District of New Jersey

NEWARK, N.J. – UST-Aldetec Holding Company LLC, which includes its wholly owned subsidiary United States Technologies Inc., a New Jersey corporation, will pay $525,000 to resolve allegations that it violated the False Claims Act, U.S. Attorney Craig Carpenito announced today.

The settlement resolves allegations that U.S. Technologies made false claims in conjunction with obtaining payments under contracts awarded to U.S. Technologies by the United States. The United States contends that U.S. Technologies provided nonconforming circuit card assemblies, at least some of which were counterfeit parts, for a weapons system used by the United States.

U.S. Attorney Carpenito credited special agents of the U.S. Department of Defense Criminal Investigative Service, under the direction of Special Agent in Charge Leigh-Alistair Barzey; special agents of the U.S. Air Force Office of Special Investigations, under the direction of Detachment Special Agent in Charge Jason T. Hein; special agents of the Department of Homeland Security (DHS), Homeland Security Investigations (HSI) under the direction of Special Agent in Charge Brian Michael in Newark; and personnel of the Defense Logistics Agency – Aviation, under the command of Brigadier General David J. Sanford, with the investigation leading to today’s settlement.

The government is represented by Assistant U.S. Attorney Mark C. Orlowski of the U.S. Attorney’s Civil Division in Newark.

Defense counsel: Carlos F. Ortiz Esq., New York

NEWARK, N.J. – A South Carolina man who participated in the sale of 17 firearms, including five assault rifles, was sentenced today to 30 months in prison for his role in a scheme to illegally sell weapons in New Jersey, U.S. Attorney Craig Carpenito announced.

Richard Lowman, 31, previously pleaded guilty before U.S. District Court Judge Claire C. Cecchi to an information charging him with one count of conspiracy to engage in the unlicensed business of dealing in firearms. Judge Cecchi imposed the sentence today in Newark federal court.

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

On six different dates between May 2017 and September 2017, Lowman – sometimes accompanied by his uncle, Reginald Moultrie – met with an individual in Newark for the purpose of selling firearms. Lowman personally participated in the sale of an assault rifle on a Newark street in May 2017. During a later transaction in August 2017, Lowman travelled from South Carolina to New Jersey and transported multiple firearms across state lines. Ultimately, six firearms were sold inside a residence in Newark on that occasion.

Seventeen firearms, including five assault rifles, were illegally sold by Lowman and Moultrie over five months. Neither Lowman nor Moultrie had a license to sell firearms. Moultrie previously pleaded guilty to possession of a firearm after having been convicted of a felony and is currently awaiting sentencing.

In addition to the prison term, Judge Cecchi sentenced Lowman to three years of supervised release.

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 NCIS for mental health reasons; and ensured that federal resources are directed at the criminals posing the greatest threat to our communities.

The United States Attorney’s Office prosecuted this case with support from the Newark Police Department, a Project Guardian partner. 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. He also thanked officers from the Newark Police Department, under the direction of Department of Public Safety Director Anthony F. Ambrose, for their assistance. For more information, please see: Project Guardian.

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

Defense counsel: Kevin Buchan Esq., Holmdel, New Jersey

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

James Thiel, 32, of Williamstown, New Jersey, pleaded guilty before U.S. District Judge Noel L. Hillman in Camden federal court to an information charging him with one count of sexual exploitation of a minor.

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

From April 2019 through August 2019, Thiel used an email account and a file sharing site to send images and videos of child sexual abuse to other individuals. Thiel produced and appeared in several of these images and videos along with a pre-pubescent child.

The sexual exploitation of a minor charge to which Thiel pleaded guilty carries a mandatory minimum sentence of 15 years in prison, a maximum potential penalty of 30 years in prison, and a $250,000 fine. Thiel will be required to register as a sex offender. Sentencing is scheduled for April 23, 2020.

U.S. Attorney Carpenito credited special agents of Department of Homeland Security (DHS), Homeland Security Investigations (HSI), under the direction of Special Agent in Charge Brian A. Michael in Newark, and the Gloucester County Prosecutor’s Office, under the direction of Prosecutor Charles A. Fiore, with the investigation leading to today’s guilty plea.

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

Defense counsel: Thomas Young Esq., Assistant Federal Public Defender, Camden

CAMDEN, N.J. – A member of a drug-trafficking organization today admitted his role in a conspiracy to distribute heroin in Camden, U.S. Attorney Craig Carpenito announced.

David Velez, 31, pleaded guilty before U.S. District Judge Renee Marie Bumb in Camden federal court to an information charging him with one count of conspiracy to distribute and possess with intent to distribute 100 grams or more of heroin.

Eleven other members – Ronnie Lopez, Nelson Salcedo, Paul Salcedo, Waldemar Garcia, William Carrillo, Elisa Rivera, Ramon Velez, Naeem Sadler, Jasmin Velez, Jameel Byng, and Kaliel Johnson – have previously pleaded guilty to their roles in the drug-trafficking conspiracy in the 500 block of Pine Street in Camden. Charges against six other defendants in this case remain pending.

The guilty pleas in this case reflect that the various members of the drug-trafficking organization sold heroin, crack cocaine and powder cocaine in and around the City of Camden.

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

An investigation led by the FBI used surveillance tactics, confidential informants, consensual recordings, over 40 controlled drug purchases, record checks, a GPS vehicle tracker, and several court-authorized wiretaps to uncover the operations of the Camden drug-trafficking organization.

The count to which Velez pleaded guilty carries a mandatory penalty of five years in prison, a maximum potential penalty of 40 years in prison, and a $5 million fine. Sentencing is scheduled for April 20, 2020.

U.S. Attorney Craig Carpenito credited special agents of the FBI’s South Jersey Violent Offender and Gang Task Force, South Jersey Resident Agency, under the direction of Special Agent in Charge Michael T. Harpster; the Camden County Police Department, under the direction of Chief Joseph Wysocki; the Camden County Prosecutor’s Office, under the direction of Acting Prosecutor Jill S. Mayer; the Camden County Sherriff’s Department, under the direction of Sheriff Gilbert L. Wilson; the Cherry Hill Police Department, under the direction of Chief William P. Monaghan; and the N.J. State Police, under the direction of Col. Patrick J. Callahan, with the investigation leading to today’s guilty plea. He also thanked the Drug Enforcement Administration, the U.S. Marshals Service, and the Department of Homeland Security for their assistance.

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

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

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

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

NEWARK, N.J. – A former commissioner with the now-defunct Paterson Municipal Utilities Authority was sentenced today to 35 months in prison for engaging in two separate schemes to steal funds from the Paterson Municipal Utilities Authority (MUA), U.S. Attorney Craig Carpenito announced.

Erik Lowe, 51, of Paterson, New Jersey, previously pleaded guilty before former U.S. District Judge Jose L. Linares to an information charging him with one count of conspiring with Carnell Baskerville, a contractor who plead guilty in February 2018 to his role in the scheme, to commit extortion under color of official right during the period from approximately December 2014 through approximately May of 2015. He also pleaded to one count of engaging in a second scheme with another contractor to commit extortion under color of official right from approximately August of 2012 through November of 2014. U.S. District Judge Kevin McNulty imposed the sentence today in Newark federal court.

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

Lowe was a commissioner of the MUA from February 2009 through May 2015, during which time he exercised control over the MUA’s finances. The MUA had been created to manage the hydroelectric plant on the Passaic River in Paterson as well as to care for and manage certain surrounding properties. Lowe and Baskerville entered into an agreement whereby Lowe would approve payments from the MUA to Baskerville’s company for services purportedly rendered when both Lowe and Baskerville knew that Baskerville had not performed and would not perform any such services. Between December 2014 and May 2015, Lowe wrote a series of MUA checks totaling $146,500 to Baskerville’s company. Lowe directed Baskerville to deposit these checks into Baskerville’s bank account and to kick back to Lowe a significant percentage of this amount in cash to reward Lowe and a fellow MUA commissioner for their official assistance in carrying out the scheme.

Lowe admitted to engaging in a similar scheme between approximately August of 2012 through approximately November of 2014 with a second contractor whose company installed and repaired fences for residential homes and commercial business. Lowe admitted that initially he inflated the checks provided to this contractor substantially above the value of the jobs the contractor performed on behalf of the MUA so that the contractor could kick back thousands of dollars in cash in kickbacks to Lowe for Lowe’s official assistance in carrying out the scheme. Lowe admitted that near the end of the scheme, he was issuing checks worth thousands of dollars to the contractor knowing that no job had been or would be performed by the contractor in exchange for the checks. Lowe, in turn, accepted kickbacks totaling thousands of dollars from the contractor in exchange for these checks. Between August 2012 and November 2014, Lowe issued checks totaling $141,700 to the contractor, for which Lowe accepted tens of thousands of dollars in cash kickbacks.

In addition to the prison term, Judge McNulty sentenced Lowe to three years of supervised release and ordered him to pay restitution of $236,400.

Baskerville pleaded guilty on Feb. 6, 2018 before Judge Linares to one count of conspiracy to commit extortion under color of official right and to one count of conspiracy to embezzle from an organization receiving federal benefits in excess of $10,000 and was sentenced Oct. 23, 2018, to 21 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 with the investigation leading to today’s sentencing.

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

Defense counsel: Linda Foster Esq., Assistant Federal Public Defender

NEWARK, N.J. – Three New Jersey men were charged with possession of cocaine and heroin with intent to distribute, U.S. Attorney Craig Carpenito announced today.

Robin Peralta, 37, of Trenton, New Jersey, is charged by complaint with one count of possession with intent to distribute five kilograms or more of cocaine and one count of possession with intent to distribute one kilogram or more of heroin. Luis Susana-Delossanto, 32, of Trenton, is charged by complaint with two counts of possession with intent to distribute five kilograms or more of cocaine. Ramon Fabian-Pena a/k/a/ “Rafael,” 59, of Passaic, New Jersey, is charged by complaint with one count of possession with intent to distribute five kilograms or more of cocaine.

All three defendants appeared Jan. 8, 2020, before U.S. Magistrate Judge Leda D. Wettre in Newark federal court. Peralta and Susana-Delossanto were released on bail. Fabian-Pena was detained.

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

A search of Peralta’s residence revealed approximately three kilograms of heroin and U.S. currency. A search of Delossanto’s vehicle revealed approximately 29 kilograms of cocaine.  At the time of the arrest of Fabian-Pena, law enforcement also recovered a package containing approximately six kilograms of cocaine.  

The counts of possession with intent to distribute heroin and possession with intent to distribute cocaine each have a minimum sentence of 10 years in prison, a maximum sentence of life in prison, and a $10 million fine.

U.S. Attorney Carpenito credited special agents of the Drug Enforcement Administration, New Jersey Division, under the direction of Special Agent in Charge Susan A. Gibson; and members of the Mercer County Prosecutor’s Office, as well as the Hamilton Township Police Department, with the investigation leading to the charges. This investigation was conducted by a New JerseyJ DEA HIDTA Task Force composed of officers from the DEA, New Jersey State Police, Mercer County Prosecutor’s Office, Hudson County Prosecutor’s Office, Wayne Police Department, Union Police Department, Woodbridge Police Department, Edison Police Department and Bayonne Police Department.

The government is represented by Assistant U.S. Attorneys Cassye Cole and Vera Varshavsky 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.

TRENTON, N.J. – Thirteen defendants have been indicted for their roles as members, associates, and suppliers of a drug-trafficking conspiracy that distributed cocaine and crack cocaine in and around Monmouth County, U.S. Attorney Craig Carpenito announced today.

Damion Helmes, Dawn Stephens, Shantay Walker, Keith Logan, Shamar Dudley, Tonya Underwood, Elizabeth Conover, Curtis Jenkins, Ralph Lee, and Eric Yarbrough were charged with conspiracy to distribute and possess with intent to distribute more than 280 grams of crack cocaine. Additionally, Helmes, Stephens, Walker, Logan, Dudley, Underwood, Conover, Jenkins, Lee, Yarbrough, Derrick Hayes, Dequan Copeland, and Cassius Williams were charged with conspiracy to distribute and possess with intent to distribute more than 500 grams of cocaine. Helmes was also charged with possession with intent to distribute cocaine and crack cocaine, possession of a firearm in furtherance of a drug-trafficking crime, and with being a felon in possession of a firearm. Hayes was also charged with being a felon in possession of a firearm. 

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

Between April 2019 and August 2019, the defendants and others engaged in a narcotics conspiracy that operated primarily in municipalities throughout Monmouth County – including Cliffwood, Keansburg, Matawan, Keyport, Red Bank, Long Branch, Neptune, and Asbury Park, as well as Brick Township in Ocean County – and which sought to profit from the distribution of cocaine and crack cocaine. Through the interception of telephone calls and text messages pursuant to court-authorized wiretap orders, and other investigative techniques, law enforcement officers learned that defendant Helmes obtained regular supplies of cocaine from defendants Hayes and Copeland. Helmes then re-distributed that cocaine, portions of which he converted into crack cocaine, for profit, to other conspirators, distributors, sub-dealers, and end users throughout Monmouth County. During the wiretap portion of the investigation, law enforcement intercepted numerous communications by and between the conspirators regarding such issues as cocaine quality and availability, pricing, packaging, quantity, and customer satisfaction.

The defendants were originally charged by complaint on Aug. 22, 2019. Dudley was previously charged by indictment.

The count of conspiracy to distribute 280 grams or more of crack cocaine carries a maximum penalty of life in prison, a ten-year mandatory minimum term of imprisonment, and a maximum fine of $10 million. The count of conspiracy to distribute 500 grams or more of cocaine carries a maximum penalty of 40 years in prison, a five-year mandatory minimum term of imprisonment, and a maximum fine of $5 million. The count charging Helmes with possession with intent to distribute cocaine and crack cocaine carries a maximum sentence of 20 years in prison and a $1 million fine. The count charging Helmes with possession of a firearm in furtherance of a drug trafficking crime carries a statutory mandatory minimum term of imprisonment of 5 years and a maximum potential penalty of life in prison, and must be served consecutive to the sentence imposed on the drug trafficking crime. The felon in possession counts against Helmes and Hayes carry a maximum sentence of 10 years in prison. Each firearms count also carries a maximum fine equal to the greatest of $250,000, twice the gross amount of pecuniary gain that any persons derived from the offense, or twice the gross amount of any pecuniary loss sustained by any victim of the offense.

U.S. Attorney Carpenito credited Special Agents and Task Force Officers of the FBI, Newark Division, Red Bank Resident Agency, Jersey Shore Gang and Criminal Organization Task Force (including representatives from the Bradley Beach, Brick, Howell, Toms River, Union Beach and Marlboro police departments, and the Monmouth County Sheriff's Office) under the direction of Special Agent in Charge Gregory W. Ehrie; the Red Bank Police Department, under the direction of Chief Darren McConnell; the Keansburg Police Department, under the direction of Chief James Pigott; the Middletown Police Department, under the direction of Chief Craig Weber; the Monmouth County Prosecutor’s Office, under the direction of Monmouth County Prosecutor Christopher J. Gramiccioni; the Highlands Police Department, under the direction of Chief Robert Burton; the Holmdel Police Department, under the direction of Chief John Mioduszewski; and the Long Branch Police Department, under the direction of Chief Jason Roebuck, with the investigation leading to today’s charges.

The government is represented by Assistant U.S. Attorney Ian D. Brater of the U.S. Attorney’s Office’s Criminal Division in Trenton.

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

NEWARK, N.J. – A Passaic County, New Jersey, man was sentenced today to 60 months in prison for leading a conspiracy involving numerous moving companies that systematically extorted hundreds of customers, U.S. Attorney Craig Carpenito announced.

Richard Bishara, 43, of Woodland Park, New Jersey, previously pleaded guilty before U.S. District Judge Susan D. Wigenton to an information charging him with one count of conspiracy to commit wire fraud. Judge Wigenton imposed the sentence today in Newark federal court.

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

Bishara and his conspirators jointly operated numerous moving companies that quoted customers “low-ball” price estimates for household goods moves and then raised prices on the date of the move after the goods were loaded and the customers were vulnerable. Through this scheme, Bishara and his conspirators, over a number of years and hundreds of moves, raised final prices for moves above the allowed increase from initial estimates as provided by federal regulations, including increases as high as 400 percent on the day of the move. The collective difference between the many estimates and the final balances for the customers’ moves was more than $1 million. Bishara personally owned a number of the moving companies involved, and, as a leader of the conspiracy, controlled certain bank accounts used by the companies.

Judge Wigenton also sentenced Bishara to three years of supervised release and ordered him to pay restitution of $72,709.

U.S. Attorney Carpenito credited special agents of the Department of Transportation-Office of the Inspector General, under the direction of Special Agent in Charge Douglas Shoemaker, Northeast Region; postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge James Buthorn, Newark Division; and special agents of the Department of Homeland Security, Homeland Security Investigations (HSI), New York, under the direction of Special Agent in Charge Peter C. Fitzhugh, with the investigation leading to today’s sentencing.

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

Defense counsel: Anthony Pope Esq., Newark

NEWARK, N.J. – A former Newark police officer today admitted soliciting and accepting cash payments from a brothel owner in Newark in exchange for protecting brothels from police action, and to failing to report those cash payments on his personal federal income tax returns, U.S. Attorney Craig Carpenito announced.

Julio I. Rivera, 50, of Old Bridge, New Jersey, pleaded guilty before U.S. District Judge Madeline Cox Arleo in Newark federal court to two counts of an indictment charging him with bribery (Count Six) and aiding and assisting in the preparation of a false 2015 personal federal tax return (Count 13).

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

From September 2014 to August 2015, Rivera solicited and accepted cash payments from a Newark brothel owner (“Individual 1”) who ran brothels located on Lafayette Street and Emmet Street. In exchange for these cash bribes, Rivera performed official acts and violated his lawful duties for the benefit of Individual 1, including declining to arrest individuals who were committing and promoting prostitution, agreeing to protect these individuals from arrest by other Newark police officers, and agreeing to take adverse action against a competing brothel. Rivera collected between $40,000 and $95,000 in bribes in exchange for protecting those and other brothels in Newark.

Rivera also intentionally withheld information from his tax preparer regarding the cash bribes that he received, which caused Rivera’s filed federal tax returns for certain tax years, including 2015, to understate the total amount of income that Rivera received. Rivera stipulated that this misconduct resulted in a loss to the IRS of $15,000 to $40,000.

The maximum potential penalty for the count of bribery is 10 years in prison and the maximum potential penalty for the tax fraud is three years in prison; both counts carry a maximum potential fine of up to $250,000 or twice the gross gain or loss from the offense. Sentencing is scheduled for April 30, 2020.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, and 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 Cari Fais of the Special Prosecutions Division in Newark.

Defense counsel: Kristen Santillo Esq., New York

TRENTON, N.J. – The former owner of a restaurant in Elizabeth, New Jersey, today admitted evading taxes on over $844,000 in income from his restaurant business, U.S. Attorney Craig Carpenito announced.

Omar Rodriguez, 49, of Parlin, New Jersey, pleaded guilty before U.S. District Judge Michael A. Shipp in Trenton federal court to one count of an information charging him with tax evasion for 2015 through 2017.

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

Rodriguez owned Mojito LLC, d/b/a Mojito Lounge and Restaurant (Mojito’s), a restaurant that served Cuban cuisine. Mojito’s generated a substantial amount of gross cash receipts and Rodriguez admitted that he skimmed a substantial portion of this cash for his personal use, which he did not report as income, and to pay Mojito’s employees and suppliers in cash. Between 2015 and 2017, Rodriguez received over $844,000 in income from Mojito’s that he failed to report to the IRS. Rodriguez caused Mojito’s to fail to report over $483,000 in cash payroll and to pay certain employment taxes. His conduct resulted in a $193,733 tax loss to the IRS for tax years 2015 through 2017.

The tax evasion charge to which Rodriguez pleaded guilty carries a maximum penalty of five years in prison and is punishable by a potential $250,000 fine. Sentencing is scheduled for April 15, 2020.

U.S. Attorney Carpenito credited special agents of the 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 Bernard J. Cooney of the of the U.S. Attorney’s Office Health Care Fraud Unit in Newark.

TRENTON, N.J. – A Pennsylvania man today admitted improperly securing a federal guarantee on a loan by making false statements to the Small Business Administration (SBA) about the creditworthiness of those loans while serving as the chief lending officer of a New Jersey bank, U.S. Attorney Craig Carpenito announced.

James Bortolotti, 51, pleaded guilty before U.S. District Judge Michael Shipp in Trenton federal court to an information charging him with one count of knowingly making false statements for the purpose of influencing the action of the SBA.

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

While serving as the chief lending officer of a New Jersey bank (Bank-1), Bortolotti became aware of a Small Business Administration lending program to incentivize lenders, including banks, to loan money to small businesses by providing a 75 percent SBA-backed guarantee on loans. When a lender applies an SBA guarantee on a loan, the lender must disclose information related to the creditworthiness of the small business. Bank-1 hired a consulting firm to help the bank apply for SBA-backed guarantees.

On Feb. 29, 2012, a consultant from the consulting firm submitted an application to the SBA for a guarantee of approximately $3.75 million on loans totaling approximately $5 million made to a small business located in Robbinsville, New Jersey. The application contained false information related to the creditworthiness of the business. Bortolotti knew the application contained false information, but reviewed and signed the application on behalf of the bank.

Making false statements for the purpose of influencing the action of the SBA carries a maximum potential penalty of 30 years in prison and a $1 million fine. Sentencing is scheduled for April 16, 2020.

U.S. Attorney Carpenito credited special agents of the SBA-Office of the Inspector General (SBA-OIG), under the direction of Special Agent in Charge Kevin Kupperbusch in Philadelphia; the FDIC-Office of the Inspector General (FDIC-OIG), under the direction of Special Agent in Charge Patricia Tarasca in New York; special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, and special agents of the Federal Housing Finance Agency – Office of Inspector General (FHFA-OIG), under the direction of Special Agent in Charge Robert Manchak, with the investigation leading to today’s guilty plea.

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

Defense counsel: William C. Cagney Esq., New Brunswick, New Jersey

NEWARK, N.J. – An Essex County, New Jersey, man will be arraigned today on charges that he engaged in a conspiracy to commit mortgage fraud that resulted in potential losses in excess of $1 million, U.S. Attorney Craig Carpenito announced.

Cabral Simpson, 43, of Belleville, New Jersey, appeared before U.S. Magistrate Judge Leda Dunn Wettre in Newark federal court. He is charged by indictment with one count of conspiracy to commit wire fraud and two counts of wire fraud.

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

Simpson, a real estate investor, and his conspirators engaged in mortgage fraud by creating fake bank statements and fake employee verification records for buyers of properties and transferring money into the buyers’ bank accounts for payment of the deposit for a property. Simpson and his conspirators submitted fraudulent mortgage loan applications, supporting documents, and closing documents on behalf of the buyers. They induced lenders to issue more than $1 million in loans, resulting in defaults and exposing the lenders and the U.S. Department of Housing and Urban Development to more than $1 million in potential losses. 

The conspiracy and wire fraud counts with which Simpson is charged each carry a maximum potential penalty of 20 years in prison and a fine of up to $250,000, or twice the gross loss or gain caused by 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, with the investigation leading to the indictment.

The government is represented by Assistant U.S. Attorney Andrew Kogan of the U.S. Attorney’s Office Cybercrimes 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.

CAMDEN, N.J. – A Burlington County, New Jersey, man was indicted today for his role in a GoFundMe scheme that collected money from donors on the internet, purportedly to benefit a homeless man, U.S. Attorney Craig Carpenito announced today.

Mark D’Amico, 40, formerly of Bordentown, New Jersey, was indicted on one count each of conspiring to commit wire fraud and conspiring to commit money laundering, as well as on four substantive counts of wire fraud and 10 substantive counts of money laundering. He was previously charged by criminal complaint on Oct. 2, 2019.

On March 6, 2019, two conspirators – Katelyn McClure and Johnny Bobbitt Jr. – pleaded guilty to conspiracy to commit wire fraud and conspiracy to commit money laundering, respectively, in connection with the same scheme. They are both awaiting sentencing.

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

In November 2017, D’Amico and McClure created a crowd source funding page on GoFundMe’s website, titled: “Paying It Forward.” The campaign solicited donations from the public, purportedly for the benefit of homeless veteran Bobbitt. D’Amico and McClure posted a story that McClure was driving home from Philadelphia on Interstate 95 and ran out of gas. Bobbitt acted as a good Samaritan and rescued McClure by using his last $20 to buy gasoline for her. The website stated that funds were being solicited, with a goal of $10,000, to get Bobbitt off the streets and provide living expenses for him.

The story told by D’Amico and McClure was not true. McClure never ran out of gas and Bobbitt never spent his last $20 for her. D’Amico and McClure conspired to create the false story to obtain money from donors based on false information. The false story was quickly picked up by local and national news outlets and went viral. Approximately $400,000 from more than 14,000 donors throughout the country was raised in less than one month.

The donated funds were transferred by D’Amico and McClure from GoFundMe into accounts that they controlled. The majority of the money was quickly spent by D’Amico and McClure on personal expenses over the next three months, including significant amounts by D’Amico for gambling, as well as for vacations, a BMW automobile, clothing, handbags and other personal items and expenses.

In mid-November 2017, when the donations had reached approximately $1,700, D’Amico and McClure told Bobbitt about the campaign and the false story. In December 2017, after D’Amico helped open a bank account for Bobbitt, D’Amico and McClure deposited $25,000 of proceeds of the scheme into Bobbitt’s account.

The charge of wire fraud conspiracy and the four substantive wire fraud charges each carry a maximum potential penalty of 20 years in prison and a $250,000 fine. The charge of conspiracy to commit money laundering, as well as five of the substantive money laundering counts, each carry a maximum penalty of 10 years in prison and a fine of $250,000. The remaining five charges of money laundering charges each carry a maximum penalty of 20 years in prison and a $250,000 fine.

U.S. Attorney Carpenito credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge John R. Tafur, 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. He also thanked the Burlington County Prosecutor’s Office, under the direction of Prosecutor Scott Coffina; and officers of the Florence Township Police Department for their work on the case.

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

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. – Two New Jersey men were today sentenced to prison terms for their respective roles in using phony monetary instruments to obtain luxury vehicles and other high value items; one of the defendants was additionally convicted of bankruptcy fraud, U.S. Attorney Craig Carpenito announced.

Germaine Howard King, a/k/a “Germaine Howard,” 47, of Elizabeth, New Jersey, was sentenced to 70 months in prison, and Daniel D. Dxrams, currently known as “Daniel Kusi,” formerly known as “Danny D. Dxrams,” 41, of Maplewood, New Jersey, was sentenced to 57 months in prison. U.S. District Judge John Michael Vasquez imposed the sentences today in Newark federal court.

King was convicted for his role in a scheme to defraud banks and other lenders using phony money orders to fraudulently discharge a $400,000 mortgage, to fraudulently obtain two Mercedes Benz (one 2007 and one 2010) cars, and to pay off credit card bills. In addition, King was convicted of a scheme to use phony cashier’s checks to pay off his co-defendant’s five luxury cars.

Dxrams was convicted for his role in a scheme to fraudulently pay off a Rolls Royce, Bentley, and three Mercedes Benz cars (two 2015 cars and one 2016 car). In addition, Dxrams was convicted of bankruptcy fraud and making a false oath during a bankruptcy proceeding.

Two co-defendant were sentenced by Judge Vasquez on Dec. 18, 2019: Melissa Reynolds, 43, of Elizabeth, who previously pleaded guilty to an information charging her with conspiracy to commit mail fraud, mail fraud affecting financial institutions, and bank fraud, was sentenced to one year and one day in prison, five years of supervised release, restitution of $587,081 and forfeiture of $548,242; Arthur N. Martin 3rd was sentenced to time served (one day), three years of supervised release and fined $12,000.

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

King conspired with Reynolds to make fraudulent money orders on their home computers. They mailed these phony money orders to a credit union in an effort to fraudulently pay off their two Mercedes Benz cars. Although the credit union rejected both bogus money orders, King and Reynolds mailed correspondences to the credit union falsely claiming that the debt was satisfied. They then stopped paying their car loans, and King kept the car. King and Reynolds mailed a fraudulent money order in the amount of $432,000 to a financial institution to pay off their mortgage. The financial institution erroneously accepted the fraudulent payment and credited it as a payoff for the mortgage. When the financial institution filed a suit seeking to reinstate the fraudulently discharged mortgage, King and Reynolds continued to allege in court that the mortgage had been paid and submitted a phony receipt for the bogus money order. King also made and mailed fraudulent money orders in an attempt to pay off his credit card bills.

Dxrams, King, and Reynolds conspired to fraudulently pay off Dxrams’ five luxury cars. They sent a bogus $101,000 cashier’s check to a finance company that enabled Dxrams to obtain a 2012 Bentley for free. Dxrams sold the car to a third party for approximately $82,000 and then issued a bank check to King for approximately $25,000. The defendants also used this scheme in an effort to fraudulently obtain three Mercedes-Benz cars and a Rolls Royce.

Dxrams was also convicted of bankruptcy fraud and making a false oath before the bankruptcy court. In December 2017, Dxrams filed a bankruptcy petition under penalty of perjury. He falsely concealed his ownership of a car rental business and the gross receipts he earned through this car rental business, his sale of the Bentley, his receipt of money from a personal injury lawsuit, his ownership of firearms, and his marital status, among other things. In January 2018, Dxrams appeared before the bankruptcy trustee and, after being placed under oath, made false statements concerning his bankruptcy petition and his sale of the Bentley.

In addition to the prison terms, Judge Vasquez sentenced King to five years of supervised release and restitution of $597,781. Dxrams was sentenced to three years of supervised release, restitution of $93,236 and forfeiture of $82,000.

U.S. Attorney Carpenito credited special agents of the FBI and the Joint Terrorism Task Force, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark; the N.J. Office of Homeland Security and Preparedness, under the direction of Director Jared Maples; the U.S. Department of Education, Office of Inspector General Eastern Regional Office, under the direction of Assistant Special Agent in Charge Debbi Mayer; and the U.S. Department of Housing and Urban Development, Office of Inspector General, under the direction of Special Agent in Charge Christina Scaringi with the investigation leading to the convictions.

The government is represented by Assistant U.S. Attorney Lakshmi Srinivasan Herman, of the National Security Unit, in Newark.

Defense counsel: King: Pro Se
Dxrams: Michael Orozco Esq., Woodland Park, New Jersey
Reynolds: Robert J. Degroot Esq., and Oleg Nekritin Esq., Newark

NEWARK, N.J. – A sergeant with the Paterson Police Department was arrested today and charged with conspiring to violate the civil rights of an individual in Paterson and with falsifying a corresponding police report, U.S. Attorney Craig Carpenito announced. 

Police Officer Michael Cheff, 49, of Paterson, was arrested by the FBI this morning and charged by complaint with conspiring to deprive an individual of civil rights under color of law and with falsifying a police report. Cheff is scheduled to have his initial appearance this afternoon before U.S. Magistrate Judge Leda Dunn Wettre in Newark federal court.

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

Certain Paterson police officers stopped and searched motor vehicles, without any justification, and stole cash and other items from the occupants of the motor vehicles. These officers also illegally stopped and searched individuals in buildings or on the streets of Paterson and seized cash from them. Cheff routinely received a portion of these stolen monies from some of these officers and signed off on corresponding false police reports about the underlying incidents. 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, three officers stopped and arrested an individual and one of the officers stole a few hundred dollars from that individual. The officers then went to the individual’s apartment, and Cheff joined them. One officer stayed behind to guard the arrested individual, who was handcuffed in a police car, while the others, including Cheff, obtained consent to search the apartment by lying to the individual’s mother. 

Cheff and the other two officers 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 one of the officers and told the officer to log it into evidence. Cheff put the rest of the money in his pocket. At the Paterson police station, in a bathroom, Cheff gave the officer who had stayed behind to guard the individual a portion of the stolen money and gave a portion of the stolen money to one of the officers who had searched the apartment with him. 

Cheff also approved a police report that falsely stated that the officers had recovered $319 from a shelf in the individual’s room. In fact, Cheff knew that he had stolen a substantial sum of money from a safe in the room.

Later that day, one of the officers sent text messages to another officer discussing Cheff’s theft of money. The officer 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 arrest.  He also thanked the Passaic County Prosecutor’s Office, under the direction of Passaic County Prosecutor Camelia M. Valdes, the Paterson Police Department, under the direction of Paterson Police Director Jerry Speziale and Police Chief Troy Oswald, 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.

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

NEWARK, N.J. – A New York man was sentenced today to 60 months in prison for participating in a scheme that used secret card-reading devices and pinhole cameras on various New York and New Jersey bank locations to steal at least $390,141.

U.S. Attorney Craig Carpenito, District of New Jersey; Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division; and Special Agent in Charge Brian Michael of the Department of Homeland Security, Homeland Security Investigations (HSI), Newark made the announcement.

Bogdan Rusu, 39, of Queens, New York, previously pleaded guilty before U.S. District Judge Esther Salas to an information charging him with one count of conspiracy to commit bank fraud. Judge Salas imposed the sentence today in Newark federal court.

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

Rusu and others engaged in a widespread bank fraud conspiracy that targeted various banks in Massachusetts, New York and New Jersey.  Rusu and others captured payment card account information from customers as they accessed their accounts through automatic teller machines (ATMs) and then used that information to steal money from the customers’ bank accounts.  As part of the scheme, Rusu and others installed devises on ATMs in New Jersey and elsewhere to  illegally obtain customer account information, including account numbers and personal identification numbers.  Rusu and others would then transfer the illegally obtained information to counterfeit payment cards and use those counterfeit cards to steal money from the accounts.   Eleven other defendants charged in this scheme have pleaded guilty.

In addition to the prison term, Judge Salas sentenced Rusu to three years of supervised release and restitution of $390,141.

U.S. Attorney Carpentio and Assistant Attorney General Benczkowski credited special agents of the Department of Homeland Security, Homeland Security Investigations (HSI), under the direction of Special Agent in Charge Michael in Newark; special agents of the U.S. Secret Service, Boston Field Office; East Longmeadow, Massachusetts, Police Department; Cambridge, Massachusetts, Police Department; Medford, Massachusetts, Police Department; Ludlow, Massachusetts Police Department; and the Massachusetts State Police, with assistance from the victim banks, with the investigation leading to today’s guilty plea. The Middlesex County, Massachusetts, District Attorney’s Office; U.S. Attorney’s Office of the Eastern District of New York and U.S. Attorney’s Office of the District of Massachusetts, Springfield Division assisted in the investigation and prosecution. 

The government is represented by Assistant U.S. Attorney Angelica Sinopole of the U.S. Attorney’s Office Organized Crime and Gangs Unit in Newark and Trial Attorney Marianne Shelvey of the Justice Department’s Criminal Division Organized Crime and Gang Section.

CAMDEN, N.J. – Two members of a drug-trafficking organization today admitted their roles in distributing significant amounts of illegal drugs in Camden, U.S. Attorney Craig Carpenito announced.

Jameel Byng, 26, and Kaliel Johnson, 27, both of Camden, pleaded guilty before U.S. District Judge Renée Marie Bumb in Camden federal court to their roles in a conspiracy based on the 500 block of Pine Street in Camden and responsible for selling heroin, crack cocaine and cocaine. Byng pleaded guilty to an information charging him with one count of conspiracy to distribute and possess with intent to distribute heroin and powder cocaine. Johnson pleaded guilty to an information charging him with one count of conspiracy to distribute and possess with intent to distribute heroin.

Nine other members of the drug-trafficking conspiracy – Ronnie Lopez, Nelson Salcedo, Paul Salcedo, Waldemar Garcia, William Carrillo, Elisa Rivera, Ramon Velez, Naeem Sadler, and Jasmin Velez – previously have pleaded guilty in this case. The charges against eight other defendants in this case remain pending.

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

An investigation led by the FBI used surveillance tactics, confidential informants, consensual recordings, over 40 controlled drug purchases, record checks, a GPS vehicle tracker, and several court-authorized wiretaps to uncover the operations of the drug-trafficking organization in which Byng and Johnson participated.

The count to which Byng pleaded guilty carries a mandatory penalty of five years in prison, a maximum potential penalty of 40 years in prison, and a $5 million fine. The count to which Johnson pleaded guilty carries a maximum potential penalty of 20 years in prison and a $1 million fine.

U.S. Attorney Craig Carpenito credited special agents of the FBI’s South Jersey Violent Offender and Gang Task Force, South Jersey Resident Agency, under the direction of Special Agent in Charge Michael T. Harpster; the Camden County Police Department, under the direction of Chief Joseph Wysocki; the Camden County Prosecutor’s Office, under the direction of Prosecutor Acting Camden County Prosecutor Jill S. Mayer; the Camden County Sherriff’s Department, under the direction of Sheriff Gilbert L. Wilson; the Cherry Hill Police Department, under the direction of Chief William P. Monaghan; and the N.J. State Police, under the direction of Col. Patrick J. Callahan, with the investigation leading to today’s guilty pleas. He also thanked the Drug Enforcement Administration, the U.S. Marshals Service, and the Department of Homeland Security for their assistance.

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

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

Defense counsel: Byng: Tamika McKoy Esq., Camden
Johnson: Edward F. Borden Esq., Cherry Hill, New Jersey

CAMDEN, N.J. – A Burlington County, New Jersey, man today admitted his role in a conspiracy to defraud the U.S. Department of Defense (DoD), U.S. Attorney Craig Carpenito announced.

Hurriyet Arslan, 49, of Willingboro, New Jersey, pleaded guilty before U.S. District Judge Joseph H. Rodriguez in Camden federal court to an information charging him with one count of conspiracy to commit mail, wire and bank fraud, one count of bank fraud and one count of money laundering.

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

Corporation 1 had a contract with the DoD to supply jet fuel to troops operating in southeast Asia. Corporation 1 employed an individual in Fort Lee, New Jersey – identified as “Victim 1” – who was responsible for communicating with the federal government through a government computer system.

Conspirators located overseas designed and deployed on the Internet fraudulent web pages (phishing pages) that resembled the public-facing website of the General Service Administration. From June 2018 through September 2018, the conspirators caused phishing e-mails to be sent to various DoD vendors, including Victim 1, in an attempt to trick the vendors into visiting the phishing pages. These e-mails appeared to be legitimate but were actually fraudulent e-mails that contained electronic links to the phishing pages. Those customers who clicked on the electronic links were directed automatically to the phishing pages, where they saw what appeared to be the GSA’s System for Award Management (SAM) website and were prompted for, and entered, their log-in credentials and personal key.

The conspirators caused Victim 1’s log-in credentials and personal key to be intercepted and transmitted, not to the GSA, but to computers and e-mail accounts that the conspirators controlled.

Arslan was the owner of Deal Automotive Sales in Florence, New Jersey. At the request of an individual in Germany, he opened a shell company based in New Jersey, with a mobile phone number and bank account. Arslan sent the mobile phone SIM card and bank account information to a conspirator in California. For doing this, Arslan received two wire transfers from someone in Turkey. Due to suspicious activity, the bank shut down the bank account, and the conspirator in California asked Arslan for his account information for Deal Automotive, which he provided.

On July 27, 2018, DoD awarded Corporation 1 a $23.5 million contract to provide Aviation JA1 Turbine fuel to troops operating in southeast Asia. The conspirators used Victim 1’s log-in credentials to access Corporation 1’s government account and changed the bank account information to reflect a bank account controlled by Arslan. The conspirator in California contacted the DoD, identifying himself as Victim 1, and confirmed that Corporation 1’s payment method had been changed to the Deal Automotive Sales bank account.

DoD transferred $23.5 into Arslan’s Deal Automotive Sales bank account, which Arslan accessed at a branch in Burlington County and transferred a portion of the money to other accounts he controlled.

The counts of conspiracy and bank fraud to which Arslan pleaded guilty carry a maximum potential penalty of 30 years in prison and a fine equal to the greatest of $1 million or twice the gross profits received or gross loss from the offense. The count of money laundering to carries a maximum penalty of 10 years in prison and a fine of $250,000 or two times the gross profits received from the offense or two times the gross loss sustained by the victims.  Sentencing is scheduled for April 13, 2020.

U.S. Attorney Carpenito credited criminal investigators of the United States Attorney’s Office, special agents of the U.S. Department of Defense, Defense Criminal Investigative Service, Northeast Field Office, under the direction of Special Agent in Charge Leigh-Alistair Barzey; 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 General Service Administration, Office of Inspector General, under the direction of Acting Special Agent in Charge Stephen Lobaugh, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorneys Jason M. Richardson and Sara Aliabadi of the U.S. Attorney=s Office Criminal Division in Camden.

NEWARK, N.J. – A former member of the U.S. Navy was sentenced today to 18 months in prison for her role in an interstate gun trafficking conspiracy, U.S. Attorney Craig Carpenito announced.

Tesora Amanda Cortes Trejorojas, 24, of Norfolk, Virginia, previously pleaded guilty to an indictment charging her with one count of conspiring with others to transport and receive in New Jersey firearms purchased and obtained outside the state. U.S. District Judge Kevin McNulty imposed the sentence today in Newark federal court

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

In November 2017, Trejorojas engaged in text messages with Azia Sinclair in which Trejorojas agreed to purchase firearms for Sinclair and Sinclair’s boyfriend, Shyheim Tyson, a/k/a “Shy,” who were both residents of New Jersey.

On Nov. 11, 2017, Sinclair and Tyson drove from New Jersey to Trejorojas’ residence in Norfolk. All three went to a gun store in Norfolk, where Trejorojas purchased five semiautomatic handguns, as well as 200 rounds of ammunition, with cash provided by Sinclair and Tyson. The next day, Sinclair and Tyson drove back to New Jersey with the five handguns and ammunition.

Approximately five hours after Sinclair and Tyson arrived back in New Jersey, an individual was arrested in Orange, New Jersey, after police officers responded to the sound of gunshots. During the arrest, police officers recovered one of the five handguns that Sinclair and Tyson had transported from Virginia to New Jersey.

In March 2018, law enforcement executed a search warrant on Sinclair’s residence in Newark, and found another of the guns that Sinclair and Tyson had transported from Virginia to New Jersey in November 2017.

Tyson and Sinclair both pleaded guilty to conspiracy to transport and receive in New Jersey firearms purchased and obtained outside the State of New Jersey. Tyson was sentenced on Jan. 7, 2019, to 37 months in prison. Sinclair was sentenced on Dec. 11, 2019, to 19 months in prison.

Judge McNulty also sentenced Trejorojas to three years of supervised release.

U.S. Attorney Carpenito credited special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Charlie J. Patterson, Newark Field Division, and Special Agent in Charge Thomas L. Chittum III, Washington Field Division, with the investigation leading to today’s sentencing. He also thanked the N.J. State Police; the Newark Department of Public Safety; and Naval Criminal Investigative Service (NCIS) in Norfolk for their assistance.

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

Defense counsel: Trejorojas: Jonathan F. Marshall Esq., Red Bank, New Jersey
Sinclair: Linda Foster Esq., Assistant Federal Public Defender, Newark
Tyson: Vincent J. LaPaglia Esq., Hoboken, New Jersey

TRENTON, N.J. – A Middlesex County, New Jersey, man today admitted his role in a conspiracy to defraud the United States by filing false tax claims for gambling winnings, U.S. Attorney Craig Carpenito announced.

Michael Watsey, 43, of South River, New Jersey, pleaded guilty before U.S. District Judge Anne E. Thompson in Trenton federal court to an information charging him with one count of conspiracy to defraud the United States with respect to claims.

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

Watsey admitted that he was involved in a conspiracy with his family members and others to file 16 fraudulent U.S. Income Tax Returns for years 2014 through 2016. He and his conspirators created false W2-G forms to report gambling winnings, showing significant winnings and federal tax withheld by casinos in Atlantic City. The 16 false tax returns falsely claimed $3.9 million in federal tax refunds. The IRS paid out $1.3 million in refunds.

Watsey admitted to creating the false forms on his home computer, preparing false documents to send the IRS after tax refunds were questioned, pretending to be a casino host by phone with an IRS representative and devising a way to have false W2-G forms filed with the IRS.

The charge to which Watsey pleaded guilty carries a maximum potential penalty of 10 years in prison and a $250,000 fine. Sentencing is scheduled for April 7, 2020.

U.S. Attorney Carpentio 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 Jason M. Richardson of the U.S. Attorney=s Office Criminal Division in Camden.

Defense counsel: Thomas Young Esq., Assistant Federal Public Defender, Camden

NEWARK, N.J. – The former acting executive director of the Jersey City Employment and Training Program (JCETP) has been charged with embezzling JCETP funds, U.S. Attorney Craig Carpenito announced today.

Sudhan M. Thomas, 44, of Jersey City, New Jersey, is charged by complaint with embezzling funds from an organization receiving federal funds. Thomas is expected to make his initial appearance on Jan. 9, 2020, before U.S. Magistrate Judge Leda Dunn Wettre in Newark federal court.

According to the complaint:

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

Using his access to JCETP funds and control of JCETP’s bank accounts, from March 2019 through July 2019, Thomas embezzled more than $45,000 from JCETP. Thomas caused checks to be drawn from JCETP accounts that were made payable to others, but ultimately received by Thomas. He also embezzled JCETP funds by issuing JCETP checks made out to cash that Thomas either cashed himself or used to obtain bank checks that Thomas made payable to his entity, Next Glocal, which were deposited into a Next Glocal bank account that Thomas controlled. Thomas used the JCETP funds deposited to Next Glocal’s bank account to pay for his personal expenses, including payments to Thomas’s landlord in Jersey City and airfare and hotel expenses for a trip to Hawaii, and to fund transfers to Thomas’ family trust account. 

The count of theft from an organization receiving federal funds carries a maximum potential penalty of up to 10 years in prison and a fine of up to $250,000 or twice the gross pecuniary gain or loss.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark; the U.S. Department of Labor, Office of the Inspector General (OIG), under the supervision of Special Agent in Charge Michael Mikulka; and special agents of the U.S. Attorney’s Office, under the direction of Supervisory Special Agent Thomas Mahoney, with the investigation leading to today’s charges. 

The government is represented by Assistant U.S. Attorney Tazneen Shahabuddin of the U.S. Attorney’s Office Special Prosecutions Division and Assistant U.S. Attorney Lee M. Cortes Jr., Chief of the Health Care Fraud 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. – Caldwell University has agreed to pay the United States more than $4.8 million to resolve allegations that it engaged in a fraudulent scheme to defraud a federal education benefit program, U.S. Attorney Craig Carpenito announced.

“Caldwell University tried to hoodwink the Department of Veterans Affairs and, worse, veterans themselves, by claiming to offer online classes developed and provided by Caldwell that were in fact marked-up offerings by an online correspondence school,” U.S. Attorney Carpenito said. “Our veterans should never be treated this way, and we will continue to work to ensure that they receive all of the benefits that they deserve as a result of their service to the country.”

“Caldwell University’s civil settlement, along with the previous criminal convictions, sends a clear message to other educational institutions that VA OIG is dedicated to holding those accountable who would take advantage of VA programs that are intended to assist veterans and their families,” Jeffrey K. Stachowiak, Acting Special Agent in Charge, U.S. Department of Veterans Affairs Office of Inspector General, said. “Our veterans sacrificed to serve our country and they deserve to receive the full education benefits that they earned through their military service. VA OIG is committed to working closely with our fellow law enforcement partners and thanks the U.S. Attorney’s Office, District of New Jersey, for its dedication to this investigation.”

According to the settlement agreement: From Jan. 1, 2011, through Aug. 8, 2013, Caldwell University submitted false claims for payment to the Department of Veterans Affairs (VA) in order to receive education benefits and funds pursuant to the Post-9/11 Veterans Education Assistance Act (Post 9/11 GI Bill) to which it was not entitled. The Post 9/11 GI bill was designed specifically to help veterans who served in the armed forces following the terrorist attacks on Sept. 11, 2001.

Three individuals previously pleaded guilty to separate informations charging them with one count of conspiracy to commit wire fraud related to this scheme to defraud the VA. Lisa DiBisceglie, the university’s former associate dean of the Office of External Partnership; David Alvey, founder and president of Ed4Mil LLC; and Helen Sechrist, a former employee of Ed4Mil, admitted their respective roles in the conspiracy to fraudulently obtain millions of dollars in tuition assistance and other education-related benefits from the Post-9/11 GI Bill. Alvey was sentenced on June 4, 2018, to five years in prison. DiBisceglie and Sechrist were each sentenced on June 5, 2018, to three years of probation. All three defendants were also ordered to pay $24 million in restitution.

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

Caldwell contracted with Ed4Mil to recruit and enroll eligible military veterans in non-degree fully online classes that were purportedly provided by Caldwell. DiBisceglie helped get approval from Caldwell’s administration to develop and administer a series of non-credit online courses for veterans in Caldwell’s name. In order for the courses to be eligible for education benefits under the Post-9/11 GI Bill, DiBisceglie, Alvey, and others prepared and submitted an application to the VA stating that the courses were developed, taught, and administered by Caldwell faculty and met Caldwell’s stringent educational standards. The VA approved the online courses for education benefits under the Post-9/11 GI Bill based upon the representations in Caldwell’s application.

However, Caldwell did not participate in developing or teaching the online courses. The courses were developed, taught, and administered by a sub-contractor of Ed4Mil, an online correspondence school in Pennsylvania that was not approved to receive education benefits under the Post-9/11 GI Bill.

Thousands of veterans were ultimately enrolled in the unapproved online correspondence courses without their knowledge while Caldwell and Ed4Mil profited. Even though Caldwell contributed no content or value to the courses, Caldwell charged the Post 9/11 GI Bill 10 to 30 times the prices charged by the online correspondence school for the same courses. As a result, the government paid over $24 million in tuition benefits to the university.

Allegations of fraud involving a separate government education benefit program were raised in a lawsuit filed under the qui tam, or whistleblower, provisions of the False Claims Act. The qui tam complaint alleges that Caldwell and Ed4Mil fraudulently obtained education benefits under the Department of Defense Tuition Assistance program. This settlement resolves federal allegations that Caldwell defrauded the Post-9/11 GI Bill administered by the VA, along with the qui tam action.

U.S. Attorney Carpenito credited special agents of the U.S. Department of Veterans Affairs, Office of Inspector General, Criminal Investigation Division, Northeast Field Office, under the direction of Acting Special Agent in Charge Stachowiak; special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark; and the U.S. Department of Education, Office of Inspector General Eastern Regional Office, under the direction of Special Agent in Charge Geoffrey Wood, with the investigation.

The government is represented by Assistant U.S. Attorney David M. Eskew, Chief of the U.S. Attorney’s Office’s Health Care Fraud Unit, and Assistant U.S. Attorney Nicole F. Mastropieri of the Opioid Abuse Prevention and Enforcement Unit in Newark.

The claims settled by this agreement are allegations only, and there has been no admissions of liability.

Defense counsel: Henry E. Klingeman Esq., Newark
Relator’s counsel: Jesse Hoyer Esq., Tampa, Florida

NEWARK, N.J. – An Essex County, New Jersey, tax preparer today admitted her role in conspiring to defraud the IRS and filing false personal tax returns for a New Jersey business owner and two other individuals, U.S. Attorney Craig Carpenito announced.

Zenobia Williams, 52, of Maplewood, New Jersey, pleaded guilty before U.S. District Judge Kevin McNulty in Newark federal court to one count of conspiring to defraud the IRS by reporting false business expenses on the business owner’s tax return to fraudulently reduce his tax liability and by reporting those sham expenses as income on two other individuals’ tax returns to obtain unwarranted refunds for them.

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

In 2016, Williams operated Maplewood Business Services LLC, a tax preparation business in Maplewood. Williams and the New Jersey business owner agreed to report false labor expenses for his business on his personal tax return for calendar year 2015 to decrease his tax liability.

On January 5, 2016, Williams sent the business owner a text message, stating, “Hey Fella, I have 1 client right now that needs 15,750 in income. I need you to produce a 1099MISC form for that person. I will give you the information. Let me know how much more income you need to 1099.” Subsequently, at the business owner’s direction, Williams prepared two IRS Forms 1099 which falsely stated that, in 2015, his business paid one individual compensation of $15,800 and another individual compensation of $11,255, when both Williams and the business owner knew that no such compensation had been paid to those individuals.

Williams also prepared a personal tax return for the business owner which falsely reported the phony business expenses totaling $27,055, which both Williams and the business owner knew would fraudulently decrease the amount of tax that the business owner owed the IRS for calendar year 2015. Williams also reported the bogus business expenses as income on the tax returns of the two individuals referred to above, which resulted in both receiving unwarranted tax refunds from the IRS.

The tax fraud conspiracy charge to which Williams pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing of the defendant is scheduled for April 17, 2020.

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

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

Defense counsel: Kenneth W. Kayser, Esq., East Hanover, New Jersey

CAMDEN, N.J. – A New Jersey resident was sentenced yesterday to 87 months in prison for threatening to murder former U.S. Rep. Frank LoBiondo and members of the congressman’s staff, U.S. Attorney Craig Carpenito announced.

Joseph Brodie, 40, of Millville, New Jersey, was previously convicted in Camden federal court on two counts of making threats to officials, officers and employees of the United States – specifically, for a telephone threat to murder LoBiondo’s chief of staff and an email threat to murder LoBiondo, his chief of staff, his veterans affairs liaison, and all of the other staff of the Mays Landing office. During the sentencing hearing yesterday, the Court determined that over the course of the prosecution, Brodie had obstructed justice and that there also was evidence to show he had intended to carry out his threats.

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

In the spring of 2017, Brodie reached out to LoBiondo seeking assistance with the medical care and treatment that Brodie was receiving from the Veterans Administration. Over the course of the next few months, Brodie spoke and corresponded with the congressman’s Veterans Affairs Liaison and a caseworker, both of whom assisted him with appointments and meetings regarding his medical care. On Sept. 19, 2017, Brodie contacted the congressman’s office and spoke to the chief of staff on the phone. Brodie wanted the chief of staff to arrange a meeting with the congressman, but the chief of staff refused. During this phone call, Brodie became angry and ultimately threatened the life of the chief of staff – calling him “a dead man.”

Approximately an hour and a half later, Brodie sent an email to the congressman’s veterans’ affairs liaison as well as the caseworker, threatening their lives as well as the lives of the congressman and his staff in the Mays Landing Office. In this email, Brodie stated that he wanted to meet the congressman “face to face” and he pointed out “how easy” it was to find the congressman’s Mays Landing Office. Brodie also attached a terrain map of the area, with the area around the congressman’s office enlarged for detail and a red pinpoint location marker on the office. Writing about the map, Brodie stated, “[i]t even shows the environment and surrounding terrain, parking lots, wooded areas, etc., (like the kind a highly trained Combat Infantryman would use)…”

On the same day as the threats, Brodie sent text messages to his fiancée stating: “I threaten the life of a Congressman’s Chief of Staff. I’m pretty sure the Secret Service are going to investigate.” He also wrote that he was “prepared” for any law enforcement officers who might respond to his home. He wrote, “I’ll give them a chance to leave. If not, it’ll be First Blood Part II Type Shit (if you never saw that Rambo movie).” Brodie also wrote, “I won’t surrender. It’s not in me.” The same day, Brodie spoke to his fiancée on the phone and told her that he was going to travel to an address in New Jersey, that he had GPS coordinates in his car, that he was going to kill LoBiondo’s chief of staff, and that there was going to be a “blood bath.”

One week later, in a statement recorded by the FBI, Brodie confessed to having made the phone threat to the chief of staff on Sept. 19, 2017, and to having sent the email threat on Sept. 19, 2017.

The evidence showed that at the time Brodie made these threats, Brodie owned several firearms and a large amount of ammunition at his home.

U.S. Attorney Craig Carpenito credited special agents of the FBI’s Atlantic City Resident Agency, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark; special agents of the U.S. Capitol Police, under the direction of Chief Steven Sund; officers from the N.J. State Police, under the direction of Col. Patrick J. Callahan; and the Cumberland County Prosecutor’s Office, under the direction of Prosecutor Jennifer Webb-McRae, with the investigation leading to yesterday’s sentencing.

The government is represented by Assistant U.S. Attorneys Sara A. Aliabadi and Jason Richardson, of the Camden office.

Defense counsel: Gina Amoriello, Esquire, Westmont, NJ and Philadelphia, PA

NEWARK, N.J.– A former associate director of a global maritime service group was arrested today for defrauding the company and embezzling hundreds of thousands of dollars for his own personal benefit, U.S. Attorney Craig Carpenito announced.

David Buckingham, 35, of Chatham, New Jersey, was indicted on five counts of wire fraud. He was arrested this morning by postal inspectors from the U.S. Postal Inspection Service and is scheduled to appear this afternoon before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court.

According to the indictment:

Buckingham held the title of associate director and head of the New York office of the victim company, a global maritime service group headquartered in London, England. The company offered among other services, the handling of subrogation claims related to marine transportation of goods for insurance companies.

Buckingham was a signatory on the company’s United States bank accounts and had authority to issue checks for legitimate business purposes. Buckingham was also responsible for paying the company’s payroll taxes.

From 2016 through 2018, Buckingham embezzled hundreds of thousands of dollars from the Victim Company by writing checks from the Victim Company to himself or to “cash” to obtain funds to which he was not entitled.  In some instances Buckingham falsified the Victim Company’s books and records in an effort to make the payments appear legitimate by claiming that certain of the checks were to make tax payments on behalf of the Victim Company or to pay other legitimate business expenses. Buckingham did not make payroll tax payments on behalf of the Victim Company during the relevant time period, and instead used the proceeds of the scheme for his own personal expenses.

The charges 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 Craig Carpenito credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge John R. Tafur, and postal inspectors of the U.S. Postal Inspection Service, Newark Division, under the direction of Inspector in Charge James Buthorn, with the investigation leading to the charges.

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

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

TRENTON, N.J. – A Florida man has admitted to laundering funds related to a $9 million business account takeover scheme with ties to Eastern Europe, U.S. Attorney Craig Carpenito announced.

Igor Buzyukov, 51, of Weston, Florida, pleaded guilty today before U.S. District Judge Anne E. Thompson in Trenton to an information charging him with one count of conspiracy to commit money laundering.

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

Between February 2018 and July 2018, several clients of Company-1, a financial technology company headquartered in San Jose, California, fell victim to an account takeover scheme resulting in total losses exceeding $9 million.

The scheme generally involved an unidentified individual or individuals calling Company-1 and impersonating a representative of one of the victim companies.  The impostor(s) would then request that an unauthorized bank account be added to the victims’ Company-1 accounts and be designated to receive payments from e-commerce customers.

The unauthorized bank accounts added to the victims’ Company-1 accounts were each controlled by Buzyukov under the name of a corporation registered to him in the State of Florida.  After monies were deposited to the unauthorized accounts, Buzyukov would transfer the funds to other accounts controlled by him.  Buzyukov then wired the majority of the funds to several bank accounts held by various individuals in Russia, Turkey and Ukraine.

Buzyukov also admitted to creating fake invoices in the amounts of the wire transfers in order to make the transactions appear legitimate.

The conspiracy to commit money laundering charge carries a statutory maximum of 20 years in prison and a fine of not more than $500,000 or twice the value of the property involved, whichever is greater.  Sentencing is scheduled for March 26, 2020.

U.S. Attorney Carpenito credited special agents of the United States Secret Service, under the direction of Special Agent in Charge Mark McKevitt in Newark with the investigation leading to today’s guilty plea. 

The government is represented by Assistant U.S. Attorney Anthony Torntore of the U.S. Attorney’s Cybercrimes Unit in Newark. 

Defense counsel: Thomas Ambrosio, Esq., Lyndhurst, NJ

NEWARK, N.J. – A Bergen County, New Jersey, man was arrested this morning after using his Twitter account to threaten to kill agents of Immigration and Customs Enforcement (ICE), U.S. Attorney Craig Carpenito announced. 

Carlos Alejandro Tariche, 22, of Edgewater, New Jersey, was arrested by agents of U.S. Department of Homeland Security, Homeland Security Investigations (HSI), and charged by complaint with one count of interstate communications containing threats to injure. He is scheduled to appear this afternoon before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court.

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

On Dec. 11, 2019, Tariche used one of his Twitter accounts to post threats to ICE agents: “We need to kill all ICE agents.”  He also posted: “Why can’t mass shootings occur at @ICEgov buildings them mfs need to get smoked.” Tariche also used his Twitter account to compare his feelings to that of Elliot Rodger, the individual who carried out a mass shooting at Isla Vista, California, murdering six people and shooting 14 others. Tariche also posted on Twitter: “You might’ve heard I paint houses,” a phrase that refers to murdering people and that was recently popularized by the movie, “The Irishman,” which depicts a mafia hitman.

Law enforcement officers were able to link Tariche to his Twitter account through an investigation of his social media accounts and the locations from where he logged onto his Twitter accounts.

The charge of interstate communications containing threats carries a statutory maximum sentence of five years in prison and a $250,000 fine, or twice the gain or loss from the offense.

U.S. Attorney Carpenito credited special agents of HSI, under the direction of Special Agent in Charge Brian Michael in Newark, with the investigation leading to today’s charge.

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

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

NEWARK, N.J. – The owner of a scrap metal business in Morris County, New Jersey, today admitted that he underreported his income on his personal tax returns, avoiding paying more than $175,000 in taxes, U.S. Attorney Craig Carpenito announced.

Anthony Curto Jr., 51, of Succasunna, New Jersey, pleaded guilty before U.S. District Judge Katharine S. Hayden in Newark federal court to an information charging him with one count of making and subscribing a false tax return.

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

Curto owned and operated Total Metal Transport, a business headquartered in Succasunna that purchased and transported scrap metal and other materials. Curto admitted that for tax years 2012 and 2013, he underreported and failed to report the gross receipts from Total Metal Transport, which he operated on a cash-only basis, on his personal tax return, avoiding more than $175,000 in taxes.

The count of making and subscribing a false tax return carries a maximum potential penalty of three years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for March 24, 2020.

U.S. Attorney Carpenito credited special agents of the 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 Bernard J. Cooney of the Health Care & Government Fraud Unit.

NEWARK, N.J. – A Newark man was sentenced today to 120 months in prison for being convicted of being a felon in possession of a firearm, U.S. Attorney Craig Carpenito announced.

Jamar Battle, 31, was previously convicted after a three-day trial before U.S. District Judge William J. Martini on one count of being a felon in possession of a firearm and ammunition. The jury deliberated two hours before delivering the guilty verdict. Judge Martini imposed the sentence today in Newark federal court.

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

On the evening of July 4, 2018, Battle was involved in an argument with his girlfriend and was waiting for her outside of her home. After she arrived near her home, Battle fired six shots at the car she had been riding in as it pulled away. He did not hit his intended target, but did hit a 5-year old girl who had been walking with her father after watching a neighborhood fireworks display. The child survived the shooting but suffered a major injury that required immediate medical attention.

Prior to this shooting, Battle had been convicted of six felonies. In 2015, Battle was sentenced to New Jersey State Prison on two firearms offenses and had just been released from prison in May 2018.

In addition to the prison term, Judge Martini sentenced Battle to three years of supervised release.

U.S. Attorney Carpenito credited law enforcement officers of the Newark Police Department, under the direction of Public Safety Director Anthony F. Ambrose; special agents of the Department of Alcohol Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Charlie J. Patterson in Newark; special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark; and the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Theodore N. Stephens 2nd, with the investigation leading to today’s sentencing.

The government was represented by Senior Trial Counsel Robert Frazer and Special Assistant U.S. Attorney Naazneen Khan of the U.S. Attorney’s Office Violent Crimes Unit in Newark.

Defense counsel: Michael P. Koribanics Esq., Clifton, New Jersey

NEWARK, N.J. – A Passaic County, New Jersey, man was charged today for a multi-million dollar bank fraud and securities fraud scheme operated through his company, Cash Flow Partners LLC (Cash Flow), U.S. Attorney Craig Carpenito announced.

Edward Espinal, 44, of Wayne, New Jersey, was charged by complaint with one count of conspiracy to commit bank fraud and one count of securities fraud. He is scheduled to have his initial appearance this afternoon before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court.

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

The Bank Fraud Conspiracy

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

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

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

The Securities Fraud Scheme

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

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

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

Two other individuals, Raymundo Torres and Jennie Frias, have previously been charged for their roles in the Cash Flow bank fraud conspiracy. Torres has pleaded guilty.

The conspiracy to commit bank fraud charge carries a maximum potential penalty of 30 years in prison and a $1 million fine. The securities fraud counts carry a maximum penalty of 20 years in prison and a $5 million fine.

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

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

U.S. Attorney Carpenito credited special agents of the FDIC-Office of the Inspector General (FDIC-OIG), under the direction of Special Agent in Charge Patricia Tarasca in New York, and special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, with the investigation leading to today’s charges. He also thanked the SEC for the assistance provided by its Enforcement Division.

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

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

Defense counsel: Telesforo Del Valle Esq., New York

NEWARK, N.J. – A federal grand jury today indicted an orthopedic surgeon for failing to pay over payroll taxes to the IRS and failing to report a foreign bank account, U.S. Attorney Craig Carpenito announced.

Brian Mehling, 54, of Hackensack, New Jersey, was charged in an 11-count indictment with 10 counts of failing to collect, account for, and pay over payroll taxes for one quarter in 2014, three quarters in 2015, three quarters in 2016, two quarters in 2017, and one quarter in 2018, and one count of failing to report a foreign bank account holding more than $10,000 for calendar year 2018.

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

Mehling, an orthopedic surgeon, started Mehling Office Management LLC, in order to pay himself and other employees as part of his medical practice. Since the year 2006, Mehling has been involved with the IRS Collection Division due to his failure to pay his quarterly employment taxes for Mehling Office Management and other entities Mehling owned and controlled. Instead, Mehling chose to spend the majority of his money on other ventures, such as traveling around the world, on his personal rental properties, and promoting his stem cell research company.

Mehling was responsible for withholding payroll taxes from the gross salary and wages of his businesses’ employees to cover individual income, Social Security, and Medicare tax obligations. For at least 10 tax quarters, Mehling’s business withheld tax payments from its employees’ checks, but Mehling failed to pay over in full the payroll taxes due to the IRS. Additionally, Mehling did not report a bank account in France that at one point held more than $10,000 in 2018.

The 10 counts of failing to collect, account for, and pay over payroll taxes each carry a maximum penalty of five years in prison, and a $250,000 fine, or twice the gross gain or loss from the offense. The count alleging failure to report a foreign bank account carries a maximum penalty of five years in prison, and a $250,000 fine.

U.S. Attorney Carpenito credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge John R. Tafur.

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

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

CAMDEN, N.J. – A Virginia man has been sentenced to 60 months in prison for conspiring to traffic 35 guns into New Jersey, U.S. Attorney Craig Carpenito announced today.

Shawn K. Harvey, 54, of Locust Grove, Virginia, was previously convicted of one count of conspiracy to traffic firearms and three counts of trafficking firearms following a two-week trial before U.S. District Judge Noel L. Hillman. Judge Hillman imposed the sentence Dec. 17, 2019, in Camden federal court.

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

Shawn K. Harvey and his son, Shawn M. Harvey, a/k/a “Munchy,” 29, also of Locust Grove, were originally arrested in August 2016 after agents from the Bureau of Alcohol, Tobacco and Firearms (ATF) directed and supervised a sting operation using a confidential informant, who purchased firearms from the Harveys at a parking lot in Pennsauken, New Jersey. Ultimately, the Harveys sold 35 firearms – including assault-style rifles, revolvers, shotguns and semi-automatic handguns – in 11 separate transactions spanning several weeks. One of these firearms was reported stolen in Virginia and many of the guns were brand new and came with ammunition.

In addition to the prison term, Judge Hillman sentenced Shawn K. Harvey to three years of supervised release. Shawn M. Harvey previously pleaded guilty and is scheduled to be sentenced Jan. 8, 2020.

U.S. Attorney Carpenito credited ATF special agents, under the direction of Special Agent in Charge Charlie J. Patterson, Newark Field Division, with the investigation leading to the sentencing.

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

Defense counsel: A. Harold Kokes Esq., Pleasantville, New Jersey

CAMDEN, N.J. – A New York man was charged with traveling to New Jersey to engage in illicit sexual conduct with a minor under the age of 16 and transporting the minor from New Jersey to New York to engage in criminal sexual activity, U.S. Attorney Craig Carpenito announced.

Richard Gabriel Piedra Ordonez, 35, of Sunnyside, New York, is charged by complaint with one count of transporting a minor with the intent to engage in criminal sexual activity and one count of traveling for the purpose of engaging in illicit sexual conduct. Piedra is expected to appear this afternoon before U.S. Magistrate Judge Ann Marie Donio in Camden federal court.

According to documents filed in this case:

In May 2019, Piedra began communicating with a New Jersey resident under the age of 16 using various social media and messaging platforms. Over the course of the subsequent months, Piedra and the victim met in person and Piedra engaged in sexual conduct with the victim. Piedra traveled to Cape May County to have sex with the victim and also drove the victim to his home in New York City, where he engaged in criminal sexual activity with the victim.

The count of transporting a minor carries a mandatory minimum sentence of 10 years in prison, a maximum potential penalty of life in prison, and a $250,000 fine. The offense of traveling for the purpose of engaging in illicit sexual conduct carries a maximum penalty of 30 years in prison and a $250,000 fine.

U.S. Attorney Carpenito credited special agents with FBI’s Atlantic City Child Exploitation & Human Trafficking Task Force, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, the Atlantic County Prosecutor’s Office, under the direction of Prosecutor Damon G. Tyner, and the N.J. State Police, under the direction of Col Patrick J. Callahan, with the investigation leading to today’s charges. He also thanked the Cape May County Prosecutor’s Office, under the direction of Prosecutor Jeffrey H. Sutherland, for its assistance with the investigation.

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

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

NEWARK, N.J. – A former U.S. Postal Service (USPS) mail carrier today admitted that he intercepted and removed envelopes containing credit cards from the mail, U.S. Attorney Craig Carpenito announced.

Jaquan Miller, 30, of Bloomfield, New Jersey, pleaded guilty before U.S. District Judge Katharine S. Hayden in Newark federal court to an information charging him with one count of conspiring to steal mail. He remains released on a $50,000 unsecured bond.

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

Miller was a USPS employee at the Hudson City Station Post Office in Jersey City, New Jersey. From the summer of 2017 through August 2018, Miller removed envelopes containing credit cards from the mail and delivered the stolen credit cards to Moussa Dagno and Olagoke Araromi and others, who then used the stolen credit cards at retail stores to purchase electronics and other items. Dagno and Araromi each pleaded guilty in April 2019 to paying bribes, bank fraud, and aggravated identity theft, and were sentenced on Oct. 15, 2019, to 57 months in prison and 61 months in prison, respectively. Miller is the seventh former USPS employee who has pleaded guilty to charges stemming from Dagno’s and Araromi’s bribery scheme.

The conspiracy charge is punishable by a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for March 25, 2019.

U.S. Attorney Carpenito credited special agents with the USPS-Office of Inspector General, under the direction of Special Agent in Charge Matthew Modafferi, Northeast Area Field Office, and inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge James Buthorn, with the investigation leading to today’s guilty plea.

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

Defense counsel: Donald Millman Esq., of West Orange, New Jersey

NEWARK, N.J. – A Bergen County, New Jersey, man has been charged in connection with a scheme to fraudulently obtain $780,000 to purchase an apartment in Fort Lee, New Jersey, U.S. Attorney Craig Carpenito announced today.

Arthur Schwartz, 78, of Fort Lee, was indicted on four counts of wire fraud. He is scheduled to appear this afternoon before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court.    

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

In February 2018, Schwartz obtained $780,000 from Victim-1 to purchase an apartment in Fort Lee by falsely stating that he possessed the funds to repay a short-term loan, but that his bank had temporarily blocked access to his account. Victim-1 agreed to extend the loan to Schwartz due and payable in 30 days. Schwartz used the money to purchase the apartment.  

From March 2018 to May 2018, Schwartz made numerous false statements intended to make Victim-1 believe that Schwartz would be sending him money to pay down the loan. On March 16, 2018, Schwartz sent a text message to Victim-1 falsely stating that he was liquidating investments in a trust account into cash for the benefit of Victim-1. Schwartz sent an email to Victim-1 on March 27, 2018, that was intended to deceive Victim-1 into believing that Schwartz had access to a Wells Fargo account with a balance of approximately $1.5 million, and that Schwartz could use that money to pay back Victim-1. Schwartz instead spent tens of thousands of dollars redecorating his Fort Lee apartment. 

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. 

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 the charges.

The government is represented by Assistant U.S. Attorneys Jonathan Fayer and Catherine R. Murphy of the U.S. Attorney’s Office Economic Crimes 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. – The U.S. Attorney’s Office for the District of New Jersey has reached a settlement with a Middlesex County, New Jersey, day care facility to ensure equal access for children with HIV or Hepatitis under the Americans with Disabilities Act (ADA), U.S. Attorney Craig Carpenito announced.

Following an investigation, the U.S. Attorney’s Office found that Children’s Choice Academy (CCA) of East Brunswick, New Jersey, violated the ADA by denying a child admission to its day care based on the parent’s disclosure that the child may have Hepatitis or HIV, without making an individualized assessment that the child posed a direct threat to the health or safety of others that could not be mitigated by reasonable modifications of CCA’s policies, practices, or procedures.

The ADA prohibits public accommodations, such as CCA, from discriminating against people with, or perceived to have, disabilities, including HIV or Hepatitis. Public accommodations also cannot deny access to goods and services to people associated with someone with a disability.

“The ADA prohibits day care centers from denying services on the basis of disability or perceived disability,” U.S. Attorney Craig Carpenito said. “Today’s settlement sends a clear message that denying access, or suggesting that a person should seek services elsewhere, is discrimination that this office will take action to address.”

Under the settlement agreement, CCA has agreed to implement policies and procedures to ensure that children with disabilities are afforded full and equal opportunities to participate in and benefit from its programs and services, to publish on its website a statement of its policy on the prohibition of disability discrimination, and to provide mandatory training on the ADA and its prohibition of disability discrimination to all CCA employees. CCA will also pay $5,000 in damages to the child and his parent.

For more information on the ADA and HIV discrimination, visit www.ada.gov/aids.   

Individuals who believe they may have been victims of discrimination may file a complaint with the U.S Attorney’s Office at http://www.justice.gov/usao-nj/civil-rights-enforcement/complaint. Additional information about the ADA can be found at www.ada.gov, or by calling the Department of Justice’s toll-free ADA information line at 800-514-0301 or 800-514-0383 (TDD). 

The government is represented by Assistant U.S. Attorney Daniel Meyler and Special Assistant U.S. Attorney Victor Williamson of the U.S. Attorney’s Office Civil Rights Unit in Newark.

NEWARK, N.J. – A Bronx, New York, man today admitted participating in a conspiracy to carry out a $3.5 million scheme to use bogus information and simultaneous loan applications at multiple banks to fraudulently obtain home equity lines of credit, a practice known as “shotgunning,” U.S. Attorney Craig Carpenito announced.

Saoud “Sam” Rihan, 59, pleaded guilty before U.S. District Judge John Michael Vazquez 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:

Rihan was a business partner of Simon Curanaj, 65, of Yonkers, New York. From 2012 through January 2014, Rihan, Curanaj, 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 2013, Rihan and Curanaj executed a deed to transfer ownership of a Bronx property to people identified in the complaint as “Individual 1” and “Individual 2,” neither of whom lived at the property. Rihan offered Individuals 1 and 2 $10,000 cash payments for acting as straw borrowers but never paid them. Rihan and Curanaj then applied for three HELOCs valued at $750,000 from multiple banks in the name of Individual 2.

Rihan and Curanaj hid the fact that the same Bronx property was pledged as collateral in all three applications. The applications also fraudulently inflated Individual 2’s income. In addition, at the time the applications were made, the value of the Bronx property, which was encumbered by a mortgage, was far less than the amount of the HELOC loans that Rihan and the real estate broker applied for.

The victim banks eventually issued loans to Individual 2 in excess of $370,000. After the victim banks funded the HELOCs and deposited money into Individual 2’s bank accounts, Individual 2 disbursed almost all of the funds to Rihan, Curanaj, and others. In 2014, Individual 2 defaulted on all the HELOC loans.
The overall scheme resulted in over $3.5 million in losses to the victim banks.

Rihan 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 March 25, 2020.

Curanaj previously pleaded guilty to his role in the scheme and is awaiting sentencing.

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 Robert Manchak in Newark; 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 U.S. Attorney’s Office Criminal Division in Newark and Special Assistant U.S. Attorney Kevin DiGregory of the FHFA-OIG.

Defense Counsel: Jeffrey Garrigan Esq., Jersey City, New Jersey

CAMDEN, N.J. – A Trenton doctor today admitted his role in two separate conspiracies for defrauding New Jersey state health benefits programs and accepting kickbacks in exchange for referring laboratory work, U.S. Attorney Craig Carpenito announced. A pharmaceutical representative admitted his role in a separate health care fraud conspiracy and to obstructing justice by telling witnesses to lie to the grand jury investigating the scheme.

Dr. Daniel Oswari, 48, of Bordentown, New Jersey, pleaded guilty today before U.S. District Judge Robert B. Kugler in Camden federal court to two counts of an indictment charging him with conspiracy to commit health care fraud and wire fraud (Count One) and conspiracy to violate the Anti-Kickback Statute and the Travel Act (Count 23). Mark Bruno, 45, of Northfield, New Jersey, also pleaded guilty before Judge Kugler to an information charging him with conspiracy to commit health care fraud and obstruction of justice.

Oswari was charged in October 2019 along with Steven Monaco, Michael Goldis, and Aaron Jones, and charges remain pending against those three defendants.

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

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

Between January 2014 and April 2016, Oswari participated in a conspiracy that discovered that certain insurance plans paid for certain prescription compound medications – a including vitamins and pain creams – from a Louisiana pharmacy, identified in the indictment as the “Compounding Pharmacy 1,” and a Pennsylvania pharmacy, identified in the indictment as “Compounding Pharmacy 2.” The conspirators targeted patients with these insurance plans that provided coverage for the compound medications, particularly New Jersey state and local government and education employees. An entity referred to in the indictment as the “Pharmacy Benefits Administrator” provided pharmacy benefit management services for the State Health Benefits Program, which covers qualified state and local government employees, retirees, and eligible dependents, the School Employees’ Health Benefits Program, which covers qualified local education employees, retirees, and eligible dependents, and other insurance plans. The Pharmacy Benefits Administrator paid prescription drug claims and then billed the State of New Jersey or the other insurance plans for the amounts paid.

Oswari and members of his staff tried to persuade patients to receive the prescription compound medications, even if the patients did not have a medical necessity for the medications.  Oswari signed printed prescription forms from Compounding Pharmacies 1 and 2 that had pre-selected the highest number of refills to obtain the highest possible insurance reimbursement.  Oswari signed some prescriptions without seeing or evaluating the individuals, including for individuals who were not his patients. Oswari signed approximately 285 prescriptions for compounded medications, and the Pharmacy Benefits Administrator paid Compounding Pharmacies 1 and 2 approximately $1.9 million for the prescriptions he signed. In exchange for signing the prescriptions, Oswari received cash kickbacks. 

Oswari also pleaded guilty to a separate conspiracy to take kickbacks for referring laboratory work and signing prescriptions. Oswari had a laboratory hire his medical assistant as a phlebotomist. The medical assistant continued to work for Oswari, but laboratory paid her salary for over two years. In return, Oswari referred his blood and urine samples to the laboratory for testing. This lab work was insured by Medicare, New Jersey Medicaid, and other insurance companies. 

Bruno worked for a company that marketed compounded medications and received a percentage of the insurance payments. Bruno introduced a doctor to the company and received a percentage of the payments for prescriptions that the doctor wrote. Bruno and others paid the doctor to reward him for signing prescriptions. Bruno recruited individuals covered by New Jersey state insurance plans because he knew that those plans paid thousands of dollars for certain compounded medications. Bruno paid several of these individuals to see his doctor and receive prescriptions for compounded medications. Bruno received $68,872 from the company and caused $524,935 in losses.

Bruno learned in 2018 that the federal grand jury was investigating him. In 2019, two individuals paid by Bruno to receive compounded medications told him that they had received subpoenas to testify in the grand jury, and another two told Bruno that they were contacted by the FBI. Bruno told the first two to lie in the grand jury and deny that he paid them. Bruno told the other two to tell the FBI that he had not paid them.

The health care fraud and wire fraud conspiracy count to which Oswari pleaded guilty carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gain or loss from the offense. The kickbacks conspiracy count to which Oswari also pleaded guilty carries a maximum penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. The heath care fraud conspiracy and obstruction of justice charges to which Bruno pleaded guilty each carry a maximum potential penalty of 10 years in prison and a $250,000 fine, or twice the gain or loss from the offense.

Sentencing for Oswari is scheduled for March 23, 2020, and sentencing for Bruno is scheduled for March 24, 2020.

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

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

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

NEWARK, N.J. – A California man has been charged with conspiring to distribute approximately 114 kilograms of cocaine in Hunterdon County, New Jersey, U.S. Attorney Craig Carpenito announced today.

Angel Alfonso Maldonado, 25, of Long Beach, California, is charged by complaint with one count of conspiring to distribute and possessing with intent to distribute over five kilograms of cocaine. He appeared today before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court and was detained.

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

Law enforcement officers in the area of Clinton Township, New Jersey, observed a tractor-trailer pull off I-78 onto the shoulder of the highway. Maldonado, who is the owner of the tractor-trailer, appeared nervous when law enforcement approached. 

A certified narcotics detection canine screened the outside of the tractor-trailer and alerted for the presence of narcotics on the side of the cabin of the tractor-trailer, as well as inside the cabin. Law enforcement subsequently searched the cabin and found two hidden compartments. Each hidden compartment contained approximately 57 kilograms of suspected narcotics. The approximately 114 kilograms were plastic wrapped, consistent with narcotics packaging. Law enforcement field-tested some of the kilograms, which tested positive for the presence of cocaine.

The count of conspiracy to distribute and possess with intent to distribute over five kilograms of cocaine carries a maximum penalty of life in prison, a mandatory minimum term of 10 years in prison, and a $10 million fine.

U.S. Attorney Carpenito credited the U.S. Attorney Carpenito credited the DEA Strike Force including agents and officers of the DEA; the New York City Police Department; the New York State Police; Immigration and Customs Enforcement – Homeland Security Investigations; the U. S. Internal Revenue Service Criminal Investigation Division; the Bureau of Alcohol, Tobacco, Firearms and Explosives; U.S. Customs and Border Protection; U.S. Secret Service; the U.S. Marshals Service; New York National Guard; the Clarkstown Police Department; U.S. Coast Guard; Port Washington Police Department; and New York State Department of Corrections and Community Supervision, with the investigation leading to today’s charge..

The government is represented by Unit Chief Meredith J. Williams and Assistant U.S. Attorney Lauren E. Repole of the Organized Crime Drug Enforcement Task Force/Narcotics Unit in Newark.

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

NEWARK, N.J. – A Monmouth County man has been charged with being a previously convicted felon in possession of a firearm, U.S. Attorney Craig Carpenito announced today. The weapon in question was found, along with a number of other weapons and ammunition, during a lawful search of a pawn shop and residence connected to one of the perpetrators of the Dec. 10, 2019, mass shooting in Jersey City, New Jersey.

Ahmed A-Hady, 35, of Keyport, New Jersey, is charged in a criminal complaint with one count of being a previously convicted felon in possession of a firearm. He was arrested by FBI agents early this morning and is expected to appear on Monday before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court.

According to the complaint, filed today:

On Dec. 10, 2019, there was a mass shooting in Jersey City in which two individuals, a male (Individual 1) and a female (Individual 2), killed three civilians after earlier killing a law enforcement officer. After the shooting, law enforcement recovered from Individual 1’s right rear pants pocket a handwritten note that contained a telephone number ending in 4115, and a Keyport, New Jersey, address. Law enforcement also recovered several weapons carried by Individuals 1 and 2, including an AR-15 rifle.

FBI agents determined that the phone number ending in 4115 contained on the note belonged to A-Hady. Law enforcement also determined that the Keyport address listed on the note was a storefront for a pawn shop.

Law enforcement obtained records of A-Hady’s history of firearm purchases. Those records indicated that around May 23, 2007, A-Hady purchased a Smith and Wesson .45 caliber handgun bearing serial number NHN5284 (the “.45 caliber”). Records also indicate that on or about June 2, 2007, A-Hady purchased a Smith and Wesson .44 caliber handgun bearing serial number CEV4085 (the “.44 caliber”).

Subsequent to purchasing the firearms, A-Hady was convicted on April 2, 2012, in Monmouth County Superior Court, of attempting to obtain a controlled dangerous substance or analog by fraud, a crime punishable by more than one year in prison. As a result of that conviction, A-Hady is no longer permitted to possess a firearm.

On the evening of Dec. 13, 2019, law enforcement officers traveled to the pawnshop and interviewed A-Hady and two of his relatives. During the course of A-Hady’s interview, he admitted to owning both the .45 caliber and the .44 caliber, but falsely denied that they were on the premises.

After A-Hady was interviewed, one of his relatives (Relative-1) told law enforcement that there was a safe located inside Company A. Relative-1 further stated that the safe contained firearms, including A-Hady’s .44 and .45 caliber handguns. Relative-1 subsequently consented to a search of the safe located inside the pawnshop. Law enforcement recovered three firearms: (i) a PK 380; (ii) a Ruger 9mm bearing serial number 33389546; and (iii) the Smith and Wesson .44 caliber handgun bearing serial number CEV4085 referenced above.

Law enforcement then lawfully searched both the pawnshop and A-Hady’s private residence. During the search of the pawnshop, law enforcement recovered six rifles (including three AR-15-style assault rifles), three handguns, and one shotgun. In addition, during the searches of the pawnshop and A-Hady’s private residence, law enforcement recovered over 400 rounds of ammunition, including a large number of hollow point bullets.

The charge of being a previously convicted felon in possession of a firearm carries a maximum potential penalty of 10 years in prison and a $250,000 fine.

U.S. Attorney Craig Carpenito credited special agents with the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark; the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Charlie J. Patterson in Newark; the Office of the New Jersey Attorney General, under the direction of Attorney General Gurbir S. Grewal; and the N.J. State Police, under the direction of Col Patrick J. Callahan, with the investigation leading to the charge. U.S. Attorney Carpenito also thanked the Hudson County Prosecutor’s Office, under the direction of Prosecutor Esther Suarez,  the Jersey City Police Department, under the direction of Director James Shea, and the Keyport Police Department, under the direction of Chief Mark Hafner, for their assistance.

The government is represented by Ronnell Wilson, Chief of the National Security Unit of the U.S. Attorney’s Office for the District of New Jersey, and Assistant U.S. Attorneys Dean C. Sovolos and Thomas S. Kearney, also of the National Security Unit.

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

TRENTON, N.J. – A Roslyn, New York, man was sentenced today to 24 months in prison for demanding bribes in exchange for his assistance in securing contracts between a Texas financial services company and two New Jersey information technology staffing companies, U.S. Attorney Craig Carpenito announced.

Mark Berger, 59, previously pleaded guilty before U.S. District Judge Michael A. Shipp to an information charging him with one count of conspiracy to violate the Travel Act. Judge Shipp imposed the sentence today in Trenton federal court.

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

From January 2011 through March 2013, Berger was the chief information officer of SWBC, a financial services company based in Texas, and had the ability and authority to hire certain companies to perform work. Berger entered into contracts between SWBC and two companies based in New Jersey, including DaVinci Technology Corp., for information technology and staffing services.

As a condition of the contracts, Berger demanded that the owner of the IT companies, Anthony Curlo of Chester, New Jersey, pay him a certain percentage of the monies that the companies would receive from SWBC.

The IT companies received approximately $3 million in revenue from SWBC. Under the terms of the illegal kickback arrangement between Berger and Curlo, Berger was supposed to receive $1.14 million in kickback payments. Berger actually received $985,000 in cash payments, which were delivered to his home in New York.

In addition to the prison term, Judge Shipp sentenced Berger to two years of supervised release.

Curlo previously pleaded guilty to his role in the scheme on Sept. 21, 2016 and is awaiting sentencing.

U.S. Attorney Carpenito credited 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 Jonathan W. Romankow of the U.S. Attorney’s Office Criminal Division in Newark.

Defense counsel: John Carman Esq., Garden City, New York

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

Robert Delagente, 45, of Oakland, New Jersey, was indicted on one count of conspiracy to distribute controlled dangerous substances, three counts of distribution of controlled dangerous substances, and one count of falsifying medical records. Delagente will be arraigned at a later date.

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 count of falsifying medical records.

U.S. Attorney Craig 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 the charges.

The government is represented by Assistant U.S. Attorneys Jason S. Gould and Sean Sherman of the Opioids 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: Marc Calello Esq., Bloomfield, New Jersey

CAMDEN, N.J. – A Camden man was sentenced today to 45 months in prison for cashing fraudulently obtained tax refund checks issued by the U.S. Treasury, unlawfully utilizing the stolen identities of residents of Puerto Rico to effectuate the scheme, and tampering with a witness, U.S. Attorney Craig Carpenito announced.

Alberto Sanchez, 34, previously pleaded guilty before U.S. District Judge Robert B. Kugler to five counts of an indictment: two counts of theft of government funds, two counts of aggravated identity theft and one count of tampering with a witness or victim. Judge Kugler imposed the sentence today in Camden federal court.

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

Stolen Identity Refund Fraud (SIRF) is a common type of fraud committed against the United States government that involves the use of stolen identities to commit tax refund fraud. SIRF schemes generally share a number of hallmarks. Perpetrators obtain personal identifying information, including Social Security numbers and dates of birth, from unwitting individuals, who often reside in the Commonwealth of Puerto Rico. They then complete Form 1040 tax returns using the fraudulently obtained information and falsifying wages earned, taxes withheld, and other data, always ensuring that the fraudulent tax return generates a refund. They direct the U.S. Treasury Department to mail refund checks to locations that the perpetrators control or can access. With the fraudulently obtained refund checks in hand, SIRF perpetrators generate cash proceeds by depositing the checks into bank accounts that they control or cashing the checks at check cashing businesses.

For the 2013 tax year, more than 3,300 SIRF tax returns were filed using the names and Social Security numbers of residents of Puerto Rico, and where the refunds were directed to be mailed to a small section of Pennsauken, New Jersey. Of the 3,300 returns filed, several of the refunds checks were issued and ultimately cashed at check cashing agencies in New Jersey, Philadelphia, and New York using false and fraudulent identifications, including fake New Jersey driver's licenses, fake Social Security cards, and fake Department of Homeland Security Permanent Resident Identification cards.

On March 28, 2018, Sanchez and others were indicted by a federal grand jury. According to the indictment, the defendants and their conspirators obtained stolen identities of residents of Puerto Rico to falsely and fraudulently generate income tax refund checks. The conspirators recruited mail carriers from the U.S. Postal Service as part of the scheme to steal the tax refund checks from the mail. The mail carriers were paid for every U.S Treasury check that was stolen. The conspirators paid “check couriers” to cash the tax refund checks in a variety of ways, including at check cashing businesses in and around Camden. The check couriers presented false and fraudulent identifications at the check cashing businesses matching the names on the tax refund checks in order to cash the checks. The scheme caused $565,091 in losses to the U.S. Treasury.

Sanchez admitted that during 2014, he cashed Treasury income tax refund checks that were issued to other people. He used an Alien Permanent Resident Identification Card, which had his photograph, but the name, address and identifying information of another individual, and a Social Security card, which had a name and Social Security number that matched the information on the income tax refund check. Sanchez also admitted that, upon finding out that another person was arrested for participating in the scheme, he told that person to lie to investigators.

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

U.S. Attorney Carpenito credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge John R. Tafur, Newark Field Office, and Special Agent in Charge Guy Ficco, Philadelphia Field Office; and special agents of the U.S. Postal Service Office of Inspector General, under the direction of Special Agent in Charge Matthew Modafferi, Northeast Area Field Office, with the investigation leading to today’s sentencing. He also thanked the U.S. Postal Inspection Service for its assistance with the investigation.

The government is represented by Assistant U.S. Attorney Jason M. Richardson and Assistant U.S. Attorney Christina O. Hud of the Criminal Division.

Defense counsel: Jose Luis Ongay Esq., Camden

NEWARK, N.J. – The former chief financial officer (CFO) of a Sussex County retail construction company was arrested today for defrauding the company and several lenders, including by embezzling millions of dollars for his own personal benefit, U.S. Attorney Craig Carpenito announced.

Jonathan Baker, 38, of Green Township, New Jersey, was indicted on five counts of wire fraud and three counts of money laundering. He was arrested this morning by special agents of the FBI and 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:

Baker held the title of CFO of Victim-Company 1, a small, privately held retail construction company located in Sparta, New Jersey. The company acted as a construction manager and a general contractor for construction projects, such as new business offices, retail spaces, and restaurants. Baker also held the title of manager of Victim-Company 2, which held 100 percent of the voting and equitable interest in Victim-Company 1.

From 2015 through 2018, Baker defrauded both companies and several commercial lenders, embezzling millions from the companies and fraudulently inducing commercial lenders into providing funds to Baker and his associated entities through fraudulent use of Victim-Company 1’s name, bank statements, balance sheet, and bank accounts.

Baker misappropriated millions of dollars from the Victim-Companies’ bank accounts and used the funds for his personal expenses, including mortgage payments on Baker’s residence, the purchase of a BMW, and the purchase of six donkeys. He also used the Victim-Companies’ credit cards to make unauthorized personal purchases.

Baker obtained funds by causing Victim-Company 1 to enter into agreements with commercial lenders through falsified documents, such as false resolutions of the Board of Directors of Victim-Company 1.

Baker concealed the fraud by making false statements to members of the Victim-Companies after they confronted him with evidence of the fraud. He falsely claimed that a commercial lender had made a mistake in filing a lien against Victim-Company 1 and repeatedly misrepresented that the commercial lender would be issuing a retraction and apology. Baker then refused to meet or join conference calls with the members of the companies to discuss the liens against Victim-Company 1, refused to produce the Companies’ bank statements, changed the locks on the Companies’ offices, and attempted to disable the Companies’ email and phone system.

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, with the investigation leading to the charges.

The government is represented by Assistant U.S. Attorneys Jonathan Fayer and Courtney A. Howard of the U.S. Attorney’s Office Economic Crimes 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: Michael Weinstein Esq., Hackensack, New Jersey

CAMDEN, N.J. – A grand jury has returned an indictment against five members of a drug-trafficking organization for conspiring to distribute significant amounts of narcotics through an open-air drug market in Camden, U.S. Attorney Craig Carpenito announced today.

The indicted defendants include: Juan Figueroa, 22; Christopher Vasquez, 29; Jose Diaz, 27; and Jose Agron, 26, all of Camden; and Dwight Williams, 28, of Lumberton, New Jersey. The indictment charges each defendant with participating in a drug trafficking conspiracy that involved at least one kilogram of a mixture and substance containing heroin; at least 280 grams of a mixture and substance containing cocaine base (“crack cocaine”); and quantities of cocaine and fentanyl. Each defendant named in the indictment was previously charged by federal complaint.

Nine other members of the drug-trafficking conspiracy – Ronnie Lopez, Nelson Salcedo, Paul Salcedo, Waldemar Garcia, William Carrillo, Elisa Rivera, Ramon Velez, Naeem Sadler, and Jasmin Velez – previously have pleaded guilty in this case. The charges against four other defendants in this case remain pending, and they and the defendants indicted today are presumed innocent unless and until proven guilty.

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

The FBI used surveillance, confidential informants, consensual recordings, multiple controlled drug purchases, a GPS vehicle tracker, search warrants of several different locations, and several court-authorized wiretaps to uncover the operations of a drug trafficking organization that dealt heroin, crack cocaine, cocaine, and fentanyl in and around Camden. The organization’s activities were concentrated on the 400-500 blocks of Pine Street, where members distributed drugs to customers who approached on foot and in vehicles. The organization also supplied drugs elsewhere, including in and around the residences of some of its members.

Members of the organization previously had conducted drug trafficking activities in and around the 1900 block of Filmore Street. After a fatal, drug-related shooting in that area in April 2017, local law enforcement increased their presence in the area and the drug-trafficking activities ultimately shifted to the area around Pine Street.

The investigation revealed that the organization’s members worked together in a multi-layered organization to supply drugs. The main role of Ronnie Lopez – one of the leaders of the organization – was to obtain bulk quantities of illegal drugs for sale to customers. The organization also had distributors and packagers, such as Carlos Perez and Nelson Salcedo, whose main roles were to obtain drugs from Lopez and others and to prepare and package the drugs for distribution downstream. The organization used “runners,” or managers, like Juan Figueroa and Paul Salcedo. These individuals obtained drugs from higher-level distributors and packagers within the organization and then provided those drugs downstream to shift managers like Jose Diaz and Christopher Vazquez. “Runners” also collected drug proceeds from lower-level shift managers and provided that money to higher-level members of the organization, such as Lopez. Shift managers, in turn, supervised the organization’s set workers, including Jose Agron, Dwight Williams, Elisa Rivera, Jasmin Velez, Kaliel Johnson, William Carrillo, Meylin Troncoso, Waldemar Garcia, Naeem Sadler, Jameel Byng, Ramon Velez and David Velez. These set workers sold drugs directly to customers and passed the proceeds up the organizational hierarchy.

Multiple communications intercepted by wiretaps reflected that members of the organization owned guns and were prepared to use them. In November 2018, law enforcement officers recovered firearms during the execution of several search warrants on locations related to the drug-trafficking organization. Juan Figueroa currently is facing several charges in Camden County Superior Court regarding the Aug. 7, 2018, shooting of two law enforcement officers, who were in an unmarked car and wearing plain clothes after having conducted surveillance earlier in the day on members of the organization. Also, some of the heroin that was purchased from the organization bore the same stamp as drugs found at the sites of drug overdoses in Camden, including two fatal overdoses.

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

U.S. Attorney Craig Carpenito credited special agents of the FBI’s South Jersey Violent Offender and Gang Task Force, South Jersey Resident Agency, under the direction of Special Agent in Charge Michael T. Harpster; the Camden County Police Department, under the direction of Chief Joseph Wysocki; the Camden County Prosecutor’s Office, under the direction of Acting Prosecutor Jill S. Mayer; the Camden County Sheriff’s Department, under the direction of Sheriff Gilbert L. Wilson; the Cherry Hill Police Department, under the direction of Chief William P. Monaghan; and the New Jersey State Police, under the direction of Col. Patrick J. Callahan, with the investigation leading to today’s indictment. He also thanked the Drug Enforcement Administration, the U.S. Marshals Service, and the Department of Homeland Security for their assistance.

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

Defense counsel:

Juan Figueroa: Paul Sarmousakis Esq., Avalon, New Jersey
Vasquez: Edward J. Crisonino Esq., Collingswood, New Jersey
Diaz: John B. Brennan Esq., Marlton, New Jersey
Agron: Gil Scutti Esq., Somerdale, New Jersey
Williams: Justin Loughry Esq., Camden

NEWARK, N.J. – Two Ocean County, New Jersey, men were charged with possessing cocaine with the intent to distribute; one defendant was also charged with being a felon in possession of a firearm, U.S. Attorney Craig Carpenito announced today.

Mario Galli III, 27, and Jason Vella, 37, both of Toms River, New Jersey, are each charged by complaint with one count of possession with intent to distribute cocaine. Galli is also charged with one count of possession of a firearm by a convicted felon and one count of possession of a firearm in furtherance of a drug trafficking crime.

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

On Sept. 19, 2019, investigators from the Ocean County Prosecutor’s Office executed search warrants on each of the defendants’ residences and recovered in excess of 150 grams of cocaine and drug paraphernalia, including digital scales, glassine envelopes, a money counter, baking soda, grinders, and $2,295 in cash. Also recovered from Galli’s residence was 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.

The charge of possession of cocaine with intent to distribute carries a maximum penalty of 20 years in prison and a $250,000 fine. The count of being a felon in possession of a firearm carries a maximum penalty of 10 years in prison and a $250,000 fine. The count of possession of a firearm in furtherance of a drug trafficking crime carries a maximum penalty of five years in prison, which must be served consecutively to any sentence on the drug count and a $250,000 fine. 

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 the charges.

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.

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

TRENTON, N.J. – Two New York men were charged today with conspiracy to commit extortion using threats of force, violence, and fear, U.S. Attorney Craig Carpenito announced.

Francis A. Garzon, 30, and Endrit Kllogjeri, 26, both of Brooklyn, New York, are each charged by complaint with one count of conspiracy to commit extortion. Both individuals appeared today before U.S. Magistrate Judge Douglas E. Arpert in Trenton federal court.

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

From Dec. 1, 2019, through Dec, 9, 2019, Garzon and Kllogjeri, along with another unidentified individual, conspired to extort a resident of Monmouth County, New Jersey, -- “Victim 1” – and the resident’s son, who resided in Brooklyn. Victim 1 was allegedly threatened with physical harm if Victim 1 did not recover a bag containing property allegedly valued at $100,000 from Victim 1’s son, identified in the complaint as “Victim 2.” Garzon further demanded an additional payment of $100,000 as “interest” for Victim 2’s possession of the bag. In connection with issuing oral threats against Victim 1, including assuring that Victim 1 did not “know who [Victim 1 was] dealing with,” Garzon additionally brandished a revolver, pointing the weapon at Victim 1 before cocking the revolver’s hammer. In a series of telephone and in-person conversations over several days following the visit to Victim 1’s home, Garzon continued to threaten Victim 1, even sending Victim 1 cellphone messages containing photographs and videos of Victim 2 and Victim 2’s family.

The count of conspiracy to commit extortion carries a maximum potential penalty of up to 20 years in prison and a fine of up to $250,000 or twice the gross pecuniary gain or loss.

U.S. Attorney Carpenito credited special agents with the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, New Jersey, and the Marlboro Township Police Department, under the direction of Police Chief Peter Pezzullo, with the investigation leading to the charges. 

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

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

NOTE: A fourth defendant, Silviu Catalin Balaci, was arrested in Germany after the issuance of this press release. The attached indictment has been amended to reflect this.

NEWARK, N.J. – Three men were arrested today in connection with a cryptocurrency mining scheme that defrauded investors of $722 million, U.S. Attorney Craig Carpenito announced. 

Matthew Brent Goettsche, 37, of Lafayette, Colorado, and Jobadiah Sinclair Weeks, 38, of Arvada, Colorado, are charged by indictment with conspiracy to commit wire fraud and Goettsche, Weeks, and Joseph Frank Abel, 49, of Camarillo, California, are charged by indictment with conspiracy to offer and sell unregistered securities. Goettsche was arrested in Colorado, Weeks in Florida, and Abel in California. All three are scheduled to have their initial appearances in the districts of their arrests. Two defendants remain at large and their identities remain under seal.

“The indictment describes the defendants’ use of the complex world of cryptocurrency to take advantage of unsuspecting investors,” U.S. Attorney Carpenito said. “What they allegedly did amounts to little more than a modern, high-tech Ponzi scheme that defrauded victims of hundreds of millions of dollars. Working with our law enforcement partners here and across the country, we will ensure that these scammers are held to account for their crimes.”

“Those arrested today are accused of deploying elaborate tactics to lure thousands of victims with promises of large returns on their investments in a bitcoin mining pool, an advanced method of profiting on cryptocurrency,” Paul Delacourt, the Assistant Director in Charge of the FBI’s Los Angeles Field Office said. “The defendants allegedly made hundreds of millions of dollars by continuing to recruit new investors over several years while spending victims' money lavishly.”

“Today’s indictment alleges the defendants were involved in a sophisticated Ponzi scheme involving hundreds of millions of dollars that preyed upon investors all over the world,” John R. Tafur, Special Agent in Charge, IRS Criminal Investigation, Newark Field Office, said.  “This was a classic con game with a virtual twist; false promises of large returns for investing in the mining of Bitcoin. IRS Criminal Investigation will continue to work with our law enforcement partners, including the Joint Chiefs of Global Tax Enforcement, to investigate and bring to justice cyber criminals.”    

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

From April 2014 through December 2019, the defendants operated BitClub Network, a fraudulent scheme that solicited money from investors in exchange for shares of purported cryptocurrency mining pools and rewarded investors for recruiting new investors. Goettsche, Weeks, and others conspired to solicit investments in BitClub Network by providing false and misleading figures that BitClub investors were told were “bitcoin mining earnings,” purportedly generated by BitClub Network’s bitcoin mining pool. Goettsche discussed with his conspirators that their target audience would be “dumb” investors, referred to them as “sheep,” and said he was “building this whole model on the backs of idiots.” Goettsche directed others to manipulate the figures displayed as “mining earnings” during the course of the conspiracy.

For example, in February 2015, Goettsche directed another conspirator to “bump up the daily mining earnings starting today by 60%,” to which his conspirator warned “that is not sustainable, that is ponzi teritori [sic] and fast cash-out ponzi . . . but sure.” In September 2017, Goettsche sent an email to another conspirator in which he suggested that Bitclub Network “[d]rop mining earnings significantly starting now” so that he could “retire RAF!!! (rich as fuck).” Weeks sent an email in June 2017 to Goettsche and another conspirator in which he remarked that BitClub selling shares in BitClub and then not using the money to purchase mining equipment was “not right.” Goettsche, Weeks, and others obtained the equivalent of at least $722 million from BitClub Network investors.    

Goettsche, Weeks, Abel, and others also conspired to sell BitClub Network shares – which were securities – notwithstanding that BitClub Network did not register the shares with the U.S. Securities and Exchange Commission. Weeks and Abel created videos and traveled around the United States and the world to promote BitClub Network. In one video, a conspirator espoused that BitClub Network was “the most transparent company in the history of the world that I’ve ever seen.” In another video, Abel assured investors that BitClub Network was “too big to fail.”              

The wire fraud conspiracy charge carries a maximum potential penalty of 20 years in prison, and a fine of up to $250,000. The conspiracy to sell unregistered securities charge carries a maximum penalty of five years in prison and a fine up to $250,000.    

U.S. Attorney Carpenito credited special agents and task force officers of the FBI’s Los Angeles Division’s West Covina Resident Agency, under the direction of Acting Assistant Director in Charge Delacourt; special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge John R. Tafur in Newark; and the IRS Los Angeles Field Office, under the direction of Special Agent in Charge Ryan L. Korner, with the investigation leading to today’s charges.

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

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

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

NEWARK, N.J. – A Staten Island, New York, man has admitted robbing a New Jersey business owner in February 2019, defrauding eight New Jersey businesses from July 2016 through January 2019, and defrauding and stealing the identities of three women, U.S. Attorney Craig Carpenito announced today.

Raymond Scura, 30, pleaded guilty before Judge Claire C. Cecchi in Newark federal court on Dec. 9, 2019, to an information charging him with wire fraud affecting a financial institution, aggravated identity theft, and Hobbs Act robbery.

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

Scura used bad checks and stolen credit cards to obtain goods and services, such as a country club membership, limousine services, luxury hotel expenses, exotic car rentals, and a Rolex watch, in order to appear wealthy and obtain the confidence of his victims, often targeting women. Once he convinced his victims of his purported wealth, he would then steal their identities and accounts to make additional purchases. As a result of his fraud and aggravated identity theft offenses, Scura caused losses to individuals and businesses in excess of $250,000

In February 2019, Scura was a customer of an internet-based business owned and operated by a New Jersey man. To pay for the services of the business, Scura wrote at least one fraudulent check to the victim. When the victim insisted on cash payment, Scura drove with the business owner to a bank, where Scura brandished a gun, threatened to kill the victim, and demanded that the victim deposit a fraudulent check for $10,000 into the victim’s bank account and then withdraw $10,000. The victim did as Scura directed and then gave Scura the $10,000.

The Hobbs Act robbery charge carries a statutory maximum of 20 years in prison and a $250,000 fine, or twice the gain or loss from the offense. The wire fraud affecting a financial institution charge carries a statutory maximum of 30 years in prison, and the aggravated identity theft charge carries a mandatory minimum sentence of two years in prison, which must be served consecutively to any other sentenced imposed. Sentencing is scheduled for April 1, 2020.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, and members of the Belleville Police Department, under the direction of Chief of Police Mark Minichini, with the investigation leading to the guilty plea. He also thanked the Summit Police Department, the Union County Prosecutor’s Office, the Burlington County Prosecutor’s Office, and the Evesham Police Department for their assistance.

The government is represented by Assistant U.S. Attorneys Christopher Amore of the Organized Crime and Gangs Unit and Elaine Lou of the U.S. Attorney’s Office in Newark.

Defense counsel: Saverio Viggiano Esq., Assistant Federal Public Defender, Newark

NEWARK, N.J. – The former chief operating officer of a New Jersey custom manufacturing firm admitted today that he made false statements and submitted false documents to the Department of Defense in fulfillment of a machine gun bipod assembly contract, U.S. Attorney Craig Carpenito announced. 

Mark Colello, 54, of Hackettstown, New Jersey, pleaded guilty before U.S. District Judge William Martini in Newark federal court to an information charging him with two counts of making false statements and representations.

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

In April 2015, Colello’s company was awarded government contracts by the U.S. Army, Department of Defense, to manufacture bipod assemblies for the M249 light machine gun that required the use of a specific grade of steel. Colello falsified test results for the hardness of steel used to construct the bipod assemblies and for the magnetic particle inspection of the head and collar joints for the bipods. The weaker grade steel and the faulty head and collar joints caused the legs of the bipods to fail when soldiers attempted to use them to support their machine guns. 

The count of making false statements carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for Jan. 28, 2020.

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; special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark; special agents of Homeland Security Investigations, under the direction of Special Agent in Charge Brian Michael; and U.S. Army Criminal Investigations Command, Major Procurement Fraud Unit, under the direction of Special Agent in Charge L. Scott Moreland, for the investigation leading to today’s guilty plea. 

The government is represented by Assistant U.S. Attorney Margaret Mahoney of the National Security Unit.