sales of certain Novartis-branded prescription drugs, and Novartis Greece employees recognized that many participating health care providers believed that they were being paid in exchange for writing prescriptions of Novartis products and not for providing data as part of a clinical study. 

Novartis Greece, through its employees and agents, knowingly and willfully conspired with others to cause Novartis AG to mischaracterize and falsely record improper payments related to the international medical congresses and the epidemiological study in Novartis AG’s books, records, and accounts. 

From 2011 through 2014, Alcon Pte Ltd knowingly and willfully conspired with others to cause Novartis AG to maintain false books, records and accounts, as a result of a scheme to bribe employees of state-owned and state-controlled hospitals and clinics in Vietnam. The false books and records resulted from a scheme in which Alcon Pte Ltd made corrupt payments through a third-party distributor to employees of state-owned and state-controlled hospitals and clinics in Vietnam in order to increase sales of intraocular lenses. Intraocular lenses are artificial replacement lenses that are implanted in the eye as part of a treatment for a variety of ailments, such as cataracts. Alcon employees in Vietnam, with the approval of executives and employees of Alcon Pte Ltd, reimbursed the distributor for up to 50 percent of the cost of the corrupt payments, and these reimbursements were falsely recorded as, among other things, consulting expenses, marketing expenses, and human resource expenses.

As part of the agreement, Novartis Greece agreed to continue to cooperate with the government in any ongoing or future criminal investigations concerning Novartis Greece, its executives, employees, or agents. Novartis Greece and its parent company, Novartis AG, agreed to enhance their compliance programs and to report to the government on the implementation of their enhanced compliance programs.  

Alcon Pte Ltd agreed to continue to cooperate with the government in any ongoing or future criminal investigations concerning Alcon Pte Ltd, its executives, employees, or agents. Alcon Pte Ltd and its parent company, Alcon Inc., agreed to enhance their compliance programs and to report to the government on the implementation of their enhanced compliance programs.  

The government reached these resolutions with Novartis Greece and Alcon Pte Ltd based on a number of factors, including: the failure to timely disclose the conduct that triggered the investigations; the nature and seriousness of the offenses, which spanned multiple years and involved high level employees; the lack of an effective compliance and ethics program at the time of the misconduct; and credit for each company’s respective cooperation. The companies also engaged in remedial measures, including terminating and disciplining individuals who orchestrated the misconduct, adopting heightened controls and anti-corruption protocols, and significantly increasing the resources devoted to compliance.

The criminal penalty for Novartis Greece reflects a 25 percent reduction off a point near the midpoint of the U.S. Sentencing Guidelines range because, although Novartis Greece fully cooperated and remediated, its parent company Novartis AG was involved in similar conduct for which it previously reached a resolution with the SEC in March 2016.

The criminal penalty for Alcon Pte Ltd reflects a 25 percent reduction off the bottom of the U.S. Sentencing Guidelines fine range because of Alcon Pte Ltd’s full cooperation with the government’s investigation.

In a related matter with the SEC, Novartis AG agreed to pay the SEC disgorgement and prejudgment interest of $112 million for the conduct in Greece and Vietnam, as well as additional conduct. 

The government is represented by Senior Trial Counsel Bernard J. Cooney and Assistant U.S. Attorney Joshua L. Haber of the U.S. Attorney’s Office Health Care Fraud Unit, District of New Jersey, and Trial Attorney Della Sentilles of the Criminal Division’s Fraud Section.

The FBI’s Garrett Mountain, New Jersey Field Office is investigating the case. The Department appreciates the assistance of the FBI Legal Attaché in Athens, Greece, the Office of International Affairs and the significant cooperation provided by the SEC in this case.

The Fraud Section is responsible for investigating and prosecuting all FCPA matters.  Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal-fraud/foreign-corrupt-practices-act.

NEWARK, N.J. – A Middlesex County, New Jersey, man was charged today with allegedly receiving files depicting child sexual abuse and concealing objects to impede the FBI’s investigation, U.S. Attorney Craig Carpenito announced.

Charles F. Browne, 52, of South River, New Jersey, is charged by complaint with one count of receiving child pornography and one count of concealing an object to impede a federal investigation. He is scheduled to appear today by videoconference before U.S. Magistrate Judge Joseph A. Dickson.

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

In September 2017, Dropbox Inc. noticed that child pornography had been uploaded to a Dropbox account with the screen name “Charles Browne” and an email address containing the term “cbrowne.” The FBI obtained the files that were uploaded to the Dropbox account, which included prepubescent child sexual abuse and a resume for Browne.     

On April 8, 2019, law enforcement approached Browne, as he left his then-residence in Tom’s River, New Jersey, to interview him about an ongoing investigation. Subsequent to the interview, he disposed of items in the Kettle Creek, a coastal waterway. 

On April 12, 2019, the Ocean County Sherriff’s Office deployed a drone at the end of the Pier and located an object of interest. FBI divers were deployed and recovered an iPad and iPhone, both of which had been previously registered with Browne’s Apple iCloud account.

Further review of the recovered devices indicated they had been at Brown’s residence and near a body of water north of Bay Terrace Road. One had been at the location where his care was pulled over. The recovered iPad contained videos depicting prepubescent child sexual abuse and emails to and from accounts linked to Browne.    

The count of receipt of child pornography carries a mandatory minimum penalty of five years in prison, a maximum penalty of 20 years in prison, and fine of $250,000. The count of concealing objects to impede a federal investigation count carries a maximum penalty of 20 years in prison and a fine of $250,000.   

U.S. Attorney Carpenito credited special agents with the FBI Newark Child Exploitation Human Trafficking Task Force, under the direction of Acting Special Agent in Charge Douglas Korneski, with the investigation leading to today’s charges.  He also thanked the FBI New York Underwater Search & Evidence Response Team, under the direction of Assistant Director in Charge William Sweeney, the FBI Laboratory Division, under the direction of Assistant Director G. Clayton Grigg, the Middlesex County Prosecutor’s Office, under the direction of Acting Prosecutor Christopher Kuberiet, the Monmouth County Prosecutor’s Office, under the direction of Prosecutor Christopher J. Gramiccioni, the Monmouth County Sheriff’s Office, under the direction of Sheriff Shaun Golden, the Ocean County Sheriff’s Office, under the direction of Sheriff Michael G. Mastronardy, the Toms River Police Department, under the direction of Chief Mitchell Little, and the South River Police Department, under the direction of Chief Mark Tinitigan, for their assistance in this investigation.    

The government is represented by Assistant U.S. Attorney Jamie L. Hoxie of the U.S. Attorney’s Office’s Cybercrime Unit in Newark, New Jersey.

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

CAMDEN, N.J. – Eleven people have been charged for their alleged roles in a large-scale conspiracy to commit bank fraud over in southern New Jersey and southeastern Pennsylvania over the course of four years, U.S. Attorney Craig Carpenito announced today.

The complaints unsealed today charge each of the defendants with bank fraud conspiracy in connection with a scheme that used hundreds of fraudulent accounts to defraud several major banks of $6 million and then launder that money and send it overseas to other conspirators.

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

The defendants are allegedly members of a Nigeria-based, multi-layered organization that engaged in a massive bank fraud conspiracy in several states, including New Jersey, Pennsylvania, Maryland and Rhode Island, between June 2016 and March 2020. Members of the group stole numerous business checks from the United States mail, altered the payee on the checks to a fraudulent name and deposited the checks in bank accounts that had been opened with forged foreign passport documents and fraudulent U.S. visas that matched the names on the stolen checks. Once the banks credited all or a portion of the funds to the accounts – but before the checks had cleared – the defendants withdrew the funds from ATMs or purchased money orders, using debit cards associated with the fraudulent accounts. Members of the organization have used over 400 fraudulent accounts with fake identity documents to defraud the banks.

The organization also laundered the proceeds of the fraud by several means, including using debit cards to purchase money orders from third party stores and using those money orders to purchase used automobiles from different automobile auction companies in Pennsylvania. The vehicles were then exported to Nigeria and other countries in Africa to launder the stolen funds and to increase profits by selling the vehicles at the higher market values obtained for vehicles in these foreign countries.

The bank fraud conspiracy count carries a maximum potential penalty of 30 years in prison and a maximum fine of $1 million.

U.S. Attorney Craig Carpenito credited special agents of the U.S. Postal Inspection Service, under the direction of Damon E. Wood, Inspector in Charge, Philadelphia Division, and Peter R. Rendina, Inspector in Charge, Washington Division; the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Jason Molina in Newark, Special Agent in Charge Brian A. Michael in Philadelphia, Special Agent in Charge John Ernst in Baltimore, and Special Agent in Charge Michael S. Shea in Boston Division; and the U.S. Department of State Diplomatic Security Service (DSS), New York Field Office and Philadelphia Resident Office, under the direction of Special Agent in Charge Timothy W. Dumas, with the investigation leading to the charges. He also thanked the U.S. Marshals Service and the Pennsylvania State Police for their assistance.

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

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

The defendants charged today are listed below:

Name

Age

Residence

Sulaiman Fola Dosunmu

39

Darby, Pennsylvania

Tunde Adeowo

40

Lansdowne, Pennsylvania

Muritala Adeowo

55

Lansdowne

Ayanniyi K Alayande

47

Darby

Ahmmed Bamidele Ponle

41

Darby

Margiettu M. Kamu

34

Philadelphia

Rafiat Adesubomi Sarumi

36

Yeadon, Pennsylvania

Babatunde Omotayo Oke

40

Hyattsville, Maryland

Adekunle Kehinde Owolabi

49

Laurel, Maryland

Olayinka Peter Olaseinde

42

Providence, Rhode Island

Olugbenga Oyedele

47

Collingdale, Pennsylvania

NEWARK, N.J. – Three New Jersey men have been charged for their alleged roles in a conspiracy to steal luxury cars in New Jersey, New York, and Connecticut and transport them across state lines, U.S. Attorney Craig Carpenito announced today.

Malik Baker, a/k/a “Smack,” a/k/a “Mu,” of Vauxhall, New Jersey, 26, and Hakeem Smith, a/k/a “B.A.,” a/k/a “Hak,” 29, and Nafique Goodwyn, 26, both of Newark, were charged by complaint with conspiring to transport stolen vehicles in interstate commerce. Baker and Smith were also charged with one count of conspiring to receive stolen vehicles and one count of receiving a stolen vehicle that had crossed state lines after being stolen, and Smith was also charged with one count of transporting a stolen vehicle across state lines. Goodwyn was arrested today and made his initial appearance via video conference before U.S. Magistrate Judge Joseph A. Dickson. He will be released on $100,000 bond with home detention. Baker and Smith are currently detained on unrelated charges and will make their initial appearances in federal court at a later date.

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

Beginning in July 2019, the defendants and others stole and conspired to steal at least 10 luxury cars in New Jersey, New York, and Connecticut, and hid those cars at a location in Irvington, New Jersey. The cars included a 2019 BMW X4 M40i, stolen from Greenwich, Connecticut, on July 19, 2019; a 2016 Mercedes-Maybach S600, stolen from Clifton, New Jersey, on Aug. 1, 2019; a 2019 Porsche Cayenne, stolen from New City, New York, on Aug. 6, 2019; a 2017 Mercedes S550 and a 2019 Rolls Royce, stolen from Hewlett Bay Park, New York, on Aug. 13, 2019; a 2019 Land Rover, stolen from Kensington, New York, on Aug. 22, 2019; a 2019 Mercede-Maybach, stolen from Quogue, New York, on Aug. 29, 2019; a 2014 Lexus GS, stolen from West Long Branch, New Jersey, on Aug. 29, 2019; a 2017 BMW M4, stolen from Marlton, New Jersey, on Sept. 7, 2019; and a 2017 Mercedes AMG S63, stolen from Orangeburg, New York, in September 2019.

The defendants often used the stolen cars to steal additional cars, and, in one instance, they used a Maserati GranTurisimo they stole from Manalapan, New Jersey, to steal a Range Rover and a Porsche Cayenne in the early morning hours of Aug. 6, 2019 in New City, New York. When law enforcement attempted to conduct a stop of the Maserati, the Maserati accelerated and crashed head-on into a police vehicle before the suspects fled the scene in another stolen vehicle. Law enforcement recovered one of the stolen cars in a shipping container at the port in Newark en route to Ghana. 

The cars stolen by the defendants have an estimated value of at least $1.5 million.

The charges of interstate transportation of stolen vehicles and receipt of stolen vehicles are both punishable by a maximum potential penalty of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offenses.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Acting Special Agent in Charge Douglas Korneski in Newark;, as well as the Newark Police Department, under the direction of Public Safety Director Anthony Ambrose; the Irvington Township Police Department, under the direction of Director Tracy Bowers; the Clarkstown, New York, Police Department, under the direction of Chief Raymond McCullagh; the Wall Township Police Department, under the direction of Chief Kenneth Brown Jr.; the Marlboro Township Police Department, under the direction of Chief Peter Pezzullo; the Tewksbury Township Police Department, under the direction of Chief Tim Barlow; the New Jersey State Police, under the direction of Colonel Patrick J. Callahan; and the Hunterdon County Prosecutor’s Office, under the direction of Acting Prosecutor Michael J. Williams, with the investigation leading to the charges.

The government is represented by Assistant U.S. Attorneys Christopher Amore and Olajide Araromi of the U.S. Attorney’s Office Criminal Division in Newark.

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

NEWARK, N.J. – A Bayonne, New Jersey, man was sentenced today to 18 months in prison for tax evasion and bankruptcy fraud, U.S. Attorney Craig Carpenito announced.

Patrick Franconeri, 57, previously pleaded guilty before U.S. District Judge Brian R. Martinotti to an information charging him with one count of tax evasion and one count of concealment of assets in bankruptcy. Judge Martinotti imposed the sentence by videoconference today.

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

Franconeri was the owner and operator of several construction businesses that performed work for a major insurance company in New Jersey. During tax year 2014, as a result of the operation of the construction companies, Franconeri earned taxable income of $1,362,950, on which there was an income tax owing to the United States of $558,439. However, Franconeri failed to file a tax return or request an extension for that year.

Franconeri took actions to conceal and attempt to conceal his income so that he would not have to pay taxes on it, including cashing checks at check-cashing facilities so that the money would not come to the attention of the IRS.

Franconeri also filed a Chapter 7 bankruptcy petition in U.S. District Court in Newark on March 11, 2010, but knowingly and fraudulently concealed property belonging to his bankruptcy estate from the United States Trustee. Franconeri concealed and failed to disclose his ownership and operation of his construction companies, as well as $965,575 in income he had received in the prior two years as the owner and operator of his construction companies.

In addition to the prison term, Judge Martinotti sentenced Franconeri to three years of supervised release and ordered him to pay restitution of $716,569 to the victims of his bankruptcy offense and $558,349 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 Jonathan W. Romankow of the Violent Crimes Unit in Newark.

TRENTON, N.J. – An Ocean County, New Jersey, man was arrested today on charges that he received and possessed images and videos of child sexual abuse downloaded from the internet, U.S. Attorney Craig Carpenito announced.

Joseph J. Punderson, 31, of Island Heights, New Jersey, is charged in a criminal complaint with one count of receipt of child pornography and one count of possession of child pornography. Punderson appeared this afternoon by videoconference before U.S. Magistrate Judge Tonianne J. Bongiovanni and detained without bail.

According to documents filed in this case:

In investigating leads provided by the National Center for Missing and Exploited Children (NCMEC) and others, law enforcement uncovered evidence that e-mail and social media accounts associated with Punderson were used and were linked to accounts that were used in the commission of suspected child pornography offenses between May 2019 and November 2019.

The charge of knowingly receiving child pornography carries a mandatory minimum sentence of five years and a maximum of 20 years in prison, and a statutory maximum fine equal to $250,000 or twice the gross pecuniary gain or loss, whichever is greater. The charge of knowingly possessing child pornography carries a maximum of 10 years in prison, and a statutory maximum fine equal to $250,000 or twice the gross pecuniary gain or loss, whichever is greater.

U.S. Attorney Carpenito credited special agents of the Department of Homeland Security, Homeland Security Investigations (HSI), Atlantic City, under the direction of Special Agent in Charge Jason Molina in Newark, the Ocean County Prosecutors Office, under the direction of Prosecutor Bradley D. Billhimer, and the Island Heights Police Department, under the direction of Acting Chief Paul Rutledge, with the investigation leading to today’s arrest.

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

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

TRENTON, N.J. – A Romanian national was sentenced today to 48 months in prison for his role in a conspiracy to steal bank account information from thousands of customers by installing secret card-reading devices and pinhole cameras on ATMs throughout New Jersey and elsewhere, U.S. Attorney Craig Carpenito announced.

Ionut Paraschiv, 35, previously pleaded guilty to conspiracy to commit bank fraud. U.S. District Judge Peter G. Sheridan imposed the sentence by videoconference this afternoon.

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

Paraschiv admitted he was part of an ATM skimming scheme that stole bank account information by installing hidden card-reading devices on ATMs throughout northern and central New Jersey. Paraschiv previously acknowledged that he and his conspirators created bank cards using the fraudulently obtained account information, which they used to unlawfully withdraw large amounts of cash from various ATMs. The scheme, which involved actual and attempted losses exceeding $1.5 million, impacted over 1,000 bank customers.

In addition to the prison term, Judge Sheridan sentenced Paraschiv to three years of supervised release and ordered him to pay $443,277 in restitution.  

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Acting Special Agent in Charge Douglas Korneski, detectives with the Middlesex County Prosecutor’s Office, under the direction of Acting Prosecutor Christopher Kubriet, and detectives with the Woodbridge Police Department, under the direction of Police Director Robert Hubner, with the investigation leading to today’s sentencing. He also thanked detectives with the New York Police Department Financial Crimes Task Force in Brooklyn, New York, for their assistance with the case.

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

NEWARK, N.J. – A Monmouth County, New Jersey, man was charged today with tax evasion, corrupt interference with the administration of the Internal Revenue laws, and failure to file federal tax returns, U.S. Attorney Craig Carpenito announced.

Thomas Bertoli, 62, of Matawan, New Jersey, is charged by indictment with three counts of tax evasion, one count of corrupt interference with the administration of the Internal Revenue laws, and four counts of failure to file tax returns. He will be arraigned at a later date.

According to the indictment:

Bertoli operated the following businesses: The Doormen Inc.; City Street Associates LLC, a/k/a CSA LLC; and Urban Logistics LLC. Individually and through his companies, Bertoli obtained payments from clients for services provided, including payments from developers and construction firms for expediting services on real estate development and construction projects, primarily in Jersey City, New Jersey; and payments from political campaigns for political consulting services in New Jersey. Expediting in the construction industry typically refers to facilitating the acquisition of building permits and other government agency approvals required for the completion of real estate projects.

Bertoli obtained hundreds of thousands of dollars in gross receipts for calendar years 2009 to 2016. Bertoli had not, as of April 18, 2017, filed federal tax returns or paid any of the taxes due, other than a $5,000 nominal payment in September 2014, for those years, despite receiving substantial gross receipts and having a substantial tax due and owing. He concealed and attempted to conceal from the IRS his income and assets through various means; Bertoli cashed at check cashers payments from his clients, made false and fraudulent statements to the IRS, and used the Urban Logistics bank account for personal expenditures.

Bertoli is charged with evasion of payment of taxes for calendar years 2009 to 2013 and evasion of assessment of taxes for calendar years 2014 and 2015. He also is charged with corrupt interference with the administration of the Internal Revenue laws and failing to file tax returns for calendar years 2013 to 2016.

Each charge of tax evasion carries a maximum potential penalty of five years in prison and a maximum $250,000 fine. The charge of corrupt interference with the administration of the Internal Revenue laws carries a maximum potential penalty of three years in prison and a $250,000 fine. Each charge of failing to file a tax return carries a maximum potential penalty of one year in prison and a $100,000 fine. 

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

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

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

NEWARK, N.J. – A former finance officer for a labor union today admitted stealing $117,000 from his union’s operating accounts, U.S. Attorney Craig Carpenito announced.

Angel L. Garcia, 57, of Tampa, Florida, pleaded guilty by videoconference before U.S. District Judge Stanley R. Chesler to an information charging him with one count of embezzling from the Amalgamated Transit Workers Union Local 1614, in Sussex County, New Jersey.

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

Garcia was a bus driver who held a part-time position at Local 1614. Garcia was elected by the membership, every three years, as the union’s financial secretary, and served in that position from June 2014 through May 2019. As such, Mr. Garcia was a fiduciary who occupied a position of trust and was obligated to act solely in the interests of the membership. As the financial secretary, he alone was responsible for maintaining the check book and other financial documents of the union. However, without executive board approval, Garcia withdrew approximately $117,000 from the union’s three bank accounts to pay for his rent, utilities, telephone and other personal goods and services. 

The embezzlement charge carries a maximum penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for Nov. 17, 2020.

U.S. Attorney Carpenito credited the investigators of the U.S. Department of Labor, Office of Labor Management Standards, under the direction of Adriana Vamvakas, Regional Director; and special agents of the Department of Labor (OIG), New York Region, under the direction of Special Agent in Charge Michael Mikulka, 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.

CAMDEN, N.J. – A husband and wife from Burlington County, New Jersey, were charged today with conspiring to defraud more than 33 victims into mailing and wiring more than $6 million to them and other conspirators after their conspirators met and wooed the victims on online dating sites, U.S. Attorney Craig Carpenito announced.

Martins Friday Inalegwu, 31, and Steincy Mathieu, 24, both of Maple Shade, New Jersey, are charged by complaint with one count of conspiracy to commit wire and mail fraud. Inalegwu was arrested today and made his first appearance by videoconference before U.S. Magistrate Judge Ann Marie Donio. Mathieu remains at large.

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

Between October 2016 and May 13, 2020, Inalegwu, Mathieu and their conspirators, several of whom reside in Nigeria, allegedly participated in an online romance scheme, defrauding victims throughout the country. The conspirators made initial contact with victims through online dating and social media websites, corresponded with them via email and phone, pretended to strike up a romantic relationship with them. They requested the victims send money to them, or their associates, for fictitious emergency needs. For example, the conspirators duped victims into believing that they needed money for customs fees and taxes, medical expenses, travel expenses or business expenses. The individuals whom the victims believed they were speaking to did not exist, and instead they were speaking to the conspirators.

Inalegwu, Mathieu and their conspirators also engaged in apartment rental scams with at least three of the victims. They advertised a property, not owned or controlled by them, for the purpose of collecting money from the victims in the form of application fees and security deposits. The conspirators listed advertisements online, enticed victims with information about the properties, pretended they were authorized to rent the properties, and then directed that the victims complete applications and send money to either Inalegwu, Mathieu or conspirators, in the form of down payments to reserve the properties. After Inalegwu, Mathieu and conspirators collected the money, the victims never heard from them again.

Conspirators used myriad email accounts and phone numbers to communicate with the victims and instruct them on where to wire the money, including recipient names, addresses, financial institutions and account numbers. Victims wired money to bank accounts held by Inalegwu and Mathieu in the United States, and also mails checks directly to Inalegwu and Mathieu. Some victims transferred money to the conspirators via money transfer services, such as Western Union or MoneyGram, and others wired money to bank accounts held by conspirators overseas.

Federal law enforcement agents have identified more than 33 victims, who sent over $6 million to conspirators, $3.1 million of which was sent directly to Inalegwu and Mathieu. Inalegwu and Mathieu spent the victims’ money on personal expenses, withdrew money in cash, transferred money to other bank accounts they personally controlled, and transferred money to bank accounts held by conspirators in Nigeria and Turkey. 

The count of conspiracy to commit wire and mail fraud is punishable by a maximum of 20 years in prison and a $250,000 fine.

U.S. Attorney Carpenito credited special agents of the FBI, Atlantic City Resident Agency, under the direction of Acting Special Agent in Charge Douglas Korneski in Newark; special agents of Homeland Security Investigations, under the direction of Special Agent in Charge Jason Molina in Newark; special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez; postal inspectors of the U.S. Postal Inspection Service under the direction of Inspector in Charge James Buthorn; and special agents of the U.S. Attorney’s Office with the investigation leading to the charges.

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

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

Earlier today, Attorney General Barr announced that, by operation of law, Audrey Strauss will become the Acting U.S. Attorney for the Southern District of New York and will serve in that capacity until a permanent successor is in place.  Audrey Strauss is a talented and tenacious lawyer, and she is someone for whom I have a great deal of respect.  She will uphold the reputation and legacy of the Southern District and honor its fine public servants.  I commend the Attorney General on his decision to have Audrey Strauss serve in this capacity, and I look forward to continuing to do the job that I love – leading the great men and women of the District of New Jersey.

TRENTON, N.J. – A federal grand jury today indicted the leader of a Trenton drug-trafficking organization for his role overseeing and managing the distribution of large amounts of heroin in the Trenton area, U.S. Attorney Craig Carpenito announced.

Robert M. Gbanapolor, 33, of Trenton, was charged with conspiracy to distribute and possess with intent to distribute 100 grams or more of heroin with the intent to distribute and distribution. Gbanapolor and 10 others were previously charged by complaint in June 2019. He will be arraigned on a date to be determined.  

Eight other members of this drug trafficking conspiracy have previously pleaded guilty in this case. The charges against two other defendants remain pending on complaint.

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

From June 2018 through May 2019, the defendants and others engaged in a heroin trafficking conspiracy in the areas of Stuyvesant Avenue, Hoffman Avenue, and Highland Avenue in Trenton, as well as in the area of Barbary Road in Philadelphia.

Through the interception of telephone calls and text messages pursuant to court-authorized wiretap orders, controlled purchases of heroin, the use of confidential sources of information, and other investigative techniques, law enforcement learned that Gbanapolor obtained regular bulk supplies of heroin from Duane Paulino-Escalera, whom Gbanapolor referred to as “Papi.”

Members of the conspiracy distributed the heroin supplied by Papi to other conspirators, distributors, sub-dealers, and end-users in and around Trenton. Law enforcement officers intercepted numerous discussions among the conspirators regarding issues such as heroin quality and availability, branding, quantity and customer satisfaction.

The charge against Gbanapolor carries a mandatory minimum penalty of five years in prison and a maximum potential penalty of 40 years in prison, and a $5 million fine.

U.S. Attorney Carpenito credited special agents of the U.S. Drug Enforcement Administration, New Jersey Division, Camden Resident Office, under the direction of Special Agent in Charge Susan A. Gibson; and task force officers of the Trenton Police Department, under the direction of Police Director Sheilah Coley, with the investigation leading to the charges. He also thanked detectives and officers of the Gloucester County Prosecutor’s Office, under the direction of Acting Prosecutor Christine A. Hoffman; detectives and officers of the Gloucester Township Police Department, under the direction of Chief Harry Earle; members of the N.J. State Police, under the direction of Col. Patrick J. Callahan; detectives and officers of the Bordentown Township Police Department, under the direction of Chief Brian Pesce; and special agents of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Charlie J. Patterson 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. Attorneys Eric A. Boden and Michelle S. Gasparian of the U.S. Attorney’s Office Criminal Division in Trenton.

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

CAMDEN, N.J. – Eighteen people have been charged for their alleged roles in a drug trafficking organization that distributed fentanyl, heroin, and cocaine in Camden, U.S. Attorney Craig Carpenito announced today.

Eleven defendants were arrested today and are expected to appear June 19, 2020, by videoconference before U.S. Magistrate Judge Karen M. Williams: Angel Rodriguez, 30; Manuel Bonilla, 35; Anderlis Martinez-Espinal, 19; Miguel Rodriguez, 27, Julio Medina, 29; Janet Lorenzo, 47; Normali Santiago, 36; Ray Santos, 35, all of Camden; Franklin Lorenzo-Gonzalez, 25, of Pennsauken, New Jersey; Bernardo Carambot, 36, and Alberto Perez, 26, both of Philadelphia.

Juan Cabrera, 30; Jabriel Rosa, 38; Hector Lopez, 31; Brian Smith, 33; Hector Mendez, 36; Pedro Yera, 25; Christian Rosario, 25; all of Camden, remain at large.

Each defendant is charged by complaint with one count of conspiracy to distribute and possess with intent to distribute fentanyl, heroin, and cocaine.  

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

From at least 2018, the defendants have all allegedly been members of a drug trafficking organization that dealt fentanyl, heroin, and cocaine in 300-400 blocks of Beckett Street, the 400 block of Royden Street, and the 600 block of Pine Street in Camden, where they distributed drugs to customers on foot and in vehicles. The organization also supplied drugs to customers and other distributors elsewhere, including areas in Philadelphia, Paulsboro, New Jersey, and Martinsburg, West Virginia.

Angel Rodriguez, Manuel Bonilla, Juan Cabrera, and Franklin Lorenzo-Gonzalez are the alleged leaders and managers, who obtained bulk supplies of narcotics, prepared and packaged those narcotics for street level sales, provided fentanyl, heroin, and cocaine for resale to customers, collected drug proceeds, operated multiple stash locations, and oversaw the daily sales and operation of the organization. Other members of the organization assisted in managing the sales on the street. High-level members of the drug trafficking organization laundered drug proceeds through bulk vehicle purchases and real estate.

The conspiracy charge carries a mandatory minimum penalty of 30 years in prison and a maximum potential penalty of life in prison and a $10 million fine.

U.S. Attorney Craig Carpenito credited special agents of the FBI’s South Jersey Violent Offender and Gang Task Force, South Jersey Resident Agency, under the direction of Special Agent in Charge of FBI Philadelphia, Michael Driscoll in Philadelphia; special agents of the FBI’s Eastern Panhandle Drug and Violent Crimes Task Force, under the direction of Special Agent in Charge of FBI Pittsburgh, Michael Christman in Pittsburgh; the New Jersey State Police, under the direction of Col. Patrick J. Callahan; the Camden County Police Department, under the direction of Chief Joseph D. Wysocki; the Camden County Prosecutor’s Office, under the direction of Acting Prosecutor Jill S. Mayer; the Camden County Sheriff’s Department, under the direction of Sheriff Gilbert L. Wilson; special agents of the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Jason Molina, Newark Division; special agents of FBI Newark, under the direction of Acting Special Agent in Charge Douglas Korneski; special agents of FBI New York, Criminal Division, under the direction of Special Agent in Charge Jacqueline Maguire; the Gloucester County Prosecutor’s Office, under the direction of Acting Prosecutor Christine Hoffman; the Pennsylvania Attorney General’s Office, under the direction of Attorney General Josh Shapiro; the New Jersey Office of Homeland Security and Preparedness, under the direction of Director Jared M. Maples; and special agents of IRS-Criminal Investigation in Newark, under the direction of Special Agent in Charge Michael Montanez, with the investigation leading to the charges announced today.

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 complaints are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

TRENTON, N.J. – A federal grand jury today indicted an individual with ties to a drug-trafficking organization for possessing nearly 1 kilogram of heroin with intent to distribute in Ocean County, U.S. Attorney Craig Carpenito announced.

Luis Payano-Perez, 36, of the Bronx, New York, was charged with one count of possession of 100 grams or more of heroin with intent to distribute. Payano-Perez was previously charged by criminal complaint in November 2018. He will be arraigned on a date to be determined.

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

In early November 2018, a U.S. Department of Homeland Security, Homeland Security Investigations (HSI), confidential informant provided information that Payano-Perez was prepared to sell the source a large volume of heroin on the evening of November 8, 2018, in the parking lot of the Wawa convenience store in Tuckerton, New Jersey.

In the days before Nov. 8, 2018, Payano-Perez and the confidential informant arranged for the quantity and price of the heroin to be sold, as well as the date, time and location of the planned transaction. On Nov. 8, 2018, Payano-Perez met with two confidential government informants at the Wawa parking lot in order to sell them approximately one kilogram of heroin. Law enforcement officers converged on the Wawa parking lot and arrested Payano-Perez. A subsequent search of Payano-Perez’s vehicle uncovered a bag containing nearly one kilogram of heroin.

The charge against Payano-Perez carries a mandatory minimum penalty of five years in prison and a maximum potential penalty of 40 years in prison, and a $5 million fine.

U.S. Attorney Carpenito credited special agents of HSI Atlantic City, under the direction of Special Agent in Charge Jason Molina in Newark; and the Tuckerton Police Department, under the direction of Chief Brian Olsen, with the investigation leading to today’s indictment.

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

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

TRENTON, N.J. – A Trenton man was charged today with attempting to ignite a marked police vehicle during the recent violent outburst in Trenton following the death of George Floyd in Minneapolis, Minnesota, U.S. Attorney Craig Carpenito announced.

Earlja J. Dudley, 27, of Trenton, was arrested by special agents of the FBI and is charged by complaint with one count of attempting to damage or destroy by fire a vehicle owned or possessed by an institution receiving federal financial assistance, and one count of attempting to damage or destroy by fire a vehicle used in and affecting interstate commerce. Dudley will make his initial appearance this afternoon by videoconference before U.S. Magistrate Judge Tonianne J. Bongiovanni.

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

On May 31, 2020, large-scale protests were held throughout the United States, including in Trenton, in response to the death of George Floyd, who died on May 25, 2020, while in the custody of the Minneapolis Police Department. Floyd’s death, and the ensuing protests, have drawn national media attention. Although the May 31 protest in Trenton was peaceful earlier in the day, violence erupted later. A group of individuals proceeded down East State Street in downtown Trenton and began to riot, smashing store fronts, looting stores, and attacking multiple marked Trenton Police Department vehicles parked on the 100 Block of East State Street. Dudley is the second defendant to be charged with federal arson offenses from those protests.

A bystander video that was posted publicly to a social media platform captured an individual, later identified as Dudley, wearing a tank top and baseball cap with the Roman numerals “XIV” in red lettering, along with distinctive green, black, and white sneakers. The video recorded Dudley and another individual standing in front of a marked Trenton Police Department vehicle and opening its hood. The video then recorded another individual joining Dudley and lighting an object that Dudley was holding over the exposed engine well of the police vehicle. Dudley placed the burning object into the engine well of the vehicle and moved away from it. Shortly thereafter, flames are visible on the video rising from the engine well of the vehicle. Law enforcement obtained photographs of Dudley posted on social media wearing, on other occasions, a tank top and baseball cap with Roman numerals “XIV” in red lettering, and distinctive green, black, and white sneakers, all of which matched the articles of clothing that Dudley was wearing in the video.

Both counts charged in the criminal complaint carry a statutory mandatory minimum term of imprisonment of five years, a maximum potential penalty of 20 years in prison, and a maximum fine of $250,000.  

U.S. Attorney Carpenito credited special agents of the FBI and task force officers of the Joint Terrorism Task Force in Newark, under the direction of Acting Special Agent in Charge Douglas Korneski, with the investigation leading to today’s arrest. He also thanked officers of the Trenton Police Department, under the direction of Police Director Sheilah Coley; and troopers of the New Jersey State Police, under the direction of Col. Patrick J. Callahan, and the New Jersey Office of Homeland Security and Preparedness, under the direction of Jared M. Maples, for their assistance.

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

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. – An Essex County, New Jersey, man today admitted being a felon in possession of two firearms, and to distributing heroin and cocaine base (crack), U.S. Attorney Craig Carpenito announced.

Aughkay L. Green, a/k/a “K-Boogie,” 49, of Newark, pleaded guilty by videoconference before U.S. District Judge Katharine S. Hayden to a three-count indictment charging him with possession of heroin and cocaine base (crack) with intent to distribute and with being a felon in possession of numerous firearms and ammunition. 

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

On Jan. 12, 2017, Green sold 25 bricks – later determined to be 38 grams – of heroin to “Individual 1,” for $1,200. On March 22, 2017, Green sold Individual 1 48.9 grams of crack cocaine for $2,250. Green was under law enforcement surveillance and observed to be dressed in his Newark Parking Authority uniform.

On April 1, 2017, Green, accompanied by an unidentified male associate, met Individual 1 in Irvington, New Jersey, where Green’s associate provided Individual 1 with: (1) a Smith and Wesson Model 21 .44 caliber handgun; (2) a Smith and Wesson Model 15 .38 handgun, and (3) 50 rounds of hollow-point .44 caliber ammunition marked “44 REM MAG FC.” Green’s associate received $1,360 from Individual 1, and subsequently provided Green with proceeds from the sale and discussed using these proceeds for the purchase of narcotics. 

The count of possession of cocaine with intent to distribute carries a statutory minimum penalty of five years in prison and a maximum potential penalty of 40 years in prison. The count of possession of cocaine with intent to distribute carries a statutory maximum penalty of 20 years in prison. The count of possession of firearms by a previously convicted felon carries a maximum penalty of 10 years in prison and a $250,000 fine. Sentencing is scheduled for Oct. 20, 2020.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Acting Special Agent in Charge Douglas Korneski in Newark; the New Jersey State Police, under the direction of Col. Patrick J. Callahan; the New Jersey Office of Homeland Security and Preparedness, under the direction of Director Jared M. Maples; the U.S. Department of Homeland Security, Homeland Security Investigations, under the direction on Special Agent in Charge Jason Molina; and the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction on Special Agent in Charge Charlie J. Patterson, with the investigation leading to today’s guilty plea.

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

NEWARK, N.J. – A Florida man made his initial court appearance today in connection with charges that he evaded over $61 million in income taxes from 2016 through 2018, U.S. Attorney Craig Carpenito announced.

Alfred Teo, 74, of Boca Raton, Florida, is charged by complaint with one count of tax evasion. He made his initial appearance by videoconference before U.S. Magistrate Judge Edward S. Kiel, who set bond at $20 million.

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

Teo was the majority shareholder of multibillion-dollar plastics manufacturing holding company Alpha Industries Management (Alpha). Teo also traded heavily in the securities markets. Between January 2016 and December 2018, Teo diverted $600 million from Alpha’s line of credit directly into his brokerage accounts to trade and to pay off margin calls. 

Teo returned a portion of the $600 million to Alpha, but he did not report the remaining outstanding amount as income on his personal tax returns. Instead, $167 million was recorded as income to AAST Holding Corp. (AAST), another Teo-owned entity that was unrelated to his plastics business, and which Teo used as a vehicle to hide personal income.

Alpha did not provide AAST with the $167 million that AAST claimed as income from Alpha in 2016, 2017, and 2018. The money Alpha recorded as salary to AAST was instead money provided for the benefit of Teo and included money that Alpha sent directly to Teo’s trading accounts.

Instead of reporting the $167 million of income from Alpha on Teo’s personal tax returns in 2016, 2017, and 2018, and paying taxes on that income, the income was reported on AAST’s corporate tax returns. Teo then provided false deduction information to his tax preparer in the form of fictitious “cost of goods sold” to artificially reduce his income and evade the income taxes owed.

AAST was organized for purposes of being a holding company, not for selling goods.  The company’s principal place of business and mailing address was a Florida residence that Teo owned. AAST’s bank account records do not show purchases of material, equipment, inventory, or other purchases consistent with the sale of goods or products. AAST’s bank account records do not include deposits that would reflect the millions of dollars in receipts that AAST reported on its tax returns for those three years.

In 2016, 2017, and 2018, Teo’s tax preparer provided draft AAST corporate tax forms for Teo’s review. Teo then returned the corporate tax forms with handwritten notes that indicated AAST had tens of millions of dollars of cost of goods sold. Teo did not provide any support to his tax preparer for these claims. 

Teo’s tax preparer used the information that Teo provided to report AAST’s cost of goods sold on AAST’s corporate tax returns in the amounts of approximately $26 million, $51 million, and $87 million for 2016, 2017, and 2018, respectively.

By submitting fraudulent cost of goods sold expenses to his tax preparer for inclusion on AAST’s corporate tax returns, Teo used AAST to avoid paying tens of millions of dollars of income taxes. He reduced AAST’s net business income by approximately $165 million for tax years 2016, 2017, and 2018 combined.

TEO’s personal IRS Forms 1040 for 2016, 2017, and 2018 included AAST’s net business income – as reduced by the approximately $165 million in AAST’s false cost of goods sold – as income to TEO.  As a result, Teo understated his personal income for those years by approximately $165 million.

Because Teo’s personal tax returns for 2016, 2017, and 2018 included AAST’s net business income, Teo’s fraudulent reduction of AAST’s net business income with purported cost of goods sold expenses resulted in a tax loss of approximately $10 million, $20 million, and $31 million in 2016, 2017 and 2018, respectively, for a total tax loss of approximately $61 million.

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

U.S. Attorney Carpenito credited 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 charges.

The government is represented by Assistant U.S. Attorneys Ari B. Fontecchio and Vijay Dewan of the Economic Crimes Unit in Newark.

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

NEWARK, N.J. – A Chinese manufacturer was charged today with producing and exporting to the United States in the midst of the COVID-19 pandemic over 140,000 misbranded and defective masks that falsely purported to be KN95 respirators, U.S. Attorney Craig Carpenito announced.

Crawford Technology Group (HK) Co. LTD. (Crawford) is charged by complaint with violating the Federal Food, Drug and Cosmetic Act (FDCA) for causing misbranded and substandard respirators that falsely purported to meet various filtration efficiency standards to be imported into the United States.

“Defective and misbranded personal protection equipment is a danger to all who unwittingly purchase and use it,” U.S. Attorney Carpenito said. “The Department of Justice and our partners remain committed to finding the unscrupulous companies that sell dangerous gear and stopping them from further endangering health care workers and first responders.”

“It is not enough that this pandemic has upended lives around the world and caused countless suffering and hundreds of thousands of deaths,” Jason Molina, Special Agent in Charge, Homeland Security Investigations (HSI), Newark, said. “In the midst of that, we have companies like this that exploited this tragedy for financial gain and in the process put millions of lives at risk. This case is a good reminder that the combined efforts of the agencies involved in Attorney General Barr’s Task Force have a very long reach to track and charge those who commit such wrongdoing. In addition, for HSI this fulfills the mission of Operation Stolen Promise to rout out COVID related fraud in all its many forms.”

Attorney General William P. Barr created the COVID-19 Hoarding and Price Gouging Task Force, led by U.S. Attorney Carpenito, who is coordinating efforts with the Antitrust Division and U.S. Attorneys across the country wherever illegal activity involving protective personal equipment occurs. The Secretary of Health and Human Services has issued a notice designating categories of health and medical supplies that must not be hoarded or sold for exorbitant prices.

“In a time when the United States Postal Service is playing such a critical role in the nation’s supply chain, the United States Postal Inspectors will be ever vigilant in our pursuit of criminals using the mail to commit fraud schemes,” U.S. Postal Inspection Service Inspector in Charge James Buthorn said. “We will not stand by and allow American citizens to be preyed upon and are proud to stand with our partners defending the public as we recover from the COVID-19 pandemic. Congratulation to the inspectors, special agents, and prosecutors.”

“U.S. Customs and Border Protection is proud of the expertise we bring to support and assist investigations that result in the seizure of illicit products,” Troy Miller, Director New York Field Office, said. “It is through interagency partnerships and collaborative efforts, like the one leading to today’s criminal charges, that law enforcement successfully combats today’s criminal organizations.”

“The FDA is actively monitoring the marketplace for fraudulent products related to our battle against COVID-19 that are marketed and distributed to Americans. The agency will continue to collaborate with our fellow law enforcement partners to bring to justice those who place profits above the public health during this pandemic,” Special Agent in Charge Jeffrey J. Ebersole, FDA Office of Criminal Investigations New York Field Office, said. “We will take appropriate action against those who jeopardize the health of Americans and take advantage of a crisis.”

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

In May 2020, Crawford, a digital electronics company based in Shenzhen, China, manufactured and sold 140,400 adulterated and misbranded KN95 filtering face piece respirators to Company-1 for import into the United States.

The packaging for the respirators, as well as the respirators themselves, falsely indicated that they were 95 percent efficient at filtering harmful airborne particles. The respirators and their packaging also claimed that they complied with established standards in the European Union and China, which require at least 94 percent or 95 percent filtering efficiency, respectively. Crawford also advertised the respirators on its website under a tab labeled “epidemic” and claimed that their respirators have “4 layers of protection” and “Passed the national standard 2626-2000 test.”  The page also says “KN95 Filtration reaches 95%,” “KN95 Filter Effect 95%,” and states that their respirators protect against “Severe Haze,” “Bacteria,” and “Dust.” These claims were false and misleading because the average filtering efficiency for the Crawford respirators was 22.33 percent, far below the required thresholds.   

U.S. Attorney Carpenito thanked the staff of the NIOSH National Personal Protective Technology Laboratory, under the direction of NIOSH Director John Howard M.D., and special agents of the U.S. Secret Service for their work on the investigation.

The charge in the complaint carries a maximum fine of $200,000.

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.

Information on the NIOSH Covid-19 Respirator Assessment program and the results of other NIOSH respirator tests can be found here:  https://www.cdc.gov/niosh/npptl/respirators/testing/NonNIOSHresults.html

The government is represented by Assistant U.S. Attorney Jonathan Peck of the Asset Recovery and Money Laundering Unit.

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

CAMDEN, N.J. – An employee of a Mount Holly, New Jersey, medical practice was arrested today for allegedly selling fraudulent prescriptions for controlled substances, U.S. Attorney Craig Carpenito announced.

Jose Colon, 36, of Sicklerville, New Jersey, is charged by complaint with one count of distributing controlled substances. He is expected to appear by videoconference later this afternoon before U.S. Magistrate Judge Ann Marie Donio. 

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

Colon, who is not a medical provider, used the identities of doctors with whom he worked to make and sell fraudulent prescriptions for controlled substances, including Oxycodone, Adderall, Percocet, and Xanax. Colon sometimes met his customers in person with a prescription pad to sell the fraudulent prescriptions for cash. He also submitted fraudulent prescriptions electronically to pharmacies in exchange for electronic payments from his customers. Colon advised his customers on how to fill the fraudulent prescriptions, including instructing them to wait until the medical practice was closed so that Colon would be able to answer any phone calls from the pharmacies questioning the validity of the fraudulent prescriptions. 

The count of distributing controlled dangerous substances carries a maximum potential penalty of 20 years in prison and a $1 million fine.

U.S. Attorney Carpenito credited special agents with the FBI Newark Division, Atlantic City Resident Agency, under the direction of Acting Special Agent in Charge Douglas Korneski with the investigation leading to today’s arrest. He also thanked the FBI Newark Health Care Fraud Task Force, whose members include the Galloway Township and Middle Township Police Departments, as well as the Cape May County Prosecutor’s Office, for their assistance on this investigation.

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.

NEWARK, N.J. – A Monmouth County, New Jersey, woman today admitted her role in a scheme to defraud a financial institution of hundreds of thousands of dollars, U.S. Attorney Craig Carpenito announced.

Blanca A. Medina, 54, of Manalapan, New Jersey, pleaded guilty before U.S. District Judge Stanley R. Chesler in Newark federal court to a one-count information charging her with conspiracy to commit bank fraud.

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

From 2015 to 2018, Medina conspired with others to fraudulently obtain mortgage loans from “Mortgage Lender A” in Monmouth County to finance the purchase of properties by unqualified buyers. Applicants for mortgage loans are required to list their assets and income on their mortgage loan applications, and mortgage lenders rely on those applications when deciding whether to issue mortgage loans.

Medina, a former loan officer for Mortgage Lender A, admitted to participating in a conspiracy in which she knowingly caused completed mortgage loan applications that contained multiple misrepresentations of material facts regarding the buyers’ assets and income to be submitted to Mortgage Lender A. A conspirator provided Medina with false and fraudulent documents for potential borrowers including false and fraudulent lease agreements, bank statements, and a gift check and gift letter. Based on these lies, Mortgage Lender A issued mortgage loans to unqualified buyers, which caused Mortgage Lender A hundreds of thousands of dollars in losses.    

The conspiracy charge to which Medina pleaded guilty carries a maximum of 30 years in prison and a $1 million fine. Sentencing is scheduled for Oct. 20, 2020.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Acting Special Agent in Charge Douglas Korneski in Newark, and Special Agents of the Federal Housing Finance Agency, Office of Inspector General, under the direction of Special Agent in Charge Robert Manchak, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Jonathan Fayer of the Economic Crimes Unit of the U.S. Attorney’s Office, and Special Assistant U.S. Attorney Charlie Divine of the Federal Housing Finance Agency, Office of Inspector General.

CAMDEN, N.J. – An Atlantic County, New Jersey, man today admitted leading a conspiracy that defrauded New Jersey health benefits programs and other insurers out of more than $50 million, U.S. Attorney Craig Carpenito announced.

William Hickman, 44, of Northfield, New Jersey, pleaded guilty by videoconference before U.S. District Judge Robert B. Kugler to one count of conspiracy to commit health care fraud and wire fraud and one count of conspiracy to commit money laundering.

“Properly prescribed medicines can be a vital part of a patient’s treatment, but they can also be costly,” U.S. Attorney Carpenito said. “This defendant orchestrated an elaborate scheme to submit prescriptions for unnecessary compounded medications on behalf of patients who had never seen a doctor. He did so to steal millions of dollars from medical health benefits systems that were intended to help employees get the treatments they needed and deserved.”

“This defendant made millions of dollars by enlisting patients and exploiting their medical insurance plans at the expense of New Jersey taxpayers,” Acting FBI Special Agent in Charge Douglas Korneski, Newark Division, said. “The FBI is committed to bringing to justice any profiteer who pursues fraud as an occupation with public monies as their paycheck.”

Hickman was charged in March 2019 along with Brian Pugh, Thomas Schallus, John Sher, Thomas Sher, and Christopher Broccoli. Charges remain pending against those defendants, and their trial is scheduled to commence on Sept. 21, 2020.

“When you visit a doctor, you expect him or her to evaluate your symptoms and prescribe medication to best treat your condition,” Michael Montanez, Special Agent in Charge, IRS Criminal Investigation, Newark Field Office, said. “Mr. Hickman, who is a salesman not a doctor, recruited patients to have prescriptions filled, not to better the health of the patients, but rather to financially line his own pockets.”

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

William Hickman was a sales representative for a pharmaceutical company. He created a side business called Boardwalk Medical LLC in his wife’s name to sell medical products for other companies, an activity that was prohibited by his employer. 

As part of his side business, Hickman started persuading patients to receive compounded medications, which are specialty medications mixed by a pharmacist to meet the specific medical needs of an individual patient. Hickman learned that certain insurance plans administered by an entity referred to in the indictment as the “Pharmacy Benefits Administrator” would reimburse thousands of dollars for a one-month supply of certain compounded medications – including pain, scar, antifungal, and libido creams, as well as vitamin combinations. He also learned that many New Jersey state and local government and education employees, including teachers, firefighters, police officers, and state troopers, had this insurance coverage. The Pharmacy Benefits Administrator would pay prescription drug claims and then bill the State of New Jersey for the amounts paid.

Hickman marketed compounded medications for several pharmacies, including the Louisiana pharmacy identified in the indictment as “Compounding Pharmacy.” His initial work for Compounding Pharmacy was through an intermediary who paid Hickman a commission if patients he found received compounded medications covered by insurance.

In early 2015, however, Hickman struck his own deal to be a master distributor for Compounding Pharmacy. Under his deal, Compounding Pharmacy agreed to pay Boardwalk Medical 40 percent or more of the insurance payments received for prescriptions obtained by Hickman and the recruiters working for him. Hickman then created a network of conspirators to work under him to find patients, including Michael Sher and Matthew Tedesco (both of whom have pleaded guilty to conspiracy to commit health care fraud) and Pugh. The conspirators working for Hickman found additional patient recruiters and brought them into the conspiracy:  Pugh recruited Schallus, Tedesco recruited Broccoli, and Michael Sher recruited John Sher and Thomas Sher. Hickman agreed to pay the conspirators working under him a percentage of the insurance reimbursement that he received from Compounding Pharmacy, and they paid recruiters working under them. 

Hickman told his recruiters to find New Jersey public employees and other people with insurance coverage administered by Pharmacy Benefits Administrator. He gave them blank Compounding Pharmacy prescription forms and told them which medicines had the highest insurance reimbursement and to check off 12 months of refills.

Hickman also told his recruiters that he had a doctor who would sign prescriptions without seeing the patients. Dr. John Gaffney, who has pled guilty to conspiracy to commit health care fraud, signed numerous prescriptions at Hickman’s request without seeing the patients or determining that they had a medical necessity for the specially compounded medications.

Based on the instructions he gave them, Hickman’s conspirators recruited New Jersey public employees and others to fraudulently obtain compounded medications from Compounding Pharmacy that the patients did not need, often without a doctor seeing the patients or determining that the medications were medically necessary. Hickman and the conspirators working for him paid individuals for receiving Compounding Pharmacy prescription medications. If the patients did not see their own doctor, recruiters would give Hickman prescriptions that were completed except for the doctor’s signature, and Hickman would have Dr. Gaffney sign the prescription. The completed prescriptions were faxed to Compounding Pharmacy, which filled the prescriptions and billed the Pharmacy Benefits Administrator. 

Compounding Pharmacy paid Boardwalk Medical for each Hickman prescription filled and paid by Pharmacy Benefits Administrator. Pharmacy Benefits Administrator paid Compounding Pharmacy over $50 million for compounded medications, and Compounding Pharmacy paid William Hickman over $26 million for prescriptions obtained by Hickman and his conspirators. Hickman paid a portion of that amount to his recruiters, and they paid the recruiters under them. Hickman admitted paying Pugh approximately $435,000 in criminal proceeds over five months. Those payments provided the basis for the money laundering conspiracy charge to which Hickman pleaded guilty.

The health care fraud and wire fraud conspiracy count to which William Hickman pleaded guilty carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gain or loss from the offense. The money laundering conspiracy charge carries a maximum potential penalty of 10 years in prison and a $250,000 fine, or twice the value of the property involved in the transaction. 

In his plea agreement, William Hickman agreed to pay restitution of $53,037,639 and to the entry of a forfeiture money judgment for $26,241,327. Hickman also agreed to forfeit specific property obtained with criminal proceeds, including five investment accounts and four real estate parcels.

Sentencing for William Hickman is scheduled for Nov. 6, 2020.

U.S. Attorney Carpenito credited agents of the FBI’s Atlantic City Resident Agency, under the direction of Acting Special Agent in Charge Douglas Korneski in Newark, IRS – Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez in Newark, and the U.S. Department of Labor, Office of Inspector General, New York Region, under the direction of Special Agent in Charge Michael C. Mikulka, with the investigation leading to today’s guilty plea. He also thanked the Division of Pensions and Financial Transactions in the New Jersey State Attorney General’s Office, under the direction of Attorney General Gurbir S. Grewal and Division Chief Aimee Nason, for its assistance in the investigation.

The government is represented by Assistant U.S. Attorneys R. David Walk, Jr. and Christina O. Hud of the U.S. Attorney’s Office in Camden and Assistant U.S. Attorney Barbara Ward, Senior Trial Counsel of the Asset Recovery and Money Laundering Unit.

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

NEWARK, N.J. – An Essex County, New Jersey, man made his initial appearance today after his arrest in North Carolina on drug charges, U.S. Attorney Craig Carpenito announced.

Lester Hicks, a/k/a “Mayhem,” 29, of Newark, is charged by complaint with one count of distributing and possessing with intent to distribute heroin. He made his initial court appearance today by videoconference before U.S. Magistrate Judge Edward S. Kiel.

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

On March 8, 2020, law enforcement officers with the Essex County Sheriff's Office were patrolling around Clinton and Avon avenues in Newark when they observed a vehicle run a red light. The officers stopped the vehicle, in which Hicks was a passenger. They determined there was an active warrant for Hicks’ arrest. A search incident to his arrest recovered 78 glassine envelopes of heroin and $121 in cash. Twenty-eight of the envelopes were stamped “Terminator” in red ink, and 50 of the envelopes were stamped “G” in red ink.

Hicks was charged, processed, and released with a summons to return to court. That same day, he was allegedly involved in a shooting near Martin Luther King Boulevard in Newark. The shooting was recorded on video and Hicks was identified as one of the shooters. After agreeing to self-surrender, he traveled instead to North Carolina, where he was arrested by agents of the Drug Enforcement Administration. Hicks had a sawed-off shotgun in his possession when arrested.

The drug trafficking offense carries a maximum potential penalty of 20 years in prison, and a $1 million fine.

U.S. Attorney Carpenito credited the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Theodore N. Stephens II, and special agents of the DEA, under the direction of Special Agent in Charge Susan A. Gibson in Newark, with the investigation leading to the charges. He also thanked the Essex County Sheriff’s Office and the Newark Police Department for their assistance with the investigation.

This investigation is part of the Violent Crime Initiative (VCI) in Newark. The Newark VCI was formed in August 2017 by the U.S. Attorney’s Office for the District of New Jersey, the Essex County Prosecutor’s Office, and the City of Newark’s Department of Public Safety for the sole purpose of combatting violent crime in and around the Newark. As part of this partnership, federal, state, county, and city agencies collaborate and pool resources to prosecute violent offenders who endanger the safety of the community. The VCI includes the U.S. Attorney’s Office, the DEA, the ATF, the Federal Bureau of Investigation, the U.S. Marshals, the Newark Department of Public Safety, the Essex County Prosecutor’s Office, the Essex County Sheriff’s Office, New Jersey State Parole Board, Union County Jail, New Jersey State Police Regional Operations and Intelligence Center/Real Time Crime Center, New Jersey Department of Corrections, the East Orange Police Department, and the Irvington Police Department.

The government is represented by Assistant U.S. Attorney Mary E. Toscano, Deputy Chief of the Criminal 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. – An Essex County, New Jersey, man today admitted being a felon in possession of three different firearms on three different days in April and May 2019, and to using one of the firearms in a shooting, U.S. Attorney Craig Carpenito announced.

Samaad Kelly, a/k/a “Spud,” 33, of Newark, New Jersey, pleaded guilty by videoconference before U.S. District Judge Esther Salas to an information charging him with two counts of being a felon in possession of a firearm and one count of being a felon in possession of ammunition.

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

On April 24, 2019, officers from the Essex County Sheriff’s Office received information that Kelly was driving in Newark in a silver BMW with a temporary registration and was in possession of a firearm. The officers observed the BMW, which had a fictitious registration, and conducted a stop. Kelly, who was driving the BMW, could not provide the officers with any identification, registration, or proof of insurance. After conducting a search of the BMW, the officers located a Taurus semi-automatic 9 millimeter handgun in the glove box. The officers arrested Kelly, and Kelly remained in custody until May 2, 2019, when he was released on bail.

On May 7, 2019, officers from the Newark Police Department responded to a report of gun shots near Astor Street in Newark. Upon their arrival, they found one 9 millimeter discharged shell casing and one 9 millimeter round of live ammunition. The officers obtained video footage from surveillance cameras located nearby, which showed Kelly point and fire a black handgun in the direction of another individual.

On May 10, 2019, detectives from the Newark Police Department were patrolling a section of Newark in the vicinity of Astor Street and Brunswick Street. One of the detectives observed Kelly wearing a fanny pack that appeared to be heavily weighed down. When the detectives approached Kelly, he immediately fled on foot. While running away from the detectives, Kelly unclipped the fanny pack and attempted to throw it over a fence. The detectives apprehended Kelly, recovered the fanny pack, and found inside of it a Ruger 9 millimeter semi-automatic pistol, loaded with 10 rounds of ammunition. The detectives arrested Kelly.

Kelly has numerous prior felony convictions, including one for attempted aggravated assault in 2008 and one for possessing a firearm as a convicted felon in 2010. Each felon in possession of a firearm and ammunition charge carries a maximum potential penalty of 10 years in prison and a $250,000 fine. Sentencing is scheduled for Oct. 20, 2020.

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 with the investigation leading to today’s guilty plea. He also thanked the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Theodore N. Stephens II, police officers and detectives of the Newark Police Department, under the direction of Public Safety Director Anthony F. Ambrose, and the Essex County Sherriff’s Office, under the direction of Sheriff Armando B. Fontoura, for their work on the case.

The government is represented by Assistant U.S. Attorney Christopher D. Amore of the Government Fraud Unit in Newark.

NEWARK, N.J. – A Newark man who was indicted in connection with his role in the distribution of heroin – some of which contained fentanyl – and cocaine base (crack) in an affordable housing complex and a nearby senior living community in Newark will make his initial court appearance today, U.S. Attorney Craig Carpenito announced.

Elijah Kane, a/k/a “Bang,” a/k/a “G5,” 28, and his brother Joshua Kane, a/k/a “WildOut,” 24, were indicted by a federal grand jury on May 29, 2020, on charges of conspiring to distribute cocaine base, possession of heroin and cocaine base with intent to distribute, and maintaining a drug-involved premises. Elijah Kane is scheduled to appear by videoconference today before U.S. Magistrate Judge Edward S. Kiel. Joshua Kane was arraigned on the indictment before U.S. District Judge Susan D. Wigenton on June 10, 2020. Elijah and Joshua Kane were both charged previously by criminal complaint.

Four other members and conspirators have been charged by complaint with one count each of conspiring to distribute cocaine base: Ahmad Beyah, a/k/a “Goon,” 18, Sherrod Richardson, a/k/a “Drama,” 19; Yusef Ellis, a/k/a “Tweeze,” 39; and Reuben Howard, a/k/a “Ahmeer,” 38, all of Newark. Richardson is also charged with possession of heroin and cocaine base on Dec. 5, 2019, with intent to distribute. Beyah is also charged with possession of heroin and cocaine base on Mar. 4, 2020, with intent to distribute. Richardson, Ellis, and Howard appeared on April 9, 2020, by telephone conference before U.S. Magistrate Judge James B. Clark III. Beyah appeared on April 16, 2020, by videoconference before U.S. Magistrate Judge Leda Dunn Wettre.

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

The charges and arrests resulted from an investigation by the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) and the U.S. Attorney’s Office, in conjunction with numerous federal, state, and local law enforcement partners. Pilgrim Baptist Village Housing Complex, Site II (Pilgrim Village), is a privately owned, affordable housing complex in the vicinity of Avon and Jelliff avenues in Newark. It consists of 46 buildings, each with four units, which are accessible via exterior entrances as well as an interior stairwell leading from each apartment to a common hallway that connects multiple buildings and semi-subterranean garages for those buildings. The buildings are clustered around internal courtyards and pedestrian walkways, and the complex is accessible on foot from Avon Avenue or Jelliff Avenue and by car from one of four driveways leading to the semi-subterranean garages. Because its location and layout make it difficult for law enforcement to surveil, Pilgrim Village is the site of an open-air illegal drug market. Since at least November 2018, law enforcement has been investigating the organization that controls this market.

Through numerous controlled purchases of narcotics, consensually recorded telephone calls and text messages, physical and electronic surveillance, and analysis of telephone call detail records, law enforcement officials determined that the defendants distributed and conspired to distribute heroin and cocaine base in and around Pilgrim Village from at least June 2019 through April 2020.

The counts of conspiracy to distribute at least 28 grams of cocaine base each carry a minimum penalty of five years in prison, a maximum penalty of 40 years in prison, and a fine of at least $5 million. The counts of distribution and possession with intent to distribute heroin and cocaine base each carry a maximum penalty of 20 years in prison and a fine of $1 million. The counts of maintaining a drug-involved premises each carry a maximum penalty of 20 years in prison and a fine of $500,000.

U.S. Attorney Carpenito credited special agents and task force officers of ATF, under the direction of Special Agent in Charge Charlie J. Patterson in Newark; and members of the Newark Department of Public Safety, under the direction of Director Anthony F. Ambrose, with the investigation leading to the charges.

He also thanked the Drug Enforcement Administration, under the direction of Special Agent in Charge Susan A. Gibson; the FBI, under the direction of Acting Special Agent in Charge Douglas Korneski; the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Theodore N. Stephens II; the Essex County Sheriff’s Office, under the direction of Sheriff Armando B. Fontoura; and the U.S. Marshals Service, under the direction of Marshal Juan Mattos Jr. He also thanked the Belleville Police Department; the Nutley Police Department; the Bloomfield Police Department; the Verona Police Department; and the Orange Police Department for their assistance with this case.

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

The government is represented by Assistant U.S. Attorney Angelica M. Sinopole of the Organized Crime & Gangs Unit of the U.S. Attorney’s Office in Newark.

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

William Hughes

Associate Deputy Attorney General

Craig Carpenito

United States Attorney for the District Of New Jersey

U.S. Department of Justice Joint Statement before the

United States Senate Committee on the Judiciary Washington, D.C.

For a Hearing Entitled

“Covid-19 Fraud: Law Enforcement’s Response to those Exploiting the Pandemic.”

June 9, 2020

CAMDEN, N.J. – A federal grand jury has indicted six members of an Atlantic City drug-trafficking organization for their roles in the distribution of large amounts of heroin in the Atlantic City area, U.S. Attorney Craig Carpenito announced today.

Terryn Kelsey, 30, Jamaal Marshall, 33, Tyjuan Demarest, 40, Tieyesha Tucker, 26, Blaine Dorsey, 55, and Valarie Lamar, 60, all of Atlantic City, were each charged in a one-count indictment returned June 10, 2020, with conspiracy to distribute or possess with the intent to distribute more than 1 kilogram of heroin. These six individuals, along with 16 others, were previously charged by criminal complaint in June of 2019. They will face arraignment in federal court on a date to be determined.

Thirteen other members of this drug trafficking conspiracy have previously pleaded guilty in this case. The charges against three other defendants remain pending on complaint.

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

Kelsey, Marshall, Demarest, Tucker, Dorsey, Lamar and other members of the drug conspiracy trafficked heroin from Patterson, New Jersey, into Atlantic City throughout the course of the investigation. An investigation led by the FBI used physical and video surveillance, confidential informants, consensual recordings, and two court authorized wiretaps to uncover the operations of this drug trafficking organization. The investigation tracked multiple stamps of heroin being distributed by the defendants, including “AK-47,” “Apple,” “Fortnite,” “Rolex,” “Frank Lucas,” “Bentley,” “Pandora,” and “9 ½.” Between January 1, 2017 and June 21, 2019, these stamps were associated with 48 deaths and 84 non-fatal overdoses in New Jersey.

The charge in the indictment against Kelsey, Marshall, Demarest, Tucker, Dorsey and Lamar carries a mandatory penalty of 10 years in prison, a maximum potential penalty of life in prison, and up to a $10 million fine.

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 Division, under the direction of Acting Special Agent in Charge Douglas Korneski; officers of the Atlantic City Police Department, under the direction of Chief White; 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 the charges. 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.

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

NEWARK, N.J. – A Passaic County, New Jersey, man who founded and owned a business consulting firm admitted today to orchestrating a multimillion-dollar bank fraud and securities fraud scheme operated through that firm, U.S. Attorney Craig Carpenito announced.

Edward Espinal, 44, of Wayne, New Jersey, the chief executive officer of Cash Flow Partners LLC (Cash Flow) pleaded guilty by videoconference before U.S. District Judge Kevin McNulty to an information charging him with one count of conspiracy to commit bank fraud and one count of securities fraud.

“Edward Espinal coordinated a vast fraud scheme that lured people into taking out fraudulent loans that his company helped obtain and, in many cases, put that borrowed money into sham investments he also controlled,” U.S. Attorney Carpenito said. “His complex scam tricked numerous investors out of a substantial amount of money, and now he will have to pay for his crimes.”

“This defendant is the quintessential con artist,” Acting FBI Special Agent in Charge Douglas Korneski said. “He played a shell game with other people’s hard-earned money, making promises he never intended to keep, and walking away with ill-gotten gains while leaving them high and dry. Fraudsters like Edward Espinal keep the FBI in business, and we work diligently to bring his type to justice.”

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

The Bank Fraud Conspiracy

Espinal was the founder and chief executive officer of Cash Flow and controlled the company’s operations. From March 2016 through December 2019, Espinal led and directed a bank fraud conspiracy designed to obtain millions of dollars in loans from banks on the basis of false representations. To attract customers, Cash Flow released internet advertisements and held seminars offering to assist customers with low-paying salaries in obtaining loans. These advertisements included promotional videos featuring Espinal and a former telenovela actor. Customers contacted Cash Flow and were routed to the company’s sales department.

Employees in the sales department then encouraged customers to sign up for various loan programs that Cash Flow provided and to enter into contracts with Cash Flow. Under those contracts, employees would help customers obtain loans from banks. The Cash Flow contracts permitted customers to keep a portion of the loan proceeds and customers agreed to provide the remaining percentage of the proceeds to Cash Flow. Cash Flow agreed to pay off the loans on behalf of its customers.

Cash Flow then used false information and fraudulent documents to obtain loans for its customers for which they otherwise would not have qualified, and posed as the customers in communications with the banks.

The Securities Fraud

From July 2016 through September 2019, Espinal obtained more than $5 million in investments from victim investors on the basis of false and fraudulent pretenses and representations.

Espinal solicited investments from prospective customers using a marketing campaign on Spanish language television channels and the internet, the “Cash Flow TV” YouTube page, and live presentations in Cash Flow’s offices and elsewhere. Espinal also solicited investments from individuals who obtained loans through Cash Flow’s bank fraud conspiracy, encouraging loan customers to invest loan proceeds in Cash Flow’s investment program. Once investors agreed to invest in Cash Flow, Espinal issued “promissory notes” to investors that guaranteed monthly investment returns between 1.25 percent and 4 percent. The promissory notes stated that Cash Flow would return investors’ principal either one year from the date of the promissory note, or 60 days after investors demanded payment. Espinal and other Cash Flow employees signed the promissory notes on behalf of Cash Flow.

Espinal made a number of misrepresentations to investors. He told investors that he would pool their funds with the funds of other investors in investments related to real estate, real estate companies, a gold mine in Ecuador, and construction projects in countries outside of the United States. In reality, Espinal used investor funds to pay returns to earlier investors, to pay for personal expenses for himself, his family, and another Cash Flow employee, to perpetuate the bank fraud scheme, and to market the bank fraud and investment scheme to future victims. Espinal falsely claimed that Cash Flow’s purported real estate fund, Cash Flow Capital, was “licensed” by the Securities and Exchange Commission. He guaranteed monthly returns on investment based on the purported proceeds from the sale of properties in Cash Flow’s investment portfolio. In reality, Espinal did not sell Cash Flow properties, so no profits were derived from the sale of Cash Flow properties.

Two other individuals, Raymundo Torres and Jennie Frias, have previously pleaded guilty to their roles 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. The securities fraud counts carry a maximum penalty of 20 years in prison and a $5 million fine. Sentencing is scheduled for Oct. 13, 2020.

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

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

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 Acting Special Agent in Charge Douglas Korneski in Newark, with the investigation leading to today’s guilty plea. He also thanked the SEC for the assistance provided by its Enforcement Division.

The government is represented by Assistant U.S. Attorneys Ari B. Fontecchio and J. Stephen Ferketic of the U.S. Attorney’s Criminal Division in Newark.

TRENTON, N.J. – A Raleigh, North Carolina, man with ties to Trenton admitted today to distributing heroin and unlawfully possessing a firearm as a convicted felon, U.S. Attorney Craig Carpenito announced.

Dennis Cheston Jr., a/k/a “Beans,” 39, pleaded guilty by videoconference before Chief U.S. District Judge Freda L. Wolfson to a third superseding indictment that charged him with distribution and possession with intent to distribute heroin (Count Five) and unlawful possession of a firearm by a convicted felon (Count Nine).

In October 2018, Cheston and 26 other members identified as having participated in a large drug trafficking conspiracy operating in Trenton were charged by criminal complaint with conspiracy to distribute heroin. Cheston and others also were charged with additional firearms offenses. On Feb. 27, 2020, a grand jury returned a 10-count third superseding indictment charging Cheston and eight other defendants with conspiracy to distribute one kilogram or more of heroin and various other drug and firearm offenses. Of the 26 defendants charged in the original criminal complaint, Cheston is the 23rd defendant to plead guilty. The charges in the third superseding indictment and the criminal complaint are currently pending against the three remaining defendants, and they are presumed innocent unless and until proven guilty.

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

From October 2017 to October 2018, law enforcement officers conducted an investigation of a large narcotics conspiracy that operated in Trenton and which sought to profit from the distribution of heroin and numerous other controlled substances. Through the interception of telephone calls and text messages pursuant to court-authorized wiretap orders, controlled purchases of heroin, the use of confidential sources of information, and other investigative techniques, law enforcement learned that Jakir Taylor and Jerome Roberts obtained regular supplies of hundreds of “bricks” of heroin from defendant David Antonio, whom they referred to as “Papi.”

Telephone and text message communications intercepted pursuant to the wiretap orders also revealed that, on multiple occasions during the investigation, Cheston – a convicted felon who has ties to Trenton – traveled from North Carolina to Trenton and obtained quantities of heroin from Taylor, which Taylor had obtained from Antonio. During one intercepted telephone call between Taylor and Cheston, Cheston advised Taylor that the heroin bearing an ink stamp that read “Top Secret,” was high quality, and that his customers liked it. During the course of these drug transactions and additional intercepted communications between Taylor and Cheston, Cheston also agreed to travel from North Carolina to Trenton and supply Taylor with multiple firearms in exchange for future supplies of heroin. On Sept. 8, 2018, based on the intercepted communications and other evidence obtained during the investigation, law enforcement tracked Cheston’s travel from North Carolina to Trenton, where he was arrested upon his arrival as he exited the Trenton Transit Center. During a subsequent search of Cheston’s backpack, law enforcement recovered a nine-millimeter Smith & Wesson handgun, which Cheston had agreed to provide to Taylor.

The drug distribution count to which Cheston pleaded guilty carries a statutory maximum term of imprisonment of 20 years and a maximum fine of $1 million. The felon-in-possession count to which Cheston pleaded guilty carries a statutory maximum term of imprisonment of 10 years and a maximum fine of $250,000. Cheston’s sentencing is scheduled for Oct. 21, 2020.

U.S. Attorney Carpenito credited special agents of the FBI, Newark Division, Trenton Resident Agency, under the direction of Acting Special Agent in Charge Douglas Korneski; special agents of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, Newark Division, Trenton Satellite Office, under the direction of Special Agent in Charge Charlie J. Patterson; officers of the Trenton Police Department, under the direction of Police Director Sheilah Coley; officers of the Princeton Police Department, under the direction of Chief of Police Nicholas Sutter; officers of the Ewing Police Department, under the direction of Chief of Police John P. Stemler III; officers of the Burlington Township Police Department, under the direction of Police Director Bruce Painter; and detectives of the Burlington County Prosecutor’s Office, under the  direction of Prosecutor Scott A. Coffina, with the investigation leading to today’s guilty plea. He also thanked officers of the New Jersey State Police, under the direction of Superintendent Col. Patrick J. Callahan; detectives of the Mercer County Prosecutor’s Office, under the direction of Prosecutor Angelo Onofri; officers of the Mercer County Sheriff’s Office, under the direction of Sheriff John A. Kemler; and members of the New Jersey State Board of Parole for their assistance in the case.

The government is represented by Attorney-in-Charge J. Brendan Day and Assistant U.S. Attorney Alexander Ramey of the U.S. Attorney’s Office’s Criminal Division in Trenton.

This case was conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF) and the FBI’s Greater Trenton Safe Streets Task Force, a partnership between federal, state and local law enforcement agencies to enhance the identification, apprehension, and prosecution of individuals involved in gang-related activities, violent crime, and drug distribution in and around the greater Trenton area. 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.

CAMDEN, N.J. – The former owner of a construction company today admitted his role in defrauding a retirement plan set up by the company, U.S. Attorney Craig Carpenito announced.

Joshua Ferrell, 34, of Chatsworth, New Jersey, the former owner of Indian Mills Contracting Services Inc. (Indian Mills), pleaded guilty plea by videoconference before U.S. District Judge Joseph H. Rodriguez to an information charging him with one count of embezzlement and theft from an employee pension or welfare benefit plan or a fund connected with such plan established for the company’s employees.

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

Ferrell admitted that, between 2011 and February 2017, he was the president and owner of Indian Mills, which was a construction company in Chatsworth. Indian Mills was a family owned construction company that worked on federal, municipal, state, commercial and industrial projects throughout New Jersey. Indian Mills employed machine operators, carpenters, cement masons and labors.

In 2015, Ferrell established the Indian Mills Contracting Inc. 401K Plan which was established as a single employer profit sharing and 401K plan. The plan was covered by the Employee Retirement Income Security Act (ERISA) of 1974. Ferrell was the plan administrator.

Under the ERISA regulations, employers are permitted to establish and maintain employer sponsored retirement plans for the benefit of their employees. Once these plans are established, both employers and employees have the option of making regular contributions of funds to them. The accumulated plan assets are generally invested for the benefit of the plan and the plan participants, and any capital gains or income earned through such investment are added to the accumulated plan assets. Upon retirement, or when otherwise eligible, a plan participant may request and receive disbursements from the retirement plan assets.  These disbursements correspond to contributions made to the plan by the participant, plus any associated gains made during the term of employment.

Ferrell admitted that the 401K plan allowed employees to defer portions of their salary before taxes from their bi-weekly paychecks and have that money earmarked for contribution into the plan’s trust.

Ferrell admitted that between Jan. 1, 2015, and February 2017, money which was deducted bi-weekly from Indian Mills employees’ paychecks and which was supposed to be contributed to the plan was instead kept by Ferrell and spent by him.

The charges to which Ferrell pleaded guilty carry a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled Oct. 19, 2020.

U.S. Attorney Carpenito credited 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 investigators of the U.S. Department of Labor, Employee Benefits Security Administration (EBSA), under the direction of Philadelphia Regional Director Michael Schloss, with the investigation leading to today’s guilty plea.

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

NEWARK, N.J. – A Somerset County, New Jersey, man made his initial court appearance by videoconference today on charges that he enticed a minor over the internet to engage in sexual activity and traveled to the Philippines to engage in sex with the minor, U.S. Attorney Craig Carpenito announced. 

James A. Diggs, 44, of Somerville, New Jersey, is charged by complaint with one count of online enticement of a minor to engage in sexual activity and one count of foreign travel to engage in criminal sexual activity. He made his initial appearance by videoconference before U.S. Magistrate Judge Leda Dunn Wettre and was detained.

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

Between September 2018 and February 2019, Diggs used an online messaging application to persuade, induce, entice, and coerce “Minor Victim-1,” who was located in the Philippines, to engage in sexual activity. During the communications, Diggs solicited Minor Victim-1 to engage in sexual acts with him in return for money or material objects. Diggs encouraged Minor Victim-1 to keep their relationship secret because Minor Victim-1 was underage. In October 2018, Diggs traveled from New Jersey to the Philippines to meet and engage in sexual activity with Minor Victim-1. 

Diggs used an online messaging application to entice and coerce three other minor victims in the Philippines to engage in unlawful sex acts. Between February 2015 and February 2019, Diggs traveled to the Philippines on at least seven occasions.

The online enticement of a minor charge carries a maximum potential penalty of life in prison, a mandatory minimum prison sentence of 10 years, and a $250,000 fine. The foreign travel to engage in criminal sexual activity charge carries a maximum potential penalty of 30 years in prison and a $250,000 fine. 

U.S. Attorney Carpenito credited special agents of the U.S. Department of Homeland Security, Homeland Security Investigations, Cherry Hill Office, under the direction of Special Agent in Charge Jason Molina, with the investigation leading to the charges. He also thanked agents of the U.S. Customs and Border Protection, John F. Kennedy International Airport, for their assistance.

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

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

CAMDEN, N.J. – The president of a company providing goods to government agencies was charged today by a federal grand jury with allegedly attempting to defraud businesses in connection with government contracting, U.S. Attorney Craig Carpenito announced.

Keith Fisher Sr., 62, of Philadelphia, Pennsylvania, and Burlington, New Jersey, is charged by indictment with one count of mail fraud. He was previously charged with this conduct in a criminal complaint and also with violating the conditions of his supervised release from a prior conviction. Fisher will be arraigned at a later date.

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

On July 18, 2017, Fisher was sentenced by U.S. District Judge Renée Marie Bumb to 60 months in prison for conspiring to commit mail fraud using various companies he owned and controlled. In that case, Fisher and his companies won bids for U.S. government contracts; subcontracted with victim-businesses to provide goods to the government pursuant to the contracts; collected payments from the government for fulfilling the contracts; and then failed to pay the subcontractor victim-businesses that actually provided the goods. 

The fraud scheme charged today involved another company, Atlantic Safety Corp., controlled by Fisher, and began when Fisher was nearing the end of his previous prison sentence.  Fisher used Atlantic Safety to bid on federal contracts through Unison Marketplace, a reverse auction online marketplace that enabled government agencies to post requirements for goods. Upon submitting a winning bid, Atlantic Safety was awarded a contract to provide goods to a government agency.

Fisher orchestrated his fraud by using an alias to subcontract with a third-party vendor to provide goods directly to the government agency. Fisher induced the third-party vendor to ship the goods to the government agency on credit by falsely promising to pay the vendor for the goods. Fisher also made false and fraudulent representations to other potential subcontractor vendors about the credit-worthiness and financial status of Atlantic Safety.

The mail fraud count carries a maximum potential penalty of 20 years in prison and a $250,000 fine.

U.S. Attorney Carpenito credited special agents with the U.S. Naval Criminal Investigative Service, Northeast Field Office, under the direction of Acting Special Agent in Charge Timothy Westfall; special agents with the General Services Administration Office of Inspector General, Office of Investigations Mid-Atlantic Division, under the direction of Special Agent in Charge Eric D. Radwick; and special agents with the U.S. Department of State Office of Inspector General, Office of Investigations, Americas, Pacific, and Asia Division, under the direction of Special Agent in Charge Robert J. Smolich, with the investigation leading to today’s indictment.

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

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

NEWARK, N.J. – Three people will begin their service as part of the selection committee for the Department of Justice’s Project Safe Neighborhoods grants program, U.S. Attorney Craig Carpenito announced today.

“I’m pleased that these three distinguished public servants have agreed to serve as members of an external panel that will review applications for grants under the Project Safe Neighborhoods program,” U.S. Attorney Carpenito said. “They each come from a background of extensive public service and each bring a unique perspective to this process.”

The three members of the selection committee are:

John Hoffman, currently General Counsel for Rutgers University, where he oversees a group of 21 attorneys responsible for several hundred litigation matters and general university affairs. Mr. Hoffman served as the state’s Acting Attorney General from June 2013 through March 2016. Before that, he served in the senior leadership team of Attorney General Jeffrey Chiesa, as executive assistant Attorney General, and before that he served as director of the Division of Investigations for the State Comptroller’s Office.

Hoffman also has extensive experience in federal government: seven years as a trial attorney for the Civil Division of the U.S. Department of Justice, and from 2004 to 2010 as an Assistant U.S. Attorney for the District of New Jersey, where he focused primarily on economic and white-collar criminal prosecutions.

Among his achievements as Acting Attorney General, Mr. Hoffman led an initiative to equip police with body-worn cameras and established a new policy directive on police-involved shooting incidents, improving the relationship between law enforcement and diverse communities. He spearheaded several initiatives to address the heroin and opiates epidemic in the state, including the enhancement of the Prescription Monitoring Program to suppress the misuse of prescription medications, and launched the opiate antidote Narcan program to law enforcement agencies statewide resulting in nearly 3,000 overdose reversals.

J. Scott Thomson is Executive Director of Global Security at Holtec International, a diversified energy technology company. Before joining the company, Mr. Thomson was the Chief of the Camden County Police Department, where he pioneered an innovative strategy that significantly transformed the public safety profile of the city of Camden, a city that was once labeled as the “Nation’s Most Dangerous City.” He created a new police department that was responsible for achieving unprecedented reductions in crime, culminating in a 50-year low in 2018. To achieve this, Mr. Thomson developed unique strategies, harnessed technologies, and bolstered an organizational culture that led to President of the United States in 2015 recognizing his department as a model for 21st Century policing.    

Mr. Thomson has served on numerous boards and committees of leading institutions including the White House Office of National Drug Control Policy, the United States Attorney General Global Advisory Committee, the International Association of Chiefs of Police, and was a founding member of the Harvard University Law Enforcement Summit Executive Leadership Group. He has also served as an adjunct professor at Fairleigh Dickinson University, School of Administrative Science.  

From 2015 to 2019, Mr. Thomson was the elected President of the Police Executive Research Forum, a Washington, D.C., policing think-tank which represents more than 3,000 international law enforcement executives.

Andrea P. McCoy Johnson most recently served as the Re-Entry and Outreach Coordinator for the U.S. Attorney’s Office in the District of New Jersey. A 20-year veteran of the Essex County Prosecutor’s Office, Ms. McCoy Johnson’s lifelong commitment to public safety, community engagement and criminal justice reform is exhibited in her career in public service. She has combined her interests in youth, criminal justice and community engagement, while working with community groups, law enforcement, and young people.

At the U.S. Attorney’s Office, she implemented Project L.E.A.D. (Legal Enrichment and Decision-Making), where she and other colleagues worked with fifth-graders at schools in Newark, Trenton and Camden. She considered this position the perfect “retirement” position as it allowed her to serve as a liaison between the community and law enforcement, create programs that focus on youth prevention, community awareness and education and allowed her to continue to serve as a public servant who gives back to her community. She also taught criminal justice classes at Rutgers University in the School of Criminal Justice, where she shared her love of juvenile justice reform, criminal justice and community collaboration with the next generation of criminal justice leaders.

After 17 years as an Assistant Prosecutor and Unit Supervisor with the Essex County Prosecutor’s Office, in 2013, Andrea was elevated to the position of Executive Assistant Prosecutor, where she was responsible for all aspects of human resources, labor and contract negotiations in an Office of over 400 employees, as well as management of the support staff.  Prior to that, she supervised the Juvenile Trial, Community Justice and Victim Witness Advocacy Units and served as an Assistant Prosecutor in the Juvenile Trial and Official Corruption and Economic Crime Units.

Project Safe Neighborhoods (PSN) is designed to create and foster safer neighborhoods through a sustained reduction in violent crime, including, but not limited to, addressing criminal gangs and the felonious possession and use of firearms. The program's effectiveness depends upon the ongoing coordination, cooperation, and partnerships of local, state, tribal, and federal law enforcement agencies – and the communities they serve – engaged in a unified approach led by the U.S. Attorney in all 94 districts.

NEWARK, N.J. – An Essex County, New Jersey, man today admitted his role as a member of a heroin trafficking conspiracy, U.S. Attorney Craig Carpenito announced.

Raheem Tarry, 34, of Newark, pleaded guilty by video conference before U.S. District Judge Susan D. Wigenton to two counts of a third superseding indictment charging him with one count of conspiracy to distribute and possess with intent to distribute one kilogram of more of heroin and distribution of heroin and possession of heroin with intent to distribute.

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

Tarry and others were members of a drug trafficking organization that dealt heroin and crack cocaine in and around Newark, specifically Hayes Street and 14th Avenue in the area of the New Community Corporation housing development (NCC). The organization is comprised of members of the Brick City Brim set of the Bloods street gang.

The investigation revealed that in addition to selling narcotics, members of the organization alerted each other to police and rival gang member or drug dealer presence within NCC; shared narcotics supply, narcotics proceeds, and customers; and raised bail money for each other following arrests. Members of the organization have also engaged in violence and been the subject of violence in connection with their narcotics trafficking activities.

Between March and August 2018, Tarry and 27 other individuals were charged by criminal complaint with conspiracy to distribute heroin and cocaine base; one individual also was charged with firearms offenses relating to his drug trafficking. On Aug. 20, 2019, a grand jury returned a 22-count third superseding indictment charging Tarry and four other defendants with conspiracy to distribute one kilogram or more of heroin and various other drug and firearms offenses; the alleged leader of the organization also was charged with participating in a continuing criminal enterprise. The charges in the complaint and third superseding indictment remain pending as to several of the defendants and one is charged in a separate indictment. They are presumed innocent unless and until proven guilty. 

The heroin trafficking conspiracy count to which Tarry pleaded guilty carries a mandatory minimum penalty of 10 years in prison, a maximum potential penalty of life in prison, and a $10 million fine. The drug distribution and possession with intent to distribute count to which Tarry pleaded guilty carries a maximum potential penalty of 20 years in prison, and a $1 million fine. Sentencing is scheduled for Oct. 14, 2020.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Acting Special Agent in Charge Douglas Korneski in Newark, and members of the Newark Department of Public Safety, under the direction of Director Anthony F. Ambrose, with the investigation leading to today’s guilty plea. He also thanked the Essex County Prosecutor’s Office, the Essex County Sheriff’s Office, the New Jersey Department of Corrections, the New Jersey State Parole Commission, and the U.S. Marshals for their assistance.

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

The government is represented by Assistant U.S. Attorneys Elaine K. Lou and Christopher D. Amore of the U.S. Attorney’s Office in Newark.

NEWARK, N.J. – An Illinois man today admitted his role in a scheme to defraud the Medicare Program in connection with fraudulent orders for genetic tests, U.S. Attorney Craig Carpenito announced.

Kyle D. McLean, 36, of Arlington Heights, Illinois, pleaded guilty by videoconference before U.S. District Judge Brian R. Martinotti to a superseding information charging him with one count of conspiracy to defraud the United States in connection with a scheme to commit health care fraud. McLean and five co-defendants were previously charged by indictment in September 2019 in connection with the conspiracy and a related scheme.

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

McLean and certain of his conspirators operated Privy Health Inc., a company that acquired DNA samples and Medicare information from hundreds of patients through various methods, including offering $75 gift cards to patients, all without the involvement of a treating health care professional. Privy partnered with another company, Ark Laboratory Network LLC, which purported to operate a network of laboratories that facilitated genetic testing. Matthew S. Ellis, a physician based in Gainesville, Florida, and a co-defendant charged in the indictment, served as the ordering physician who authorized genetic testing for hundreds of patients across the country that he never saw, examined, or treated. These included patients from New Jersey and various other states where Ellis was not licensed to practice medicine. Through this process, Ellis, McLean, and others submitted and caused to be submitted fraudulent orders for genetic tests to numerous clinical laboratories. These orders falsely certified that Ellis was the patients’ treating physician and, in some cases, falsely indicated that a patient had a personal or family history of cancer. In 2018 alone, Medicare paid clinical laboratories at least approximately $4.6 million for genetic tests that Ellis ordered as part of this scheme.

The charge to which McLean pleadedguilty carries a maximum penalty of five years in prison and a fine of $250,000, or twice the gross grain or loss from the offense. Sentencing is scheduled for Oct. 9, 2020.

A co-defendant, Kacey C. Plaisance, of Altamonte Springs, Florida, previously pleaded guilty and is scheduled to be sentenced on September 17, 2020.

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

The government is represented by Senior Trial Counsel Bernard J. Cooney of the Health Care Fraud Unit of the U.S. Attorney’s Office in Newark.

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

NEWARK, N.J. – A Chinese manufacturer was charged today with producing and exporting to the United States in the midst of the COVID-19 pandemic nearly half a million misbranded and defective masks that falsely purported to be N95 respirators, U.S. Attorneys Craig Carpenito, District of New Jersey, and Richard P. Donoghue, Eastern District of New York, announced.

King Year Packaging and Printing Co. Ltd. (King Year) is charged by complaint with three counts of violating the Federal Food, Drug and Cosmetic Act (FDCA) for causing misbranded and substandard respirators that falsely purported to meet the N95 standard to be imported into the United States. The complaint also charges the defendant with one felony count of making a false statement by filing misleading registration documents with the U.S. Food and Drug Administration (FDA). The criminal complaint was filed in Brooklyn federal court.

“These charges demonstrate the continued commitment of the Department of Justice and our partners to aggressively pursue those who sell misbranded and defective personal protective equipment, whether they are located here or abroad,” Carpenito said. “We will aggressively investigate and charge manufacturers that put our medical professionals and first responders at risk in fighting this crisis.”

“The charges alleged in this complaint show a blatant disregard for the safety of American citizens,” Acting FBI-Newark Special Agent in Charge Douglas Korneski said. “Had it not been for the actions of the investigative team, this defendant would have put first responders, hospital employees, and other front line workers directly in harm’s way with faulty equipment just to make a buck. The defendant tried to bypass the government's regulations by misbranding the quality of the equipment being peddled. The FBI remains vigilant in the pursuit of criminals trying to exploit the current crisis.”

Attorney General William P. Barr created the COVID-19 Hoarding and Price Gouging Task Force, led by U.S. Attorney Carpenito, who is coordinating efforts with the Antitrust Division and U.S. Attorneys across the country wherever illegal activity involving protective personal equipment occurs. The Secretary of Health and Human Services has issued a notice designating categories of health and medical supplies that must not be hoarded or sold for exorbitant prices.

“U.S. Customs and Border Protection is proud of the expertise we bring to support and assist investigations by our law enforcement partners,” Troy Miller, Director, CBP New York Field Office, said.  “It is through interagency partnerships and collaborative efforts, like the one leading to today’s charges that we send a message to foreign manufacturers on the importance of understanding and complying with US health, safety, and import laws.”

“The FDA is actively monitoring the marketplace for fraudulent products related to our battle against COVID-19. The agency will continue to collaborate with our fellow law enforcement partners to bring to justice those who place profits above the public health during this pandemic,” Jeffrey J. Ebersole, Special Agent in Charge, FDA Office of Criminal Investigations’ New York Field Office, said. “Today’s announcement should serve as a reminder that we will take appropriate action against those who jeopardize the health of Americans while taking advantage of a crisis.”

According to the complaint:

From April 6, 2020, to April 21, 2020, King Year manufactured 495,200 defective and misbranded masks that claimed to be N95 respirators, and caused those defective products to be imported into the United States. King Year stamped the NIOSH and FDA logos on the packaging for its respirators, appealing directly to healthcare personnel, when in fact, its respirators were not NIOSH-approved, nor were they approved, cleared, or otherwise authorized by the FDA. King Year’s respirators also were embroidered with “N95,” even though they fell well below the minimum 95 percent filtration standard.

King Year’s misbranded and defective products had the potential to deceive U.S. consumers, including healthcare workers and first responders, into believing they were purchasing authentic N95 respirators, and put them at risk. To cover up the poor quality of its respirators, King Year disseminated false documents attesting to their authenticity and filed a fraudulent registration statement with the FDA.

Each charge carries a maximum fine of $500,000 or the greater of twice the gross gain or twice the gross loss from the offense.

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 government is represented by Assistant United States Attorney Jonathan Fayer of the Economic Crimes Unit for the U.S. Attorney’s Office for the District of New Jersey.

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

CAMDEN, N.J. – A Camden County, New Jersey, man previously convicted of multiple felony offenses including robbery, burglary, and aggravated assault today admitted possessing fraudulent law enforcement credentials and unlawfully possessing a handgun, U.S. Attorney Craig Carpenito announced.

Warren E. Shelton, 54, of Chesilhurst, New Jersey, pleaded guilty by videoconference before U.S. District Judge Joseph H. Rodriguez to an indictment charging him with one count of unlawful possession of imitation badges, identification cards, and other insignia prescribed for use by officers of a department or agency of the United States and one count of possession of a firearm by a previously convicted felon.

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

In 2018, Shelton designed, ordered, and acquired counterfeit Department of Homeland Security, Federal Protective Service (FPS) credentials, business identification cards, and a badge falsely representing that he was employed as a special agent with FPS and authorized to carry a weapon and enforce federal laws. During a court-authorized search of Shelton’s home in May 2019, investigators located and seized these counterfeit items and also located and seized a Colt .45 caliber handgun and ammunition along with two blank guns that resembled real firearms. As a previously convicted felon, Shelton is prohibited from possessing a firearm.

Shelton faces a maximum potential penalty of 10 years in prison and a fine of up to $250,000 for the firearm offense. He also faces up to six months in prison and a fine of up to $5,000 for possession of the counterfeit FPS credentials, business cards, and badge. Sentencing is scheduled for Oct. 7, 2020.

U.S. Attorney Carpenito credited special agents of the Department of Homeland Security (DHS), Office of Inspector General (OIG), under the direction of Assistant Special Agent in Charge Julio Santana; special agents of the Department of Homeland Security, Federal Protective Services (FPS), under the direction of Supervisory Special Agent Anthony Fuscellaro; special agents of the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Jason Molina; special agents of the U.S. Secret Service, Philadelphia Field Office, under the direction of Special Agent in Charge James Henry; and special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Newark Field Division, under the direction of Special Agent in Charge Charlie J. Patterson with the investigation leading to today’s guilty plea.  He also thanked officers of the New Jersey State Police, under the direction of Superintendent Col. Patrick J. Callahan, the Camden County Police Department, under the direction of Chief Joseph Wysocki, and the Chesilhurst Police Department, under the direction of Chief Wendell Smith for their assistance.

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

CAMDEN, N.J. – An Atlantic County, New Jersey, man has been arrested on charges that he participated in a riot in Atlantic City on May 31, 2020, following a day of otherwise peaceful protests, U.S. Attorney Craig Carpenito announced today.

Carlos A. Matchett, 30, of Atlantic City, New Jersey, was arrested June 3, 2020, by special agents of the FBI and is charged by complaint with use of a facility of interstate and foreign commerce, namely, a cellular telephone, and the social media platform Facebook, with intent to participate in and carry on a riot. Matchett will make his initial appearance today by videoconference before U.S. Magistrate Judge Karen M. Williams.

According to the complaint:

During the evening of May 31, 2020, following protests in Atlantic City, a group of people engaged in a spree of rioting, destruction, and looting in and around the Tanger Outlets, an area known locally as “the Walk.”  Police responded to the area and observed Matchett standing in the middle of a roadway shouting obscenities at law enforcement and enticing persons around him to join in looting. After Matchett refused orders to disperse, police arrested him. During a search, they found a knife, a hatchet, and a jar filled with gasoline inside a backpack that he was wearing.

Further investigation revealed that shortly before his arrest, Matchett made public postings on his Facebook page linking to a news article about looting in Philadelphia and remarking to others, “LET’S START A RIOT.” Matchett also posted a video on Facebook on May 31, 2020, that showed him encouraging and assisting others in the vicinity of the Tanger Outlets in Atlantic City to loot goods from smashed store fronts. 

The charge in the complaint carry a maximum prison term of five years and a maximum fine of $250,000.

U.S. Attorney Carpenito credited special agents of the FBI’s Atlantic City Resident Agency, under the direction of Acting Special Agent in Charge Douglas Korneski in Newark and the FBI’s Atlantic City Resident Agency’s Joint Terrorism Task Force, whose members include the Atlantic City Police Department and New Jersey State Police, with the investigation leading to today’s arrest. He also thanked officers of the Atlantic City Police Department, under the direction of Police Chief Henry White, for their assistance.

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

The 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 Monmouth County, New Jersey, man was charged today with tax evasion, corrupt interference with the administration of the Internal Revenue laws, and failure to file a federal tax return, U.S. Attorney Craig Carpenito announced.

Thomas Bertoli, 62, of Matawan, New Jersey, has been charged by complaint with two counts of tax evasion, one count of corrupt interference with the administration of the Internal Revenue laws, and one count of failure to file a tax return.  A summons was issued for Bertoli to appear before a United States Magistrate Judge at a time to be scheduled.

According to the complaint:

Defendant Bertoli operated the following businesses: The Doormen Inc.; City Street Associates LLC, a/k/a CSA LLC; and Urban Logistics LLC. Individually and through his companies, Bertoli obtained payments from clients for services provided, including payments from developers and construction firms for expediting services on real estate development and construction projects, primarily in Jersey City, New Jersey; and payments from political campaigns for political consulting services in New Jersey. Expediting in the construction industry typically refers to facilitating the acquisition of building permits and other government agency approvals required for the completion of real estate projects. 

Bertoli obtained hundreds of thousands of dollars in gross receipts for calendar years 2009 to 2016. Bertoli had not, as of April 18, 2017, filed federal tax returns or paid any of the taxes due, other than a $5,000 nominal payment in September 2014, for those years. He concealed and attempted to conceal from the IRS his income and assets through various means; Bertoli cashed at check cashers payments from his clients, made false and fraudulent statements to the IRS, and used the Urban Logistics bank account for personal expenditures.

Bertoli is charged with tax evasion for calendar years 2009 to 2013 and evasion of assessment of taxes for calendar year 2014. He also is charged with corrupt interference with the administration of the Internal Revenue laws and failing to file a tax return for calendar year 2013.

Each charge of tax evasion carries a maximum potential penalty of five years in prison and a $250,000 fine. The charge of corrupt interference with the administration of the Internal Revenue laws carries a maximum potential penalty of three years in prison and a $250,000 fine. The charge of failing to file a tax return carries a maximum potential penalty of one year in prison and a $100,000 fine. 

U.S. Attorney Carpenito credited special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Laura J. Perry and special agents of the FBI, under the direction of Acting Special Agent in Charge Douglas Korneski in Newark, with the investigation leading to today’s charges.

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

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