District of New Jersey

As I said in the wake of the despicable hate crimes committed in Jersey City last December, we are confronting problems in this state and this country that I cannot believe we are still facing at this point in our history. I emphatically reject the idea that violence is the solution to those problems. I am proud of the people of Newark, Camden and elsewhere who have raised their voices in peaceful protest to seek justice for George Floyd and the many other victims like him, and to call for change.

A few individuals are using these protests as cover to commit violent acts and damage our communities. They are not honoring the memory of George Floyd. They do not work to ensure justice for his memory, his family or his loved ones. They hide behind his name to further their own agendas. They may think that they can worsen the divide that responsible community, civic and governmental leaders have engaged with one another to try to close for years. They are wrong.

I know this engagement works because I see the impact of productive community and law enforcement partnerships every day in Newark, Camden, and elsewhere. As I watch the police and the community grow together, I see crime go down. I know that members of the community intervened during the past several days to prevent a few individuals from turning a peaceful protest violent. I commend their brave stand, and I say to them: we will not allow the actions of the lawless few to silence the voice of the many.

The U.S. Attorney’s Office will continue to protect the right of all people to assemble and protest peacefully, without interruption from those bent on violence or destruction. We will continue to investigate and prosecute those police officers who abuse their power through the unlawful use of force and other violations of our citizens’ civil rights. We will also intervene wherever individuals try to distract from these valid causes by engaging in riots, arson and looting. We will bring all of these wrongdoers to justice. 

Our work sends a strong message: New Jersey will not tolerate the victimization of our people, our cities, our businesses, our law enforcement and our government. Justice will prevail.

NEWARK, N.J. – An investment fund manager was indicted today in connection with an alleged $68 million securities fraud scheme, U.S. Attorney Craig Carpenito announced.

Brenda Smith, 59, of Philadelphia, Pennsylvania, was indicted on six counts of wire fraud and one count of securities fraud. Smith was initially charged by complaint in August 2019. 

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

Smith managed and controlled Broad Reach Capital LP, a purported investment fund.  Broad Reach Capital was a pooled investment fund/hedge fund that was established in February 2016 and was open to accredited investors with a minimum investment of $1 million.

From February 2016 through August 2019, Smith allegedly orchestrated a scheme in which she made misrepresentations to investors and promised that she would invest their funds in particular trading strategies that Broad Reach Capital was optimally situated to execute.  Smith referred to these strategies as dividend capture, VIX Convergence, and opportunistic trading. Instead of investing the money as she advertised, Smith diverted tens of millions of dollars of investor funds out of Broad Reach Capital for purposes inconsistent with the trading strategies, including for personal use and to pay out millions of dollars to other investors.

Smith misrepresented the success and performance of Broad Reach Capital to investors and prospective investors. She touted Broad Reach Capital as a trade-focused investment fund that was highly liquid and employed a robust risk management program. Smith distributed written materials about Broad Reach Capital to investors and prospective investors that included purported historical performance information, such as claimed annual returns of over 33 percent in 2017 and positive monthly returns in 2018. In fact, the total cash and securities in the Broad Reach Capital bank and brokerage accounts decreased from December 2016 through June 2019.  For example, the written materials claimed that Broad Reach Capital had a 1.76 percent return in February 2018 when in reality, Broad Reach Capital’s brokerage accounts lost over 50 percent of their value.

To lull investors and induce them to continue investing, Smith provided monthly account statements that falsely showed that their investments were safe and earning significant returns.  Smith also falsely represented that she was personally invested in Broad Reach Capital and provided a fictitious account statement to at least one investor.

As part of the fraudulent scheme, Smith collected more than $68 million of cash into Broad Reach Capital from approximately 40 investors. At its peak, however, the value of cash and securities in the Broad Reach Capital bank and brokerage accounts did not exceed $32 million. Instead of investing the money as she promised, Smith transferred tens of millions of dollars out of Broad Reach Capital to entities she controlled for purposes inconsistent with its trading strategies, including more than $10 million for mineral mining operations and $2 million for American Express credit card bills. When investors requested redemption of their investments, Smith diverted other investors’ funds to pay the requested redemption amounts. 

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

The U.S. Securities and Exchange Commission (SEC) Philadelphia Regional Office previously filed a civil complaint against Smith based on the same conduct.

U.S. Attorney Carpenito credited special agents of the FBI Philadelphia Division, under the direction of Special Agent in Charge Michael Driscoll, and special agents of the U.S. Attorney’s Office with the investigation leading to today’s charges. He also thanked the U.S. Securities and Exchange Commission’s Philadelphia Regional Office, under the direction of Director Kelly L. Gibson, for its assistance.

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

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

NEWARK, N.J. – The owners of two clinical laboratories in Texas and Mississippi today admitted their roles in a scheme to pay kickbacks in exchange for referrals of patient DNA samples and genetic tests to the laboratories, U.S. Attorney Craig Carpenito announced.

Sherman Kennerson, 55, of Plano, Texas, and Jeffrey Madison, 54, of DeSoto, Texas, each pleaded guilty by videoconference before U.S. District Judge Brian R. Martinotti to one count of conspiracy to defraud the United States in connection with a scheme to violate the Anti-Kickback Statute. 

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

Kennerson and Madison co-owned and operated with other individuals Spectrum Diagnostic Labs LLC (Spectrum Lab) and Metric Lab Services LLC (Metric Lab), two clinical laboratories, located in Texas and Mississippi, respectively, that performed genetic tests and submitted claims to Medicare. Kennerson and Madison oversaw the laboratories’ marketing and sales operations through which outside marketing groups recruited physicians to refer patients’ DNA samples to the laboratories for genetic tests and related services.

Kennerson and Madison paid bribes to Ark Laboratory Network LLC (Ark), one the marketing groups for Spectrum Lab and Metric Lab, and Jeffrey Tamulski, to induce Ark to refer patients’ DNA samples to the laboratories. Tamulski and the owners of Ark, Edward B. Kostishion, Jeremy M. Richey, and Kacey C. Plaisance, were previously charged by indictment in September 2019 in connection with a related kickback conspiracy involving referrals to laboratories for genetic testing. Plaisance pleaded guilty to his role in the conspiracy on May 6, 2020. 

As part of the scheme, the laboratories entered into sham agreements with Ark and Tamulski under which Ark purported to provide various consulting, marketing, and other services at an hourly rate. Kennerson and Madison, however, paid Ark and Tamulski in exchange for referrals and DNA samples based on a percentage of the revenue the laboratories received from federal health care programs, including Medicare. Once the amount of the bribe was calculated, Ark and Tamulski drafted and submitted sham invoices to the laboratories that backed into the agreed upon bribe amount and attempted to conceal the scheme through describing various services provided at hourly rates. Metric Lab paid Ark over $136,000 in bribes and the laboratories received over $517,000 in payments from Medicare for claims connected to the kickback scheme with Ark and Tamulski.

The conspiracy charge to which Kennerson and Madison each pleaded guilty carries a maximum penalty of five years in prison and a fine of $250,000, or twice the gross grain or loss from the offense, whichever is greatest. Sentencing for both defendants is scheduled for Oct. 5, 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 J. 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 pleas.

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 Nebraska man today admitted engaging in fraudulent activity that exposed his employer’s confidential information, U.S. Attorney Craig Carpenito announced. 

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

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

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

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

The charge of wire fraud is punishable by a maximum potential penalty of 20 years in prison and a fine of the greater of $250,000, twice the gross profits to Young or twice the gross loss suffered by the victim.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Acting Special Agent in Charge Douglas Korneski in Newark, and task force officers from the N.J. State Police, Jersey City Police Department, Ocean City Police Department, and Federal Protective Service, with the investigation leading to today’s guilty plea. He also thanked the FBI’s Omaha Division, under the direction of Special Agent in Charge Kristi Koons Johnson, for its role in the investigation.

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

TRENTON, N.J. – A Middlesex County, New Jersey, man was arrested today for attempting to set fire to a marked police vehicle in Trenton after a demonstration over the death of George Floyd in Minneapolis, Minnesota, U.S. Attorney Craig Carpenito announced.

Justin Spry, 21, of South Plainfield, New Jersey, 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. Spry will make his initial appearance June 3, 2020, by videoconference before U.S. Magistrate Judge Tonianne J. Bongiovanni.

“The conduct described in the criminal complaint demonstrates a deliberate effort to destroy a police vehicle during a demonstration,” U.S. Attorney Carpenito said. “Our office will not hesitate to bring to justice anyone who engages in this kind of destruction. We will work with our law enforcement partners to find these violent perpetrators and charge them appropriately.”

According to the complaint:

On May 31, 2020, large-scale protests were held throughout the United States, including in Trenton, in response to the death of Floyd on May 25, 2020, while in the custody of the Minneapolis Police Department. Although the May 31 protest in Trenton began peacefully, violence erupted later in the day. A group of individuals proceeded along East State Street in downtown Trenton and began to smash store fronts, loot businesses, and attack marked Trenton Police Department vehicles parked along East State Street.

A street camera recorded Spry and another individual attempt to stuff a piece of cloth into the gas tank of a marked police vehicle and ignite it. Law enforcement officers on scene observed Spry as he attempted to ignite the vehicle. Spry noticed the officers and attempted to flee, but was arrested.

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, as well as special agents of the FBI’s Trenton Resident Agency, 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; troopers of the New Jersey State Police, under the direction of Colonel Patrick J. Callahan; and officers of the New Jersey Department of Corrections, under the direction of Commissioner Marcus O. Hicks, for their assistance.

The government is represented by Assistant U.S. Attorneys Alexander E. Ramey and Michelle 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.

CAMDEN, N.J. – A Camden County man today admitted his role in a scheme to steal hundreds of thousands of dollars in government funds using fraudulently procured electronic benefits transfer (EBT) cards, U.S. Attorney Craig Carpenito announced.

Octavio Rodriguez, 51, of Pennsauken, New Jersey, pleaded guilty by videoconference before U.S. District Judge Renee Marie Bumb to an information charging him with one count of conspiracy to defraud the United States and one count of defrauding the U.S. Department of Agriculture’s (USDA) Supplemental Nutrition Assistance Program (SNAP).

Rodriguez and his co-defendants – Luciano Estevez, 50, and Jose Garcia, 52, both of Camden, and Juan Melo, 56, of Woodlynne, New Jersey – were previously charged by separate complaints in August 2019 with participating in the conspiracy and defrauding SNAP. Melo and Estevez previously pleaded guilty to their roles in the scheme.

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

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

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

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

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

The conspiracy count to which Rodriguez pleaded guilty carries a maximum penalty of five years in prison, and the SNAP fraud offense to which Rodriguez pleaded guilty carries a maximum penalty of 20 years in prison. Each offense also carries a fine of $250,000, or twice the gross gain or loss from the offense, whichever is greatest. Sentencing is scheduled for Oct. 5, 2020.

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

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

NEWARK, N.J. – U.S. Attorney Craig Carpenito today announced that the state of New Jersey has received $16.6 million in Department of Justice grants to respond to the challenges posed by the outbreak of COVID-19.

The grants, awarded to the New Jersey Department of Law and Public Safety and more than 40 county and local entities, are available under the Coronavirus Emergency Supplemental Funding program, authorized by the recent stimulus legislation signed by President Trump.

“The coronavirus pandemic has put tremendous stress on all of our normal government functions,” U.S. Attorney Carpenito said. “The additional funding made available by this program will provide much-needed resources to the men and women in New Jersey who place themselves at risk to protect all of us.”

“The outbreak of COVID-19 and the public health emergency it created are sobering    reminders that even the most routine duties performed by our nation’s public safety officials carry potentially grave risks,” Katharine T. Sullivan, Principal Deputy Assistant Attorney General for the Office of Justice Programs, said. “These funds will provide hard-hit communities with critical resources to help mitigate the impact of this crisis and give added protection to the brave professionals charged with keeping citizens safe.”

The New Jersey Department of Law and Public Safety was awarded $11.8 million. The cities of Newark ($922,000), Camden ($527,000) and Jersey City ($465,000) were among the other recipients. In all, New Jersey received 42 grants totaling more than $16.6 million.

The law gives jurisdictions considerable latitude in the use of these funds for dealing with COVID-19. Potential uses include hiring personnel, paying overtime, purchasing protective equipment and distributing resources to hard-hit areas. Funds may also be used to help correctional facilities cover costs related to COVID-19, including, but not limited to, sanitation, contagion prevention and measures designed to address the related medical needs of inmates, detainees and correctional personnel.

Agencies that were eligible for the fiscal year 2019 State and Local Edward Byrne Memorial Justice Assistance Grant Program are candidates for the emergency funding. Local units of government and tribes will receive direct awards separately according to their jurisdictions’ allocations. For a list of all awards thus far, visit the Coronavirus Emergency Supplemental Funding program webpage.

The Office of Justice Programs, directed by Principal Deputy Assistant Attorney General Katharine T. Sullivan, provides federal leadership, grants, training, technical assistance and other resources to improve the nation’s capacity to prevent and reduce crime, assist victims and enhance the rule of law by strengthening the criminal and juvenile justice systems. More information about OJP and its components can be found at www.ojp.gov.

NEWARK, N.J. – A Newark man had his initial appearance today on charges stemming from his arrest for narcotics trafficking and illegally possessing a firearm, U.S. Attorney Craig Carpenito announced.

Ibraaheem Islam, a/k/a “Ish,” 32, appeared by video conference before U.S. Magistrate Judge Leda Dunn Wettre and was detained without bail. He is charged by complaint with three counts of possession with intent to distribute cocaine base (Counts One through Three), one count of possession of a firearm by a convicted felon (Count Four), and one count of possession of a firearm in furtherance of a drug trafficking crime (Count Five). 

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

From at least April 17, 2020 to May 27, 2020, Islam engaged in conduct consistent with hand-to-hand narcotics transactions on a regular basis in the vicinity of Chadwick Avenue, Newark, New Jersey. Law enforcement obtained a warrant for Islam’s arrest, as well as warrants to search two vehicles and one residence associated with Islam. On May 30, 2020, law enforcement recovered a 5.7x28 millimeter caliber FN Herstal model “FN Five-SeveN” pistol, loaded with 17 rounds of ammunition, 194 vials containing suspected cocaine base, and 64 glassine envelopes containing suspected heroin. Islam was placed under arrest and taken into custody. 

Counts One and Two each carry a maximum penalty of 20 years in prison and a fine of up to $1 million. Count Three carries a mandatory minimum sentence of five years in prison, a maximum sentence of 40 years in prison, and a fine of up to $5 million. Count Four carries a maximum sentence of 10 years in prison, and a fine of up to $250,000. Count Five carries a mandatory minimum sentence of five years in prison, a maximum sentence of life in prison, and a fine of up to $250,000.

U.S. Attorney Carpenito credited special agents of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, Newark Division, under the direction of Special Agent in Charge Charlie J. Patterson; the Newark Police Department, under the direction of Public Safety Director Anthony F. Ambrose; and the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Theodore N. Stephens II, with the investigation leading to the charges.

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.

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

The government is represented by Assistant U.S. Attorneys Samantha C. Fasanello, Cassye Cole, and Desiree Grace Latzer of the U.S. Attorney’s Office in Newark.

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

NEWARK, N.J. – A grand jury today indicted two men, one from Ocean County, New Jersey, and the other from Utah, with carrying out a fraudulent scheme to obtain credit cards in the names of third parties, make purchases on the cards to generate rewards points, monetize the points, and cancel the purchases.

Aharon Lev, a/k/a “Aaron Lev,” a/k/a “Aron Lev,” a/k/a “David Gold,” a/k/a “David Monroe,” 33, of Lakewood, New Jersey, and Timothy Gibson, 43, of Lehi, Utah, are charged by indictment with one count each of conspiracy to commit wire fraud. Lev is also charged by indictment with two counts of wire fraud and two counts of aggravated identity theft. Lev was previously charged by complaint and released on bond to Israel; he is required to return to New Jersey by June 9, 2020, to be arraigned on the indictment. Gibson will make his initial appearance at a date to be determined.

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

From August 2014 through May 2016, Lev recruited individuals to give him their personally identifiable information, such as names and Social Security numbers, which Lev used to open numerous small-business accounts in their names with the victim credit card company. With Gibson’s assistance, Lev then used those accounts to make purchases that generated rewards points, which could be redeemed for frequent-flyer miles with various airlines. Once the points were issued, Lev cancelled the purchases and sold the points to Gibson, who resold them to third parties for use as miles to purchase airfare. Over two years, the scheme cost the credit card company more than $8 million in fees paid to the airlines for acceptance of points for miles.

Each charge of wire fraud and conspiracy to commit wire fraud carries a maximum penalty of 20 years in prison, a $250,000 fine, restitution, and forfeiture. Each charge of aggravated identity theft carries a mandatory sentence of two years in prison, to be served consecutive to any sentence on the wire-fraud and conspiracy charges.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, and postal inspectors with the U.S. Postal Inspection Service, under the direction of Inspector in Charge James Buthorn, with the investigation leading to the charges.

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

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

NEWARK, N.J. – A former staffer for a member of the United States House of Representatives today admitted using, without authorization, the seal of the House of Representatives in connection with falsified letters written on the member’s congressional letterhead, U.S. Attorney Craig Carpenito announced.

Patrick Sheehan, 29, of West Milford, New Jersey, pleaded guilty during a videoconference before U.S. Magistrate Judge Michael A. Hammer to an information charging him with the unauthorized use of the seal of the United States House of Representatives.

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

Sheehan was employed in the Newton, New Jersey, office of a member of the United States House of Representatives from February 2018 to August 2019. As a staff member, he had access to the member’s official letterhead, which contained the likeness of the seal of the United States House of Representatives.

In July 2019, Sheehan falsified and mailed to various recipients a series of letters. The first letters purported to be from another employee of the member and contained false information regarding the member and that employee. The employee did not create, approve, or sign those letters. Sheehan then falsified multiple copies of a letter on the member’s official letterhead purporting to be from the member. That letter, which the member did not create, approve, or sign, responded to the false information in the employee letters, and also contained false information. The phony letters that Sheehan created and distributed contained the likeness of the seal of the House of Representatives.     

Sheehan faces a maximum potential penalty of six months in prison, five years of probation, and a fine of $5,000. Sentencing is scheduled for Sept. 29, 2020.

U.S. Attorney Carpenito credited special agents with the U.S. Capitol Police, under the direction of Chief of Police Steven A. Sund, inspectors with the U.S. Postal Inspection Service, under the direction of Inspector in Charge James Buthorn, and special agents with the U.S. Attorney’s Office for the District of New Jersey with the investigation. 

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

NEWARK, N.J. – The Justice Department today sued a Gloucesster County construction company for allegedly defrauding the United States by falsely claiming credit for using disadvantaged business entities, U.S. Attorney Craig Carpenito announced.

C. Abbonizio Contractors Inc., a company based in Sewell, New Jersey, allegedly defrauded the government by claiming to use disadvantaged entities when those entities were not actually used to perform work.

Companies performing federally funded work on New Jersey transportation projects sponsored by the New Jersey Department of Transportation (NJDOT) are required to utilize disadvantaged business entities (DBE) for a specified percentage of the work, and are required to certify their use of these entities.  

According to the complaint filed today in U.S. District Court:

Abbonizio Contractors obtained a $39 million subcontract from PKF Mark III, the prime contractor on the Direct Connection Project, a federally funded reconfiguration of the interchanges of Routes I-295, I-76, and Route 42 in Camden County. PKF Mark III was required to perform 15 percent of the work with DBE contractors, and Abbonizio Contractors assumed that requirement as part of its subcontract. Abbonizio Contractors and its president, Peter Abbonizio, improperly claimed credit for using DBE to perform work on the project by reporting to PKF Mark III the use of DBE that did not actually perform work. The scheme involved hiring DBE not to perform work, but merely to fraudulently invoice work as their own that was actually performed by other companies, in violation of the contract and federal regulations.

U.S. Attorney Carpenito credited special agents of the U.S. Department of Transportation, Office of Inspector General under the direction of Acting Inspector General Howard R. Elliot, and agents of the Port Authority of New York and New Jersey, Office of the Inspector General under Acting Inspector General Michael Farbiarz, with the investigation leading to the filing of this civil fraud complaint.

The government is represented by Assistant U.S. Attorney Mark C. Orlowski of the U.S. Attorney’s Government Fraud Unit in Newark.

CAMDEN, N.J. – A New Jersey man with a prior felony conviction was charged today with unlawfully possessing dozens of firearms, including handguns, rifles, a silencer, ammunition, and high-capacity magazines, U.S. Attorney Craig Carpenito announced.

Darick Nollett, 30, of Heislerville, New Jersey, is charged by criminal complaint with one count of unlawfully possessing a firearm as a convicted felon, and one count of knowingly receiving and possessing a firearm that was not registered to him in the National Firearms Registration and Transfer Record. Nollett is expected to make his initial appearance by videoconference this afternoon before U.S. Magistrate Judge Joel Schneider in Camden federal court.

According to documents filed in this case:

Nollett used the Internet to purchase a device that, while marketed as a “fuel filter,” is known to law enforcement to be frequently purchased by individuals for use as a firearm silencer. Law enforcement officers executing a court-authorized search warrant of Nollett’s residence recovered the following, in addition to the silencer:

• A Remington 710 .270 caliber rifle;
• A Savage 93R17 .17 caliber rifle;
• An Aero Precision DTOM 15 rifle;
• A CMMG Inc. MK4 rifle;
• A Del-Ton DTI-15 rifle;
• An Aero Precision DTOM 15 rifle;
• A Keltec rifle;
• A Smith & Wesson .38 caliber revolver;
• A Ruger LCP .380 caliber semi-automatic pistol;
• A Colt Python .357 caliber revolver;
• A Taurus PT738 .380 caliber handgun;
• A Sig Sauer P226 .22 caliber handgun;
• A Glock 20 10mm handgun;
• A Heckler & Koch VP9 tactical pistol;
• A Smith & Wesson M&P40 .40 caliber handgun;
• A Springfield XD-40 .40 caliber handgun;
• A Springfield XD-45 .45 caliber handgun;
• A Taurus PT111 G2 9mm handgun;
• A Browning BPS 12 gauge shotgun;
• A Winchester Model 120 12 gauge shotgun;
• A Hatsan Arms Escort PS Magnum 12 gauge semi-automatic shotgun;
• A Remington 870 20 gauge shotgun;
• A Mossberg 500E .410 gauge shotgun;
• A Rossi 520 20 gauge shotgun;
• A New England Firearms Pardner SBI 12 gauge shotgun;
• A Fabrica Aguirre y Aranzabal JC Higgins Model 100 12 gauge shotgun;
• A Savage Model 720 12 gauge shotgun;
• A Springfield Armory Model 1896 rifle;
• A Ruger Model 10-22 .22 caliber rifle;
• A Remington 7615 Police .223 caliber rifle;
• A Winchester Model 1864 30 30 rifle; and
• A Mossberg 500 12 gauge shotgun;

In addition, law enforcement officers recovered an assembled AR-15 style rifle with scope that did not bear a serial number. Law enforcement officers also recovered unassembled parts for another AR-15 style rifle.

Each charge carries a maximum potential penalty of 10 years in prison and a $250,000 fine.

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.

U.S. Attorney Carpenito credited special agents of the U.S. Department of Homeland Security, Homeland Security Investigations (HSI), Cherry Hill office, under the direction of Newark Special Agent in Charge Jason Molina, special agents of the ATF Newark Field Division, under the direction of Special Agent in Charge Charlie J. Patterson, postal inspectors of the U.S. Postal Inspection Service, Philadelphia Division, under the direction of Inspector in Charge Damon E. Wood, officers of the New Jersey State Police, under the direction of Superintendent Col. Patrick J. Callahan, and the Cumberland County Prosecutor’s Office, under the direction of Prosecutor Jennifer Webb-McRae, with the investigation leading to today’s charges.

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

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

TRENTON, N.J. – A Union County, New Jersey, man today admitted distributing and conspiring to distribute 400 grams or more of fentanyl, U.S. Attorney Craig Carpenito announced.

Jhon Rodriguez-Acosta, 34, of Elizabeth, New Jersey, pleaded guilty by videoconference before U.S. District Judge Peter G. Sheridan to one count of conspiracy to distribute and possess with the intent to distribute 400 grams or more of fentanyl and one count of knowingly and intentionally distributing of 400 grams or more of fentanyl. 

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

From April 2018 through Feb. 13, 2019, Rodriguez-Acosta conspired with others to distribute narcotics. On Feb. 12, 2019, Rodriguez-Acosta provided a conspirator with over one kilogram of fentanyl. On or about Feb. 13, 2019, Rodriguez-Acosta and a second conspirator traveled to the parking lot of a 7-Eleven in Elizabeth to collect payment for the fentanyl he distributed.

The counts to which Rodriguez-Acosta pleaded guilty each carry a mandatory minimum sentence of 10 years in prison, a maximum sentence of life imprisonment and a fine of up to $10 million. Sentencing is scheduled for Sept. 28, 2020.

U.S. Attorney Craig Carpenito credited special agents of the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Jason Molina, with the investigation leading to today’s guilty plea.

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

NEWARK, N.J. – A Bronx, New York, man was sentenced today to 46 months in prison for his role in a conspiracy to distribute heroin and fentanyl from a drug mill in the Bronx to locations in New Jersey, U.S. Attorney Craig Carpenito announced.

Daury Contreras Ulerio, 35, a/k/a “Majimbou,” previously pleaded guilty before U.S. District Judge Esther Salas in Newark federal court to an indictment charging him with one count of conspiracy to distribute 400 grams or more of a mixture and substance containing fentanyl. Dilson Vazquez Genao, 23, Eddie Urena Rodriguez, 35, Francisco Mercedes Gil, 31, and Jose Antonio Vazquez Pena, a/k/a “Tono,” 47, also of the Bronx, New York, all have pleaded guilty before Judge Salas to the same charges previously and are awaiting sentencing.

Two other individuals – Jhan Carlos Capellan Maldonado, 31, and Reimon Genao Rosario, 23 – were indicted on the same charge as Ulerio in August 2019. Their cases are pending; the charges against them are merely accusations, and they are presumed innocent unless and until proven guilty.

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

In early February 2019, law enforcement officers learned that Maldonado used an apartment in Bronx to store, mix, and package heroin and fentanyl in distribution quantities. Pena stayed at the apartment in order to safeguard the narcotics and narcotics supplies. Maldonado employed approximately five workers at a time – including Rodriguez, Ulerio, Rosario, Gil, and Genao – to assist in preparing the heroin and fentanyl for distribution, which Maldonado then distributed to customers in New Jersey.

On Feb. 25, 2019, law enforcement officers saw Maldonado drive to a retail store and emerge with several full shopping bags and then drive to the apartment. Genoa came out of the building and met with Maldonado, who got out of his vehicle and gave Genoa the plastic shopping bags. Through its investigation, law enforcement later learned that the plastic shopping bags contained materials to package heroin and fentanyl.

Genoa went back inside the building and was followed by law enforcement officers, who watched as Genoa entered Maldonado’s apartment with a key, still carrying the shopping bags. On Feb. 27, 2019, law enforcement searched Maldonado’s apartment and found seven individuals inside, including Rodriguez, Ulerio, Rosario, Gil, Maldonado, Pena, and Genao. All seven defendants attempted to escape out a window, but all but one – Rosario – were apprehended and arrested by law enforcement officers waiting outside. Rosario was arrested at a later date. Law enforcement recovered nearly a kilogram of fentanyl from the apartment, along with materials to grind and package fentanyl for distribution.

U.S. Attorney Craig Carpenito credited the U.S. Department of Homeland Security, Homeland Security Investigations (HSI), New Jersey Division, under the direction of Special Agent in Charge Jason Molina, with the investigation leading to today’s sentencing.

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

TRENTON, N.J. – A Philadelphia man was sentenced today to 33 months in prison for his role in a drug distribution conspiracy connected to the seizure of fentanyl and heroin at a New Jersey rest stop last year, U.S. Attorney Craig Carpenito announced.

Denny Diaz, 30, previously pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton federal court to an information charging him with one count of conspiracy to distribute fentanyl and heroin. Judge Sheridan imposed the sentence today.

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

Diaz’s co-defendant, Luis Aponte, 49, of Riverside, California, drove a tractor-trailer truck to a rest stop in Bloomsbury, New Jersey, on March 1, 2019. The next day, he met Diaz in a car and gave Diaz approximately six kilograms of fentanyl. Both men were arrested shortly thereafter. Law enforcement officers searched Aponte’s truck at the rest stop and found an additional two kilograms of fentanyl and 11 kilograms of heroin inside. 

In addition to the prison term, Judge Sheridan sentenced Diaz to three years of supervised release. Aponte previously pleaded guilty to his role in the conspiracy. He is scheduled to be sentenced July 6, 2020.

U.S. Attorney Craig Carpenito credited special agents of the Drug Enforcement Administration, under the direction of Special Agent in Charge Ray Donovan, New York Division; New York City Police Commissioner Dermot F. Shea; and New York State Police Superintendent Keith M. Corlett with the investigation leading to today’s sentencing. This case is being investigated by the DEA’s New York Drug Enforcement Task Force, comprising agents and officers of the DEA, New York City Police Department and New York State Police.

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

NEWARK, N.J. – A Morris County, New Jersey, man today admitted maliciously calling in a bomb threat to a religious institution, U.S. Attorney Craig Carpenito announced.

James Triano, 38, of Pompton Plains, New Jersey, pleaded guilty by videoconference before U.S. District Judge Kevin McNulty to an indictment charging him with maliciously conveying false information about an explosive.

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

On March 21, 2017, Triano called a religious institution in Livingston, New Jersey. He told a representative of that institution there was a bomb located in the religious institution’s building that would explode in 30 minutes. Triano conveyed this information about the bomb knowing that it was false. The bomb threat resulted in a substantial disruption to the religious institution, as well as to the public. 

The count with which Triano has pleaded guilty is punishable by a maximum potential penalty of 10 years in prison and a $250,000 fine. Sentencing is scheduled for Sept. 30, 2020.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, and officers from the Livingston Police Department, under the direction of Police Chief Gary Marshuetz, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Catherine R. Murphy of the U.S. Attorney’s Office Criminal Division in Newark.

NEWARK, N.J. – A Hudson County, New Jersey, man today admitted his role in two bank robberies and one attempted bank robbery and to impersonating a federal agent, U.S. Attorney Craig Carpenito announced. 

William Tedeschi, 48, of Jersey City, New Jersey, pleaded guilty by videoconference before U.S. District Judge Brian R. Martinotti to an indictment charging him with one count of bank robbery, one count of attempted bank robbery, and one count of impersonating a federal agent. Tedeschi was previously charged by indictment in December 2019, and his co-defendants were charged in the same indictment for their roles in a Union City bank robbery.

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

On Sept. 8, 2019, Tedeschi entered a Jersey City business purporting to be an FBI agent soliciting donations for a fictitious charity benefitting law enforcement. On Nov. 5, 2019, Tedeschi and his co-defendants robbed a bank in Union City, New Jersey, and split the robbery proceeds. On Nov. 16, 2019, Tedeschi attempted to rob a bank in Newark, and on Nov. 26, 2019, Tedeschi robbed a bank in Elizabeth, New Jersey. During the two completed robberies and the attempted robbery, Tedeschi handed the bank tellers notes demanding cash.

The bank robbery charges to which Tedeschi pleaded guilty carry a maximum potential penalty of 20 years in prison and $250,000 fine; the impersonation of a federal officer charge carries a maximum penalty of three years and a $250,000 fine. Tedeschi’s sentencing is scheduled for Oct. 1, 2020.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, with the investigation leading to today’s guilty plea. He also thanked the Jersey City Police Department, Elizabeth Police Department, Newark Police Department, and Union City Police Department for their assistance. 

The government is represented by Assistant U.S. Attorney Cymetra M. Williams of the U.S. Attorney’s Office Health Care Fraud Unit in Newark.

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

NEWARK, N.J. – A Paterson, New Jersey, man was sentenced to 37 months in prison for his role in a drug trafficking/money laundering organization that operated throughout northern New Jersey, U.S. Attorney Craig Carpenito announced.

Jhensel Jimenez-Taveras, 27, previously pleaded guilty before U.S. District Judge Susan D. Wigenton to an information charging him with one count of conspiracy to commit money laundering. Judge Wigenton imposed the sentence today.

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

In April 2019, law enforcement officers observed Jimenez-Taveras engage in a suspected narcotics transaction in Berkeley Heights, New Jersey. Law enforcement officers stopped the vehicle that Jimenez-Taveras was operating and located $123,255 in cash. Further investigation revealed that Jimenez-Taveras was responsible for transferring large sums of U.S. currency on behalf of the drug trafficking/money laundering organization. Jimenez-Taveras acknowledged that these funds were the product of narcotics sales and that his intent in transporting the money was to fund additional narcotics activities.

In addition to the prison term, Judge Wigenton sentenced Jimenez-Taveras to three years of supervised release. As part of his plea agreement, Jimenez-Taveras must also forfeit the $123,255 that was seized by law enforcement.

This case was 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.

U.S. Attorney Carpenito credited special agents of the U.S. Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Jason Molina, and troopers with the New Jersey State Police, under the direction of Col. Patrick J. Callahan, with the investigation leading to today’s sentencing.

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

TRENTON, N.J. – A Mercer County, New Jersey, man today admitted his role as a member of a drug trafficking conspiracy and his possession of multiple semiautomatic firearms in furtherance of his unlawful drug-trafficking activities, U.S. Attorney Craig Carpenito announced.

Jubri West, 20, of Trenton, pleaded guilty by teleconference before Chief U.S. District Judge Freda L. Wolfson to a superseding information charging him with one count each of conspiracy to distribute and possess with intent to distribute heroin; possession with intent to distribute heroin; and possession of firearms in furtherance of a drug-trafficking crime.

In October 2018, West and 25 other individuals were charged by criminal complaint with conspiracy to distribute heroin; West and others also were charged with firearms offenses relating to their drug trafficking. On Feb. 27, 2020, a grand jury returned a 10-count third superseding indictment charging West and six other defendants with conspiracy to distribute one kilogram or more of heroin and various other drug and firearms offenses. Of the 26 defendants originally charged in the criminal complaint, West is the 22nd defendant to plead guilty. The charges in the third superseding indictment remain pending against four defendants.

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

From as early as October 2017 to October 2018, West and others engaged in a large drug trafficking conspiracy that operated in the areas of Martin Luther King Boulevard, Sanford Street, Middle Rose Street, Southard Street, Hoffman Avenue, Chambers Street, and Coolidge Avenue 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 David Antonio, whom they referred to as “Pop” and “Papi,” and that they distributed those supplies of heroin to other dealers and end users in and around Trenton.

During the investigation of the conspiracy, on Sept. 6, 2018, law enforcement officers stopped a green 2002 Volkswagen Passat driven by, and registered to, Timothy Wimbush, a/k/a “Young Money,” and occupied by West, Taquan Williams, a/k/a Trip,” and a juvenile. Law enforcement officers recovered from West’s pocket a quantity of heroin, and during a subsequent search of the vehicle, law enforcement recovered from a secret trap compartment under the rear passenger’s seat approximately 57 bricks of heroin, four semiautomatic firearms – including a .223 caliber assault rifle linked with a shooting in Trenton four days earlier – and hundreds of rounds of ammunition. Law enforcement officers identified the heroin as having been supplied by other members of the conspiracy. The charges against Wimbush and Williams remain pending.

The drug conspiracy and drug distribution counts to which West pleaded guilty each carry a maximum potential penalty of 20 years in prison, and a maximum fine of $1 million. The firearms count to which West pleaded guilty carries a statutory mandatory minimum penalty of five years in prison – which must run consecutively to any other sentence West receives – and a maximum potential penalty of life in prison. West’s sentencing is scheduled for Sept. 23, 2020.

U.S. Attorney Carpenito credited special agents of the FBI, Newark Division, Trenton Resident Agency, under the direction of Special Agent in Charge Gregory W. Ehrie; special agents of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, Newark Division, Trenton Field Office, under the direction of Special Agent in Charge Charlie J. Patterson; 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 investigation and prosecution of 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.

The charges and allegations pending in the third superseding indictment against the remaining defendants are merely accusations and those defendants are presumed innocent unless and until proven guilty.

NEWARK, N.J. – An Essex County, New Jersey, man who is a previously convicted felon admitted today to possessing a firearm and ammunition in connection with an incident in which he shot another individual, U.S. Attorney Craig Carpenito announced.

Andre Shoulars, 27, of Newark, pleaded guilty by teleconference before U.S. District Judge Esther Salas to an indictment charging him with one count of possession of a firearm and ammunition by a convicted felon. 

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

On Nov. 4, 2018, at approximately 2:30 p.m., the victim was in the area of 340 Hawthorne Avenue in Newark, speaking with another individual. Shoulars approached the victim, pulled out a semiautomatic handgun, and began firing several shots at the victim. Although the victim was able to run away as Shoulars fired the handgun, the victim was hit in the foot with one .40 caliber bullet fired by Shoulars. The victim was treated at a hospital for the bullet wound. 

Newark police officers responded to the scene of the shooting and recovered five .40 caliber shell casings from the street. Officers also recovered videotapes from several surveillance cameras which were stationed in the area of the shooting. These videotapes showed Shoulars walking around in the area just before the shooting, and also showed Shoulars shooting at the victim and then running away.     

The charge to which Shoulars pleaded guilty carries a maximum penalty of 10 years in prison and a fine of up to $250,000.  Sentencing is scheduled for Sept. 21, 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 ensures that federal resources are directed at the criminals posing the greatest threat to our communities. For more information about Project Guardian, please see https://www.justice.gov/projectguardian.

U.S. Attorney Carpenito credited the U.S. Marshals Service, under the direction of U.S. Marshal Juan Mattos Jr., and the Newark Police Department, under the direction of Public Safety Director Anthony F. Ambrose, with the investigation leading to today’s guilty plea.

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

TRENTON, N.J. – A Monmouth County, New Jersey, man today admitted participating in a conspiracy to defraud health insurance companies through a multi-state patient brokering scheme in which he bribed drug-addicted individuals to enroll in drug rehabilitation in exchange for referral fees from the rehabilitation centers, U.S. Attorney Craig Carpenito announced.

Peter J. Costas, 26, of Red Bank, New Jersey, pleaded guilty by teleconference before U.S. District Judge Peter G. Sheridan to an information charging him with one count of conspiracy to commit health care fraud.

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

Costas helped orchestrate a scheme in New Jersey, California, and other states that involved bribing individuals addicted to heroin and other drugs to enter into drug rehabilitation centers so Costas and his conspirators could generate referral fees from those facilities.

Costas worked with several marketing companies to carry out the scheme, but one marketing company in California run by Costas’s conspirators was pivotal. The marketing company maintained contractual relationships with drug treatment facilities around the country. Costas was engaged by the marketing company to recruit potential patients, who were addicted to heroin or other drugs and who had robust private health insurance, from New Jersey and other states. 

To convince drug-addicted individuals to travel to and enroll in rehabilitation when they otherwise would not have, Costas offered to bribe them – often as much as several thousand dollars. Once they agreed to enroll in drug rehabilitation in exchange for the offered bribe, Costas and the owners of the marketing company would arrange and pay for cross-country travel to the drug treatment centers in California and other states. Costas would stay in touch with the New Jersey patients at the facilities and specifically instruct them to stay at the facilities long enough to generate referral payments.

Costas and the marketing company often directed patients to different rehabilitation facilities month after month to generate multiple referral payments without regard to whether the substance abuse treatment was medically necessary or effective. In a conversation over Facebook, one patient told Costas that if Costas made good on his promise to pay the patient a bribe, the patient would enroll in additional facilities to trigger additional referral payments and bribes: “[J]ust get us [sic] grab the dough and put us in another place. . . . Get paid some more feel me. . . . I’ll keep this up all year wit[h] you. As long as you do us right.” When the patient later expressed doubt that Costas would pay the bribe, Costas responded, “Don’t worry. . . .  I do this with SO MANY PPL [people].”

Costas and the marketing company sent patients to facilities in California and other states that they knew provided ineffective drug treatment or actually fostered drug use on their premises. The facilities typically paid the marketing company a fee of $5,000 to $10,000 per patient referral, and Costas and other brokers received approximately half that amount for each patient they brokered. During the scheme, Costas brokered dozens of patients on behalf of marketing companies around the country, and the conspiracy caused millions of dollars of losses for health insurers.

Costas faces a maximum potential penalty of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for Sept. 29, 2020.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, with the investigation leading to today’s guilty plea.

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

NEWARK, NJ – The Justice Department today announced that it filed a lawsuit against Jackson Township, New Jersey, and the township planning board alleging they implemented zoning ordinances that intentionally restrict the operation of religious schools and housing associated with such schools, including religious boarding schools known as yeshivas, required by the Orthodox Jewish community.

The complaint alleges that the township passed two ordinances, and the planning board applied those ordinances in a manner that discriminated against the Orthodox Jewish community, in violation of the Religious Land Use and Institutionalized Persons Act of 2000 (RLUIPA) and the Fair Housing Act (FHA). Both ordinances expressly prohibit dormitories throughout Jackson, making it impossible for religious boarding schools such as Orthodox Jewish yeshivas to establish there. Although Jackson passed these ordinances to prevent dormitories anywhere in Jackson, the planning board has since approved, without requiring a variance, the plans for two nonreligious projects with dormitory-type housing.

“Religious discrimination has no place in our society and runs counter to the founding principles of our nation,” U.S. Attorney Craig Carpenito said. “No religious community should ever face unlawful barriers or be singled out for inferior treatment. This complaint reflects our continued commitment to combat discrimination and unequal treatment.”

“Using zoning laws to target Orthodox Jewish individuals for intentional discrimination and exclude them from a community is illegal and utterly incompatible with this Nation’s values,” Eric Dreiband, Assistant Attorney General for the Civil Rights Division, said. “Let me be clear.  The Department of Justice will use the full force of its authority to stop such anti-Semitic conduct and prevent its recurrence.”

The complaint also alleges that the township and planning board enacted the ordinances with respect to religious dormitories against a backdrop of extreme animus by Jackson residents and township decision makers toward the Orthodox Jewish community and a movement by residents to keep Orthodox Jewish community members from settling in Jackson. The complaint alleges that the township and planning board’s actions towards the Orthodox Jewish community violate RLUIPA’s non-discrimination and equal terms provisions, as well as the FHA.

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

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

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

The government is represented by Assistant U.S. Attorney Kelly Horan Florio of the U.S. Attorney’s Office Civil Rights Unit, and Trial Attorney Beth Frank, U.S. Department of Justice, Civil Rights Division, Housing and Civil Enforcement Section.

The Justice Department today announced that it filed a lawsuit against the township of Jackson and the township’s planning board, alleging that they violated the Religious Land Use and Institutionalized Persons Act (RLUIPA) and the Fair Housing Act (FHA) by targeting the Orthodox Jewish community through zoning ordinances restricting religious schools and barring religious boarding schools. 

 “Using zoning laws to target Orthodox Jewish individuals for intentional discrimination and exclude them from a community is illegal and utterly incompatible with this Nation’s values,” said Eric Dreiband, Assistant Attorney General for the Civil Rights Division. “Let me be clear. The Department of Justice will use the full force of its authority to stop such anti-Semitic conduct and prevent its recurrence.”

“Religious discrimination has no place in our society and runs counter to the founding principles of our nation,” said Craig Carpenito, U.S. Attorney for the District of New Jersey. “No religious community should ever face unlawful barriers or be singled out for inferior treatment. This complaint reflects our continued commitment to combat discrimination and unequal treatment.”

The complaint, filed in the District of New Jersey, alleges that the township passed ordinances 03-17 and 04-17 and the planning board applied those ordinances in a manner that discriminated against the Orthodox Jewish community. Both ordinances expressly prohibit dormitories throughout Jackson, making it impossible for religious boarding schools such as Orthodox Jewish yeshivas to operate there. Although Jackson passed these ordinances to prevent dormitories anywhere in Jackson, the planning board has since approved, without requiring a variance, the plans for two nonreligious projects with dormitory-type housing. 

The complaint further alleges that the township and planning board enacted the ordinances against a backdrop of extreme animus by some Jackson residents and township decision makers toward the Orthodox Jewish community and a movement by residents to keep Orthodox Jewish individuals from settling in Jackson. The complaint alleges that the township and planning board’s actions towards the Orthodox Jewish community violate RLUIPA’s non-discrimination and equal terms provisions, as well as the FHA.

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

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

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

TRENTON, N.J. – Three members of a Burlington County drug-trafficking organization have admitted their roles in a conspiracy to distribute a variety of illegal substances, U.S. Attorney Craig Carpenito announced today.

Jerrod Epps, 35, of Medford, New Jersey, pleaded guilty today before U.S. Senior District Judge Anne E. Thompson to an information charging him with one count of conspiracy to distribute and possess with intent to distribute crack cocaine. Teron Huggins, 42, of Mount Laurel, New Jersey, pleaded guilty on May 14, 2020, to an information charging him with two counts of conspiracy to distribute and possess with intent to distribute cocaine. Talib Conway, 39, of Philadelphia, pleaded guilty on May 8, 2020, to an information charging him with conspiracy to distribute and possess with intent to distribute cocaine, conspiracy to distribute and possess with intent to distribute more than 28 grams of crack cocaine, and conspiracy to distribute and possess with intent to distribute more than 100 grams of heroin.

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

Between July 2019 and September 2019, the defendants engaged in a narcotics conspiracy that operated primarily in municipalities throughout Burlington County – including Willingboro, Burlington City, Burlington Township, Bordentown Township, Edgewater Park, Pemberton and Mount Laurel – and which sought to profit from the distribution of cocaine, crack cocaine, and heroin. Through the interception of telephone calls and text messages pursuant to court-authorized wiretap orders, and other investigative techniques, law enforcement learned that defendants obtained regular supplies of cocaine and other substances from conspirators in the Burlington County and Philadelphia areas and then redistributed cocaine, crack cocaine, and heroin, to other conspirators, distributors, sub-dealers, and end users. Law enforcement officers intercepted numerous communications by and between the conspirators regarding such issues as cocaine, crack cocaine, and heroin quality and availability, pricing, packaging, quantity, and customer satisfaction.

The counts of conspiracy to distribute at least 28 grams of crack cocaine and conspiracy to distribute more than 100 grams of heroin to which Conway pleaded guilty each carry a statutory mandatory minimum sentence of five years in prison, a maximum penalty of 40 years in prison, and a maximum fine of $5 million. The count of distribution and possession with intent to distribute cocaine to which Conway pleaded guilty carries a maximum penalty of 20 years in prison and a fine of $1 million. The counts of conspiracy to distribute cocaine to which Huggins pleaded guilty each carry a maximum penalty of 20 years in prison and a fine of $1 million. The count of conspiracy to distribute crack cocaine to which Epps pleaded guilty carries a maximum penalty of 20 years in prison and a fine of $1 million. Sentencing for all three defendants is scheduled for Sept. 30, 2020.

U.S. Attorney Carpenito credited special agents of the FBI, Newark Division, Trenton Resident Agency, under the direction of Special Agent in Charge Gregory W. Ehrie; special agents of ATF Newark Field Division, Trenton Field Office, under the direction of Special Agent in Charge Charlie J. Patterson; detectives of the Burlington County Prosecutor’s Office, under the direction of Prosecutor Scott Coffina; officers of the Burlington Township Police Department, under the direction of Director of Public Safety Bruce Painter; officers of the Willingboro Police Department, under the direction of Director of Public Safety Kinamo Lomon; officers of the Burlington City Police Department, under the direction of Chief of Police John Fine; officers of the Florence Police Department, under the direction of Chief of Police Brian Boldizar; officers of the Bordentown Township Police Department, under the direction of Chief of Police Brian Pesche; officers of the Edgewater Park Police Department, under the direction of Chief of Police Robert Hess; officers of the Mount Laurel Police Department, under the direction of Chief of Police Stephen Reidener; officers of the Ewing Police Department, under the direction of Chief of Police John Stemler; officers of the Westampton Police Department, under the direction of Chief of Police Stephen Ent; and officers of the Trenton Police Department, under the direction of Director Sheilah Coley with the investigation leading to the guilty pleas.

The government is represented by Assistant U.S. Attorney Martha K. Nye of the U.S. Attorney’s Office Criminal Division in Trenton, and Assistant U.S. Attorney Andrew B. Johns of the U.S. Attorney’s Office Criminal Division in Camden.

NEWARK, N.J. – A Newark man was sentenced today to 120 months in prison for his role in a conspiracy to distribute over a kilogram of heroin and 240 grams of crack cocaine, U.S. Attorney Craig Carpenito announced.

Maurice McPhatter, a/k/a “Ree,” 47, previously pleaded guilty before U.S. District Judge Kevin McNulty to a superseding information charging him with one count of conspiracy to possess with intent to distribute more than one kilogram of heroin and more than 28 grams of cocaine base. Judge McNulty imposed the sentence today.

Today’s sentence follows a coordinated takedown in September 2017 of seven members of a drug trafficking organization led by Ahmad Johnson, a/k/a “OC,” 38. Also charged were Cory Canzater, a/k/a “Big C;” Willie McPhatter, a/k/a “Roc;” Keith Henderson, and Sacha Negron, all of Newark. 

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

From September 2016 through June 2017, Maurice McPhatter, Johnson, and other members of their drug trafficking organization engaged in a drug distribution conspiracy that operated in and around Newark. Maurice McPhatter was a runner, who distributed narcotics for the organization.

Through the authorized interception of telephone calls and text messages, controlled purchases of heroin, the use of confidential sources of information, and other investigative means, law enforcement learned that Johnson was a leader of the conspiracy and was responsible for obtaining wholesale amounts of narcotics, including heroin and cocaine, and processing and packaging the narcotics for sale. Johnson found users to “test” the narcotics to evaluate the quality, potency, and danger for broader distribution. After the narcotics were tested, runners, including Maurice McPhatter, sold the narcotics to other distributors and users. At the time of the arrests, law enforcement found over a kilogram of heroin, over 200 grams of crack cocaine, and over 150 grams of fentanyl.

Johnson pleaded guilty to a drug conspiracy and was sentenced on April 15, 2019, to 180 months in prison. Willie McPhatter, Henderson, and Negron have all pleaded guilty to drug conspiracy charges and are awaiting sentencing.  Canzater was convicted in March 2020 of one count of conspiracy to distribute and possess with intent to distribute controlled dangerous substances, one count of distribution and possession with intent to distribute heroin and one count of distribution and possession with intent to distribute crack cocaine, following a one-week trial before Judge Kevin McNulty in Newark federal court. Canzater is awaiting sentencing

In addition to the prison term, Judge McNulty sentenced Maurice McPhatter to five years of supervised release.

U.S. Attorney Carpenito credited special agents and officers with DEA’s High-Intensity Drug Trafficking Area (HIDTA) Group 1, under the direction of Special Agent in Charge Susan A. Gibson in Newark, with the investigation leading to today’s sentencing.

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 Patricia Astorga and Ari B. Fontecchio of the U.S. Attorney’s Office in Newark.

NEWARK, N.J. – A Passaic County, New Jersey, man will make his initial appearance today on charges of producing and distributing images of child sexual abuse, U.S. Attorney Craig Carpenito announced.

Jose Minaya, 24, of Paterson, New Jersey, is charged by complaint with one count of production of child pornography and one count of distribution of child pornography. He will make his initial appearance by video conference before U.S. Magistrate Judge Cathy L. Waldor.

According to documents filed in this case:

In July 2019, Minaya used a web-based application to engage an 11-year-old child in a sexually explicit conversation online. Minaya ultimately instructed the child to take sexually explicit photographs and send them to him, and the child complied. Minaya also had used another web-based application to upload an unrelated video depicting the graphic sexual assault of a child to the internet, where it was publicly available.

The charge of production of child pornography carries a mandatory minimum penalty of 15 years in prison, a maximum potential penalty of 30 years in prison, and a $250,000 fine. The charge of distribution of child pornography carries a mandatory minimum of five years in prison, a maximum of 20 years in prison, and a $250,000 fine.

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

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

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

NEWARK, N.J. – A Bergen County man was arrested today for his alleged role in a large-scale fraudulent credit card and fake identification making operation, U.S. Attorney Craig Carpenito announced. 

Michael Fulcher, 35, of Teaneck, New Jersey, was arrested this morning by special agents of the U.S. Secret Service and charged by complaint with one count each of possession of 15 or more counterfeit access devices, possession of access device-making equipment, and aggravated identity theft. He appeared by teleconference today before U.S. Magistrate Judge Cathy L. Waldor and released on $100,000 unsecured bond.

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

On March 23, 2020, Fulcher was found to be in possession of identity theft and access device-making equipment in the attic of his Teaneck home. Law enforcement officers seized a large amount of equipment that was used to produce fraudulent credit cards, driver’s licenses, counterfeit money, and counterfeit identification cards. Fulcher had 4,920 counterfeit credit cards, 206 counterfeit driver’s licenses from 24 different states containing victims’ personal identifiable information along with unknown suspect photographs, several state’s holograms for driver’s licenses, devices used to read the data that is encoded on the magnetic strip of a credit card, devices used to re-encode data onto the magnetic strip of a credit card, printers designed to print plastic cards, and several laptop computers, hard drives, memory devices, and other electronic devices.

Law enforcement officers searched the electronic devices found in Fulcher’s home and found, among other things, templates to create credit cards, currency, and identification documents, including driver’s licenses, and spreadsheets containing thousands of unique credit card account numbers. 

The charge of possession of 15 or more counterfeit access devices carries a statutory maximum sentence of 10 years in prison. The possession of access device-making machines charge carries a statutory maximum sentence of 15 years in prison, and the aggravated identity theft charge carries a mandatory sentence of two years in prison, which must be served consecutively to any other sentence imposed. Each of the offenses also carries a maximum fine of $250,000, or twice the gain or loss from the offense, whichever is greater.

U.S. Attorney Carpenito credited special agents of the U.S. Secret Service, under the direction of Special Agent in Charge Mark McKevitt in Newark, with the investigation leading to the charges and arrest. He also thanked the Department of Homeland Security, Homeland Security Investigations in Newark, the U.S. Postal Inspection Service, and the Teaneck Police Department for their assistance.

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

The 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 Newark man will make his initial appearance today on charges stemming from his arrest for illegally possessing a machine gun, U.S. Attorney Craig Carpenito announced.

Anthony Reynolds, 26, is charged by federal criminal complaint with one count of possession of a machine gun, one count of possession of a firearm by a convicted felon, and one count of possession of a machine gun not registered to him in the National Firearms Registration and Transfer Record. He is scheduled to appear by video conference this afternoon before U.S. Magistrate Judge Joseph A. Dickson.

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

On May 2, 2020, at approximately 8:40 p.m., Newark Police Officers were conducting surveillance in marked patrol cars in the area of Summer Avenue and May Street in Newark, with the specific purpose of minimizing social gathering of citizens in order to prevent the spread of the COVID-19 virus. 

One of the officers observed several individuals congregating on the sidewalk within close proximity to each other. The officers stopped their patrol cars and exited their vehicles. As they did so, one of the officers observed Reynolds remove a black handgun from the front of his waistband and place it underneath a parked vehicle. An officer looked underneath the vehicle and observed a .40 caliber Glock 23 semiautomatic handgun, which was loaded with 11 rounds of ammunition.

Law enforcement officials determined that the firearm was fitted with a Glock conversion device commonly referred to as “Glock Switch,” which has the effect of converting a semiautomatic Glock pistol into a machinegun. 

Reynolds was then placed under arrest. A search of Reynolds incidental to his arrest revealed a small clear sandwich bag containing suspected marijuana and $655.25 in United States currency. 

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

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

U.S. Attorney Carpenito credited special agents of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, Newark Division, under the direction of Special Agent in Charge Charlie J. Patterson; and the Newark Police Department, under the direction of Public Safety Director Anthony F. Ambrose, with the investigation leading to the charges.

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

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

CAMDEN, N.J. – A Gloucester County, New Jersey, man was sentenced today to 65 months in prison for mailing thousands of fraudulent invoices to hospitals, clinics and doctors’ offices throughout the United States, U.S. Attorney Craig Carpenito announced.

Robert S. Armstrong, 49, of Turnersville, New Jersey, previously pleaded guilty before U.S. District Judge Noel L. Hillman in Camden federal court to an information charging him with one count of mail fraud. Judge Hillman imposed the sentence today.

This is Armstrong’s second mail fraud scheme. On Nov. 19, 2015, Armstrong was sentenced to 57 months in prison for committing a similar mail fraud scheme in the name of his company, Scholastic Book Supply. In that case, Armstrong caused the mailing of thousands of fraudulent invoices to schools throughout the United States billing them for books that the schools did not order or receive. He was sentenced today to 41 months on the Pinnacle Medical Supply case, which was committed while he was on supervised release for the Scholastic Book Supply case. He pleaded guilty to three violations of his supervised release from prison in the Scholastic Book Supply case, and was sentenced to an additional 24 months in prison, for a total prison sentence imposed today of 65 months. 

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

Operating under the name of Pinnacle Medical Supplies, Armstrong prepared and caused to be prepared fraudulent invoices billing hospitals, clinics and doctors’ offices across the United States for medical supplies such as diabetic test strips, EpiPens® and sanitizing wipes that the medical providers never ordered or received. In addition to billing for medical supplies never ordered or received, the invoices included fraudulent shipping information and a fraudulent address.

Armstrong then contracted with a legitimate bulk mailing company to mail more than 10,000 invoices to medical providers across the United States. Each invoice included a payment envelope preaddressed to Pinnacle Medical Supply at mail boxes Armstrong had set up with commercial mail receiving agents in Florida and Texas.   

In response to the phony invoices, at least 943 medical providers sent $214,495 to Pinnacle Medical Supply. Armstrong deposited many of the checks from the victim medical providers into a bank account he opened in the name of Pinnacle Medical Supply.

In addition to the prison term, Judge Hillman sentenced Armstrong to an additional three years of supervised release and ordered him to pay full restitution.

U.S. Attorney Carpenito credited law enforcement officers of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Damon Wood in Philadelphia, with the investigation leading to today’s sentencing. He also thanked the Washington Township Police Department in Gloucester County, the Woolwich Township Police Department and the National Insurance Crime Bureau (NICB). 

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

TRENTON, N.J. – A U.S. Postal Service (USPS) carrier will make his initial appearance today on charges that he stole from the mail prescription drugs issued by the U.S. Department of Veterans Affairs (VA), U.S. Attorney Craig Carpenito announced. 

Christopher F. Donohue, 60, of Leonardo, New Jersey, is charged by complaint with theft of mail containing prescription drugs. Donohue is expected to make his initial appearance by video conference before U.S. Magistrate Judge Zahid N. Quraishi in Trenton. 

According to the complaint and statements made in court:

Donohue was employed as a mail carrier at the USPS Post Office in Belford, New Jersey.  On March 2, 2020, Donohue stole an envelope containing prescription medication that was destined for delivery to a military veteran. This theft was consistent with a series of other mail packages containing prescription medication issued by the VA, which had gone missing from the Belford Post Office without reaching their intended recipients. On May 6, 2020, Donohue attempted to steal another package from the Belford Post Office, which law enforcement had outfitted with a prescription bottle and inert pills as part of the investigation. Donohue was arrested and law enforcement recovered the pill bottle and envelope from him incidental to his arrest.

The charge of theft of mail by postal employee carries a maximum penalty of up to five years in prison and up to a $250,000 fine.

U.S. Attorney Carpenito credited special agents of the U.S. Postal Service, Office of Inspector General, Eastern Area Field Office, under the direction of Special Agent-in-Charge Kenneth Cleevely; the Department of Veterans Affairs, Office of Inspector General, Northeast Field Office, under the direction of Special Agent in Charge Christopher F. Algieri; and the Middletown Township Police Department under the direction of Chief Craig Weber with the investigation leading to today’s charges.

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

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

“The Supreme Court’s decision speaks for itself, and we are bound by that decision. Beyond that, we have no comment.”

CAMDEN, N.J. – An Atlantic County, New Jersey, man today admitted evading payment of income taxes on money he diverted from his businesses, U.S. Attorney Craig Carpenito announced.

Coby Frier, 53, of Atlantic City, New Jersey, pleaded guilty by videoconference before U.S. District Judge Noel L. Hillman to an information charging him with one count of income tax evasion.

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

Frier was one of the owners of several bars, restaurants, and clubs in Atlantic City, New Jersey. Frier admitted that from 2012 through 2015, he took cash skimmed from the businesses and deposited those funds into his personal bank accounts. He later used those funds for personal expenses, including luxury hotels, department store purchases, and restaurants. Frier also admitted to using cash skimmed from the businesses to make down payments on luxury vehicles and to attempting to evade detection by the IRS by keeping these down payments under the $10,000 cash reporting threshold.

For 2012 through 2015, Frier did not report as income the cash skimmed from the businesses, did not file personal income tax returns, and did not pay any personal income taxes.  Frier admitted that he owed to the United States tax on this unreported income.

The charge to which Frier pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for Sept. 11, 2020.

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 Special Agent in Charge Gregory W. Ehrie in Newark, with the investigation leading to today’s guilty plea.

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

NEWARK, N.J. – A Monmouth County, New Jersey, man has been charged with knowingly receiving images of child sexual abuse, U.S. Attorney Craig Carpenito announced today.

Herman Christopher Jensen, 67, of Union Beach, New Jersey, is charged by complaint with one count of knowingly receiving child pornography. He was arrested on May 6, 2020, and appeared by teleconference before U.S. Magistrate Judge Joseph A. Dickson. Jensen was released on $100,000 unsecured bond.

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

The FBI began investigating Jensen for assuming the identity of a 17-year-old boy in order to entice and solicit a minor to send nude and sexually explicit images over the internet.  Jensen did this by creating a fake Facebook account, purporting to be a teenaged boy named “Kevin Bennett.” From January 2018 through August 2018, Jensen used the “Kevin Bennett” Facebook account to communicate with the minor victim, causing the victim to believe the victim was in a involved in a romantic relationship with “Kevin Bennett.” 

Jensen requested nude and semi-nude photographs from the victim through Facebook’s messenger service. The victim obliged to his requests. As time went on, Jensen received increasingly explicit videos.

In August of 2018, Jensen revealed to the victim that he was not, in fact, the teenager he purported to be, but instead, an adult named Chris Jensen. The victim continued to communicate with Jensen via the “Chris Jensen” Facebook account. In December 2018, the victim traveled to New Jersey to live with Jensen, where Jensen began having sex with the minor victim.

On Dec. 19, 2018, local authorities became involved in the matter causing the removal of the minor victim from Jensen’s residence.

The charge of knowingly receiving child pornography carries a 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.

U.S. Attorney Carpenito credited special agents and task force officers of the FBI and its Red Bank Resident Agency Jersey Shore Gang and Criminal Organization Task Force, under the direction of Special Agent in Charge Gregory W. Ehrie, with the investigation leading to the charges. He also thanked the Union Beach, New Jersey, Police Department, under the direction of Chief of Police Michael J. Woodrow, for assistance in the investigation.

The government is represented by Assistant U.S. Attorney Perry Farhat of the Government Frauds Unit in Newark.

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

NEWARK, N.J. – A Georgia man has been charged with trafficking multiple firearms from Georgia to Jersey City, New Jersey, which were subsequently used in acts of violence, U.S. Attorney Craig Carpenito announced today.

Jonathan Brown, 26, of Covington, Georgia, was arrested today in Covington by special agents of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and is charged by complaint with one count of conspiracy to commit the unlicensed sale of firearms. He had his initial appearance, and was detained pending a detention hearing scheduled for May 8, 2020, in the Northern District of Georgia.

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

Brown led a scheme to purchase firearms in or around Georgia and traffic those firearms to individuals in Jersey City. Brown, who is barred from purchasing firearms himself due to multiple prior felony convictions, used straw purchasers in Georgia to obtain the firearms so that Brown could sell those firearms to others. On multiple occasions, Brown brought firearms from Georgia to New Jersey to for sale.

Within months of Brown’s trips to Jersey City, law enforcement arrested numerous individuals in Jersey City in possession of firearms purchased by Brown’s straw purchasers. At least one of the weapons trafficked by Brown was later used in the shooting of another person in Jersey City. At least one of the individuals in possession of one of Brown’s guns had a prior felony conviction, and was therefore barred from possessing a firearm. To date, law enforcement has recovered seven firearms allegedly trafficked by Brown in Jersey City.   

The conspiracy count with which the defendant is charged carries a maximum sentence of five years in prison and a maximum fine of $250,000. 

U.S. Attorney Craig Carpenito credited special agents of the ATF, Newark Field Division, under the direction of Special Agent in Charge Charlie J. Patterson, as well as the Jersey City Police Department, the Hudson County Prosecutor’s Office, the ATF Atlanta Field Division, and the Newton County, Georgia, Sheriff’s office, with the investigation leading to the charges and arrest. 

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

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

The government is represented by Assistant U.S. Attorney Andrew Macurdy and Special Assistant U.S. Attorney Keith Travers of the U.S. Attorney’s Office Criminal Division in Newark.

NEWARK, N.J. – A Florida man today admitted his role in using his company to defraud the Medicare Program in connection with fraudulent orders for genetic tests, U.S. Attorney Craig Carpenito announced.

Kacey C. Plaisance, 38, of Altamonte Springs, Florida, pleaded guilty by videoconference before U.S. District Judge Brian R. Martinotti in Newark federal court to an information charging him with two counts of conspiracy to defraud the United States in connection with schemes to commit health care fraud and violate the Anti-Kickback Statute. Plaisance and five co-defendants were previously charged by indictment in September 2019 in connection with the conspiracies.

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

Plaisance and his conspirators operated Ark Laboratory Network LLC (“Ark”), a company that purported to operate a network of laboratories that facilitated genetic testing. Ark partnered with Privy Health Inc., a company that another conspirator operated, and another company to acquire 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. A co-defendant, Matthew S. Ellis, a physician based in Gainesville, 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 other states where Ellis was not licensed to practice medicine. Ellis, Plaisance, and their conspirators 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 $4.6 million for genetic tests that Ellis ordered in this manner.

Plaisance and his conspirators entered into kickback agreements with certain clinical laboratories under which the laboratories paid Ark bribes in exchange for delivering DNA samples and orders for genetic tests. Ark concealed these kickback arrangements through issuing sham invoices to laboratories that purportedly reflected services provided at an hourly rate even though the parties had already agreed upon the bribe amount, which was based on the revenue the laboratories received from Medicare or an amount paid for each DNA sample. In 2018, the clinical laboratories paid Ark at least $1.8 million in bribes.

Each of the counts to which Plaisance pleaded guilty carry a maximum penalty of five years in prison and a fine of $250,000, or twice the gross grain or loss from the offense. Plaisance’s sentencing is scheduled for Sept. 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 J. 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. – An Essex County, New Jersey, man was sentenced today to 120 months in prison for being a felon in possession of a firearm, U.S. Attorney Craig Carpenito announced today.

Shakey Hoover, 39, of Newark, was convicted March 27, 2019, of one count of being a felon in possession of a weapon following a two-day trial before U.S. District Judge Stanley R. Chesler in Newark federal court. Judge Chesler imposed the sentence today by video conference.

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

On the evening of April 23, 2017, four individuals — Lashaunda Glenn, her boyfriend, her sister, and her sister's boyfriend — arrived by car at Glenn’s mother’s house in Newark to pick up a television belonging to Glenn’s sister. Glenn’s mother lived in the third-floor apartment of the house with Hoover, her longtime boyfriend and a convicted felon.

Glenn and Hoover began arguing. As the confrontation became more heated, Hoover pulled from his waistband a small silver revolver, pointed it at the group, and threatened to kill them. Glenn and her companions ran to a nearby police station to report what had happened. Newark police arrived at the house a few minutes later and found a silver revolver loaded with one bullet. An examination of the gun found Hoover’s fingerprint on it.

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

U.S. Attorney Carpenito credited the Newark Police Department, under the direction of Public Safety Director Anthony Ambrose; the N.J. State Police, under the direction of Col. Patrick J. Callahan; and special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Charlie J. Patterson in Newark, with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorneys Jason S. Gould and Stephen Ferketic of the Criminal Division in Newark

CAMDEN, N.J. – A Camden man today admitted his role today in a scheme to steal hundreds of thousands of dollars in government funds using fraudulently procured electronic benefits transfer (EBT) cards, U.S. Attorney Craig Carpenito announced.

Luciano Estevez, 50, pleaded guilty by teleconference before U.S. District Judge Renee Marie Bumb to an information charging him with one count of conspiracy to defraud the United States and one count of defrauding the U.S. Department of Agriculture’s (USDA) Supplemental Nutrition Assistance Program (SNAP).

Estevez and his co-defendants: Jose Garcia, 52, of Camden; Octavio Rodriguez, 51, of Pennsauken, New Jersey; and Juan Melo, 56, of Woodlynne, New Jersey, were previously charged by separate complaints in August 2019 with participating in the conspiracy and defrauding SNAP. Melo previously admitted his role in the scheme when he pleaded guilty on April 28, 2020, to an information charging him with participating in the conspiracy and defrauding SNAP. 

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

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

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

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

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

The conspiracy count to which Estevez pleaded guilty carries a maximum penalty of five years in prison and a fine of $250,000, or twice the gross gain or loss from the offense. The SNAP fraud offense to which Estevez pleaded guilty carries a maximum penalty of 20 years in prison and a fine of $250,000, or twice the gross gain or loss from the offense. Sentencing is scheduled for Sept. 11, 2020.

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

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

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

TRENTON, N.J. – A Monmouth County, New Jersey, man will have his initial appearance today for possessing a machine gun as a previously convicted felon, U.S. Attorney Craig Carpenito announced.

Davon Harley, 30, of Neptune City, New Jersey, appeared by video conference this afternoon before U.S. Magistrate Judge Zahid M. Quraishi and was detained without bail. Harley was arrested by local authorities on Feb. 8, 2020, and charged with state offenses. He is now charged by federal criminal complaint with one count of being a convicted felon in possession of a firearm and one count of possession of a machinegun. 

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

In February 2020 a Neptune City Police officer confronted Harley, a previously convicted felon, who was arguing with others in the yard of an apartment complex. Harley fled through the apartment complex into neighboring properties and discarded a handgun that, upon inspection, had been altered to fire exclusively in fully automatic mode. The weapon had a magazine capable of holding 31 rounds of ammunition. Members of law enforcement, assisted by the Neptune Township and Asbury Park police departments located Harley and recovered the machine gun and the magazine that Harley had discarded.

The felon in possession of a firearm and possession of a machine gun charges each carry a maximum penalty of 10 years in prison and a fine of up to $250,000.

U.S. Attorney Carpenito credited special agents of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, Newark Division, Trenton Field Office, under the direction of Special Agent in Charge Charlie J. Patterson; officers of the Neptune City Police Department, under the direction of Police Director Matthew Quagliato; officers of the Neptune Township Police Department, under the direction of Chief of Police James M. Hunt Jr.; officers of the Asbury Park Police Department, under the direction of Chief of Police David Kelso; officers of the Monmouth County Sheriff’s Office, under the direction of Sheriff Shaun Golden; and detectives of the Monmouth County Prosecutor’s Office, under the direction of Prosecutor Christopher  J. Gramiccioni, with the investigation leading to the charges. This case was brought as part of Project Stop the Violence, a comprehensive strategy to combat gun crimes in Monmouth County.

The government is represented by Special Assistant U.S. Attorney Christopher Matthews 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, woman today admitted defrauding the U.S. Department of Labor, Office of Workers Compensation, U.S. Attorney Craig Carpenito announced.

Janeide Chillis, 53, of Irvington, New Jersey, pleaded guilty by teleconference before U.S. District Judge Susan D. Wigenton to an information charging her with one count of making false statements and committing fraud to obtain federal workers’ compensation.

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

Chillis was a U.S. Postal Service employee. In March 2006, she signed and filed under penalty of perjury a form with the U.S. Department of Labor claiming she suffered disabling injuries from a slip-and-fall accident at work. Chillis also provided a letter from a New Jersey doctor who claimed that Chillis was “temporarily totally disabled.” As a result of those representations, Chillis began receiving workers’ compensation benefits from the U.S. Department of Labor. For the next several years, in order to maintain such benefits, Chillis periodically submitted additional forms certifying that she was unemployed and would report any income or other information that affected her receipt of benefits. Notwithstanding those representations, from 2011 through the present, Chillis earned extra income and travelled extensively, including to Africa and France, all of which she did not report to the U.S. Department of Labor.

During the same time period, Chillis also received reimbursement payments for home health aide services. Beginning in 2013, she stopped receiving home health aide services, but continued receiving reimbursement based on false representations she made to the U.S. Department of Labor.

In total, Chillis received $686,588 in federal benefits from her fraud.

The count of making false statements and committing fraud to obtain federal workers’ compensation benefits is punishable by a maximum of five years in prison and a fine of $250,000, or twice the gross gain or loss derived from the offense, whichever is greater. Sentencing is scheduled for Sept. 10, 2020.

U.S. Attorney Carpenito credited special agents of the U.S. Postal Service, Office of Inspector General, under the direction of Special Agent in Charge of the Northeast Area Field Office Matthew M. Modafferi; the Department of Labor, Office of Inspector General, New York Region, under the direction of Special Agent in Charge Michael C. Mikulka; the Social Security Administration Office of the Inspector General, New York Field Division, under the direction of Special Agent-in-Charge John Grasso; and special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Laura J. Perry, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Joshua L. Haber of the Health Care Fraud Unit in the Criminal Division, Newark.

NEWARK, N.J. – U.S. Attorney Craig Carpenito is urging those who have experienced or have information about housing-related sexual harassment to report it to the Department of Justice. 

Sexual harassment by landlords, property managers, maintenance workers, and others may violate the federal Fair Housing Act. As our nation faces unprecedented challenges amid the COVID-19 pandemic, U.S. Attorney Carpenito has reaffirmed the U.S. Attorney’s Office’s commitment to continue to enforce this vital statute.

“Landlords and superintendents using the power they have over tenants to sexually harass or assault them is intolerable,” U.S. Attorney Carpenito said. “It is even more disturbing when landlords or others exploit our current national crisis by sexually harassing people in need of housing. This office will not hesitate to seek justice and hold wrongdoers accountable.”

As a result of the COVID-19 public health crisis, many people have found themselves out of work, furloughed, or otherwise in dire financial straits. This has led many to seek abatements or suspensions of their rent or other housing accommodations. While many landlords and housing providers have responded positively, others have seen an opportunity to exploit the financially vulnerable through demands for sexual favors and other acts of sexual misconduct.  This behavior is not only appalling, but illegal.

In January 2018, the U.S. Attorney’s Office for the District of New Jersey hosted one of the first community roundtable discussions to help launch the Justice Department’s Initiative to Combat Sexual Harassment in Housing. The initiative seeks to identify barriers to reporting sexual harassment in housing, increase awareness of its enforcement efforts and collaborate with federal, state, and local partners to increase reporting and help survivors quickly and easily connect with federal resources.

To report sexual harassment in housing, contact the Justice Department at (800) 896-7743 or fairhousing@usdoj.gov or contact the U.S. Attorney’s Office at (855) 281-3339 or usanj.civilrightscomplaint@usdoj.gov. For more information about the Justice Department’s Initiative to Combat Sexual Harassment in Housing, please visit https://www.justice.gov/crt/sexual-harassment-housing-initiative

TRENTON, N.J. – A former employee of Tax Pro’s and Tax Solutions & Associates, tax preparation businesses located in Essex and Union counties, was sentenced today to 48 months in prison for conspiring to defraud the United States by filing false income tax returns, U.S. Attorney Craig Carpenito announced.

Tony V. Russell, 49, of Stone Mountain, Georgia, previously pleaded guilty before U.S. District Judge Michael A. Shipp in Trenton federal court to Count One of an indictment charging him with conspiracy to defraud the IRS. Judge Shipp imposed the sentence today in a teleconference proceeding.

Two members of the conspiracy have previously pleaded guilty to their roles in the fraud and await sentencing. Damien Askew, 39, of Union, New Jersey, pleaded guilty June 6, 2017, to conspiracy to defraud the IRS and filing a false federal personal income tax return and is awaiting sentencing. Rudolph Sanders, 41, of Newark, New Jersey, pleaded guilty May 10, 2018, to conspiracy to defraud the IRS and is awaiting sentencing.

Two other members of the conspiracy, Joseph Kenny Batts, 49, of Elkridge, Maryland, and Angelo K. Thompson, 38, of Reistertown, Maryland, were arrested April 17, 2018, on charges of conspiracy to defraud the IRS and aiding and assisting in the preparation of false federal income tax returns. On Aug. 8, 2019, Thompson pleaded guilty before Judge Shipp to Count One of an indictment charging him with conspiracy to defraud the IRS, and awaits sentencing.  On Sept. 17, 2019, Batts was convicted following a one-week trial before Judge Shipp on one count of conspiracy to defraud the United States and five counts of aiding and assisting in the preparation of false federal income tax returns, and awaits sentencing.

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

From at least 2009 to April 2015, Batts was co-owner, along with Askew, of Tax Pro’s, a tax return preparation and payroll business in Essex County, where Russell, Sanders, Batts, Thompson, and Askew prepared tax returns. To boost their business, the defendants conspired to falsify their clients’ federal income tax returns to generate refunds from the IRS in amounts that their clients were not entitled to receive. Russell, Sanders, Batts, Thompson, and Askew inflated tax refunds by fabricating and inflating credits for education and childcare; deductions, such as charitable contributions and unreimbursed employee expenses; and business losses. 

Russell and other members of the conspiracy also permitted Batts to use their Preparer Tax Identification Numbers (PTIN) – the identification number that paid tax preparers are required to place on tax returns they have prepared – when preparing tax returns to conceal Batts’ identity as the actual tax return preparer; Batts had a prior federal tax fraud conviction.

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

By fraudulently inflating the amounts of the tax refunds, Batts, Askew, Thompson, Russell, and Sanders caused a total tax loss to the IRS in excess of $900,000.

In addition to the prison term, Judge Shipp sentenced Russell to three years of supervised release and ordered him to pay restitution of $241,185.

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

The government is represented by Assistant U.S. Attorneys Cari Fais and Jihee Suh of the Special Prosecutions Division.

CAMDEN, N.J. – A South Jersey woman who owns a tax preparation business admitted today to helping her clients file falsified tax returns, U.S. Attorney Craig Carpenito announced.

Gloria Valentin, 48, of Cherry Hill, New Jersey, pleaded guilty by teleconference before U.S. District Judge Renee Marie Bumb in Camden federal court to an information charging her with one count of aiding and assisting in the preparation of false income tax returns.

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

Valentin owned, operated and approved all of the income tax returns filed by GNG Business Solutions in Cinnaminson. She admitted that she prepared approximately 60 income tax returns for 27 tax clients during tax years 2013 through 2016. Those tax returns contained similar patterns of false and fictitious Schedule A itemized deductions and unreimbursed employee business expenses. Valentin and her employees fabricated Schedule A, unreimbursed employee business expenses when none were incurred. Those false expenses resulted in substantially reduced income tax liabilities and resulted in larger refunds for her clients and caused a tax loss of $201,896 to the government.

The charges to which Valentin pleaded guilty carry a maximum potential penalty of three years in prison and a $250,000 fine. Sentencing is scheduled for Sept. 8, 2020.

U.S. Attorney Carpenito credited special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Laura J. Perry, 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 Bergen County, New Jersey, woman today admitted participating in a scheme that involved the creation of false documentation to secure over $4 million in bank loans, U.S. Attorney Craig Carpenito announced.

Jennie Frias, a/k/a “Jennie Castillo,” 36, of Englewood, New Jersey, pleaded guilty by teleconference before U.S. District Judge Kevin McNulty to an information charging her with one count of conspiracy to commit bank fraud.

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

Between March 2016 and May 2018, Cash Flow Partners LLC, a business consulting firm with offices in New York and New Jersey, released internet advertisements and held seminars offering to assist customers in obtaining bank loans, including loans insured by the Federal Deposit Insurance Corporation (FDIC). When customers submitted documentation supporting their bank loan applications to Cash Flow Partners, Frias and others created false documentation to make customers’ loan applications appear more financially viable than they actually were. Victim banks sustained losses of over $4 million.

One of Frias’ conspirators, Raymundo Torres, previously pleaded guilty to charges relating to his role in the Cash Flow bank fraud conspiracy.

The conspiracy to commit bank fraud charge carries a maximum potential penalty of 30 years in prison and a $1 million fine. Sentencing is scheduled for Sept. 2, 2020.

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

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

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

CAMDEN, N.J. – A Camden County, New Jersey man today admitted his role in a scheme to steal hundreds of thousands of dollars in government funds using fraudulently procured electronic benefits transfer (EBT) cards, U.S. Attorney Craig Carpenito announced.

Juan Melo, 56, of Woodlynne, New Jersey, pleaded guilty by teleconference before U.S. District Judge Renee Marie Bumb in Camden federal court to an information charging him with one count of conspiracy to defraud the United States and one count of defrauding the U.S. Department of Agriculture’s (USDA) Supplemental Nutrition Assistance Program (SNAP).  Melo and his co-defendants, Luciano Estevez, 50, and Jose Garcia, 52, both of Camden; and Octavio Rodriguez, 51, of Pennsauken, New Jersey, were previously charged by separate complaints in August 2019 with participating in the conspiracy and defrauding SNAP.

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

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

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

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

Estevez also unlawfully procured an EBT terminal registered to a superstore in Philadelphia to use at his small grocery store in Camden, where Melo was an employee.  Through this terminal, the scheme netted approximately $110,000 in SNAP funds. 

Each of the counts to which Melo pleaded guilty carry a maximum penalty of five years in prison and a fine of $250,000, or twice the gross gain or loss from the offense. Melo’s sentencing is scheduled for Sept. 8, 2020.

U.S. Attorney Carpenito credited special agents of the U.S. Department of Agriculture-Office of Inspector General, Northeast Region, under the direction of Special Agent in Charge Bethanne M. Dinkins; the U.S. Department of Health and Human Services-Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert, and the FBI Philadelphia Field Office, South Jersey Resident Agency, under the direction of Special Agent in Charge Mike Driscoll in Philadelphia.

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

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

CAMDEN, N.J. – A Cumberland County, New Jersey-based attorney today admitted evading more than $250,000 in federal taxes on income generated from his law firm, U.S. Attorney Craig Carpenito announced.

Douglas M. Long, 54, of Upper Deerfield, New Jersey, pleaded guilty by video conference before U.S. District Judge Noel. L Hillman in Camden federal court to an information charging him with one count of federal income tax evasion.

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

From 2012 through 2015, Long, managing partner of the Woodbury, New Jersey, law firm Long & Marmero LLP, exercised primary control over the firm’s finances and supervised the firm’s bookkeeper. Many of Long’s personal expenses, including school tuition for his children, utilities and service fees for his personal residences, student loan payments for Long and his spouse, and other expenses, repeatedly were paid out of the law firm’s bank accounts.  Long directed the bookkeeper to falsely classify these payments as law firm business expenses to avoid his tax obligations. He also falsely declared, under penalty of perjury, that his personal tax returns for tax years 2012 through 2015 were true and accurate when they were not. Long ultimately concealed over $800,000 in personal income and evaded payment of over $250,000 in taxes owed to the IRS during tax years 2012 through 2015, including $368,000 in income and $120,000 in taxes for tax year 2014. 

The tax evasion charge is punishable by a maximum penalty of five years in prison and a potential fine of $250,000 or twice the gross gain or loss from the offense. In connection with his plea, Long also agreed to pay restitution to the IRS. Sentencing is scheduled for Sept. 11, 2020.

U.S. Attorney Carpenito credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge John R. Tafur, and the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorneys Gabriel J. Vidoni of the Office’s Camden branch and Bruce P. Keller of Special Prosecutions Division.

NEWARK, N.J. – A Union County, New Jersey, man was charged today with allegedly filing a false tax return for tax year 2013, U.S. Attorney Craig Carpenito announced.

Anthony Salters, 57, of Hillside, New Jersey, is charged by complaint with subscribing to a false tax return. A summons was issued for Salters to appear in Newark federal court at a time to be scheduled by U.S. Magistrate Judge Leda Dunn Wettre.

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

Salters was a principal of Media Allies LLC, a company that purportedly provided public relations services. On Feb. 12, 2014, Salters signed, filed, and caused to be filed with the IRS a  U.S. Individual Income Tax Return, Form 1040, for tax year 2013, which contained a written declaration that it was filed under penalty of perjury and which falsely stated that Salters’ business income was zero and his total income was zero.

Salters and Media Allies had substantial gross receipts in calendar year 2013. Checks totaling $104,411 made payable to Media Allies were deposited into a Media Allies bank account for which Salters was the sole authorized signer. Payors of those checks included the City of Orange Township, the Paterson Municipal Utilities Authority, the Newark Housing Authority, a political campaign committee, and a company associated with a camp where a program was to be conducted for high school football teams affiliated with Newark public schools.

The charge of subscribing to a false tax return carries a maximum potential 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 John R. Tafur; special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark; and special agents of the U.S. Department of Housing and Urban Development, Office of Inspector General, under the direction of Special Agent in Charge Christina Scaringi, with the investigation leading to today’s charges.

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

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

NEWARK, N.J. – The U.S. Attorney’s Office for the District of New Jersey and the Department of Justice’s Civil Rights Division today concluded that there is reasonable cause to believe that the conditions at the Edna Mahan Correctional Facility for Women in Clinton, New Jersey violate the Eighth Amendment of the Constitution. Specifically, the Department concluded that there is reasonable cause to believe that Edna Mahan fails to protect prisoners from sexual abuse by the facility’s staff.

As required by the Civil Rights of Institutionalized Persons Act (CRIPA), the Department provided the facility with written notice of the supporting facts for these alleged conditions and the minimum remedial measures necessary to address them.   

“Sexual abuse cannot be tolerated in any setting, including in prisons and jails,” U.S. Attorney Craig Carpenito said. “We have been encouraged by the State’s cooperation throughout our investigation, and stated commitment to ending sexual abuse at Edna Mahan. We hope to continue to work with New Jersey to resolve these significant concerns.”

“The Eighth Amendment of the Constitution guarantees prisoners reasonable safety from harm,” Assistant Attorney General Eric Dreiband for the Civil Rights Division said. “Sexual abuse should not be a part of any prisoner’s punishment. Our investigation found reasonable cause to conclude that women prisoners at Edna Mahan are at substantial risk of sexual abuse by staff because systemic deficiencies discourage prisoners from reporting sexual abuse and allow sexual abuse to occur undetected and undeterred.”

The Civil Rights Division and the U.S. Attorney’s Office for District of New Jersey initiated the investigation in April 2018 under CRIPA, which authorizes the Department to take action to address a pattern or practice of deprivation of constitutional rights of individuals confined to state or local government-run correctional facilities.

The government is represented by Assistant U.S. Attorney Michael E. Campion, Chief of the Civil Rights Unit; Assistant U.S. Attorney Kelly Horan Florio, Civil Rights Unit; Mary Bohan, Deputy Chief of the Civil Rights Division’s Special Litigation Section; and Kerry Krentler Dean, Trial Attorney, Special Litigation Section.

Individuals who believe their civil rights may have been violated may file a complaint with the U.S Attorney’s Office at http://www.justice.gov/usao-nj/civil-rights-enforcement/complaint.

The Department of Justice’s Civil Rights Division and the U.S. Attorney’s Office for the District of New Jersey today concluded that there is reasonable cause to believe that the conditions at the Edna Mahan Correctional Facility for Women (Edna Mahan) in Clinton, New Jersey violate the Eighth Amendment of the Constitution. Specifically, the department concluded that there is reasonable cause to believe that Edna Mahan fails to protect prisoners from sexual abuse by the facility’s staff.

As required by the Civil Rights of Institutionalized Persons Act (CRIPA), the department provided the facility with written notice of the supporting facts for these alleged conditions and the minimum remedial measures necessary to address them.   

“The Eighth Amendment of the Constitution guarantees prisoners reasonable safety from harm,” said Assistant Attorney General Eric Dreiband for the Civil Rights Division. “Sexual abuse should not be a part of any prisoner’s punishment. Our investigation found reasonable cause to conclude that women prisoners at Edna Mahan are at substantial risk of sexual abuse by staff because systemic deficiencies discourage prisoners from reporting sexual abuse and allow sexual abuse to occur undetected and undeterred.”   

“Sexual abuse cannot be tolerated in any setting, including in prisons and jails,” said U.S. Attorney Craig Carpenito. “We have been encouraged by the State’s cooperation throughout our investigation, and stated commitment to ending sexual abuse at Edna Mahan.  We hope to continue to work with New Jersey to resolve these significant concerns.”

The Civil Rights Division and the U.S. Attorney’s Office for District of New Jersey initiated the investigation in April 2018 under CRIPA, which authorizes the department to take action to address a pattern or practice of deprivation of constitutional rights of individuals confined to state or local government-run correctional facilities.

Additional information about the Civil Rights Division of the Justice Department is available on its website at www.justice.gov/crt.

NEWARK, N.J. – Three people have been charged in connection with their roles 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, U.S. Attorney Craig Carpenito announced today.

Charged by complaint with one count each of conspiring to distribute cocaine base are: 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. Richardson and Ellis were arrested today; Howard was arrested April 8, 2020. All three defendants appeared today by telephone conference before U.S. Magistrate Judge James B. Clark III.

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 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 or conspired to distribute cocaine base in an 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. 

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 Special Agent in Charge Gregory W. Ehrie; 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 investigation is part of the Newark Violent Crime Initiative (VCI), through which the U.S. Attorney’s Office has partnered with state, federal, county, and local law enforcement to investigate violent crime in Newark and surrounding cities.

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

NEWARK, N.J. – Pentax Medical Company will pay $43 million to resolve criminal charges based on the company’s shipment of four types of endoscopes for 18 months without FDA-cleared instructions for use and the company’s failure to file timely reports of two infections associated with its endoscopes, the Department of Justice announced today.

Pentax was charged in a criminal complaint filed today in Newark federal court with distributing misbranded medical devices in interstate commerce in violation of the Federal Food, Drug, and Cosmetic Act (FDCA). Pentax has entered into a three-year deferred prosecution agreement (DPA) that will allow it to avoid conviction if it complies with the reform and enhanced compliance requirements outlined in the agreement. As a result of the conduct outlined in the criminal complaint, Pentax has agreed to pay a $40 million criminal fine and to forfeit $3 million.

“Pentax made a decision to ignore the cleared instructions for use of its endoscopes, believing that doing so would increase its sales putting profits over patient safety,” U.S. Attorney Carpenito said. “In doing so, and by failing to report to the FDA certain adverse events relating to those endoscopes, it broke the law, jeopardized the health of patients, and, ultimately, cost itself $43 million on fines and forfeiture.”

“In carrying out its responsibilities to protect the health and safety of patients treated with medical devices, the FDA relies on manufacturers to provide health care professionals with the correct, approved or cleared instructions for safe use of the devices, and to report promptly to the FDA potential product safety issues,” Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division said. “Pentax’s failure to follow important safety requirements is serious and warrants the significant penalties imposed as part of this resolution.”

“Americans expect and deserve that the medical devices used on them are safe, effective, and properly labeled with accurate information. When companies subvert FDA’s standards and requirements, they place unsuspecting patients at risk,” Catherine A. Hermsen, Assistant Commissioner for Criminal Investigations, FDA Office of Criminal Investigations, said. “FDA will continue to investigate and help bring to justice companies that jeopardize the public health by distributing misbranded products.”

The criminal complaint against Pentax, which Pentax agrees is true, charges that Pentax made a deliberate business decision not to use revised FDA-cleared instructions for cleaning its endoscopes because Pentax feared the new instructions would cause it to lose business.  Endoscopes are reusable devices that must be cleaned after each use or else infectious material may remain and be transmitted to subsequent patients. In 2014, the FDA told Pentax to revise its existing cleaning instructions for four types of endoscopes and add cleaning steps. Pentax agreed, and FDA cleared, revised cleaning instructions in April 2014. Pentax was then required to include these revised cleaning instructions when it shipped those four endoscopes.

Instead, for the next 18 months, Pentax shipped the four types of endoscopes with the old instructions for use and not the newly enhanced, FDA-cleared cleaning instructions. Pentax decided not to use the enhanced cleaning instructions because they required customers to spend more time cleaning the endoscopes. One internal email warned that the increase of cleaning time from five minutes to 25 minutes would be “catastrophic,” and another predicted that customers “will be very upset and could switch away from PENTAX because of the extra time, manpower, and cost to perform the new protocol.”

Pentax continued shipping the four types of endoscopes without the FDA-cleared cleaning instructions until September 2015. At that time, Pentax started including FDA-cleared instructions for two of the endoscopes and included newly validated cleaning instructions for the other two types of endoscopes. Pentax made $18 million in gross profits from selling the four types endoscopes during this 18-month period.

Pentax was also charged with and admitted failing to file timely reports of two infection incidents associated with its endoscope. To enable FDA and others to identify and monitor adverse events, the FDCA requires medical device manufacturers to file adverse event reports – known as Medical Device Reports (MDRs) – within 30 days of becoming aware of information that reasonably suggests that the manufacturer’s device may have caused or contributed to a death or serious injury. 

In June 2013, Pentax learned that four patients at Advocate Lutheran General Hospital in Chicago were infected with drug-resistant bacteria after being treated with the same Pentax endoscope. Pentax failed to file MDRs within 30 days because its employees did not understand the reporting requirements. Pentax filed an MDR about the Advocate Lutheran infections in late September 2013.

In late June 2014, Pentax learned that four patients at Massachusetts General Hospital in Boston were infected with Escherichia coli bacteria after being treated with the same Pentax endoscope. Pentax also failed to file MDRs about this incident within 30 days because its employees misunderstood the reporting requirements. Pentax filed an MDR about the infections at Massachusetts General Hospital in December 2014.

As part of the DPA, Pentax has agreed to, among other things, conduct a thorough audit of its current instructions for use for endoscopic devices and MDR procedures to determine their compliance with FDA requirements and report to the FDA in writing. It has agreed to enhance its compliance training and maintain an effective compliance program. Pentax’s president and the president of the Lifecare Division of Pentax’s parent Hoya Corporation must annually certify that Pentax took the compliance measures required by the DPA, and Hoya’s board of directors must certify annually that Pentax’s compliance program is effective. 

The investigation was conducted by special agents from the FDA’s Office of Criminal Investigations, under the direction of Special Agent in Charge Jeffrey J. Ebersole of the New York Field Office, along with special agents of the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert.

The government is represented by Assistant U.S. Attorney R. David Walk Jr. of the U.S. Attorney’s Office for the District of New Jersey; and Senior Litigation Counsel Patrick Jasperse of the Civil Division’s Consumer Protection Branch, with the assistance of Senior Counsel Shannon M. Singleton of the FDA’s Office of Chief Counsel.

For more information about the Consumer Protection Branch and its enforcement efforts, visit its website at http://www.justice.gov/civil/consumer-protection-branch.