District of New Jersey

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.

“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,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division.  “Pentax’s failure to follow important safety requirements is serious and warrants the significant penalties imposed as part of this resolution.”

“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,” said U.S. Attorney Craig Carpenito for the District of New Jersey.  “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.”

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 – 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 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.

“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,” said Catherine A. Hermsen, Assistant Commissioner for Criminal Investigations, FDA Office of Criminal Investigations.  “FDA will continue to investigate and help bring to justice companies that jeopardize the public health by distributing misbranded products.”

As part of the DPA, Pentax has agreed to, among other actions, 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.  For more information about the U.S. Attorney’s Office for the District of New Jersey, visit its website at https://www.justice.gov/usao-nj.

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

NEWARK, N.J. – A Union County, New Jersey, man has been arrested for his role in a drug trafficking conspiracy in which he allegedly set up a drug mill in his apartment, U.S. Attorney Craig Carpenito announced today.

Brad Toby, 35, of Linden, New Jersey, was arrested April 2, 2020, and charged by complaint with one count of conspiring to possess heroin and cocaine with intent to distribute. He made his initial appearance via videoconference today before U.S. Magistrate Judge Michael A. Hammer and was released on $200,000 secured bond.

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

Law enforcement officers have been investigating a drug trafficking organization operating in New Jersey and New York and learned that Toby is a member of that organization. During a lawful search of Toby’s residence, law enforcement officers recovered: five kilograms of heroin; four kilograms of cocaine; $100,000 in currency; drug packaging; drug paraphernalia, including scales and kilogram presses; a handgun; and ammunition.

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

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.

U.S. Attorney Craig Carpenito credited the special agents of the Drug Enforcement Administration, under the direction of Special Agent in Charge Susan A. Gibson in Newark, and the members of the City of Linden Police Department, under the direction of Chief David Hart, with the investigation leading to today’s charges and arrest.   

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

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

NEWARK, N.J. – The Department of Justice today announced that it is making $850 million available to help public safety agencies respond to the challenges posed by the outbreak of COVID-19. The Coronavirus Emergency Supplemental Funding program, authorized by the recently passed stimulus legislation, will allow eligible state, local and tribal governments to apply immediately for these critical funds. The department is moving quickly to make awards, with the goal of having funds available for drawdown within days of the award.

“The COVID-19 outbreak has placed tremendous stress on our public safety professionals at all levels of government,” U.S. Attorney Craig Carpenito said. “I urge the jurisdictions that are eligible for these vital resources to apply for them as soon as possible. Our goal is to get this emergency funding into the hands of the public safety providers who need it as quickly as possible.”

“This is an unprecedented moment in our nation’s history and an especially dangerous one for our front-line law enforcement officers, corrections officials, and public safety professionals,” Office of Justice Programs Principal Deputy Assistant Attorney General Katharine T. Sullivan said. “We are grateful to the Congress for making these resources available and for the show of support this program represents.”

The solicitation, posted by the Bureau of Justice Assistance in the Justice Department’s Office of Justice Programs (OJP), will remain open for at least 60 days and be extended as necessary. OJP will fund successful applicants as a top priority on a rolling basis as applications are received. Funds may be used to hire personnel, pay overtime costs, cover protective equipment and supplies, address correctional inmates’ medical needs and defray expenses related to the distribution of resources to hard-hit areas, among other activities. Grant funds may be applied retroactively to Jan. 20, 2020, subject to federal supplanting rules.

Agencies that were eligible for the fiscal year 2019 State and Local Edward Byrne Memorial Justice Assistance Grant Program are candidates for this emergency funding. A complete list of eligible jurisdictions and their allocations can be found at https://bja.ojp.gov/program/fy20-cesf-allocations.

For more information about the Coronavirus Emergency Supplemental Funding program, please visit: https://bja.ojp.gov/funding/opportunities/bja-2020-18553. For more information about the Office of Justice Programs, please visit https://www.ojp.gov/.

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

NEWARK, N.J. – A Pittsburgh, Pennsylvania, man has been charged with possession of cocaine with the intent to distribute it, U.S. Attorney Craig Carpenito announced today.

Kenswick Austin, 45, is charged by complaint with one count of possession with intent to distribute at least 500 grams of cocaine. He was arrested March 30, 2020, and appeared today by teleconference before U.S. Magistrate Judge Michael A. Hammer of Newark federal court. Austin was released on $100,000 unsecured bond.

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

Between March 13, 2020, and March 28, 2020, Austin participated in multiple meetings and telephone calls to arrange the shipment of a package containing controlled substances into New Jersey. On March 30, 2020, the package arrived at an agreed-upon location, and Austin accompanied several other individuals to take possession of the package. After a trained narcotics detection canine alerted to the presence of narcotics within a vehicle containing the package and within the package itself, law enforcement searched the vehicle and package pursuant to a federal search warrant and found approximately two kilograms of a substance that field-tested positive for cocaine.

The charge of possession with intent to distribute 500 grams or more of cocaine carries a minimum sentence of five years and a maximum of 40 years in prison, and a $5 million fine.

U.S. Attorney Carpenito credited special agents and task force officers of the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Brian Michael, with the investigation leading to the charges. He also thanked the Bound Brook, New Jersey, Police Department, under the direction of Chief of Police Vito Bet, for assistance in the investigation.

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

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

NEWARK, N.J. – U.S. Attorney Craig Carpenito, New Jersey Attorney General Gurbir S. Grewal, and New Jersey Acting State Comptroller Kevin D. Walsh today announced the formation of a joint federal-state task force to investigate and prosecute a wide range of misconduct arising from the COVID-19 pandemic, including the unlawful hoarding of medical supplies, price gouging, charity scams, procurement fraud, insurance fraud, phishing schemes, and false and misleading investment opportunities.

The New Jersey COVID-19 Fraud Task Force will marshal the collective investigative power of federal and state law enforcement agencies by forming joint investigative and prosecution teams to quickly address fraud complaints. In addition, the Task Force will share information publicly about common frauds so individuals and businesses can better protect themselves. Residents are encouraged to report possible misconduct through a hotline established by the National Center for Disaster Fraud at (866) 720-5721 or https://www.justice.gov/disaster-fraud/webform/ncdf-disaster-complaint-form .  Complainants may remain anonymous.

“Attorney General Grewal and I have a well-established, close working relationship, and we both felt it was incredibly important at this time that we combine our resources and form a joint COVID-19 Task Force,” U.S. Attorney Carpenito said. “Our two offices, working in concert with all of our law enforcement partners, will ensure that that there is a solid front protecting the public from criminals who are attempting to illegally profit from this health crisis. Whether you’re price-gouging on necessities or hawking phony cures or protections, if you’re trying to rip off the public, we will find you and come after you.”

“An unprecedented public health crisis creates an unprecedented opportunity for scammers and con artists,” Attorney General Grewal said. “Now more than ever, we need to work together to protect our community from fraud. I applaud U.S. Attorney Carpenito for his national leadership on this issue, and I thank Acting Comptroller Walsh for his work protecting New Jersey’s taxpayers from waste, fraud, and abuse.”

“The Office of the State Comptroller has a long and productive history of collaboration with both the United States Attorney’s Office and the New Jersey Office of the Attorney General,” Acting Comptroller Walsh said. “Our investigators, auditors and attorneys stand ready to combat any fraud, waste or abuse connected to our state’s battle against COVID-19.  I thank U.S. Attorney Carpenito and Attorney General Grewal for their leadership of this important COVID-19 Task Force and I am ready to assist in its important mission.”

The Task Force will be led by the U.S. Attorney for the District of New Jersey, the New Jersey Attorney General, and the Acting State Comptroller, and will include the following federal agencies: the Federal Bureau of Investigation; the Department of Health and Human Services, Office of the Inspector General; the U.S. Secret Service; the U.S. Postal Inspection Service; Immigration and Customs Enforcement, Homeland Security Investigations; Social Security Administration, Office of Inspector General; and the U.S. Department of Education, Office of Inspector General.

In addition, the Task Force will include several divisions within the New Jersey Attorney General’s Office, including the New Jersey State Police, the Division of Criminal Justice, the Division of Consumer Affairs, the Division of Law, the Office of the Insurance Fraud Prosecutor, and the Office of Public Integrity and Accountability.

The Task Force warned New Jerseyans about the most common types of COVID-related frauds and misconduct, including:

• Unlawful hoarding: The Department of Health and Human Services (HHS) issued a Notice pursuant to President Trump’s Executive Order 13910 and the Defense Production Act, which designated health and medical resources necessary to respond to the spread of COVID-19 that are scarce or the supply of which would be threatened by excessive accumulation. These designated materials are subject to the hoarding prevention measures authorized under the Executive Order and the Act.  Individuals or businesses that violate the Act will be subject to prosecution.

 

• Price-gouging: Individuals and businesses may sell essential goods, like hand sanitizer, for significantly higher prices than in a non-emergency setting. New Jersey's price gouging law bans excessive price increases during a declared state of emergency and for 30 days after it ends. A price increase is considered excessive if the new price is more than 10 percent higher than the price charged during the normal course of business prior to the emergency. Price gouging violations are punishable by fines of up to $10,000 for the first violation and $20,000 for each subsequent violation.

 

• Treatment scams: Scammers are offering to sell fake cures, vaccines, and advice on unproven treatments for COVID-19.

 

• Supply scams: Scammers are creating fake shops, websites, social media accounts, and email addresses claiming to sell medical supplies currently in high demand, such as surgical masks. When consumers attempt to purchase supplies through these channels, fraudsters pocket the money and never provide the promised supplies.

 

• Provider scams: Scammers are also contacting people by phone and email, pretending to be doctors and hospitals that have treated a friend or relative for COVID-19, and demanding payment for that treatment.

 

• Charity scams: Scammers are soliciting donations for individuals, groups, and areas affected by COVID-19.

 

• Phishing scams: Scammers posing as national and global health authorities, including the World Health Organization (WHO) and the Centers for Disease Control and Prevention (CDC), are sending phishing emails designed to trick recipients into downloading malware or providing personal identifying and financial information.

 

• App scams: Scammers are also creating and manipulating mobile apps designed to track the spread of COVID-19 to insert malware that will compromise users’ devices and personal information.

 

• Investment scams: Scammers are offering online promotions on various platforms, including social media, claiming that the products or services of publicly traded companies can prevent, detect, or cure COVID-19, and that the stock of these companies will dramatically increase in value as a result. These promotions are often styled as “research reports,” make predictions of a specific “target price,” and relate to microcap stocks, or low-priced stocks issued by the smallest of companies with limited publicly available information.

 

The Task Force urged everyone to avoid these and similar scams by taking the following steps:

• Independently verify the identity of any company, charity, or individual that contacts you regarding COVID-19.

 

• Check the websites and email addresses offering information, products, or services related to COVID-19. Be aware that scammers often employ addresses that differ only slightly from those belonging to the entities they are impersonating. For example, they might use “cdc.com” or “cdc.org” instead of “cdc.gov.”

 

• Be wary of unsolicited emails offering information, supplies, or treatment for COVID-19 or requesting your personal information for medical purposes. Legitimate health authorities will not contact the general public this way.

 

• Do not click on links or open email attachments from unknown or unverified sources. Doing so could download a virus onto your computer or device.

 

• Make sure the anti-malware and anti-virus software on your computer is operating and up to date.

 

• Ignore offers for a COVID-19 vaccine, cure, or treatment. Remember, if there is a medical breakthrough, you won’t hear about it for the first time through an email, online ad, or unsolicited sales pitch.

 

• Check online reviews of any company offering COVID-19 products or supplies. Avoid companies whose customers have complained about not receiving items.

 

• Research any charities or crowdfunding sites soliciting donations in connection with COVID- 19 before giving. Remember, an organization may not be legitimate even if it uses words like “CDC” or “government” in its name or has reputable looking seals or logos on its materials. For online resources on donating wisely, visit the Federal Trade Commission (FTC) website.

 

• Be wary of any business, charity, or individual requesting payments or donations in cash, by wire transfer, gift card, or through the mail. Don’t send money through any of these channels.

 

• Be cautious of “investment opportunities” tied to COVID-19, especially those based on claims that a small company’s products or services can help stop the virus. If you decide to invest, carefully research the investment beforehand. For information on how to avoid investment fraud, visit the U.S. Securities and Exchange Commission (SEC) website.

 

For the most up-to-date information on COVID-19, visit the Centers for Disease Control and Prevention (CDC) and World Health Organization (WHO) websites.

NEWARK, N.J. – A Georgia man will appear in court today for his alleged role in a conspiracy to defraud federally funded and private health care benefit programs by submitting fraudulent testing claims for COVID-19 and genetic cancer screenings, U.S. Attorney Craig Carpenito announced.

Erik Santos, 49, of Braselton, Georgia, is charged by complaint with one count of conspiring to violate the Anti-Kickback Statute and one count of conspiring to commit health care fraud. He was arrested at his home today by special agents of the FBI and is scheduled to have his initial court appearance this afternoon before U.S. Magistrate Judge Alan J. Braverman in Atlanta federal court.

“The complaint in this case describes a defendant who saw the spread of COVID-19 as nothing more than an opportunity to profit personally,” U.S. Attorney Carpenito said. “As the complaint alleges, he offered kickbacks in exchange for medically unnecessary tests – including potentially hard-to-obtain COVID-19 tests – thus preying on people’s fear in order to defraud the government and make money for himself.  The U.S. Attorney’s Office and our law enforcement partners are focused on protecting the public from this kind of despicable pandemic profiteering, and will act quickly to halt the fraud and bring the perpetrators to justice.”

“It is unfortunate that we have people in our country who will capitalize on others' suffering to make a buck,” Special Agent-in-Charge Gregory W. Ehrie of FBI Newark said. “But this case takes things to a new low. This defendant not only allegedly defrauded the government, he conspired to bilk his fellow citizens of a valuable resource that's in high demand. His profiteering is akin to receiving blood money. Throughout this challenging crisis, the FBI remains on duty and vigilant in our efforts to capture anyone who puts money before humanity."

“At a time when Americans are coming together in many different ways to help our fellow citizens make it through this crisis, it is unfathomable to think that some people, driven by personal greed, would try to take advantage of people who need help the most,” Chris Hacker, Special Agent in Charge of FBI Atlanta, said. “Though the FBI has had to adapt to doing business in this trying time, we want to make it clear that we are continuing to protect our citizens and uphold the Constitution.”

“Individuals seeking to fraudulently profit during the COVID-19 global pandemic undermine the government's response, jeopardize medical professionals and endanger the public,” Special Agent-in-Charge Leigh-Alistair Barzey, Defense Criminal Investigative Service (DCIS), Northeast Field Office, said. “The DCIS is committed to working with the U.S. Department of Justice and its law enforcement partners to combat health care fraud and protect TRICARE, the DoD's health care system, and the military members and their families who depend upon it.”

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

Santos ran a marketing company that generated leads to testing companies. From November 2019 through the present, Santos and others engaged in a large-scale scheme to defraud Medicare by soliciting and receiving kickback payments from companies involved in clinical and diagnostic testing in exchange for steering to those companies individuals eligible for testing that Medicare would reimburse. Medicare is a federally funded program to provide medical insurance benefits for individuals 65 and older and certain disabled individuals who qualify under the Social Security Act.

Santos agreed with others to be paid kickbacks on a per-test basis for submitting genetic cancer screening tests to diagnostic testing facilities, regardless of medical necessity. A genetic cancer screening is a diagnostic tool that tests for a genetic predisposition to cancer. Santos’ scheme aimed to submit more than $1.1 million in fraudulent claims to Medicare.

Starting in February 2020, the effects of the COVID-19 pandemic began to be felt in the United States.  The virus is considered especially dangerous to patients over 65 – the same population that is eligible for Medicare and TRICARE benefits. As cases have increased in the United States, many individuals are reporting difficulty obtaining tests to determine whether they were infected with the virus.

As the COVID-19 crisis began to escalate, Santos used the pandemic as an opportunity to expand his pre-existing kickback schemes and to capitalize on a national emergency for his own financial gain. Santos agreed with others to be paid kickbacks on a per-test basis for COVID-19 tests, provided that those tests were bundled with a much more expensive respiratory pathogen panel (RPP) test, which does not identify or treat COVID-19. Santos sought to maximize his kickback profits and to bleed federal health care resources at a time when Medicare beneficiaries across the United States were in dire need of coverage for medical treatment and services.

On March 19, 2020, Santos made the following statements in a telephone call explaining that he viewed the pandemic as a money-making opportunity:

• “[W]hile there are people going through what they are going through, you can either go bankrupt or you can prosper.”

 

• “[T]he good thing is we’re opening a lot of doors through this coronavirus testing.”

 

• Santos noted that his other work was on hold because “everybody has been chasing the Covid dollar bird.”

The count of conspiracy to commit health care fraud carries a maximum potential punishment of 10 years in prison; conspiracy to violate the Anti-Kickback Statute carries a maximum potential penalty of five years in prison. Both offenses are also punishable by a fine of $250,000, or twice the gross gain or loss from the offense.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark and Special Agent in Charge Chris Hacker in Georgia; U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert; U.S. Department of Defense, Office of the Inspector General, Defense Criminal Investigative Service, under the direction of Special Agent in Charge Leigh-Alistair Barzey; U.S. Department of Veterans Affairs Office of Inspector General, under the direction of Resident Agent in Charge Christopher F. Algieri with the ongoing investigation leading to today’s arrest.

To find more about Department of Justice resources and information, please visit: www.justice.gov/coronavirus

The government is represented by Assistant U.S. Attorney Sean M. Sherman of the U.S. Attorney’s Office’s Opioids Unit in Newark.

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

NEWARK, N.J. – A Brooklyn man was arrested today for allegedly coughing on FBI agents while claiming to have COVID-19, and with lying to them about his accumulation and sale of surgical masks, medical gowns, and other medical supplies, U.S. Attorney Craig Carpenito announced. 

Baruch Feldheim, 43, was arrested by special agents of the FBI today and charged by complaint with assaulting a federal officer and with making false statements to law enforcement.  Feldheim is scheduled to have his initial appearance this afternoon before U.S. Magistrate Judge Michael A. Hammer in Newark federal court.

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

On March 25, 2020, the Department of Health and Human Services issued an executive order designating certain scarce health and medical resources necessary to respond to the spread of the Coronavirus. Those designated materials included N95 filtering face-piece respirators, personal protection equipment (PPE) face masks, surgical masks, sterilization services, and disinfecting devices, among other things.

Feldheim allegedly sold certain designated materials, including N95 respirators, to doctors and nurses at inflated prices. In one instance, on March 18, 2020, a doctor in New Jersey contacted Feldheim via a WhatsApp chat group labeled “Virus2020!” Feldheim agreed to sell to the doctor approximately 1,000 N95 masks and other assorted materials for $12,000, an approximately 700 percent markup from the normal price charged for those materials. Feldheim directed the doctor to an auto repair shop in Irvington, New Jersey, to pick up the order. According to the doctor, the repair shop contained enough materials, including hand sanitizers, Clorox wipes, chemical cleaning supply agents, and surgical supplies, to outfit an entire hospital. Feldheim later told the doctor that he had been forced to move all of those supplies from Irvington to another location.

On March 23, 2020, Feldheim allegedly offered to sell a nurse a quantity of surgical gowns and directed the nurse to his residence in Brooklyn. Feldheim also received, on March 25, 2020, a shipment from Canada containing approximately eight pallets of medical facemasks. On March 27, 2020, FBI agents observed an empty box of N95 masks outside of Feldheim’s residence.

On March 29, 2020, FBI agents witnessed multiple instances during which individuals approached Feldheim’s residence and walked away with boxes or bags that appeared to contain medical supplies. On that date, FBI agents approached Feldheim outside of his residence. After identifying themselves as FBI agents, they told Feldheim that they wanted to stay a distance away from him given concerns over the spread of Coronavirus. When the agents were within four to five feet of him, Feldheim allegedly coughed in their direction without covering his mouth. The agents then told him that they were looking for certain PPE materials and that they had information that Feldheim was in possession of large quantities of such materials. At that point, Feldheim told the FBI agents that that he had the Coronavirus. 

Feldheim then made false statements to the FBI agents regarding his possession and sale of personal protective equipment and other materials. He falsely told the agents, among other things, that he worked for a company that bought and sold personal protective equipment and other materials and that he never took physical custody of the materials. Feldheim further falsely stated that he did not possess large quantities of personal protective equipment materials and that he never sold them directly to individuals. 

The assault charge carries a maximum penalty of one year in prison and a $100,000 fine. The false statements charge carries a maximum penalty of five years in prison and a $250,000 fine.

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

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 arrest.

The government is represented by Assistant U.S. Attorney Jonathan Fayer of the Economic Crimes Unit.

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

NEWARK, N.J. – U.S. Attorney Craig Carpenito today announced that nearly $60 million in Department of Justice grants is available to help communities address public safety by supporting successful reentry of adult and juvenile offenders into their communities.

“The vast majority of inmates will be eventually returning to society after having completed their sentences,” U.S. Attorney Carpenito said. “We want to make sure that when they do, they have the best possible chance at successfully reintegrating. The programs supported by these grants will help support those who are developing the strategies that will make that possible.”

“Our nation is facing difficult public safety challenges that demand strong and immediate action. The high rate of recidivism poses a dire threat to community safety and is being met with a robust response by this Administration,” Katharine T. Sullivan, Principal Deputy Assistant Attorney General for the Office of Justice Programs said. “The Department of Justice is front and center in the fight to meet this persistent challenge. OJP is making historic amounts of grant funding available to ensure that our communities have access to innovative and diverse solutions.”

The funding is available through OJP, the federal government’s leading source of public safety funding and crime victim assistance in state, local and tribal jurisdictions. OJP’s programs support a wide array of activities and services, including adult and juvenile reentry initiatives and research projects designed to improve our knowledge of what works in reentry programming. 

A number of funding opportunities are currently open, with several more opening in the near future. 

 

Correctional Adult Reentry Education, Employment, and Recidivism Reduction Strategies Program

https://bja.ojp.gov/funding/opportunities/bja-2020-17104

Total Available $7.2 million                                       Deadline 4/27/2020

 

Improving Community Supervision Outcomes through Swift, Certain, and Fair Responses

https://bja.ojp.gov/funding/opportunities/bja-2020-17096

Total Available $3 million                                          Deadline 4/28/2020

 

Improving Reentry for People with Substance Use Disorders Program

https://bja.ojp.gov/SCASUD20

Total Available $13.2 million                                     Deadline 4/27/2020    

 

Innovations in Reentry Initiative: Building System Capacity & Testing Strategies to Reduce Recidivism

https://bja.ojp.gov/funding/opportunities/bja-2020-17281

Total Available $4 million                                          Deadline 5/4/2020

 

Research and Evaluation on Promising Reentry Initiatives            https://nij.ojp.gov/funding/opportunities/nij-2020-17295

Total Available $6 million                                         Deadline 5/5/2020      

 

Review and Validation of the First Step Act Risk Assessment Tool             https://nij.ojp.gov/funding/opportunities/nij-2020-fsa

Total Available: Determined after selection               Deadline 4/10/2020

 

Second Chance Act Community-Based Reentry Program

https://bja.ojp.gov/funding/opportunities/bja-2020-17110

Total Available $13.5 million                                     Deadline 5/4/2020

 

Second Chance Act Evaluation Participation Support

https://bja.ojp.gov/funding/opportunities/bja-2020-17680

Total Available $4 million                                         Deadline 4/28/2020

 

Second Chance Act Youth Offender Reentry Program

https://ojjdp.ojp.gov/sites/g/files/xyckuh176/files/media/document/ojjdp-2020-17350.pdf

Total Available $7 million                                          Deadline 4/28/2020

 

 

For more information regarding all OJP funding opportunities, visit https://www.ojp.gov/funding/explore/current-funding-opportunities

NEWARK, N.J. – A Monmouth County, New Jersey, man is scheduled to appear before a U.S. Magistrate Judge today for allegedly producing and distributing images of himself sexually assaulting a child, U.S. Attorney Craig Carpenito announced today.

Christian Importuna, 24, of Englishtown, 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 today by telephone conference before U.S. Magistrate Judge Cathy L. Waldor. Importuna was arrested at his home this morning by special agents of the FBI.

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

Importuna produced at least two videos that showed him sexually assaulting a child. The videos came to the attention of law enforcement officials on March 24, 2020, when Importuna attempted to trade images of child pornography with an undercover law enforcement officer on an internet-based application. Law enforcement initially linked the videos to Importuna through business records indicating that they were sent from his Englishtown residence. The investigation further linked Importuna to the production of the images through physical identifiers that were visible in the subject videos.

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 FBI Newark's Child Exploitation and Human Trafficking Task Force, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, with the investigation leading to these charges. He also thanked the New Jersey Regional Computer Forensics Lab, Monmouth County Prosecutor's Office, and Englishtown Police Department, for their assistance with the investigation.

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

NEWARK, N.J. – U.S. Attorney Craig Carpenito today announced that more than $83 million in Department of Justice grants is available to help communities improve school security and protect students, faculty and staff from threats of violence.

“The funding opportunities we are announcing will help with research into the causes of school violence and the effectiveness of approaches to dealing with it,” U.S. Attorney Carpenito said. “It will also provide resources that can be used to develop support services for children exposed to violence in their homes, schools, and communities, and for violent crime reduction strategies that focus on violent juvenile offenders.”

“School violence is no longer an abstract threat but has become a tragic reality in too many of America’s communities. Moving to meet this challenge is among the Administration’s top domestic priorities,” said Katharine T. Sullivan, Principal Deputy Assistant Attorney General for the Office of Justice Programs. “The Department of Justice is front and center in the fight to meet this challenge. OJP is making historic amounts of grant funding available to ensure that our communities have access to innovative and diverse solutions.”

The funding is available through OJP, the federal government’s leading source of public safety funding and crime victim assistance in state, local and tribal jurisdictions. OJP’s programs support a wide array of activities and services, including programs designed to tighten school security and improve the reporting of threats. 

A number of funding opportunities for school safety are currently open, with another opening in the near future: 

Research and Evaluation on School Safety

https://nij.ojp.gov/funding/opportunities/nij-2020-17308

Total Available $5 million                                         Deadline 4/13/2020    

 

STOP Act School Violence Program (FY20)

https://nij.ojp.gov/funding/opportunities/nij-2020-17308

Total Available $71.4 million                                     Deadline 4/13/2020

 

Strategies to Support Children Exposed to Violence  

https://ojjdp.ojp.gov/funding/opportunities/ojjdp-2020-17926

Total Available $7 million                                           Deadline 4/27/2020

 

For more information regarding all OJP funding opportunities, visit: https://www.ojp.gov/funding/explore/current-funding-opportunities.

NEWARK, N.J. –U.S. Attorney Craig Carpenito today announced that more than $163 million in Department of Justice grants is available to help communities address America’s addiction crisis.

“My office devotes substantial resources toward the battle against opioid diversion and abuse, but the problem requires more than just a law enforcement approach,” U.S. Attorney Carpenito said. “These grants provide resources to our partners that can help them tackle opioid addiction, a crisis that afflicts so many of our communities, with solutions focused on treatment and recovery. I encourage them to explore the opportunities listed below.”

“Our nation is facing the difficult challenge of curbing substance addiction, which threatens public safety and is among the Administration’s top domestic priorities,” Katharine T. Sullivan, Principal Deputy Assistant Attorney General for the Office of Justice Programs (OJP), said. “The Department of Justice is front and center in the fight to meet this challenge. OJP is making historic amounts of grant funding available to ensure that our communities have access to innovative and diverse solutions.”

The funding is available through OJP, the federal government’s leading source of public safety funding and crime victim assistance in state, local and tribal jurisdictions. OJP’s programs support a wide array of activities and services, including programs designed to prevent overdose deaths and break the cycle of addiction and crime. 

A number of funding opportunities that address the addiction crisis are currently open: 

Adult Drug Court and Veterans Treatment Court Discretionary Grant Program

https://bja.ojp.gov/funding/opportunities/bja-2020-17098

Total Available $1.75 million                                     Deadline 5/14/2020    

 

Comprehensive Opioid, Stimulant, and Substance Abuse Site-based Program

https://bja.ojp.gov/COSSAP20

Total Available $27 million                                        Deadline 5/21/2020

 

Enhancing Community Responses to America's Addiction Crisis: Serving Our Youngest Crime Victims

https://www.ovc.gov/grants/pdftxt/fy-2020-enhancing-community-responses-to-drug-crisis.pdf

Total Available: $19 million                                       Deadline: 5/4/2020

           

Family Drug Court Program

https://ojjdp.ojp.gov/funding/opportunities/ojjdp-2020-17090

Total Available $18.2 million                                     Deadline 4/8/2020 (Extended)

 

Harold Rogers Prescription Drug Monitoring Program

https://bja.ojp.gov/funding/opportunities/bja-2020-17754

Total Available $28.1                                                 Deadline 5/5/2020

 

Juvenile Drug Treatment Court Program

https://ojjdp.ojp.gov/funding/opportunities/ojjdp-2020-17051

Total Available $7.2 million                                       Deadline 4/13/2020 (Extended)

 

Mentoring Opportunities for Youth Initiative

https://ojjdp.ojp.gov/funding/opportunities/ojjdp-2020-16930

Total Available $48 million                                        Deadline 4/13/2020  

 

Opioid Affected Youth Initiative

https://ojjdp.ojp.gov/funding/opportunities/ojjdp-2020-17352

Total Available $9 million                                          Deadline 4/20/2020

 

Research and Evaluation on Drugs and Crime           https://nij.ojp.gov/funding/opportunities/nij-2020-17275

Total Available $1 million                                          Deadline 4/20/2020                            

 

Residential Substance Abuse Treatment for State Prisoners

https://bja.ojp.gov/RSAT20

Total Available $4.5 million                                       Deadline 4/6/2020

 

For more information regarding all OJP funding opportunities, visit: https://www.ojp.gov/funding/explore/current-funding-opportunities

 

NEWARK, N.J. – U.S. Attorney Craig Carpenito of the District of New Jersey today announced that more than $65 million in Department of Justice grants is available to help communities combat human trafficking and serve adults and children who are victimized in trafficking operations.

“Human trafficking crimes are among the most difficult cases our office handles,” U.S. Attorney Carpenito said. “The resources being made available by the Justice Department to all of our partners in battling this crime will go a long way in this fight. I encourage state and local agencies to apply to these grant programs for help obtaining the tools these funds will make available.”

“Our nation is facing difficult challenges, none more pressing than the scourge of human trafficking. Human traffickers pose a dire threat to public safety and countering this threat remains one of the Administration’s top domestic priorities,” Katharine T. Sullivan, Principal Deputy Assistant Attorney General for the Office of Justice Programs, said. “The Department of Justice is front and center in the fight against this insidious crime. OJP is making historic amounts of grant funding available to ensure that our communities have access to innovative and diverse solutions.”

The funding is available through OJP, the federal government’s leading source of public safety funding and crime victim assistance in state, local and tribal jurisdictions. OJP’s programs support a wide array of activities and services, including programs that support human trafficking task forces and services for human trafficking survivors. 

A number of funding opportunities are currently open, with several more opening in the near future. 

Missing and Exploited Children Training and Technical Assistance Program

https://ojjdp.ojp.gov/funding/opportunities/ojjdp-2020-17351

Total Available $1.8 million                                      Deadline 4/6/2020 (Extended)

 

Multidisciplinary Task Force Program to Combat Human Trafficking

Total Available $22 million                                       Opens week of 3/16/2020

 

Preventing Trafficking of Girls

Total Available $1.7 million                                       Opens week of 3/16/2020

 

Research and Evaluation on Trafficking in Persons   https://nij.ojp.gov/funding/opportunities/nij-2020-17324

Total Available $2.5 million                                       Deadline 4/20/2020   

 

Services for Victims of Human Trafficking

Total Available $16.5 million                                     Opens week of 3/16/2020

 

Specialized Training and Technical Assistance on Housing for Victims of Human Trafficking                                                                                                             

Total Available $2 million                                          Opens week of 3/16/2020

 

Human Trafficking Training and Technical Assistance Program

Total Available $5 million                                          Opens week of 3/16/2020

 

Improving Outcomes for Child and Youth Victims of Human Trafficking                          

Total Available $6 million                                          Opens week of 3/16/2020

 

Integrated Services for Minor Victims of Labor Trafficking

Total Available $8 million                                          Opens week of 3/16/2020

For more information regarding all OJP funding opportunities, visit https://www.ojp.gov/funding/explore/current-funding-opportunities

 

NEWARK, N.J. – U.S. Attorney Craig Carpenito of the District of New Jersey today urged the public to report suspected fraud schemes related to COVID-19 (the novel coronavirus) by calling the National Center for Disaster Fraud (NCDF) hotline (1-866-720-5721) or to the NCDF at: https://www.justice.gov/disaster-fraud/webform/ncdf-disaster-complaint-form .

In coordination with the Department of Justice, Attorney General William Barr has directed U.S. Attorneys to prioritize the investigation and prosecution of COVID-19 fraud schemes. The NCDF Hotline can receive and enter complaints into a centralized system that can be accessed by all U.S. Attorneys, as well as Justice Department litigating and law enforcement components, to identify, investigate and prosecute fraud schemes. The NCDF coordinates complaints with 16 additional federal law enforcement agencies, as well as state Attorneys General and local authorities.

“Unfortunately, we have already seen examples in New Jersey of unscrupulous people trying to take advantage of this global pandemic to cheat frightened citizens and the government out of money,” U.S. Attorney Carpenito said. “Our mission to protect the public is as important now as ever, and we will investigate and prosecute these fraudsters with every resource we have.”

Some examples of these schemes include:

• Individuals and businesses selling fake cures for COVID-19 online and engaging in other forms of fraud.
• Phishing emails from entities posing as the World Health Organization or the Centers for Disease Control and Prevention.
• Malicious websites and apps that appear to share COVID-19s-related information to gain and lock access to your devices until payment is received.
• Seeking donations fraudulently for illegitimate or non-existent charitable organizations.
• Medical providers obtaining patient information for COVID-19 testing and then using that information to fraudulently bill for other tests and procedures.      

In a memorandum to U.S. Attorneys issued March 19, Deputy Attorney General Jeffrey Rosen also directed each U.S. Attorney to appoint a Coronavirus Fraud Coordinator to serve as the legal counsel for the federal judicial district on matters relating to the COVID-19, direct the prosecution of COVID-19-related crimes, and to conduct outreach and awareness activities.   The District of New Jersey Coronavirus Fraud Coordinator is Daniel Shapiro, Chief of the Economic Crimes Unit in Newark.

To find more about Department of Justice resources and information, please visit www.justice.gov/coronavirus

NEWARK, N.J. – Two Passaic County men are scheduled to appear today in connection with the robbery of the Valley National Bank in Little Falls, New Jersey, on Feb. 27, 2020, U.S. Attorney Craig Carpenito announced.

Nicholas Ortiz, 37, of Paterson, New Jersey, and Jose Soto, 49, of Passaic, New Jersey, are each charged by complaint with one count of bank robbery and one count of conspiracy to commit bank robbery. Soto is also charged with an additional count of bank robbery in connection with the robbery of a PNC Bank branch in Passaic on Feb. 6, 2020. Both defendants were arrested today and are scheduled to have their initial appearances this afternoon with U.S. Magistrate Judge Cathy Waldor in Newark federal court by telephonic conference.

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

On Feb. 6, 2020, two suspects wearing ski masks and holding umbrellas entered the PNC Bank in Passaic, New Jersey, and allegedly began ordering everyone to get down on the floor. One of the suspects pointed a silver and black handgun customers and employees. The other suspect entered the bank and jumped over the teller counter, demanding that the teller turn over all cash in the drawers.

On Feb. 27, 2020, two suspects allegedly entered the Valley National Bank in Little Falls, New Jersey. One of the suspects pointed a silver and black gun at customers and employees.  The second suspect jumped over a teller counter and began rifling through various drawers. The suspects then forced the bank employees at gunpoint to open the vault, and began retrieving cash from the bank vault. The suspects forced all employees into the bank vault and then fled through the rear door. 

Law enforcement officers were subsequently able to identify Soto as the owner of the getaway car from the PNC Bank robbery. They were also able to place Soto’s phone in the vicinity of the PNC Bank on the day of the robbery. 

Law enforcement were able to identify Ortiz as the owner of the getaway car from the Valley National Bank Robbery. They were also able to place both Soto’s and Ortiz’s phone in the vicinity of the Valley National Bank on the day of the robbery.  

Each bank robbery charge carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. The conspiracy charge carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark; the Passaic Police Department, under the direction of Chief Luis A. Guzman; the Little Falls Police Department, under the direction of Chief Steven Post; the Passaic County Prosecutor’s Office, under the direction of Prosecutor Camelia M. Valdes; the Passaic County Sheriff’s Department, under the direction of Sheriff Richard Berdnik; and the Paterson Police Department, under the direction of Police Director Jerry Speziale, with the investigation leading to today’s charges.

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

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

TRENTON, N.J. – A Trenton man today admitted his role as a supplier to a significant drug trafficking conspiracy that distributed more than one kilogram of heroin in Trenton and the surrounding area, U.S. Attorney Craig Carpenito announced today.

David Antonio, a/k/a “Pop,” a/k/a “Papi,” a/k/a “Santiago Ramirez,” 32, pleaded guilty today before Chief U.S. District Judge Freda L. Wolfson in Trenton federal court to Count One of a third superseding indictment charging him with conspiracy to distribute and possess with intent to distribute one kilogram or more of heroin. Another Trenton resident, Wayne K. Bush, 42, pleaded guilty today before Judge Wolfson to Count Ten of the third superseding indictment charging him with using a telephone to facilitate a drug trafficking crime.

In October 2018, Antonio, Bush, and 24 other individuals were charged by criminal complaint with conspiracy to distribute heroin. On Feb. 27, 2020, a grand jury returned a 10-count third superseding indictment charging Antonio, Bush, and five other defendants with conspiracy to distribute one kilogram or more of heroin and various other drug and firearm offenses. Of the 26 defendants originally charged in the criminal complaint, Antonio and Bush are the 20th and 21st defendants to plead guilty. The charges remain pending against five defendants.

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

From October 2017 to October 2018, the defendants 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 conspirators Jakir Taylor and Jerome Roberts obtained regular supplies of hundreds of “bricks” of heroin from Antonio. Intercepted communications among Taylor, Roberts, Antonio, and other conspirators revealed that Taylor and Roberts agreed to obtain from Antonio, and that Antonio agreed to supply, a “motherlode” of as many as 1,400 bricks of heroin in a single delivery – equating to approximately 1.5 kilograms of heroin. Taylor told Antonio that he intended to “flood the streets” of Trenton with this large supply, and Antonio agreed to supply a sufficient amount of heroin to Taylor that would allow him to do so. In communications with Taylor, Antonio indicated that he was “filling the bags” up with heroin and fentanyl. During coordinated arrests on Oct. 25, 2018, law enforcement arrested Antonio at a residence in Trenton, and recovered more than 1.4 kilograms of heroin, in addition to a significant amount of paraphernalia used to package heroin for distribution.

Telephonic communications intercepted pursuant to the wiretap order also revealed that Bush, who was incarcerated during the conspiracy on a related conviction, facilitated Taylor’s plan by providing specific advice and recommendations to Taylor on pricing and quantity, ensuring loyalty from his subordinates, and maintaining relationships with heroin suppliers.

The drug conspiracy count to which Antonio pleaded guilty carries a statutory mandatory minimum term of 10 years in prison, a maximum potential penalty of life years in prison, and a maximum fine of $10 million. Because Antonio admitted during his plea to having previously been convicted of a federal drug trafficking offense for which he served more than a year in prison, he may be eligible for a statutory enhanced penalty, which would increase the statutory mandatory minimum term of imprisonment to 15 years, and a maximum fine of $20 million. The facilitation charge to which Bush pleaded guilty carries a statutory maximum term of imprisonment of four years, and a maximum fine of $250,000. Antonio’s sentencing is scheduled for June 30, 2020, and Bush’s sentencing is scheduled for June 29, 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 pleas. 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 against the remaining five defendants are merely accusations, and they are presumed innocent unless and until proven guilty.

TRENTON, N.J. – The second of two Hudson County, New Jersey, men charged with conspiring to use drones to smuggle contraband, including marijuana, steroids, syringes, cell phones and cell phone equipment, into the federal correctional facility at Fort Dix, surrendered to authorities and appeared in court today, U.S. Attorney Craig Carpenito announced.

Adrian Goolcharran, a/k/a “Adrian Ajoda,” a/k/a “Adrian Ahoda,” 35, of Union City, New Jersey, appeared before U.S. Magistrate Judge Tonianne Bongiovanni in Trenton federal court and was released on a $100,000 secured bond. He and Nicolo Denichilo, 38, of Jersey City, New Jersey, are each charged by complaint with one count of conspiring to smuggle contraband and to defraud the United States and one count of smuggling contraband into the federal prison at Fort Dix. Denichilo appeared in court March 13, 2020, following his arrest and was released on a $100,000 unsecured bond.

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

Special agents of the U.S. Department of Justice, Office of Inspector General (DOJ-OIG) obtained evidence of at least seven drone deliveries since July 2018 containing contraband meant for inmates at Fort Dix. Goolcharran used cell phones to coordinate the drops with others, including text messaging aerial shots of locations at Fort Dix to better position the drops and to discuss weather conditions. On the same day as a drone drop in April 2019, local police in the area conducted a vehicle stop on Denichilo and Goolcharran less than five miles from Fort Dix. On March 7, 2020, an individual fitting Goolcharran’s description and another individual were captured by a surveillance camera carrying and flying a drone from a launch spot located in the woods outside of Fort Dix. Law enforcement also obtained evidence of Goolcharran bringing multiple drones to a store for repairs, including a broken drone shortly after the March 7, 2020, drone flight.

On March 12, 2020, law enforcement agents, acting on information obtained by Fort Dix officials, approached Denichilo and another individual at a launch site near Fort Dix, minutes after Fort Dix officials had observed a drone flying over a housing unit at the prison. Both men fled, and Denichilo was apprehended hiding in a ditch near the launch site. Fort Dix officials also found an inmate in the area of the drone drop inside the prison in possession of 34 cell phones, nine chargers, 51 SIM cards and other telephone equipment. Agents also seized an SUV near the launch site outside of the prison that contained the drone in the backseat.

Contraband that has been seized by authorities pursuant to the intercepted drone drops into Fort Dix includes marijuana, steroids, more than 160 cell phones, 150 SIM cards, 74 cell phone batteries and chargers, 35 syringes and two metal saw blades. Denichilo’s fingerprint was obtained from a plastic bag recovered from one of the drone drops at Fort Dix.  Goolcharran’s DNA was recovered from electrical tape found on the drone used in a July 2018 drop.  

The conspiracy count carries a maximum penalty of five years in prison and maximum fine of $250,000 and the contraband smuggling count carries a maximum penalty of one year in prison and $100,000 fine. 

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

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

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

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

NEWARK, N.J. – A Brazilian national was arrested this morning for his role in a long-running mortgage fraud scheme based in New Jersey, U.S. Attorney Craig Carpenito announced.

Isaac DePaula, 40, of Brazil, was charged by complaint in 2012, indicted in 2016, and has been a fugitive. He returned via Newark Liberty International Airport this morning to face a four-count indictment charging him with conspiracy to commit bank fraud and three counts of bank fraud. DePaula made his initial appearance before U.S. Magistrate Judge James B. Clark III in Newark federal court and was released on his own recognizance.

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

From September 2006 to May 2008, DePaula and his conspirators engaged in a long-running, large-scale mortgage fraud conspiracy through a company called Premier Mortgage Services (PMS). The conspirators targeted properties in low-income areas of New Jersey. After recruiting straw buyers, the conspirators used a variety of fraudulent documents to make it appear as though the straw buyers possessed far more assets, and earned far more income, than they actually did. The conspirators then submitted these fraudulent documents as part of mortgage loan applications to financial institutions. Relying on these fraudulent documents, financial institutions provided mortgage loans for the targeted properties. The conspirators then split the proceeds from the mortgages among themselves and others by using fraudulent settlement statements (HUD-1), which hid the true sources and destinations of the mortgage funds provided by financial institutions. In reality, the straw buyers had no means of paying the mortgages on the properties, many of which entered into foreclosure proceedings.

DePaula was a loan officer at PMS and recruited straw buyers, provided false and fraudulent documents to the straw buyers, and incorporated false and fraudulent documents into loan applications to induce financial institutions to fund mortgage loans. The loan officers profited illegally by receiving a commission from PMS for each mortgage loan that they closed, and also profited illegally by diverting portions of the fraudulently obtained mortgage proceeds for themselves, often via shell corporations or nominee bank accounts.

DePaula faces a maximum potential penalty of 30 years in prison and a fine of $1 million per count. His co-defendant, Rodrigo Costa, remains at large. All of the remaining conspirators have previously pleaded guilty and been sentenced for their roles in the scheme.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie; special agents of the IRS, under the direction of Special Agent in Charge John R. Tafur; and special agents of the Federal Housing Finance Agency’s Office of the Inspector General, under the direction of Special Agent in Charge Robert Manchak, for the investigation leading to today’s arrest.

The government is represented by Assistant U.S. Attorneys Rahul Agarwal and Zach Intrater.

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

Defense counsel: Joshua Cohn Esq., Saddle Brook, New Jersey

TRENTON, N.J. – Two Hudson County, New Jersey, men were charged today with conspiring to use drones to smuggle contraband, including marijuana, steroids, syringes, cell phones and cell phone equipment, into the federal correctional facility at Fort Dix, U.S. Attorney Craig Carpenito announced.

Nicolo Denichilo, 38, of Jersey City, New Jersey, and Adrian Goolcharran, a/k/a “Adrian Ajoda,” a/k/a “Adrian Ahoda,” 35, of Union City, New Jersey, were each charged by complaint with one count of conspiring to smuggle contraband and to defraud the United States and one count of smuggling contraband into the federal prison at Fort Dix. Denichilo was arrested March 12, 2020, after federal law enforcement agents learned of a scheduled drone drop at Fort Dix. He had his initial appearance this afternoon before U.S. Magistrate Judge Tonianne Bongiovanni in Trenton federal court and was released on $100,000 unsecured bond. Goolcharran remains at large.

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

Special agents of the U.S. Department of Justice, Office of Inspector General (DOJ-OIG) obtained evidence of at least seven drone deliveries since July 2018 containing contraband meant for inmates at Fort Dix. Goolcharran used cell phones to coordinate the drops with others, including text messaging aerial shots of locations at Fort Dix to better position the drops and to discuss weather conditions. On the same day as a drone drop in April 2019, local police in the area conducted a vehicle stop on Denichilo and Goolcharran less than five miles from Fort Dix. On March 7, 2020, an individual fitting Goolcharran’s description and another individual were captured by a surveillance camera carrying and flying a drone from a launch spot located in the woods outside of Fort Dix. Law enforcement also obtained evidence of Goolcharran bringing multiple drones to a store for repairs, including a broken drone shortly after the March 7, 2020, drone flight.

On March 12, 2020, law enforcement agents, acting on information obtained by Fort Dix officials, approached Denichilo and another individual at a launch site near Fort Dix, minutes after Fort Dix officials had observed a drone flying over a housing unit at the prison. Both men fled, and Denichilo was apprehended hiding in a ditch near the launch site. Fort Dix officials also found an inmate in the area of the drone drop inside the prison in possession of 34 cell phones, nine chargers, 51 SIM cards and other telephone equipment. Agents also seized an SUV near the launch site outside of the prison that contained the drone in the backseat.

 Contraband that has been seized by authorities pursuant to the intercepted drone drops into Fort Dix includes marijuana, steroids, more than 160 cell phones, 150 SIM cards, 74 cell phone batteries and chargers, 35 syringes and two metal saw blades. Denichilo’s fingerprint was obtained from a plastic bag recovered from one of the drone drops at Fort Dix.  Goolcharran’s DNA was recovered from electrical tape found on the drone used in a July 2018 drop.  

The conspiracy count carries a maximum penalty of five years in prison and maximum fine of $250,000 and the contraband smuggling count carries a maximum penalty of one year in prison and $100,000 fine. 

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

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

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

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

NEWARK, N.J. – A Florida man appeared in court today on charges that he laundered funds related to a $30 million wire fraud scheme, U.S. Attorney Craig Carpenito announced.

Denis Sotnikov, 36, of Hallandale Beach, Florida, is charged by complaint with one count of money laundering. He appeared today before U.S. Magistrate Judge Jared M. Strauss in a Fort Lauderdale, Florida, federal court and was detained.

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

Between April 2018 and March 2020, individuals engaged in an internet-based financial fraud scheme, which generally involved the creation of fraudulent websites to solicit funds from individuals seeking to invest money. At times, the websites were designed to closely resemble websites being operated by actual, well-known, and publicly reputable financial institutions; at other times, the fraudulent websites were designed to resemble financial institutions that seemed legitimate, but did not, in fact, exist.

Victims of the fraud scheme typically discovered the fraudulent websites via internet searches. The fraudulent websites advertised various types of investment opportunities, most prominently the purchase of certificates of deposit, or CDs, with higher than average rates of return on the CDs to lure potential victims.

To date, at least 70 victims of the fraud scheme nationwide, including in New Jersey, have collectively transmitted at least $30 million that they believed to be investments.

In many instances, the victims would contact an individual or individuals via telephone or email, as directed on a fraudulent website, who provided the victims with applications and wiring instructions for the purchase of a CD. The funds wired by the victims would then be moved to various domestic and international bank accounts, including accounts in Russia, the Republic of Georgia, Hong Kong, and Turkey. None of the victims received a CD after wiring the funds.

Sotnikov received funds from at least 18 victims of the fraud scheme, totaling $6 million, in accounts at various domestic banks that were controlled by him or by a close relative. Of this amount, $3.7 million was either frozen by the banks or returned to victims, and $707,380 was wired overseas by Sotnikov. The remaining stolen funds – $1.5 million – were transferred to numerous other accounts controlled by Sotnikov and used to fund personal expenditures, including down payments on several luxury vehicles, purchases at high-end retail stores such as Louis Vuitton, Tiffany & Co., and Cartier, rent exceeding $9,000 per month on a home in Florida, several vacations, living expenses and bills.

The money laundering charge is punishable by a maximum of 20 years in prison and a fine of up to $500,000, or twice the value of the property involved, whichever is greater.

The U.S. Securities and Exchange Commission (SEC) also filed a civil complaint against Sotnikov and several companies associated with him today based on the same conduct.

U.S. Attorney Carpenito credited special agents of the FBI, including the FBI’s Cyber Crimes Task Force, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark. He also thanked the SEC for the assistance provided by its Enforcement Division.

The government is represented by Assistant U.S. Attorneys Anthony P. Torntore and Jamie L. Hoxie of the U.S. Attorney’s Cybercrimes Unit in Newark.

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

Defense counsel: Roman Groysman Esq., Fort Lauderdale

TRENTON, N.J. – A Monmouth County, New Jersey, business owner admitted today to tax evasion and failure to pay the IRS over $540,000 in employment taxes, U.S. Attorney Craig Carpenito announced. 

Wilson Salas-Molina, 39, of Howell, New Jersey, pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton federal court to an information charging him with one count of payroll tax evasion and one count of failure to collect, account for, and pay over payroll taxes.

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

Salas-Molina was the owner and operator of US Contractor Inc. (a/k/a Wilson Contractors Inc., a/k/a WC Contractor Inc.), a roofing business located in Monmouth County.  From 2012 to 2018, Salas-Molina was required to withhold and pay over to the IRS the employment taxes for US Contractor employees. Salas-Molina cashed checks he received from roofing clients at a check cashing service, and he paid his 14 employees in cash to conceal his payment of wages and his failure to report, account for, and pay over employment taxes to the IRS. The scheme resulted in a failure to withhold and pay over $540,000 in employment taxes to the IRS.   

The count of tax evasion and the count of failure to collect, account for, and pay over payroll taxes each carry a maximum potential penalty of five years in prison and $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for XX.

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

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

NEWARK, N.J. – A Bergen County man was arrested today for defrauding lenders and corporations of millions of dollars by impersonating two bank executives interested in funding syndicated loans for global companies, U.S. Attorney Craig Carpenito announced.

Matthew O’Callaghan, 43, of Upper Saddle River, New Jersey, is charged by indictment with five counts of wire fraud and three counts of money laundering. He is scheduled to appear this afternoon before U.S. Magistrate Judge Edward S. Kiel in Newark federal court.

According to the indictment:

From 2016 through 2019, O’Callaghan defrauded two financial services groups and four other companies of millions of dollars by deceiving them into believing that “Bank A” was agreeing to commit funds to revolving credit facilities. He represented himself as an executive at Bank A using the aliases “Edward Tierney” and “Michael Nash.” O’Callaghan induced the victims into making trades in which they agreed to pay Bank A to take on a commitment to fund revolving credit facilities.

O’Callaghan submitted numerous fraudulent documents to the victims that were designed to deceive them into believing that Nash and Tierney were legitimate representatives of Bank A, including email addresses resembling legitimate Bank A email addresses, false email signature blocks for Tierney and Nash that bore the Bank A logo and listed the business address for Bank A, fraudulent wiring instructions bearing Bank A’s logo and address, and a tax form bearing a tax identification number for Bank A.

O’Callaghan directed the victims to wire funds to a bank account at Bank A that O’Callaghan controlled and then converted the money for his own use, including the purchase of an automobile, gambling, travel, and payments to a private club.

The wire fraud counts each carry a maximum potential penalty of 20 years in prison and $250,000 fine, or twice the gross gain or loss from the offense. The money laundering counts each carry a maximum potential penalty of 10 years in prison and $250,000 fine, or twice the gross gain or loss from the offense.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, and 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 Jonathan Fayer of the U.S. Attorney’s Office Economic Crimes Unit in Newark.

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

Defense counsel: Michael S. Weinstein Esq., Hackensack, New Jersey

CAMDEN, N.J. – A Point Pleasant, New Jersey, man was sentenced today to 120 months in prison for distributing approximately 300 grams of crystal methamphetamine and thousands of pills containing heroin or fentanyl, U.S. Attorney Craig Carpenito announced.

Carl Chianese, 80, of Point Pleasant, New Jersey, previously pleaded guilty before U.S. District Judge Robert Kugler to an information charging him with one count of conspiracy to distribute controlled substances. He also admitted a violation of his supervised release by committing the drug trafficking offense while on court supervision for two earlier federal drug trafficking cases that involved the distribution of large quantities of methamphetamine. Judge Kugler imposed the sentence today in Camden federal court.

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

Chianese, along with conspirator Joseph Servidio, distributed pills that contained heroin or fentanyl. Chianese and Servidio were also involved in the distribution of multiple ounce quantities of crystal methamphetamine. They sold the pills and crystal methamphetamine on multiple occasions to an FBI undercover agent in exchange for cash payments. According to law enforcement sources, Servidio is a member of La Cosa Nostra. These drug transactions included the sale of 300 pills containing heroin, which were sold to the FBI agent at a Garden State Parkway rest stop on Dec. 23, 2016. In total, Chianese was responsible for the distribution of over 200 grams of fentanyl and heroin, and approximately 300 grams of crystal methamphetamine.

Chianese was arrested by FBI agents at his residence on March 14, 2018. During a search of his residence by the agents, the agents recovered a .38 caliber revolver, a magazine for a .380 caliber semi-automatic handgun, and over $25,000 in cash. Chianese agreed to the forfeiture of the firearm and cash, which was ordered by the court as part of the sentence imposed.

In addition to the prison term, Judge Kugler sentenced Chianese to three years of supervised release.

Servidio pleaded guilty June 17, 2019, to his role in the conspiracy and is scheduled to be sentenced by Judge Kugler on March 26, 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 sentencing. He also thanked the U.S. Department of Labor and the Bureau of Alcohol, Tobacco, Firearms and Explosives for their assistance.

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

Defense counsel: Mark Catanzaro Esq., Mount Holly, New Jersey

NEWARK, N.J. – A Newark man was convicted today for his role in a conspiracy to distribute heroin and crack cocaine, U.S. Attorney Craig Carpenito announced.

Cory Canzater, a/k/a, “Big C,” 47, of Newark, was found guilty 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. Canzater was convicted following a one-week trial before U.S. District Judge Kevin McNulty in Newark federal court. The jury deliberated 30 minutes before returning the guilty verdicts.

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

From May 2017 through June 2017, Canzater engaged in a heroin and crack cocaine distribution conspiracy that operated in and around Newark, led by Ahmad Johnson, a/k/a “OC,” 40, of Newark. Other members of the conspiracy included Maurice McPhatter, a/k/a “Ree,” Willie McPhatter, a/k/a “Roc,” Keith Henderson, and Sacha Negron, all of Newark. 

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 Canzater was a member of a conspiracy led by Johnson, who was responsible for obtaining wholesale amounts of drugs, including heroin and cocaine, and processing and packaging the drugs for sale in and around Newark.

Johnson pleaded guilty to a drug conspiracy and was sentenced on April 15, 2019, to 180 months in prison. Maurice McPhatter, Willie McPhatter, Henderson, and Negron have all pleaded guilty to drug conspiracy charges and are awaiting sentencing. 

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.

The conspiracy charge carries a mandatory minimum penalty of 10 years in prison, a maximum potential penalty of life years in prison, and a $10 million fine. Sentencing is scheduled for July 22, 2020.

U.S. Attorney Carpenito credited special agents of the Drug Enforcement Administration, under the direction of Special Agent in Charge Susan A. Gibson in Newark; special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Charlie J. Patterson in Newark; the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Theodore N. Stephens II, and the Newark Police Department, under the direction of Public Safety Director Anthony F. Ambrose, with the investigation leading to the guilty verdicts. He also thanked the Fairfield Police Department; Bloomfield Police Department; Irvington Police Department; Roselle Police Department; Linden Police Department; Rockaway Township Police Department; and the Irvington Police Department for their assistance.

The government is represented by Assistant U.S. Attorneys Patricia Astorga of the Opioids Unit and Ari B. Fontecchio of the Economic Crimes unit.

A Hudson County, New Jersey, woman was sentenced today to 70 months of prison for her conviction on charges of forced labor, alien harboring for financial gain, and marriage fraud, the Department of Justice announced.

Alia Imad Faleh Al Hunaity, aka “Alia Al Qaternah,” 44, was found guilty in May 2019 on all counts of the indictment against her following a six-day trial before U.S. District Judge Robert B. Kugler, who imposed the sentence today in Camden federal court.

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

Hunaity brought the victim, a Sri Lankan national, to the United States on a temporary visa in 2009 to perform domestic work. Hunaity caused the victim to overstay her visa and remain in the United States illegally for over nine years. Hunaity forced the victim to cook and clean her homes in Woodland Park and Secaucus, New Jersey, and to care for her three children, all without pay. She limited the victim’s interactions with the world outside of Hunaity’s homes. During this time, Hunaity required the victim to sleep on a bed in a public space in Hunaity’s homes, including in the kitchen. In 2018, Hunaity forced the victim to marry her so that the victim could obtain legal residence and Hunaity could continue to force her to work without fear of the victim being deported.   

In addition to the prison term, Judge Kugler sentenced Al Hunaity to three years of supervised release. 

U.S. Attorney Carpenito and Assistant Attorney General Dreiband credited special agents of U.S. Homeland Security Investigations, Newark Division, under the direction of Special Agent in Charge Brian Michael, and special agents of the U.S. Department of Labor, Office of Inspector General, New York Region, under the direction of Special Agent in Charge Michael C. Mikulka, with the investigation leading to today’s sentencing. 

This case was prosecuted in conjunction with the interagency Anti-Trafficking Coordination Team initiative of the Departments of Justice, Homeland Security and Labor. ACTeams focus on developing high-impact human trafficking investigations and prosecutions involving forced labor, international sex trafficking and sex trafficking by force, fraud or coercion through interagency collaboration among federal prosecutors and federal investigative agencies.

The government is represented by Assistant U.S. Attorney Andrew Macurdy and Trial Attorney Kate Hill of the Civil Rights Division’s Human Trafficking Prosecution Unit. 

CAMDEN, N.J. – A Hudson County, New Jersey, woman was sentenced today to 70 months of prison for her conviction on charges of forced labor, alien harboring for financial gain, and marriage fraud, U.S. Attorney Craig Carpenito and Assistant Attorney General Eric Dreiband of the Civil Rights Division announced.

Alia Imad Faleh Al Hunaity, a/k/a “Alia Al Qaternah,” 44, was found guilty in May 2019 on all counts of the indictment against her following a six-day trial before U.S. District Judge Robert B. Kugler, who imposed the sentence today in Camden federal court.

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

Hunaity brought the victim, a Sri Lankan national, to the United States on a temporary visa in 2009 to perform domestic work. Hunaity caused the victim to overstay her visa and remain in the United States illegally for over nine years. Hunaity forced the victim to cook and clean her homes in Woodland Park and Secaucus, New Jersey, and to care for her three children, all without pay. She limited the victim’s interactions with the world outside of Hunaity’s homes. During this time, Hunaity required the victim to sleep on a bed in a public space in Hunaity’s homes, including in the kitchen. In 2018, Hunaity forced the victim to marry her so that the victim could obtain legal residence and Hunaity could continue to force her to work without fear of the victim being deported.   

In addition to the prison term, Judge Kugler sentenced Al Hunaity to three years of supervised release and ordered her to pay restitution of $1.2 million. 

U.S. Attorney Carpenito and assistant Attorney General Dreiband credited special agents of U.S. Homeland Security Investigations, Newark Division, under the direction of Special Agent in Charge Brian Michael, and special agents of the U.S. Department of Labor, Office of Inspector General, New York Region, under the direction of Special Agent in Charge Michael C. Mikulka, with the investigation leading to today’s sentencing. 

This case was prosecuted in conjunction with the interagency Anti-Trafficking Coordination Team initiative of the Departments of Justice, Homeland Security and Labor. ACTeams focus on developing high-impact human trafficking investigations and prosecutions involving forced labor, international sex trafficking and sex trafficking by force, fraud or coercion through interagency collaboration among federal prosecutors and federal investigative agencies.

The government is represented by Assistant U.S. Attorney Andrew Macurdy and Trial Attorney Kate Hill of the Civil Rights Division’s Human Trafficking Prosecution Unit.

NEWARK, N.J. – A Hudson County, New Jersey, man today admitted participating in an automobile accident scheme in which health care practitioners fabricated or exaggerated accident victims’ injuries to support fraudulent insurance claims to Personal Injury Protection (PIP) insurance plans for medically unnecessary services, U.S. Attorney Craig Carpenito announced.

Luis G. Aguirre, 59, pleaded guilty before U.S. District Judge Stanley R. Chesler in Newark federal court 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:

Aguirre helped to orchestrate an automobile accident scheme in Bergen County, New Jersey, by acting as a “runner” who identified and recruited accident victims to the scheme. Aguirre subsequently introduced the victims to various chiropractors, medical imaging centers, and others, who billed PIP insurance plans for medically unnecessary services.

Aguirre and an employee from an auto body shop in West New York, New Jersey, (Individual-1) identified and recruited individuals who had been in car accidents, finding them through word-of-mouth in the community and through relationships with health care providers in northern New Jersey. Aguirre paid Individual-1 a sum of money for each accident victim that Individual-1 helped identify and recruit to the scheme. Individual-1, in turn, paid accident victims for participating in the scheme. Aguirre also ensured that the victims had filed police reports to support subsequent insurance claims.

Aguirre then directed the accident victims to visit specific health care providers to obtain medically unnecessary medical exams and services, such as X-rays and MRIs, for fake or exaggerated injuries that they supposedly suffered during the automobile accidents.

Aguirre was paid approximately $500 in cash by the health care providers for each individual accident victim that he delivered. Aguirre thereby caused health care providers to submit insurance claims to PIP insurance plans on behalf of the accident victims.

For example, on Sept. 25, 2018, an individual from North Bergen, New Jersey, (Individual-3) was involved in an automobile accident in Elizabeth, New Jersey. Based on a police report of the incident, the accident was minor: Individual-3 was rear-ended by another car when both were stopped at a red light. According to the police report, Individual-3 refused medical treatment at the scene, stating that Individual-3 would seek separate medical attention. At the time of the accident, Individual-3 had an automobile insurance policy through Auto Insurer-1, which included PIP coverage.

Aguirre learned from Individual-1 that Individual-3 was willing to participate in the scheme in exchange for cash payment. On Oct. 12, 2018, Aguirre directed Individual-3 to visit the proprietor (Individual-2) of an MRI Center in Rochelle Park, New Jersey, where Individual-3 underwent a series of medically unnecessary X-rays. On Oct. 16, 2018, the MRI Center billed Individual-3’s PIP insurance policy.

Aguirre’s participation in the conspiracy caused an estimated loss to PIP insurance plans of over $250,000, while the total loss caused by the conspiracy exceeded $3.5 million.

Aguirre 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 July 14, 2020.

U.S. Attorney Carpenito credited special agents of the Department of Labor – Office of Inspector General (DOL-OIG), under the direction of Special Agent in Charge Michael C. Mikulka; and special agents of the FBI, under the direction 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 at the U.S. Attorney’s Office in Newark.

Defense Counsel: John Lynch Esq., Union, New Jersey

CAMDEN, N.J. – Eighteen alleged members of two drug trafficking operations based in Gloucester City and Camden have been charged in connection with their roles in distributing drugs, including high-dosage oxycodone pills, U.S. Attorney Craig Carpenito announced today.

The defendants were charged with conspiring to possess and distribute drugs in two complaints unsealed today. Sixteen of the defendants were arrested today and are scheduled to appear this afternoon before U.S. Magistrate Judges Joel Schneider and Karen M. Williams in Camden federal court. Two defendants remain at large. (See table below)

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

The charges and arrests are the result of a wiretap investigation led by the FBI into drug distribution operations that dealt in, among other drugs, high-dose, 60- and 80-mg oxycodone pills. The operations’ leaders – Rocco DePoder for the Gloucester City operation and Erick Bell and Alfred Kee Jr. for the Camden operation – and the other suppliers, resellers and associates charged in the complaints generally employed the following means to facilitate the pill trafficking: Bell, Kee and DePoder would solicit the suppliers, including certain defendants named in the complaints, and others, primarily over the telephone, to supply them with quantities of oxycodone, Adderall and Xanax for DePoder, and oxycodone for Bell and Kee. After receiving substantial quantities of pills at Bell’s home in Camden, DePoder’s home in Gloucester City, and other locations in southern New Jersey (including Lindenwold and Woodbury), Bell and DePoder would take orders for pills over the telephone from others. Bell, Kee and DePoder would provide purchasers with these pills. The defendants employed coded language and used multiple phones to conceal their activities.

The conspiracies charged in the complaints carry a maximum prison term of 20 years and a maximum fine of $1 million.

U.S. Attorney Carpenito credited special agents of FBI Philadelphia Division, South Jersey Resident Agency, under the direction of Acting Special Agent in Charge Tara McMahon; U.S. Department of Health and Human Services-Office of the Inspector General, under the direction of Special Agent in Charge Scott J. Lampert; the Camden County Sheriff's Office, under the direction of Sheriff Gilbert L. Wilson; New Jersey Office of Homeland Security and Preparedness, under the direction of Director Jared M. Maples; the Camden County Police Department, under the direction of Chief Joseph Wysocki; and the U.S. Department of Agriculture-Office of Inspector General, under the direction of Special Agent in Charge Bethanne M. Dinkins, with the investigation leading to the charges.

He also thanked the FBI Newark Division, New Jersey State Police, Camden County Prosecutor’s Office, and U.S. Drug Enforcement Administration (DEA) for their assistance.

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

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

*denotes at large

NEWARK, N.J. – A Newark man was sentenced today to 240 months in prison for committing a gunpoint carjacking in Union County, New Jersey, U.S. Attorney Craig Carpenito announced.

Hasson Thomas, 30, previously pleaded guilty before U.S. District Judge John Michael Vazquez to superseding information charging him with one count of carjacking, one count of possession of a firearm by a previously convicted felon, and one count of possession of a firearm in furtherance of a crime of violence. Judge Vazquez imposed the sentence today in Newark federal court.

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

On the evening of Aug. 18, 2018, Thomas approached a parked vehicle occupied by two people on Chestnut Street in Roselle Park, New Jersey. Thomas entered the vehicle and pointed a firearm at the two occupants while ordering them to exit the vehicle. After ordering the victims out of the vehicle, Thomas drove from the scene. Roselle Park Police in the area attempted to pursue Thomas as he fled the scene at a high rate of speed shortly before crashing.

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

U.S. Attorney Carpenito credited special agents of the ATF, under the direction of Special Agent in Charge Charlie J. Patterson in Newark; the Newark Police Department, under the direction of Public Safety Director Anthony F. Ambrose, the Union County Prosecutor’s Office, under the direction of Acting Prosecutor Lyndsay V. Ruotolo; the New Jersey State Police, under the direction of Col. Patrick J. Callahan; the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Theodore N. Stephens II; and the Roselle Park Police Department, under the direction of Chief Daniel J. McCaffery, with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorney Desiree Grace Latzer of the Organized Crime and Gangs Unit and Jamel Semper, Chief of the U.S. Attorney’s Office’s Violent Crimes Unit.

Defense counsel: Chester Keller Esq., Assistant Federal Public Defender (Newark)

TRENTON, N.J. – An associate of the DeCavalcante crime family today admitted possessing cocaine with the intent to distribute and possessing a firearm during the course of a drug crime, U.S. Attorney Craig Carpenito announced.

Mario Galli III, 28, of Toms River, New Jersey, pleaded guilty before Judge Anne E. Thompson in Trenton federal court to an information charging him with one count of possession with intent to distribute cocaine and one count of possession of a FEG 9mm Model PGK-9HP gun, loaded with 12 rounds of ammunition, by a convicted felon in furtherance of a drug trafficking crime.

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

Between Sept. 19 and Sept. 20, 2019, investigators from the Ocean County Prosecutor’s Office executed search warrants on Galli’s residence and the residence of a conspirator. They recovered between400 and 500 grams of cocaine. The search of Galli’s residence also recovered a FEG 9mm Model PGK-9HP gun loaded with 12 rounds of ammunition. At the time, Galli was on supervised release from a 2016 federal conviction for conspiracy to distribute in excess of 500 grams of cocaine. He served 30 months in federal prison on that charge.

The charge of possession of cocaine with intent to distribute carries a maximum penalty of 20 years in prison and a $1 million fine. The count of being a felon being in possession of a firearm during a drug crime carries a penalty of five years in prison which must be served consecutively to the penalty for the drug crime, and a $250,000 fine. Sentencing is scheduled for July 7, 2020.

U.S. Attorney Carpenito credited the members of the FBI’s Organized Crime Task Force under the direction of Special Agent in Charge Gregory W. Ehrie in Newark; and investigators from the Ocean County Prosecutor’s Office, under the direction of Prosecutor Bradley D. Billhimer, with the investigation leading to today’s guilty plea.

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

Defense counsel: James Butler Esq.

NEWARK, N.J. – An Essex County, New Jersey, father and son have been sentenced to prison for their roles in exchanging $3.49 million in Supplemental Nutrition Assistance Program (SNAP) benefits for cash, U.S. Attorney Craig Carpenito announced today.

Jose Perdomo, 35, of Newark, was sentenced today to 15 months of home detention and five years of probation. He previously pleaded guilty before U.S. District Judge Esther Salas to an information charging him with one count of SNAP fraud and one count of engaging in monetary transactions in property derived from specified unlawful activity.

His father, Juan Perdomo, 60, of Newark, was sentenced March 3, 2020, to 38 months in prison. He previously pleaded guilty to an information charging him with one count of SNAP fraud, one count of engaging in monetary transactions in property derived from SNAP fraud, and one count of aiding in the preparation of a materially false tax return. Judge Salas imposed the sentences in Newark federal court.

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

From October 2015 to September 2018, Juan Perdomo ran M&R Supermarket, a business that was authorized to accept benefits provided by SNAP, formerly known as the Food Stamp program. SNAP is administered by the U.S. Department of Agriculture. Retail food stores approved for participation may sell food in exchange for SNAP benefits, but may not exchange SNAP benefits for cash.

Every SNAP recipient receives an Electronic Benefit Transfer (EBT) card, similar to a debit card, to use to make purchases. Every retailer authorized to accept SNAP benefits has an EBT terminal. Food purchases are made by swiping the card at the terminal. After the customer enters 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.

Law enforcement agents verified the fraudulent exchange of SNAP benefits for cash through the use of an undercover law enforcement agent who engaged in 11 “purchases” at M&R Supermarket, where Juan and Jose Perdomo exchanged money for SNAP benefits.

The bank account of M&R Supermarket showed numerous cash withdrawals in excess of $10,000 by Juan Perdomo as well as several cashed checks in excess of $10,000 by Jose Perdomo.

Jose and Juan Perdomo were each ordered to pay $4.8 million in restitution to the U.S. Department of Agriculture; Juan Perdomo was ordered to pay $400,099 in restitution to the IRS and was also sentenced to three years of supervised release.

U.S. Attorney Carpenito credited special agents of the U.S. Department of Agriculture – Office of Inspector General, under the direction of Special Agent in Charge Bethanne M. Dinkins, special agents of the U.S. Department of Homeland Security, Homeland Security Investigations (HSI), under the direction of Special Agent in Charge Brian A. Michael, and IRS - Criminal Investigation, under the direction of Special Agent in Charge John R. Tafur, with the investigation leading to the sentencings.

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

Defense counsel: Juan Perdomo: Brooke Barnett Esq., Newark
Jose Perdomo: John P. McGovern Esq., Newark

NEWARK, N.J. – A Hudson County, New Jersey, woman was arrested today for allegedly embezzling hundreds of thousands of dollars from a non-profit corporation dedicated to providing affordable housing to residents of Englewood, New Jersey, U.S. Attorney Craig Carpenito announced.

Yezenia Castillo, 44, of Hoboken, New Jersey, is charged by complaint with four counts of wire fraud. She is scheduled to appear this afternoon before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court.

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

From May 2015 to August 2016 Castillo used her position as the accountant for the non-profit company to issue unauthorized checks made payable to herself or entities she controlled. She forged the signature of the president of the company’s board of directors on those checks, representing to the company that the payments were for legitimate business expenses, including tax payments to be made on behalf of the company. A review of bank records during this period did not identify tax payments made by Castillo to the IRS or the State of New Jersey on behalf of the company.

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

U.S. Attorney Carpenito credited special agents of the U.S. Department of Housing and Urban Development, Office of the Inspector General, under the direction of Special Agent in Charge Christina Scaringi, 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 charges.

The government is represented by Assistant U.S. Attorneys Vijay Dewan and Sammi Malek of the U.S. Attorney’s Office Economic Crimes Unit.

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 California man today admitted shipping approximately 30 pounds of crystal methamphetamine and conspiring to send an additional five kilograms of fentanyl into New Jersey, U.S. Attorney Craig Carpenito announced.

Isabel Otanez-Sanchez, 26, of San Jacinto, California, pleaded guilty before U.S. District Judge Noel Hillman in Camden federal court to an information charging him with one count of conspiracy to possess with intent to distribute 500 grams or more of methamphetamine and a quantity of fentanyl. 

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

In September 2018, law enforcement officers received information that an individual known as “Pancho,” later identified as Otanez-Sanchez, was shipping large quantities of narcotics to New Jersey from California. On Jan. 28, 2019, Sanchez agreed to send 30 pounds of methamphetamine to a law enforcement confidential source (CS) in Atlantic City, New Jersey.  Otanez-Sanchez, along with conspirator Jesus Zavala-Torres, hid 28 packages of methamphetamine inside a salvaged vehicle that was shipped to New Jersey from California. Agents recovered the 28 packages, totaling approximately 30 pounds, from the car’s gas tank. On Feb. 12, 2019, the CS met with Sanchez and Torres in Riverside, California. At this meeting, Otanez-Sanchez and Torres also agreed to sell an additional five kilograms of fentanyl that would be shipped to the CS in New Jersey in the same manner as the methamphetamine. Following this meeting, Otanez-Sanchez and Torres were arrested by law enforcement and the fentanyl they intended to ship to New Jersey was recovered. Zavala-Torres previously pleaded guilty to his role in the conspiracy.

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

U.S. Attorney Carpenito credited special agents of the Department of Homeland Security, Homeland Security Investigations (HSI), Cherry Hill, under the direction of Special Agent in Charge Brian Michael in Newark, with the investigation leading to today’s guilty plea.  He also thanked HSI in Riverside, California; the New Jersey State Police; the Hemet, California, Police Department; and the Atlantic City Task Force for their assistance.

The government is represented by Special Assistant U.S. Attorney Meriah Russell of the U.S. Attorney's Office Criminal Division in Camden.

NEWARK, N.J. – A Union County, New Jersey, man was arrested today by federal agents on charges of mortgage fraud and scheming to defraud the Orange Public Library, U.S. Attorney Craig Carpenito announced.

Shenandoah Adams Sr., a/k/a “Shane Adams Sr.,” 54, of New Providence, New Jersey, is charged by indictment with six counts of wire fraud and two counts of making false statements in connection with a mortgage loan. He is scheduled to appear this afternoon before U.S. Magistrate Judge Leda Dunn Wettre in Newark federal court.

According to the indictment:

Adams was a principal of Adams Property Management and Investment Group Limited Liability Company (Adams Property Management), which purchased property on Hilton Street in East Orange, New Jersey, in 2014. The following year, Adams arranged for a close associate (Individual 1) to obtain a $153,562 loan from a mortgage lender to purchase the Hilton Street property from Adams Property Management. Adams knew that Individual 1 did not have the money to pay the balance of the purchase price of $225,000. At the closing on March 25, 2015, Adams directed Individual 1 to issue a fraudulent check in the amount of $90,280.47 (the balance of the purchase price) to give the false impression that Individual 1 had paid the closing balance. Adams reassured Individual 1 that Adams would not negotiate the check. Adams signed a settlement statement, falsely certifying that Individual 1 paid the closing balance and that the settlement statement was a true and accurate statement of all receipts and disbursements made in connection with the sale of the Hilton Street property, when Adams knew that Individual 1’s check was fraudulent. Adams used Individual 1’s loan proceeds to pay off Adams Property Management’s $100,000 mortgage loan to purchase the Hilton Street Property and to obtain a $26,335.30 check for Adams Property Management.

Although Adams reassured Individual 1 that Adams would fund Individual 1’s mortgage payments, by May 2016 Individual 1’s mortgage payments on the Hilton Street property were substantially in arrears. Adams arranged for Individual 1 to sell the property to another associate for a price of $255,000. The closing on that sale commenced on May 31, 2016; the total amount to pay off Individual 1’s mortgage was $210,565.34. On June 1, 2016, Adams and Individual 1 had a telephone conversation with an out-of-state representative of the mortgage servicer for Individual 1’s lender, during which Adams made false and fraudulent statements to induce the lender to reduce the payoff amount. The lender agreed to reduce Individual 1’s payoff amount to $190,000. At Adams’s direction, Individual 1 cashed the check for the amount of the reduction, $20,665.34, and delivered the cash proceeds to Adams.

Adams also was a principal of VH Electrical and Plumbing Limited Liability Company (VH). On March 11, 2015, Adams, on behalf of VH, entered into a contract with the Orange Public Library to replace the library’s HVAC/Chiller unit for a price of $49,000. The project was funded by a U.S. Department of Housing and Urban Development (HUD) Community Development Block Grant to the library and Orange.

Before getting the contract with the library, Adams sent the library’s executive director, Timur Davis, two fake quotes purportedly from two vendors to give the false impression that VH would replace the library’s chiller for less than those other vendors. After VH had been hired, Adams sent Davis records to give the false impression that Adams was taking steps to order a replacement chiller. Adams received $40,000 from the library, but did not replace the chiller. Davis pleaded guilty on Feb.13, 2020 to making false statements to HUD in connection with the project.

The charges of wire fraud carry a maximum potential penalty of 20 years in prison and a maximum $250,000 fine. The charges of making false statements in connection with a mortgage application carries a maximum potential penalty of 30 years in prison and a maximum potential fine of $1 million.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark; special agents of the U.S. Department of Housing and Urban Development, Office of Inspector General, under the direction of Special Agent in Charge Christina Scaringi; and special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge John R. Tafur, with the investigation leading to today’s arrest.

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

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

Defense counsel: TBD

NEWARK, N.J. – A federal grand jury today charged a sergeant with the Paterson Police Department with conspiring with other officers to violate individuals’ civil rights, and submitting a false police report to conceal their illegal activity, U.S. Attorney Craig Carpenito announced.

Sergeant Michael Cheff, 49, of Paterson, New Jersey, was charged in a two-count indictment with conspiring to deprive individuals of civil rights under color of law and with falsifying a police report. Cheff was previously charged by criminal complaint in January 2020. He will be arraigned in federal court on a date to be determined.

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

Eudy Ramos, Daniel Pent, Jonathan Bustios, Matthew Torres, and Frank Toledo were police officers with the Paterson Police Department. Cheff supervised their activities and approved their reports and other paperwork related to arrests and seizures of money, narcotics, and firearms. Ramos, Pent, Bustios, Torres, and Toledo, while on official duty, violated the civil rights of individuals in Paterson. They stopped and searched motor vehicles without any justification and stole cash and other items from the occupants. They also illegally stopped and searched individuals in buildings or on the streets of Paterson and seized cash from them. They concealed their activities by submitting to Cheff false reports that omitted, or lied about, their illegal activities. Cheff signed off on those false police reports, and routinely received a portion of these stolen monies from some of these officers. In 2016, Cheff told one of the officers to start “tagging,” or logging into evidence, some of the money that the officer was stealing, because effecting narcotics arrests without logging money into evidence would otherwise raise questions.

On Nov. 14, 2017, Cheff joined Bustios, Ramos, and Torres in stealing cash from an apartment in Paterson. Bustios, Ramos, and Torres stopped and arrested an individual in Paterson. Bustios stole a few hundred dollars from the individual during the arrest, then the officers went to the individual’s apartment, and were joined by Cheff. Torres stayed behind to guard the arrested individual, who was handcuffed in a police car, while Cheff, Ramos, and Bustios obtained consent to search the apartment by lying to the individual’s mother.

Cheff, Ramos, and Bustios then searched the individual’s room. Cheff located a safe inside a closet in the room and took money and narcotics from the safe. He handed a small portion of the money to Bustios and told Bustios to log it into evidence. Cheff put the rest of the money in his pocket. After the search, in a bathroom at the Paterson police station, Cheff gave Torres and Ramos a portion of the stolen money. Cheff also approved a police report that falsely stated that the officers had recovered $319 from on top of a shelf in the individual’s room.

Later that day, Bustios and Toledo exchanged text messages discussing Cheff’s theft of money. Bustios said, among other things, that Cheff “got us for over a stack today,” that “there was a safe” and that Cheff “grabbed the cash.” According to the individual whose apartment was searched, the safe contained approximately $2,700, and all of it was missing after the search was completed.

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

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 indictment. He also thanked the Passaic County Prosecutor’s Office, under the direction of Prosecutor Camelia M. Valdes, the Paterson Police Department, under the direction of Paterson Police Director Jerry Speziale and Paterson Police Chief Ibrahim “Mike” Baycora, and the Paterson Police Department Office of Internal Affairs for their assistance in the investigation.

The government is represented by Assistant U.S. Attorney Rahul Agarwal, Deputy Chief of the Criminal Division, and Assistant U.S. Attorney Lee M. Cortes Jr., Chief of the Health Care Fraud Unit.

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

Defense counsel: John Lynch Esq., Union City

TRENTON, N.J. – The former co-owner of a Union City, New Jersey, pharmacy today admitted his role in a scheme to pay bribes to health care professionals and evading taxes on $33.9 million in income, U.S. Attorney Craig Carpenito announced.

Igor Fleyshmakher, 58, of Holmdel, New Jersey, pleaded guilty before U.S. District Judge Michael A. Shipp in Trenton federal court to an information charging him with conspiring to violate the federal anti-kickback statute and tax evasion.

The information alleges that he conspired to violate the anti-kickback statute with seven other individuals, including the following individuals who have been previously charged by superseding indictment or information: Samuel “Sam” Khaimov of Glen Head, New York; Ruben Sevumyants of Marlboro, New Jersey; Alex Fleyshmakher of Morganville, New Jersey; and Eduard “Eddy” Shtindler of Paramus, New Jersey. Shtindler has previously pleaded guilty for his role in a related kickback conspiracy and is pending sentencing.

“Kickback schemes like this not only illegally enrich defendants like Fleyshmakher, they take needed resources from our health care system,” U.S. Attorney Carpenito said. “And after stealing millions of dollars in this way, the defendant stole again, by failing to report this income or pay taxes on it. His guilty plea today will make sure he is held to account for his crimes.”

“This fraudster was part of a kickback scheme that not only tilted the scales toward Prime Aid Pharmacies, but diverted precious federal dollars so he could enrich himself while ripping off the government,” FBI-Newark Special Agent in Charge Gregory W. Ehrie said. “If you are an investor or medical professional participating in a fraud scheme for an ill-gotten gain, you should ask yourself if it's worth the price you will pay. The FBI is searching for schemes like this and if you participate, you will be caught.”

“Bribing doctors to line your own pockets and using secret accounts to evade taxes are both very serious offenses motivated by one thing: greed,” John R. Tafur, Special Agent in Charge, IRS Criminal Investigation, Newark Field Office, said. “Today’s guilty plea should send a strong deterrent message to anyone else thinking about participating in this type of illegal activity. If you decide to roll the dice, IRS Criminal Investigation along with our law enforcement partners will find you.”

“Fleyshmakher, with his previously indicted co-conspirators, bribed doctors to illegally increase profits and enrich themselves,” Scott J. Lampert, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services, said. “Working with our state and federal law enforcement partners, we will continue to hold accountable anyone who attempts to defraud government healthcare insurance programs.”

According to documents filed in this case:

The Prime Aid Pharmacies – now closed – operated as “specialty pharmacies” out of locations in Union City, New Jersey, and Bronx, New York. They processed expensive medications used to treat various conditions, including Hepatitis C, Crohn’s disease, and rheumatoid arthritis. Igor Fleyshmakher was a co-owner of Prime Aid Union City. Khaimov was the other co-owner of Prime Aid Union City and the lead pharmacist of Prime Aid Bronx. Sevumyants was Prime Aid Union City’s operations manager, and Alex Fleyshmakher worked at Prime Aid Union City and was an owner of Prime Aid Bronx. Shtindler was a Prime Aid Union City employee.

Staring in 2010, in order to obtain a higher volume of prescriptions, Igor Fleyshmakher, Khaimov, Sevumyants, Alex Fleyshmakher, Shtindler, and other Prime Aid employees paid bribes to doctors and doctors’ employees to induce doctors’ office to steer prescriptions to the Prime Aid Pharmacies. The bribes included expensive meals, designer bags, and payments by cash, check, and wire transfers. The bribes and kickbacks were paid to, among others, doctors and doctors’ employees in New Jersey and New York.

As part of his plea agreement, Igor Fleyshmakher agreed that the improper benefit conferred as part of the conspiracy to violate the federal anti-kickback statute was between $3.5 million and $9.5 million.

In addition, between 2012 and 2014, Igor Fleyshmakher diverted a substantial amount of Prime Aid Union City income into a secret bank account that he opened and controlled. He concealed the account from the pharmacy’s tax preparers and did not report any of the funds he deposited into it on his personal income tax returns. In total, he diverted $33.9 million of income into the secret account, all of which he failed to report to the IRS. As a co-owner of the pharmacy, his conduct resulted in a $5.8 million tax loss to the IRS on his share of that income for tax years 2012 through 2014.

The conspiracy and tax evasion charges to which Igor Fleyshmakher pleaded guilty each carry a maximum penalty of five years in prison and a fine of up to $250,000. Sentencing is scheduled for June 22, 2020.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark; special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge John R. Tafur; special agents of the Department of Health and Human Services-Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert; and the N.J. Office of the State Comptroller, under the direction of Comptroller Kevin Walsh, with the ongoing 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 of the U.S. Attorney’s Office in Newark.

The charges against and allegations in the information pertaining to Khaimov, Sevumyants, and Alex Fleyshmakher are merely accusations, and those three defendants are presumed innocent unless and until proven guilty.

Defense counsel: Eric M. Creizman Esq. and Melisa Madrigal Esq., New York

TRENTON, N.J. – An Ocean County, New Jersey, man was arrested this morning on charges that he induced a minor to send him sexually explicit pictures and to engage in sexually explicit conduct over an online messaging service, U.S. Attorney Craig Carpenito announced.

Kevin Van Pelt, 29, of Lakehurst, New Jersey, is charged by complaint with one count of online enticement of a minor to engage in criminal sexual conduct and one count of possession of child pornography. Van Pelt appeared this afternoon before U.S. Magistrate Judge Lois H. Goodman in Trenton federal court and was released on $100,000 unsecured appearance bond.

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

From August 2018 to October 2018, Van Pelt used multiple online messaging services to communicate with a minor victim, including repeatedly requesting that the minor send him sexually explicit images. Van Pelt also had images of child sexual abuse on his cellular phone when he was arrested by local authorities on May 1, 2019.

The charge of online enticement carries a mandatory minimum sentence of 10 years in prison, a maximum potential penalty of life in prison, and a $250,000 fine. The charge of possession of child pornography carries a maximum potential penalty of 10 years in prison and a $250,000 fine.

U.S. Attorney Carpenito credited members of the FBI Child Exploitation Human Trafficking Task Force, under the direction of FBI Special Agent in Charge Gregory W. Ehrie in Newark; members of the Gloucester County Prosecutor’s Office, under the direction of Prosecutor Charles A. Fiore; and members of the Woolwich Township Police Department, under the direction of Chief Richard Jaramillo, with the investigation leading to today’s arrest.

The government is represented by Assistant U.S. Attorney Elisa T. Wiygul of the U.S. Attorney’s Office Criminal Division in Trenton.

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

NEWARK, N.J. – A Bronx, New York, man today admitted engaging in fraudulent activity that exposed victims to more than $1.5 million in losses, U.S. Attorney Craig Carpenito announced.

Joshua Suarez, 33, pleaded guilty before U.S. District Judge Kevin McNulty in Newark federal court to an information charging him with conspiring to commit wire fraud.

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

Suarez was a member of a conspiracy to fraudulently obtain money, including by impersonating account holders and obtaining money from their accounts. He recruited and paid individuals to open bank accounts. A member of the conspiracy then caused money to be deposited into the accounts, money that often had been fraudulently obtained by impersonating victims and transferring money out of their financial accounts. Suarez and others then caused money to be withdrawn from the bank accounts. The conspiracy exposed victims to losses of more than $1.5 million.

The conspiracy to commit wire fraud charge carries a maximum potential penalty of 20 years in prison and $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for June 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, and the U.S. Department of Labor, Office of Inspector General, under the direction of Special Agent in Charge Michael C. Mikulka in New York, with the investigation leading to today’s guilty plea.

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

Defense counsel: Dennis Cleary Esq., West Orange, New Jersey

NEWARK, N.J. – Eleven people were charged today for their roles as members and associates of a drug trafficking organization involved in the distribution of narcotics, including heroin, fentanyl, and cocaine base (crack) in the Stephen Crane Village Housing Complex in Newark, U.S. Attorney Craig Carpenito announced.

One defendant is also charged with the murder of a conspirator in an apartment in Crane Village.

The charges and arrests resulted from an investigation led by the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives and the U.S. Attorney’s Office and in conjunction with numerous local law enforcement partners and the U.S. Drug Enforcement Administration.

“The criminal complaint against these defendants details a brazen drug dealing operation going on right out in the open that used violence to accomplish its goals,” Carpenito said. “Thanks to the combined work of our federal, state, and local partners, we have been able to address a substantial threat to the public.”

“Tonight, residents of the Stephen Crane Village Apartments, and the Cities of Newark and Belleville, can rest a little easier,” ATF Special Agent in Charge Charlie J. Patterson said. “Through the relentless efforts of our ATF Newark personnel, along with the unmatched dedication of our partner agencies, we have collectively removed the worst of the worst from our community. These individuals worked in tandem as a hybrid gang, whose community spoilage included drug distribution, and murder. Their ruthless grip on the community has been broken thanks to law enforcement cooperation, and a common mission to remove the most dangerous offenders responsible for violent crime from the community.

“Belleville Police are committed to reducing violent crimes that directly have an impact on our residents,” Belleville Police Chief Mark Minichini said. “Today’s arrests sends a clear concise message that local, county, and state resources will work together to combat these types of crimes thereby making our community safer.”

“No one should have to live in fear in their homes or community,” Special Agent in Charge of the Drug Enforcement Administration’s New Jersey Division, Susan A. Gibson said. “The defendants in this investigation were using Crane Village as their own personal drug market putting every resident at risk. This multi-agency investigation reinforces our commitment to the safety of the public.”

“Once again, collaboration brings results to a community that has been held hostage by a few people,” Newark Public Safety Director Anthony F. Ambrose said. “Our support to our federal partners for making another Newark community ridden of criminals.”

The complaint charges Gary Shahid, 60; Jose Lora, 22; Dayquan Jordan, 25; Ricky Terrell, 23; Charles Mells, 36; Raquan Rawls, 21; Nasir Williams, 23; Quadir Hatcher, 27; Tyree Purkett, 23; James Wicker, 27; and Mayse, 33 – all Newark residents – in one conspiracy spanning February 2019 to February 2020 and involving the distribution of heroin, fentanyl, and cocaine base in and around Crane Village. Jordan, Rawls, Williams, Hatcher, and Mayse, are additionally charged with distribution of cocaine base and heroin on Nov. 21, 2019. Mayse is additionally charged with murder during and in relation to a drug trafficking offense.

Seven defendants were arrested today and two – Mayse and Mells – were already in state custody. Two defendants – Rawls and Purkett – remain at large. Those arrested today are scheduled to have their initial appearances this afternoon before U.S. Magistrate Michael A. Hammer in Newark federal court.

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

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

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

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

The count of conspiracy to distribute at least 28 grams of cocaine base and a quantity of heroin and fentanyl carries a minimum penalty of five years in prison, maximum penalty of 40 years in prison, and a fine of at least $5 million. The count of distribution of a quantity of heroin and cocaine base carries a maximum of 20 years in prison and a fine of $1 million. The count of murder during and in relation to a drug trafficking crime is eligible for the death penalty, or a maximum sentence of life in prison, and a $250,000 fine.

U.S. Attorney Carpenito credited special agents and task force officers with the ATF, Newark Division, under the direction of Special Agent in Charge Patterson; the Belleville Police Department, under the direction of Chief Minichini; special agents and task force officers of the DEA, under the direction of Special Agent in Charge Gibson in Newark; the Newark Police Department, under the direction of Director Ambrose; the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Theodore N. Stephens II; and the Essex County Sheriff’s Office, under the direction of Sheriff Armando B. Fontoura. He also thanked the U.S. Marshals Service, the Nutley Police Department, the Bloomfield Police Department, the West Orange Police Department, the Verona Police Department, the Orange Police Department and the Bergen County Sheriff’s Office for their assistance with this case.

This investigation is part of the Newark Violent Crime Initiative (VCI), where the U.S. Attorney’s Office has partnered with state, federal, county, and local law enforcement to investigate crime in Newark and the surrounding cities.

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

The government is represented by Assistant U.S. Attorney Tracey Agnew of the Organized Crime and Gangs Unit of the U.S. Attorney’s Office’s Criminal Division in Newark.

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

Defense counsel: Shahid: Peter Carter Esq., Newark
Jordan: Stacy Biancamano Esq., Cranford, New Jersey
Terrell: Ernesto Cerimele Esq., Newark
Williams: John McGovern Esq., Newark
Hatcher: Kevin Buchan Esq., Roseland, New Jersey
Wicker: Julian Wilsey Esq., Livingston, New Jersey
Mayse: Richard Verde Esq., Caldwell, New Jersey
Lora: Laurie Fierro Esq., Kinnelon, New Jersey

NEWARK, N.J. – A former Newark police officer was found guilty by a federal jury today of conspiring to defraud the Newark Watershed Conservation and Development Corporation (NWCDC) and giving kickbacks to its former executive director, U.S. Attorney Craig Carpenito announced.

Janell Robinson, 42, of Newark, was found guilty of one count of conspiracy to defraud the NWCDC facilitated by use of mails and wire transmissions, two counts of mail fraud, and one count of conspiracy to commit extortion under color of official right affecting interstate commerce following a 10-day trial before U.S. District Judge Susan D. Wigenton.

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

Between March 2010 and May 2013, while Robinson was a Newark police officer, she controlled Protected and Secured Services LLC (P&S), a company that purported to provide security consulting services to its only client, the NWCDC. Robinson conspired with Linda Watkins Brashear of West Orange, New Jersey, the former executive director of the NWCDC, to pay Brashear a stream of concealed and undisclosed kickbacks from the proceeds that P&S received from the NWCDC. In exchange for Brashear’s assistance in securing P&S a contract with the NWCDC and approving completely fraudulent or inflated invoices that Robinson submitted, Robinson paid Brashear cash kickbacks from the proceeds of the fraud.

In total, the NWCDC paid P&S approximately $289,000 during the scheme, approximately $50,000 of which was used by Robinson to pay Brashear kickbacks.   

The wire and mail fraud conspiracy, mail fraud, and conspiracy to commit extortion under color of official right charges each carry a maximum potential penalty of 20 years in prison and a $250,000 fine. Sentencing is set for June 8, 2020.

Brashear pleaded guilty to her role in the scheme and was sentenced Sept. 21, 2017, to 102 months in prison.

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

The government is represented by Senior Trial Counsel Leslie F. Schwartz and Assistant U.S. Attorney Jacques S. Pierre of the U.S. Attorney’s Office Special Prosecutions Division.

NEWARK, N.J. – A Bergen County doctor today admitted distributing opioids without a legitimate medical reason and falsifying medical records to cover it up, U.S. Attorney Craig Carpenito announced.

Robert Delagente, 45, of Oakland, New Jersey, pleaded guilty before U.S. District Judge Claire C. Cecchi in Newark federal court to an indictment charging him with one count of conspiracy to distribute controlled dangerous substances, three counts of distribution of controlled dangerous substances, and one count of falsifying medical records.

“This defendant knowingly prescribed for his patients some of the most dangerous and addictive drugs available, sometimes with no more contact than a text message from the patient,” U.S. Attorney Carpenito said. “Many of these patients were dealing with pain and addiction, and instead of getting help from their doctor, they were drawn deeper into the cycle of drug abuse. His admission of guilt today ensures that he will be appropriately punished for this behavior.”

“Dr. Delagente sold his ethics, his medical license, and his moral compass,” FBI-Newark Special Agent in Charge Gregory W. Ehrie said. “There is no magic elixir for the pain caused by pill mill doctors. The cure is public awareness, victims who come forward and a determined fleet of FBI investigators who will arrest these unscrupulous practitioners when they run afoul of the law.”

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

Beginning in May 2014, Delagente was a doctor at a medical practice called North Jersey Family Medicine (NJFM) in Oakland, New Jersey. He allegedly described himself in conversations pertaining to his prescribing of painkillers as the “Candy Man” and the “El Chapo of Opioids.” Delagente knowingly prescribed controlled substances, such as oxycodone, Percocet, Tylenol with codeine, and various benzodiazepines (alprazolam, diazepam, clonazepam, and temazepam), outside the ordinary course of professional practice and without a legitimate medical purpose. He ignored the inherent danger and medical risk of overdose, drug abuse, and death that can accompany prescriptions of highly addictive opioids, benzodiazepines, and muscle relaxers, both on their own and in combination with one another.

Delagente prescribed controlled substances without ever seeing the purported patient for a medical visit or even discussing with the patient the medical need for the prescription. He allowed patients to ask him for controlled substances via text message and would write a prescription for patients that he would leave at the front desk, without requiring an office visit or consultation of any kind. He allowed patients to dictate the strength and dosage of the controlled substances he prescribed for them. Delagente also prescribed the dangerous drug combination known as the “Holy Trinity,” comprised of opioids (usually oxycodone), benzodiazepines (usually alprazolam) and muscle relaxers (usually carisoprodol).

Delagente failed to monitor patients for addiction and ignored drug screening tests to determine whether certain patients were taking illicit drugs. In fact, Delagente prescribed controlled substances to patients he knew were addicted to opioids or other controlled substances. In one instance, an NJFM employee texted Delagente that a patient had gotten a babysitter and driven a long distance to get to the practice, but had been unable to see a doctor. Delagente responded: “Oh well … C’est la vie! Lol … He can wait for his oral heroin another day. Lol.”

One patient texted Delagente that the patient “probably can’t stop the pk’s,” referring to painkillers. The patient told Delagente that the patient “would need a plan to stop…not cold turkey.” A few days later, when the patient was having trouble obtaining pain medication, the patient wrote to Delagente that “If I go 4 days without [painkillers] I am in huge trouble.” In response, Delagente wrote “I will leave you a short supply RX [prescription] at the front to pick up.” Delagente then wrote the patient a prescription for 120 tablets of 30-milligram oxycodone for 30 days. Delagente at one point told this patient: “I’m literally sticking my neck out and can lose my medical license or [be] arrested for what I just did.”

Delagente also was charged with altering medical records of patients who received controlled substance prescriptions from him after law enforcement officials had subpoenaed the records in late April 2019.

Delagente faces a maximum penalty of 20 years in prison and a $1 million fine on each of the distribution of controlled dangerous substances charges. Delagente faces a maximum penalty of 20 years in prison and a $250,000 fine on the charge of falsifying medical records. Sentencing for Delagente is scheduled for June 10, 2020.

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

The government is represented by Assistant U.S. Attorneys Jason S. Gould of the Health Care Fraud Unit and Sean M. Sherman of the Opioids Unit in Newark.

 

NEWARK, N.J. – A Union County, New Jersey, man previously convicted of multiple felonies was found guilty in federal court of being a felon in possession of a firearm, U.S. Attorney Craig Carpenito announced today.

Jarrell L. Daniels, 29, of Elizabeth, New Jersey, was convicted after a two and a half-day trial before U.S. District Judge Kevin McNulty in Newark federal court of one count of being a felon in possession of a semi-automatic submachine gun with a high capacity magazine and multiple rounds of ammunition. The jury deliberated less than two hours before delivering the guilty verdict on Feb. 20, 2020.

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

On the morning of April 9, 2018, Daniels was walking down Irvington Avenue in Elizabeth, carrying a loaded .45 caliber Masterpiece Arms ACP submachine gun, with 30 additional rounds of ammunition in an extended magazine. Daniels was wearing a disguise, as well as latex gloves. He came upon his victim and opened fire, shooting at his victim 16 times, but none of the shots struck the victim. As he fled the scene, Daniels dropped his head covering and later stashed the gun and other items of clothing in a nearby trashcan. DNA on these items, as well as surveillance footage and ballistics evidence, ultimately enabled the authorities to identify Daniels as the shooter.

The count on which Daniels was convicted is punishable by a maximum of 10 years in prison and a fine of up to $250,000. Sentencing has not yet been scheduled.

U.S. Attorney Carpenito credited law enforcement officers of the Elizabeth Police Department, under the direction of Police Chief John Brennan, Jr.; the Union County Sheriff’s Office, under the direction of Sheriff Peter Corvelli; special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark; special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Charlie J. Patterson; and the Union County Prosecutor’s Office, under the direction of Acting Prosecutor Lyndsay V. Ruotolo, with the investigation leading to the guilty verdict.

The government was represented by Assistant U.S. Attorneys Vera Varshavsky and Sammi Malek of the Criminal Division of the U.S. Attorney’s Office in Newark.

Defense counsel: Peter Willis Esq. and Maximillian Novel Esq., Jersey City, New Jersey

NEWARK, N.J. – A federal grand jury has indicted a Paterson, New Jersey, man for distributing a quantity of heroin and fentanyl that led to the overdose death of a New Jersey resident, U.S. Attorney Craig Carpenito announced.

Wyzier Peterson, 22, was also charged with two additional sales of heroin and fentanyl, as well as with conspiring to distribute at least 40 grams of fentanyl and at least 100 grams of heroin. The defendant was previously charged by complaint.

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

Peterson and his conspirators are all members and associates of the 230 Boys street gang, which operates primarily around Rosa Parks Boulevard and Godwin Avenue in Paterson. Through numerous controlled purchases of narcotics, consensually recorded telephone calls and text messages, physical surveillance, and the analysis of telephone call detail records, law enforcement officers determined that from September 2018 through July 3, 2019, Peterson and his conspirators conspired to distribute narcotics, to include heroin and fentanyl.

The count of conspiracy to distribute at least 100 grams of heroin and 40 grams of fentanyl carries a maximum penalty of 40 years in prison and a fine of at least $5 million. The counts of distribution of heroin and fentanyl carry a maximum of 20 years in prison and a fine of $1 million. The count of distribution of heroin and fentanyl, which led to the death of another person, carries a maximum of life imprisonment.

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.

U.S. Attorney Carpenito credited special agents and task force officers with the Bureau of Alcohol, Tobacco, Firearms, and Explosives, Newark Division, under the direction of Special Agent in Charge Charlie J. Patterson; special agents of the Drug Enforcement Administration, under the direction of Special Agent in Charge Susan A. Gibson; officers of the New Jersey State Police, under the direction of Col. Patrick J. Callahan; officers of the Paterson Police Department, under the direction of Police Director Jerry Speziale; officers of the Jefferson Township Police Department, under the direction of Chief Sean Conrad; detectives of the Passaic County Prosecutor’s Office, under the direction of Camelia M. Valdes; and detectives of the Morris County Prosecutor’s Office, under the direction of Prosecutor Fredric Knapp; with the investigation leading to the charges.

The government is represented by Assistant U.S. Attorney Francesca Liquori, of the U.S. Attorney’s Office’s OCDETF/Narcotics Unit.

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

NEWARK, N.J. – A Freeport, New York, man today admitted participating in a conspiracy to carry out a $9 million scheme to use bogus information and simultaneous loan applications at multiple banks to fraudulently obtain home equity lines of credit, a scheme known as “shotgunning,” U.S. Attorney Craig Carpenito announced.

Yorce Yotagri, 53, pleaded guilty before U.S. District Judge John Michael Vazquez in Newark federal court to an indictment charging him with one count of conspiracy to commit bank fraud.

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

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

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

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

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

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

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

The overall scheme, which included HELOC loans for approximately 17 different properties, resulted in over $9 million in losses to the victim banks.
Yotagri faces a maximum potential penalty of 30 years in prison and a $1 million fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for June 25, 2020.

U.S. Attorney Carpenito credited special agents of the Federal Housing Finance Agency – Office of Inspector General (FHFA-OIG), under the direction of Special Agent in Charge Steven Perez in Newark; 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. Attorney Jason S. Gould of the U.S. Attorney’s Office Criminal Division in Newark and Special Assistant U.S. Attorney Kevin DiGregory of the FHFA-OIG.

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

Defense counsel: Randy Scott Zelin Esq., New York

TRENTON, N.J. – A Fort Lee, New Jersey, man was sentenced today to 72 months in prison for generating phony tax refunds using personal identifying information stolen from current and former members of the U.S. army, U.S. Attorney Craig Carpenito announced.

Shope Oluwo, 35, previously pleaded guilty before Chief U.S. District Judge Freda L. Wolfson to an indictment charging him with one count each of conspiracy to commit wire fraud, access device fraud, and aggravated identity theft. Chief Judge Wolfson imposed the sentence today in Trenton federal court.

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

From January through February 2016, Oluwo conspired with others, including Dermot Sutherland, 30, of Philadelphia, to obtain personal identifying information that was stolen from current or former members of the U.S. Army. Oluwo used that stolen information to create fake military identification cards and fraudulent W-2 forms bearing the victims’ names.

Oluwo provided the phony cards and W-2 forms to Sutherland, who posed as the victims and filed phony returns with a tax preparation company. Afterwards, Sutherland received debit cards from the tax preparation company that contained the ill-gotten refunds.

In addition to the prison term, Judge Wolfson sentenced Oluwo to three years of supervised release and ordered to pay $11,170 in restitution.

Sutherland previously pleaded guilty to his role and was sentenced in February 2019 to three years of probation.

U.S. Attorney Carpenito credited special agents of the U.S. Department of Defense, Defense Criminal Investigative Service, under the direction of Special Agent in Charge Leigh-Alistair Barzey; postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge James Buthorn; and special agents of IRS–Criminal Investigation, under the direction of Special Agent in Charge John R. Tafur in Newark, with the investigation leading to today’s sentencing.

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

Defense counsel: Patrick Brackley Esq., New York

TRENTON, N.J. – A Texas man today admitted conspiring to distribute one kilogram or more of heroin, 400 grams or more of fentanyl, and five grams or more of methamphetamine, U.S. Attorney Craig Carpenito announced.

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

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

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

The counts to which Macias Prieto 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 May 26, 2020.

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

CAMDEN, N.J. – A New Jersey man was arrested today for allegedly robbing a Camden barbershop and for possessing a firearm as a previously convicted felon, U.S. Attorney Craig Carpenito announced.

Benjamin Daye, 33, is charged by complaint with one count of Hobbs Act robbery and one count of unlawful possession of a firearm by a convicted felon. Daye is scheduled to appear this afternoon before U.S. Magistrate Judge Ann Marie Donio in Camden federal court.

“This case is prime example of the renewed focus on prosecuting gun crimes that was announced by the Department of Justice last fall,” U.S. Attorney Carpenito said. “We are working with our partners at Alcohol, Tobacco, Firearms and Explosives and local law enforcement to investigate gun crimes and bring offenders to justice swiftly. Today’s complaint describes a defendant who not only was prohibited from possessing a gun, but who allegedly was all too quick to use one in furtherance of a violent crime.”

“The arrest today and development of this investigation is a great example of collaboration at its best,” ATF Special Agent in Charge Charlie J. Patterson said. “ATF is proud to partner with the U.S. Attorney’s Office and the Camden County Police Department to stop the City’s most violent offenders, especially those who use firearms to commit senseless acts of crime. ATF will continue to be on the front line alongside our partners to ensure our communities remain safe places to live, work, and play.”

“Eliminating illegal firearms, and the carnage they create, in our community is my number priority,” Camden County Police Chief Joseph Wysocki said. “The violent crime tied to these guns has a destabilizing impact on our neighborhoods and residents. Furthermore, crimes committed with these weapons and the individuals that carry them will have our agency’s undivided attention. I want to thank all of our partners, local, state and federal, for their assistance in this arrest and forthcoming prosecution.”

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

On Nov. 23, 2019, Daye entered a barbershop in Camden armed with a loaded handgun. He grabbed a juvenile customer, pointed the gun at the customer’s head, and demanded cash and belongings from employees and customers. Daye was apprehended shortly thereafter next to a bag containing the handgun and the stolen items. Daye previously was convicted of three crimes, each punishable by imprisonment for a term exceeding one year.

The Hobbs Act charge carries a maximum potential penalty of 20 years in prison and a $250,000 fine. The charge of being a felon in possession of a firearm 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. For more information about Project Guardian, please see https://www.justice.gov/projectguardian

U.S. Attorney Carpenito credited special agents of the ATF, under the direction of Special Agent in Charge Patterson; the Camden County Police Department, under the direction of Chief Wysocki; and the Camden County Prosecutor’s Office, under the direction of Acting Prosecutor Jill S. Mayer, with the investigation leading to today’s charges. This investigation was a joint efforts of the ATF Camden Field Office and the Camden County Police Department (CCPD) Shooting Response Team (SRT). ATF and CCPD have formulated a partnership composed of special agents, detectives, and intelligence analysts that investigate shooting incidents in real time.

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

NEWARK, N.J. – A New Jersey man who allegedly lured commercial sex workers to travel from out of state to engage in prostitution and other sexual acts by use of force, violence and threats in and around Middlesex County, New Jersey, will appear in court today, U.S. Attorney Craig Carpenito announced.

Jose Torres, 42, is charged by complaint with two counts of coercion and enticement. The defendant is scheduled to appear this afternoon before U.S. Magistrate Judge M. Page Kelly in Boston federal court. Torres was arrested on Feb. 14, 2020, in Boston.

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

From May 2015 to October 2019, Torres persuaded, induced and enticed commercial sex workers to travel from various out of state locations, including Canada and New York, in order to engage in prostitution. Torres lured commercial sex workers to New Jersey with promises of large payments. When the commercial sex workers asked for payment, Torres became aggressive, often assaulting and raping them. Torres never paid the sex workers.

The coercion and enticement charges each carries a maximum term of 20 years’ imprisonment and a potential $250,000 fine.

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

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

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark; special agents of the U.S. Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Brian Michael; the Middlesex County, New Jersey, Prosecutor’s Office, under the direction of Acting Prosecutor Christopher L. C. Kuberiet; and the Peabody, Massachusetts, Police Department, under the direction of Chief Thomas Griffin, with the investigation leading to the charges.

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

TRENTON, N.J. – A Monroe County, Pennsylvania, man today admitted that he conspired to distribute more than one kilogram of heroin as part of a conspiracy responsible for distributing significant quantities of heroin and cocaine in and around the Bayshore area of Monmouth and Middlesex counties, U.S. Attorney Craig Carpenito announced.

Guy Jackson, 47, of Effort, Pennsylvania, pleaded guilty before U.S. District Judge Brian R. Martinotti in Trenton federal court to an information charging him with one count of conspiracy to distribute and possess with intent to distribute one kilogram or more of heroin. Jackson also admitted to conspiring to distribute and possess with intent to distribute a quantity of cocaine.

Also today, Jackson’s wife, Lashawn Mealing, 48, of Manchester, New Jersey, (formerly of Effort, Pennsylvania), pleaded guilty before Judge Martinotti to an information charging her with one count of obstructing and attempting to obstruct justice with respect to the charges against Jackson and others, while Mealing was herself on federal pretrial release in the present case.

In November 2018, Jackson, Mealing, and 13 others were charged in a federal criminal complaint with conspiracy to distribute heroin and cocaine. Mealing and Jackson are the 10th and 11th defendants to plead guilty. Defendant Deberal Rogers has been indicted.

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

From May 2017 to November 2018, the defendants and others engaged in a narcotics conspiracy that operated in the Raritan Bayshore region. Through the interception of telephone calls and text messages pursuant to court-authorized wiretap orders, controlled purchases of heroin and cocaine, the use of confidential sources of information, and other investigative techniques, law enforcement learned that Jackson regularly obtained large quantities of heroin and cocaine for further distribution from co-defendant Gregory Gillens. The complaint alleged that Mealing also engaged in the conspiracy to distribute these narcotics. Gillens previously pleaded guilty to his role in the conspiracy and is scheduled to be sentenced on June 2, 2020.

Members of the conspiracy sold the narcotics to other conspirators, distributors, sub-dealers, and end-users. Some of the heroin distributed by the conspiracy contained fentanyl, a dangerous synthetic opioid.

Following the filing of the complaint in November 2018, Mealing obstructed justice and attempted to do so by orchestrating, at Jackson’s request, the break-in of a rental vehicle that had been used as part of the narcotics trafficking conspiracy and the removal of evidence of the narcotics offense from the rental vehicle.

The heroin conspiracy count to which Jackson pleaded guilty carries a statutory mandatory minimum term of imprisonment of 10 years, a maximum potential penalty of life in prison, and a maximum fine of $10 million. If accepted by the court at the time of sentencing, Jackson’s plea agreement would result in Jackson serving a stipulated total sentence between 12 and 17½ years in prison. Sentencing is scheduled for June 23, 2020.

The obstruction of justice while on federal pretrial release count to which Mealing pleaded guilty carries a maximum potential penalty of 30 years in prison, and a maximum fine of $250,000. Sentencing is scheduled for June 23, 2020.

Jackson has been in custody since his arrest on November 28, 2018.

U.S. Attorney Carpenito credited special agents of the FBI, Newark Division, Red Bank Resident Agency, Jersey Shore Gang and Criminal Organization Task Force (including representatives from the Bradley Beach Police Department, Brick Police Department, Howell Police Department, Marlboro Police Department, Monmouth County Sheriff's Office, Toms River Police Department, and Union Beach Police Department) under the direction of Special Agent in Charge Gregory W. Ehrie; special agents of the FBI, Philadelphia Division, Scranton Resident Agency, under the direction of Acting Special Agent in Charge Tara McMahon; the New Jersey State Police, under the direction of Col. Patrick J. Callahan, Superintendent; the Matawan Police Department, under the direction of Chief Thomas J. Falco, Jr.; the Holmdel Police Department, under the direction of Chief John Mioduszewski; the Highlands Police Department, under the direction of Chief Robert Burton; the Monmouth County Prosecutor’s Office, under the direction of Prosecutor Christopher J. Gramiccioni; the Old Bridge Police Department, under the direction of Chief William A. Volkert; the Keansburg Police Department, under the direction of Chief James K. Pigott; the Hazlet Police Department, under the direction of Chief Philip Meehan; and the Aberdeen Police Department, under the direction of Chief John T. Powers, with the investigation leading to today’s guilty pleas.

The government is represented by Assistant U.S. Attorney Elisa T. Wiygul of the U.S. Attorney’s Office’s Criminal Division in Trenton.

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

Defense counsel: Jackson: Lorraine S. Gauli-Rufo Esq., Verona, New Jersey
Mealing: David E. Schafer Esq., Princeton, New Jersey

CAMDEN, N.J. – A Camden woman was sentenced today to 46 months in prison for accessing a protected computer without authorization, stealing money from her employer and then laundering the proceeds of her theft, U.S Attorney Craig Carpenito announced.

Dilcia Mercedes, 38, previously pleaded guilty before U.S. District Judge Renee Marie Bumb to an information charging her with one count of unauthorized access of a computer with intent to defraud and one count of money laundering. Judge Bumb imposed the sentence today in Camden federal court.

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

From April 2014 to May 2017, Mercedes worked for a mortgage lender as a payment processor and had access to the company’s computer system. She discovered that some escrow checks were returned to the company as undeliverable. Mercedes admitted that she would monitor those funds by checking monthly reports to see if the funds were ever claimed. If the money was not claimed, Mercedes recruited various family members and friends to allow her to use their bank accounts. With that information, Mercedes used her family members’ and friends’ identities to open reloadable debit/credit accounts. She accessed the company’s computer system and made it appear as if the customer requested that the money be sent via wire transfer into the fraudulent accounts. After creating the request, Mercedes then accessed the company’s computer and approved the transfer using a co-worker’s login and password.

Mercedes caused approximately 580 fraudulent wire transfers, totaling more than $2 million, from her company’s bank account to bank accounts and reloadable debit/credit accounts controlled by Mercedes’ relatives, friends or associates. She then used the money to pay personal expenses.

In addition to the prison term, Judge Bumb sentenced Mercedes to three years of supervised release and ordered her to pay $2,087,697 in restitution.

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 Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Brian Michael, special agents of the U.S. Department of Housing and Urban Development, Office of Inspector General, under the direction of Special Agent in Charge Wyatt Achord, and special agents of the Board of Governors of the Federal Reserve System Consumer Financial Protection Bureau, Office of Inspector General, under the direction of Special Agent in Charge Stephen Carroll, with the investigation leading to today’s sentencing.

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

Defense counsel: Michael Kahn Esq., Cherry Hill, New Jersey

NEWARK, N.J. – A Bergen County man who embezzled funds from his company’s employee benefit plan over an eight-year period was sentenced today to 30 months in prison, U.S. Attorney Craig Carpenito announced.

Howard Preschel, 63, of Teaneck, previously pleaded guilty before U.S. District Court Judge Susan D. Wigenton in Newark federal court to one count of an indictment charging him with embezzling funds from the CMG Vending Inc. Pension Trust Fund.       

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

Preschel served as the sole trustee for the CMG Vending Inc. Pension Trust Fund.  CMG Vending operated, leased, and rented vending machines throughout New Jersey and New York. As the trustee, Preschel, by law, was a fiduciary and therefore required to act solely in the interest of the participants and beneficiaries.

Between November 2010 and April 2018, Preschel embezzled $368,782.66 from the pension trust fund by engaging in 52 separate illegal withdrawals or transfers from various pension trust accounts. As a result of these illegal withdrawals and transfers, the trust fund accounts lost an additional $93,266.98 in interest.

In addition to the prison term, Judge Wigenton sentenced Preschel to three years of supervised release. She also ordered Preschel to make restitution to the CMG Vending Inc. Pension Trust Fund in the amount of $462,049.64. Preschel also agreed to a debarment which prohibits him from acting as a fiduciary on behalf of any employee benefit plan for a period of 13 years.   

U.S. Attorney Carpenito credited special agents of the U.S. Department of Labor, Office of Inspector General, under the direction of Special Agent in Charge Michael Mikulka in Mountainside, and the United States Department of Labor, Employee Benefits Security Administration, under the direction of Acting Regional Director of the New York Regional Office, Thomas Licetti, with the investigation leading to today’s sentencing. 

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