District of New Jersey

A federal grand jury returned an indictment unsealed today in Newark, New Jersey charging Faramarz Shahi Savandi, 34, and Mohammad Mehdi Shah Mansouri, 27, both of Iran, in a 34-month-long international computer hacking and extortion scheme involving the deployment of sophisticated ransomware, announced Deputy Attorney General Rod J. Rosenstein, Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Craig Carpenito for the District of New Jersey and Executive Assistant Director Amy S. Hess of the FBI.

The six-count indictment alleges that Savandi and Mansouri, acting from inside Iran, authored malware, known as “SamSam Ransomware,” capable of forcibly encrypting data on the computers of victims.  According to the indictment, beginning in December 2015, Savandi and Mansouri would then allegedly access the computers of victim entities without authorization through security vulnerabilities, and install and execute the SamSam Ransomware on the computers, resulting in the encryption of data on the victims’ computers.  These more than 200 victims included hospitals, municipalities, and public institutions, according to the indictment, including the City of Atlanta, Georgia; the City of Newark, New Jersey; the Port of San Diego, California; the Colorado Department of Transportation; the University of Calgary in Calgary, Alberta, Canada; and six health care-related entities: Hollywood Presbyterian Medical Center in Los Angeles, California; Kansas Heart Hospital in Wichita, Kansas; Laboratory Corporation of America Holdings, more commonly known as LabCorp, headquartered in Burlington, North Carolina; MedStar Health, headquartered in Columbia, Maryland; Nebraska Orthopedic Hospital now known as OrthoNebraska Hospital, in Omaha, Nebraska and Allscripts Healthcare Solutions Inc., headquartered in Chicago, Illinois.

According to the indictment, Savandi and Mansouri would then extort victim entities by demanding a ransom paid in the virtual currency Bitcoin in exchange for decryption keys for the encrypted data, collecting ransom payments from victim entities that paid the ransom, and exchanging the Bitcoin proceeds into Iranian rial using Iran-based Bitcoin exchangers.  The indictment alleges that, as a result of their conduct, Savandi and Mansouri have collected over $6 million USD in ransom payments to date, and caused over $30 million USD in losses to victims.

“The Iranian defendants allegedly used hacking and malware to cause more than $30 million in losses to more than 200 victims,” said Deputy Attorney General Rosenstein.  “According to the indictment, the hackers infiltrated computer systems in 10 states and Canada and then demanded payment. The criminal activity harmed state agencies, city governments, hospitals, and countless innocent victims.”

“The allegations in the indictment unsealed today—the first of its kind—outline an Iran-based international computer hacking and extortion scheme that engaged in 21st-century digital blackmail,” said Assistant Attorney General Benczkowski.  “These defendants allegedly used ransomware to infect the computer networks of municipalities, hospitals, and other key public institutions, locking out the computer owners, and then demanded millions of dollars in payments from them. As today’s charges demonstrate, the Criminal Division and its law enforcement partners will relentlessly pursue cybercriminals who harm American citizens, businesses, and institutions, regardless of where those criminals may reside.”

“The defendants in this case developed and deployed the SamSam Ransomware in order to hold public and private entities hostage and then extort money from them,” said U.S. Attorney Carpenito.  “As the indictment in this case details, they started with a business in Mercer County and then moved on to major public entities, like the City of Newark, and healthcare providers, like the Hollywood Presbyterian Medical Center in Los Angeles and the Kansas Heart Hospital in Wichita—cravenly taking advantage of the fact that these victims depend on their computer networks to serve the public, the sick, and the injured without interruption.  The charges announced today show that the U.S. Attorney’s Office for the District of New Jersey will continue to act to disrupt such criminal acts, and identify those who are responsible for them, no matter where in the world they may seek to hide.”

“This indictment demonstrates the FBI’s continuous commitment to unmasking malicious actors behind the world’s most egregious cyberattacks,” said Executive Assistant Director Hess.  “By calling out those who threaten American systems, we expose criminals who hide behind their computer and launch attacks that threaten our public safety and national security.  The actions highlighted today, which represent a continuing trend of cyber criminal activity emanating from Iran, were particularly threatening, as they targeted public safety institutions, including U.S. hospital systems and governmental entities.  The FBI, with the assistance of our private sector and U.S. government partners, are sending a strong message that we will work together to investigate and hold all criminals accountable.”

Savandi and Mansouri are charged with one count of conspiracy to commit wire fraud, one count of conspiracy to commit fraud and related activity in connection with computers, two substantive counts of intentional damage to a protected computer and two substantive counts of transmitting a demand in relation to damaging a protected computer.

According to the indictment, Savandi and Mansouri created the first version of the SamSam Ransomware in December 2015, and created further refined versions in June and October 2017.  In addition to employing Iran-based Bitcoin exchangers, the indictment alleges that the defendants also utilized overseas computer infrastructure to commit their attacks.   Savandi and Mansouri would also use sophisticated online reconnaissance techniques (such as scanning for computer network vulnerabilities) and conduct online research in order to select and target potential victims, according to the indictment.  According to the indictment, the defendants would also disguise their attacks to appear like legitimate network activity.

To carry out their scheme, the indictment alleges that the defendants also employed the use of Tor, a computer network designed to facilitate anonymous communication over the internet.  According to the indictment, the defendants maximized the damage caused to victims by launching attacks outside regular business hours, when a victim would find it more difficult to mitigate the attack, and by encrypting backups of the victims’ computers.  This was intended to—and often did—cripple the regular business operations of the victims, according to the indictment.  The most recent ransomware attack against a victim alleged in the indictment took place on Sept. 25, 2018.

This case was investigated by the FBI’s Newark Field Office.  Senior Counsel William A. Hall Jr. of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS) and Assistant U.S. Attorney and Chief of the Cybercrimes Unit Justin S. Herring of the District of New Jersey are prosecuting the case.  The Department thanks its law enforcement colleagues at the National Crime Agency (UK), West Yorkshire Police (UK), Calgary Police Service (Canada), and the Royal Canadian Mounted Police.  Significant assistance was provided by the Justice Department’s National Security Division and the Criminal Division’s Office of International Affairs.

Victims are encouraged to contact their local FBI field office and file a complaint online with the Internet Crime Complaint Center (IC3).  The IC3 staff reviews complaints, looking for patterns or other indicators of significant criminal activity, and refers investigative packages of complaints to the appropriate law enforcement authorities in a particular city or region. The FBI provides a variety of resources relating to ransomware through the IC3, which can be reached at www.ic3.gov.   For more information on ransomware prevention, visit:  https://www.ic3.gov/media/2016/160915.aspx   

Charges contained in an indictment are merely allegations, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

NEWARK, N.J. – An indictment returned by a federal grand jury was unsealed today in Newark, charging Faramarz Shahi Savandi, 34, and Mohammad Mehdi Shah Mansouri, 27, both of Iran, in a 34-month-long international computer hacking and extortion scheme involving the deployment of sophisticated ransomware, U.S. Attorney Craig Carpenito for the District of New Jersey, Deputy Attorney General Rod J. Rosenstein, Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, and Executive Assistant Director Amy S. Hess of the FBI announced.

The six-count indictment alleges that Savandi and Mansouri, acting from inside Iran, authored malware, known as “SamSam Ransomware,” capable of forcibly encrypting data on the computers of victims. According to the indictment, beginning in December 2015, Savandi and Mansouri would then allegedly access the computers of victim entities without authorization through security vulnerabilities, and install and execute the SamSam Ransomware on the computers, resulting in the encryption of data on the victims’ computers. These more than 200 victims included hospitals, municipalities, and public institutions, according to the indictment, including the City of Atlanta, Georgia; the City of Newark, New Jersey; the Port of San Diego, California; the Colorado Department of Transportation; the University of Calgary in Calgary, Alberta, Canada; and six health care-related entities: Hollywood Presbyterian Medical Center in Los Angeles, California; Kansas Heart Hospital in Wichita, Kansas; Laboratory Corporation of America Holdings, more commonly known as LabCorp, headquartered in Burlington, North Carolina; MedStar Health, headquartered in Columbia, Maryland; Nebraska Orthopedic Hospital now known as OrthoNebraska Hospital, in Omaha, Nebraska and Allscripts Healthcare Solutions Inc., headquartered in Chicago, Illinois.

According to the indictment, Savandi and Mansouri would then extort victim entities by demanding a ransom paid in the virtual currency Bitcoin in exchange for decryption keys for the encrypted data, collecting ransom payments from victim entities that paid the ransom, and exchanging the Bitcoin proceeds into Iranian rial using Iran-based Bitcoin exchangers. The indictment alleges that, as a result of their conduct, Savandi and Mansouri have collected over $6 million USD in ransom payments to date, and caused over $30 million USD in losses to victims.

“The defendants in this case developed and deployed the SamSam Ransomware in order to hold public and private entities hostage and then extort money from them,” U.S. Attorney Carpenito said. “As the indictment in this case details, they started with a business in Mercer County and then moved on to major public entities, like the City of Newark, and healthcare providers, like the Hollywood Presbyterian Medical Center in Los Angeles and the Kansas Heart Hospital in Wichita – cravenly taking advantage of the fact that these victims depend on their computer networks to serve the public, the sick, and the injured without interruption. The charges announced today show that the U.S. Attorney’s Office for the District of New Jersey will continue to act to disrupt such criminal acts, and identify those who are responsible for them, no matter where in the world they may seek to hide.”

“The Iranian defendants allegedly used hacking and malware to cause more than $30 million in losses to more than 200 victims,” Deputy Attorney General Rosenstein said. “According to the indictment, the hackers infiltrated computer systems in 10 states and Canada and then demanded payment. The criminal activity harmed state agencies, city governments, hospitals, and countless innocent victims.”

“The allegations in the indictment unsealed today—the first of its kind—outline an Iran-based international computer hacking and extortion scheme that engaged in 21st-century digital blackmail,” Assistant Attorney General Benczkowski said. “These defendants allegedly used ransomware to infect the computer networks of municipalities, hospitals, and other key public institutions, locking out the computer owners, and then demanded millions of dollars in payments from them. As today’s charges demonstrate, the Criminal Division and its law enforcement partners will relentlessly pursue cybercriminals who harm American citizens, businesses, and institutions, regardless of where those criminals may reside.”

“This indictment demonstrates the FBI’s continuous commitment to unmasking malicious actors behind the world’s most egregious cyberattacks,” said Executive Assistant Director Hess. “By calling out those who threaten American systems, we expose criminals who hide behind their computer and launch attacks that threaten our public safety and national security. The actions highlighted today, which represent a continuing trend of cyber criminal activity emanating from Iran, were particularly threatening, as they targeted public safety institutions, including U.S. hospital systems and governmental entities. The FBI, with the assistance of our private sector and U.S. government partners, are sending a strong message that we will work together to investigate and hold all criminals accountable.”

Savandi and Mansouri are charged with one count of conspiracy to commit wire fraud, one count of conspiracy to commit fraud and related activity in connection with computers, two substantive counts of intentional damage to a protected computer and two substantive counts of transmitting a demand in relation to damaging a protected computer.

According to the indictment, Savandi and Mansouri created the first version of the SamSam Ransomware in December 2015, and created further refined versions in June and October 2017. In addition to employing Iran-based Bitcoin exchangers, the indictment alleges that the defendants also utilized overseas computer infrastructure to commit their attacks. Savandi and Mansouri would also use sophisticated online reconnaissance techniques (such as scanning for computer network vulnerabilities) and conduct online research in order to select and target potential victims, according to the indictment. According to the indictment, the defendants would also disguise their attacks to appear like legitimate network activity.

To carry out their scheme, the indictment alleges that the defendants also employed the use of Tor, a computer network designed to facilitate anonymous communication over the internet. According to the indictment, the defendants maximized the damage caused to victims by launching attacks outside regular business hours, when a victim would find it more difficult to mitigate the attack, and by encrypting backups of the victims’ computers. This was intended to—and often did—cripple the regular business operations of the victims, according to the indictment. The most recent ransomware attack against a victim alleged in the indictment took place on Sept. 25, 2018.

This case was investigated by the FBI’s Newark Field Office. Assistant U.S. Attorney and Chief of the Cybercrimes Unit Justin S. Herring of the District of New Jersey and Senior Counsel William A. Hall Jr. of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS) are prosecuting the case. The Department thanks its law enforcement colleagues at the National Crime Agency (UK), West Yorkshire Police (UK), Calgary Police Service (Canada), and the Royal Canadian Mounted Police. Significant assistance was provided by the Justice Department’s National Security Division and the Criminal Division’s Office of International Affairs.

Victims are encouraged to contact their local FBI field office and file a complaint online with the Internet Crime Complaint Center (IC3). The IC3 staff reviews complaints, looking for patterns or other indicators of significant criminal activity, and refers investigative packages of complaints to the appropriate law enforcement authorities in a particular city or region. The FBI provides a variety of resources relating to ransomware through the IC3, which can be reached at www.ic3.gov. For more information on ransomware prevention, visit: https://www.ic3.gov/media/2016/160915.aspx

Charges contained in an indictment are merely allegations, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

10 Arrests Made in Coordinated Takedown by Federal and State Law Enforcement; Eight Defendants At Large, One in Custody on State Charges

CAMDEN, N.J. – Nineteen people were charged today for their roles in a conspiracy to sell significant amounts of illegal drugs in Camden, U.S. Attorney Craig Carpenito announced.

A complaint unsealed today charges the defendants (see chart below) with participating in a drug trafficking conspiracy that involved at least 280 grams of cocaine base, at least one kilogram of heroin, and other quantities of cocaine and fentanyl. The defendants arrested today are scheduled to have their initial appearances this afternoon before U.S. Magistrate Judge Joel Schneider in Camden federal court. E defendants remain at large.

According to documents filed in this case:

An investigation led by the FBI used surveillance, confidential informants, consensual recordings, multiple controlled drug purchases, record checks, a GPS vehicle tracker, and several court-authorized wiretaps to uncover the operations of a drug trafficking organization that dealt crack cocaine, cocaine, heroin and fentanyl in and around the City of 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 to customers and other distributors elsewhere.

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 organization ultimately shifted its activities to Pine Street.

The investigation has revealed that from November 2016 to November 2018, the organization’s members worked together in a multi-layered organizational structure to supply drugs. The main role of Ronnie Lopez – one of the alleged 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, Elisa Rivera, Jasmin Velez, Dwight Williams, Kaliel Johnson, William Carrillo, Meylin Troncoso, Waldemar Garcia, Naeem Sadler, and Jameel Byng. These set workers sold drugs directly to customers and passed the proceeds up the organizational hierarchy. David Velez and Ramon Velez sold drugs supplied by the organization near their residences.

The drug trafficking organization is also believed to have used violence in the course of its operations. Multiple communications intercepted by wiretaps reflected that members of the organization owned guns and were prepared to use them. 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 Harpster; the Camden County Police Department, under the direction of Chief J. Scott Thomson; the Camden County Prosecutor’s Office, under the direction of Prosecutor Mary Eva Colalillo; 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 the charges.

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 contained in the complaints and the charges against Figueroa in state court are merely accusations, and the defendants are considered innocent unless and until proven guilty.

Defendant

Age

Residence

Nelson Salcedo

48

Camden

Ronnie Lopez

40

Pennsauken, New Jersey

Paul Salcedo

28

Camden

Carlos Perez

45

Collingswood, New Jersey

**Juan Figueroa

21

Camden

Jose Diaz

26

Camden

*Christopher Vazquez

28

Camden

*Ramon Velez

43

Camden

*David Velez

30

Camden

*Waldemar Garcia

33

Camden

Naeem Sadler

18

Camden

*Kaliel Johnson

26

Camden

Jasmin Velez

25

Camden

*Elisa Rivera

28

Camden

*Meylin Troncoso

31

Camden

Dwight Williams

27

Mount Holly, New Jersey

William Carrillo

44

Camden

*Jose Agron

25

Camden

Jameel Byng

25

Camden

*denotes at large

**denotes in state custody

CAMDEN, N.J. – A former New Jersey lawyer today admitted his role in a money laundering scheme, U.S. Attorney Craig Carpenito announced.

Michael W. Kwasnik, 49, of North Miami Beach, Florida, pleaded guilty before U.S. District Judge Robert B. Kugler in Camden federal court to Count 12 of a superseding indictment, charging him with money laundering.

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

Kwasnik was previously associated with a law firm, Kwasnik, Rodio, Kanowitz and Buckley P.C. – and its successor firm, Kwasnik, Kanowitz and Associates P.C. – with offices in Cherry Hill, New Jersey, and Philadelphia. His father, and co-defendant, William M. Kwasnik, of Marlton, New Jersey, owned and operated an insurance company, Abby Grant, with offices in Cherry Hill and Lakewood, New Jersey.

In April 2011, Michael Kwasnik induced a client to establish an irrevocable family trust to settle his mother’s estate, with promises that any money deposited in the trust would not be invested, but rather held for the client’s benefit. With the client’s consent, Michael Kwasnik established the trust and named himself as the trustee. Based on Michael Kwasnik’s promises, the client gave Michael Kwasnik $125,774, which the client received after his mother’s death, to deposit in the trust account. Michael Kwasnik deposited the money into the trust account and the next day, transferred $125,000 to Abby Grant’s bank account, and then to the Kwasnik, Rodio, Kanowitz and Buckley P.C. bank account, without the client’s knowledge or permission. Michael Kwasnik admitted that he did so to conceal and disguise the source of the money and that it was the proceeds of a mail fraud or wire fraud scheme.

The money laundering offense to which Michael Kwasnik pleaded guilty carries a maximum penalty of 20 years in prison and a $500,000 fine, or twice the gross gain or loss from the offense. Under terms of the plea agreement, he must also forfeit $125,000 and pay restitution.

The charges against William Kwasnik remain pending, and he is presumed innocent unless and until proven guilty.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Michael T. Harpster, Philadelphia Division, and special agents of IRS Criminal Investigation, under the direction of Special Agent in Charge John R. Tafur, Newark Division, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorneys Deborah Prisinzano Mikkelsen and Jason Richardson of the U.S. Attorney’s Office in Camden.

Defense counsel: Michael Kwasnik: Richard Klineburger Esq., Haddonfield, New Jersey
William Kwasnik: Daniella Gordon Esq., Moorestown, New Jersey

TRENTON, N.J. – A Florida woman was sentenced today to 60 months in prison for her role in an oxycodone distribution conspiracy in Flemington, New Jersey, U.S. Attorney Craig Carpenito announced.

Alicia Balaban, 35, of Wellington, Florida, previously pleaded guilty before U.S. District Judge Freda Wolfson to an information charging her with one count of conspiracy to distribute and possess with intent to distribute oxycodone. Judge Wolfson imposed the sentence today in Trenton federal court.

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

From April 2016 through December 2017, Balaban, her mother, Michele Call, 63, of Flemington, New Jersey, and Nelida Rios, 55, also of Flemington, worked together to secure prescriptions for oxycodone, fill them at pharmacies in Flemington, and then distribute the pills to Marie DeJulia, 42, of Lodi, New Jersey, from Call’s and Rios’ residences for resale. The conspirators distributed thousands of 30 mg oxycodone pills.

In addition to the prison term, Judge Wolfson sentenced Balaban to three years of supervised release, and fined her $1,500. She ordered forfeiture of $93,560.

All of the defendants have pleaded guilty. On Nov. 20, 2018, Call was sentenced to 54 months in prison and Rios was sentenced to 48 months in prison. DeJulia is awaiting sentencing.

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

The government is represented by Assistant U.S. Attorney Danielle Alfonzo Walsman, Chief of the U.S. Attorney’s Office Public Protection Unit in Newark.

Fourteen Arrests Made in Coordinated Takedown by Federal and State Law Enforcement; One Defendant At Large

TRENTON, N.J. – Fifteen people were charged for their roles in a conspiracy to distribute significant quantities of heroin and cocaine in the Bayshore area of Monmouth and Middlesex counties, U.S. Attorney Craig Carpenito announced today.

Fourteen of the defendants (see chart below) were charged by complaint with conspiracy to distribute 100 grams or more of heroin and all 15 defendants were charged with conspiracy to distribute 500 grams or more of cocaine. Those arrested today are scheduled to have their initial appearances this afternoon before U.S. Magistrate Judge Tonianne J. Bongiovanni in Trenton federal court. One defendant, Shavar Williams, remains at large.

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

From May 2017 to November 2018 the defendants and others engaged in a drug trafficking conspiracy that operated in the Raritan Bayshore region of Middlesex and northern Monmouth counties.

Through the interception of telephone calls and text messages pursuant to court-authorized wiretap orders, controlled purchases of heroin and cocaine, the use of confidential sources of information, and other investigative techniques, law enforcement learned that defendants Guy Jackson, Richard Gethers, and Deberal Rogers regularly obtained from defendant Gregory Gillens large quantities of heroin and cocaine for distribution. Defendant Lashawn Mealing, Jackson’s wife, also engaged in the conspiracy to distribute these illegal drugs along with her husband.

Members of the conspiracy redistributed the heroin and cocaine supplied by Gillens, for profit, to other conspirators, distributors, sub-dealers, and end users in the Bayshore area. Based on laboratory analysis of heroin obtained via controlled purchases from a member of the conspiracy, the heroin distributed by the conspiracy is believed to contain fentanyl, a dangerous synthetic opioid.

Law enforcement officials intercepted numerous discussions between the conspirators regarding the availability of quantities of heroin and cocaine, pricing, packaging, quantity, and customer satisfaction. The members of the conspiracy frequently took, and discussed taking, affirmative steps to avoid detection by law enforcement, including using prepaid cellular telephones with fictitious or no subscriber information, engaging in counter surveillance of law enforcement vehicles, using multiple vehicles to conduct narcotics transactions, discussing whether certain individuals might be cooperating with law enforcement, and speaking in coded language to disguise the illicit nature of their discussions.

The heroin and cocaine conspiracy counts charged in the complaint each carry a statutory mandatory minimum term of five years and a maximum of 40 years in prison, and a maximum fine of $5 million.

U.S. Attorney Carpenito credited special agents of the FBI, Newark Division, Red Bank Resident Agency, Jersey Shore Gang and Criminal Organization Task Force (including representatives from the Bradley Beach, 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; special agents of the FBI, Philadelphia Division, Scranton Resident Agency, under the direction of Special Agent in Charge Michael T. Harpster; the N.J. State Police, under the direction of Col. Patrick J. Callahan, Superintendent; the Matawan Police Department, under the direction of Chief Thomas J. Falco, Jr.; the Holmdel Police Department, under the direction of Chief John Mioduszewski; the Highlands Police Department, under the direction of Chief Robert Burton; the Monmouth County Prosecutor’s Office, under the direction of Monmouth County Prosecutor Christopher J. Gramiccioni; the Old Bridge Police Department, under the direction of Chief William A. Volkert; the Keansburg Police Department, under the direction of Chief James K. Pigott; the Hazlet Police Department, under the direction of Chief Philip Meehan; and the Aberdeen Police Department, under the direction of Chief John T. Powers, with the investigation leading to today’s charges. U.S. Attorney Carpenito also thanked the Monmouth County Sheriff’s Office, under the direction of Sheriff Shaun Golden; the Monmouth County Police Academy, under the direction of Director Darryl G. Breckenridge; and the Monmouth County Correctional Institution, under the direction of Warden Donald Sutton; for their logistical support.

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

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

Name

Age

Residence

Guy Jackson

46

Effort, Pennsylvania

Gregory Gillens

46

Hillside, New Jersey

Lashawn Mealing

47

Effort, Pennsylvania

Richard Gethers

43

Perth Amboy, New Jersey

Deberal Rogers

46

Perth Amboy, New Jersey

Krystal Cordoba

33

Elizabeth, New Jersey

Daniel Alfano

44

Keansburg, New Jersey

Daniel McHugh

48

Sayreville, New Jersey

Tyler Scarangello

33

Belford, New Jersey

David Nagy

41

Old Bridge, New Jersey

Christy Dube

33

Cliffwood, New Jersey

George Holiday, Sr.

47

Union Beach, New Jersey

*Daryl Jackson

45

Old Bridge, New Jersey

Shavar Williams

43

Cliffwood, New Jersey

Brian Hall

47

Howell, New Jersey

*Defendant only charged with conspiracy to distribute cocaine.

TRENTON, N.J. – A Manhattan man was sentenced today to 60 months in prison for robbing banks in Jackson Township, Fort Lee, and Hasbrouck Heights, as well as attempting to burglarize a fourth bank in Englewood between December 2013 and February 2017, U.S. Attorney Craig Carpenito announced.

Eddy Cruz, 42, previously pleaded guilty before U.S. District Judge Peter G. Sheridan to an information charging him with three counts of bank robbery and one count of attempted bank burglary. Judge Sheridan imposed the sentence today in Trenton federal court.

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

On Dec. 24, 2013, Cruz entered a PNC Bank in Jackson Township and handed a bank teller a note demanding money. After the teller handed him some cash, Cruz fled the scene. Cruz also robbed a TD Bank in Fort Lee on Feb. 13, 2017, and a TD Bank in Hasbrouck Heights on Feb. 18, 2017. During both robberies, Cruz wore a mask to disguise his identity and handed the tellers notes demanding cash.

On Feb. 24, 2017, law enforcement officers tracked Cruz’s car, which had been spotted at one of the earlier bank robberies, to a location in Manhattan. That same day, Cruz drove to yet another TD Bank in Englewood where he was apprehended moments before he robbed the bank in a similar disguise to what he wore during the previous two bank robberies.

In addition to the prison term, Judge Sheridan sentenced Cruz to three years of supervised release and ordered him to pay restitution of $10,556.

U.S. Attorney Carpenito credited special agents with the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark and Special Agent in Charge John Brosnan in New York; the Bergen County Prosecutor’s Office, under the direction of Acting Prosecutor Dennis Calo; the Fort Lee Police Department, under the direction of Chief Keith M. Bendul; the Hasbrouck Heights Police Department, under the direction of Chief Michael J. Colaneri; the Roxbury Police Department, under the direction of Chief Marc Palanchi; the Paramus Police Department, under the direction of Chief Kenneth Ehrenberg; and the Jackson Township Police Department, under the direction of Chief Matthew Kunz, with the investigation leading to today’s sentencing. He also thanked the Greenburgh, New York, Mount Pleasant, New York, and Yonkers, New York, police departments, as well as the New York Police Department for their assistance.

The government is represented by Assistant U.S. Attorney Joshua L. Haber of the U.S. Attorney’s Office Criminal Division in Newark

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

CAMDEN, N.J. – A Camden man was sentenced today to 120 months in prison for selling crack cocaine, U.S. Attorney Craig Carpenito announced.

Karim Johnson, a/k/a “Chicky,” 39, previously pleaded guilty before U.S. District Judge Renée Marie Bumb to an information charging him with one count of conspiracy to distribute and possess with intent to distribute 28 grams or more of cocaine base. Judge Bumb imposed the sentence today in Camden federal court.

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

Johnson admitted that he sold crack cocaine and furanyl fentanyl, a synthetic opioid, around the 1700 block of Filmore Street in Camden. Johnson and nine other members of the drug ring were initially arrested in June 2017 following a long-term investigation by the FBI, which utilized multiple telephone wiretaps, surveillance, confidential informants, cooperating witnesses, more than 20 controlled drug purchases, a GPS vehicle tracker and four court-authorized search warrants, among other investigative techniques. Members of the drug trafficking organization distributed crack cocaine, fentanyl, and heroin to users and resellers in and around Camden and to people cooperating with the FBI. The investigation ultimately led to the seizure of more than 300 grams of crack cocaine, quantities of fentanyl and heroin, a firearm, drug paraphernalia, and recent charges against an eleventh member of the organization, Davon Leak, 19.

Four other defendants – Daron Suiter, 24, George Williams, 44, Latoya Whealton, a/k/a “Toya,” 34, and Rajai Gaines, a/k/a “Jigga,” 36 – have previously pleaded guilty. Suiter was sentenced on Aug. 9, 2018, to 60 months imprisonment; the other defendants are awaiting sentencing.
Drug and firearm charges remain pending in a second superseding indictment against six other defendants, including alleged leaders John Gunther, a/k/a “Critty,” 35; and Taleaf Gunther, a/k/a “Leafy” and “L,” 32; as well as alleged members William Roland, a/k/a “Chill,” 36; Mark Campbell, a/k/a “D” and Diz,” 28; Malcolm McCoy, 26; and Rajai Gaines, a/k/a “Jigga,” 36.

In addition to the prison term, Judge Bumb sentenced Johnson to eight years of supervised release and 300 hours of community service.
The charges and allegations contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

U.S. Attorney 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 Harpster; the Camden County Police Department, under the direction of Chief J. Scott Thomson; the Camden County Prosecutor’s Office, under the direction of Prosecutor Mary Eva Colalillo; and the N.J. State Police, under the direction of Col. Patrick J. Calahan, with the investigation.

He also thanked the Camden County Sheriff’s Department, the Cherry Hill Police Department, and the U.S. Department of Homeland Security Investigations (HSI) for their assistance.

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

Defense counsel: Johnson: Stanley O. King Esq., Woodbury, New Jersey
Suiter: Martin I. Isenberg Esq., Gibbsboro, New Jersey
Williams: Michael E. Riley Esq., Mount Holly, New Jersey
Whealton: David S. Rudenstein Esq., Philadelphia
John Gunther: Edward J. Crisonino Esq., Westmont, New Jersey
Taleaf Gunther: Robert C. Wolf Esq., Westmont
Roland: Megan J. Davies Esq., Westmont
Campbell: Troy A. Archie Esq., Cinnaminson, New Jersey
McCoy: Albert W. Allison Esq., Blackwood, New Jersey
Gaines: Edward F. Borden Esq., Cherry Hill, New Jersey
Leak: Teri Lodge Esq., Marlton, New Jersey

 

TRENTON, N.J. – A Middlesex County, New Jersey, man who worked as an emergency medical technician and volunteer firefighter was sentenced today to 135 months in prison for enticing a child to produce sexually explicit images, U.S. Attorney Craig Carpenito announced.

Zachary Motta, 24, of Iselin, New Jersey, previously pleaded guilty before U.S. District Judge Freda L. Wolfson to an information charging him with one count of online enticement of a minor to engage in criminal sexual activity. Judge Wolfson imposed the sentence today in Trenton federal court.

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

Beginning in October 2016, Motta communicated with a boy who told Motta he was 12 years old. Motta used a computer and internet connection to ask the victim to send a picture of himself nude, which he did.

In addition to the prison term, Judge Wolfson sentenced Motta to five years of supervised release and ordered him to pay a $5,000 Justice for Victims of Trafficking Act assessment.

U.S. Attorney Carpenito credited special agents with the FBI, under the direction of Newark Special Agent in Charge Gregory W. Ehrie, and the Middlesex County Prosecutor’s Office, under the direction of Prosecutor Andrew C. Carey, with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorney Danielle Alfonzo Walsman of the U.S. Attorney’s Office Criminal Division in Newark.

Defense counsel: Michael Policastro Esq., Milltown, New Jersey

NEWARK, N.J. – The U.S. Court of Appeals for the Third Circuit today affirmed five of seven convictions each for a former top official of the Port Authority of New York and New Jersey (PA) and a former member of then-Gov. Christopher J. Christie’s senior staff for their roles in a scheme to punish the mayor of Fort Lee, New Jersey, by misusing PA resources to cause traffic problems in the borough, Mark Coyne, Attorney for the United States, announced.

William E. Baroni Jr., 46, and Bridget Anne Kelly, 46 — formerly the deputy executive director of the Port Authority and the deputy chief of staff for legislative and intergovernmental affairs in the Governor’s office, respectively — were each convicted on Nov. 4, 2016, of conspiring to misuse, and actually misusing, property of an organization receiving federal benefits; conspiring to commit, and actually committing, wire fraud; conspiring to injure and oppress certain individuals’ civil rights, and acting under color of law to deprive certain individuals of their civil rights. Baroni was sentenced to 24 months in prison and Kelly was sentenced to 18 months in prison.

In a unanimous, precedential opinion by Senior U.S. Circuit Judge Anthony J. Scirica Sr., the court upheld all but the civil rights counts of conviction and remanded the case to U.S. District Judge Susan D. Wigenton for resentencing.

All of the charges relate to the defendants’ scheme to manufacture traffic problems in Fort Lee by, without public warning, reducing from three to one the number of local access lanes to the upper level of the George Washington Bridge and the toll booths servicing those lanes. This was done to punish Mayor Mark Sokolich for not endorsing then-Gov. Christie’s re-election bid. The evidence at trial showed that Fort Lee suffered hours of gridlock on four successive days during the first week of the school year because of the scheme.

The Court of Appeals found sufficient evidence of wire fraud and wire fraud conspiracy, rejecting the defendants’ argument that Baroni had unilateral authority to control traffic patterns at “the world’s busiest motor vehicle bridge.” The court found that he lacked such authority and that he and Kelly had deprived the PA of property by devoting PA resources to a sham traffic study. The court said the United States “has an especially significant interest in protecting the Port Authority’s . . . operational integrity” against fraud.

The court concluded that the defendants intentionally misapplied PA property and conspired to do so. The court held that the applicable statue covers more than just bribery and theft, and that Baroni’s and Kelly’s “conduct in this case falls squarely within the statute’s purpose.

The court rejected the defendants’ argument that the United States was improperly using federal criminal statutes to police state and local officials in the conduct of their official duties. “Congress has a uniquely significant interest in safeguarding the Port Authority, an interstate agency created by its consent,” the court said. The court confirmed that the defendants’ motive in defrauding the Port Authority was “not a required element of any of the charged offenses.

The court also held, however, that the constitutional right of intrastate travel on public roadways was not sufficiently developed nationwide to warrant prosecution under the federal civil rights statutes. The court therefore reversed and vacated Baroni’s and Kelly’s convictions for criminal civil rights violations.

The government is represented in the appeals by Assistant U.S. Attorney and Special Counsel to the U.S. Attorney Bruce P. Keller of the U.S. Attorney’s Office in Newark. Assistant U.S. Attorneys Lee M. Cortes Jr., David W. Feder and Vikas Khanna represented the United States at trial. The case is being overseen by Attorney for the United States Mark Coyne, Chief of the Appeals Division, because of the recusals of U.S. Attorney Craig Carpenito and First Assistant U.S. Attorney Rachael Honig.

NEWARK, N.J. – A member of the New Jersey Grape Street Crips who was arrested earlier this week in Durham, North Carolina, on charges that include RICO conspiracy, attempted murder, and conspiracy to commit murder had his initial appearance in federal court today, U.S. Attorney Craig Carpenito announced.

Ramon Morales, a/k/a “Ray Rizzo,” a/k/a “Rizzo,” a/k/a “Rizzolini,” 33, of Newark, was charged in a six-count indictment with RICO conspiracy, attempted murder in aid of racketeering, conspiracy to commit murder in aid of racketeering, using a firearm during a crime of violence, and conspiracy to distribute one kilogram or more of heroin. Morales had his initial appearance today before U.S. Magistrate Judge Joe L. Webster in Durham federal court and was detained without bail.

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

Morales, allegedly a longtime member of the New Jersey Grape Street Crips, attempted to murder Almalik Anderson, a rival of the Grape Street Crips’ leader Corey Hamlet. In 2013, on Hamlet’s orders, Grape Street Crips gang members repeatedly shot and nearly killed Anderson and a woman who was in Anderson’s car. After learning that Anderson had survived the attempted murder and had been responsible for murdering one of their fellow gang members in retaliation for his shooting, Morales and another conspirator met with Hamlet at the Pennington Court public housing complex in Newark. Hamlet told Morales and other gang members that they had the green light to “even the scoreboard,” as told in a contemporaneous letter. Morales and another conspirator then armed themselves and drove around Newark to find Anderson, but were unsuccessful.

Morales also participated in a meeting during which Hamlet ordered another gang member to murder Anwar West, a fellow Grape Street Crips member whom Hamlet perceived had been disloyal by attempting to end the feud between Hamlet and Anderson.

Morales was also involved in the distribution of one kilogram or more of heroin, as well as in transporting firearms from the Durham, North Carolina, area to Newark. On Oct. 30, 2013, law enforcement officers in Maryland stopped a vehicle – driven by a Grape Street Crips member and rented in Morales’ name – that contained three assault rifles and dozens of rounds of ammunition.

More than 70 members and associates of the Grape Street Crips have been charged and convicted since the start of a coordinated federal investigation in the gang’s violent and drug-trafficking activities in 2013.

Morales faces a sentence of up to life for the RICO conspiracy, a sentence of up to life with a 10-year mandatory minimum for conspiracy to distribute heroin, and a sentence of up to life plus a five-year mandatory minimum for using a firearm in furtherance of a crime of violence. Morales also faces a sentence of up to 10 years for the conspiracy and attempt to commit murder in aid of racketeering.

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 the DEA, under the direction of Special Agent in Charge Valerie A. Nickerson with the investigation leading to Morales’ arrest. He also thanked the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Theodore N. Stephens II, police officers and detectives of the Newark Police Department, under the direction of Public Safety Director Anthony F. Ambrose, and the Essex County Sheriff’s Office, under the direction of Armando B. Fontoura, for their assistance.

The government is represented by Assistant U.S. Attorney Osmar J. Benvenuto, Chief of the Organized Crime and Gangs Unit, and Assistant U.S. Attorney Richard J. Ramsay of the Appeals Division in Newark.

This case was conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF) and the FBI’s Safe Streets Task Force, a partnership between federal, state and local law enforcement agencies. 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.

TRENTON, N.J. – Two Hunterdon County, New Jersey, women were sentenced today to federal prison terms for their respective roles in an oxycodone distribution conspiracy in Flemington, New Jersey, U.S. Attorney Craig Carpenito announced.

Michele Call, 63, of Flemington, New Jersey, was sentenced to 54 months in prison and Nelida Rios, 55, also of Flemington, was sentenced to 48 months in prison. Both defendants previously pleaded guilty before U.S. District Judge Freda Wolfson to informations charging them each with one count of conspiracy to distribute and possess with intent to distribute oxycodone. Judge Wolfson imposed the sentences today in Trenton federal court.

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

From April 2016 through December 2017, Rios, Call and Call’s daughter, Alicia Balaban, 35, of Wellington, Florida, worked together to secure prescriptions for oxycodone, fill them at pharmacies in Flemington, and then distribute the pills to Marie DeJulia, 42, of Lodi, New Jersey, from Call’s and Rios’ Flemington residences for resale. The conspirators distributed thousands of 30 mg oxycodone pills.

In addition to the prison terms, Judge Wolfson sentenced both women to three years of supervised release, and fined them each $1,000. She ordered forfeiture of $40,000 from Call and $42,000 from Rios.

Balaban and DeJulia have also pleaded guilty and are scheduled to be sentenced next week.

U.S. Attorney Carpenito credited special agents of the Drug Enforcement Administration’s New Jersey Division, under the direction of Special Agent in Charge Valerie A. Nickerson in Newark, with the investigation leading to today’s sentencings.

The government is represented by Assistant U.S. Attorney Danielle Alfonzo Walsman, Chief of the U.S. Attorney’s Office Public Protection Unit in Newark.

Defense counsel: DeJulia: John Azzarello Esq., Morristown, New Jersey
Balaban: Clifford Lazzaro Esq., Elizabeth, New Jersey
Call: Jason LeBoeuf Esq., Newark
Rios: Michael Pedicini Esq., Chatham, New Jersey

CAMDEN, N.J. – An Cape May County, New Jersey, man today admitted defrauding New Jersey state health benefits programs and other insurers out of more than $4 million by submitting fraudulent claims for medically unnecessary prescriptions, U.S. Attorney Craig Carpenito announced.

James Wildman, 44, of Marmora, New Jersey, a former maintenance worker for the Ocean County school system, pleaded guilty before U.S. District Judge Robert B. Kugler in Camden federal court to an information charging him with conspiracy to commit health care fraud.

According to documents filed in this case 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.

From January 2015 through February 2016, Wildman served as a recruiter in the conspiracy and persuaded individuals in New Jersey to obtain very expensive and medically unnecessary compounded medications from an out-of-state pharmacy, identified in the information as the “Compounding Pharmacy.” The conspirators learned that certain compound medication prescriptions – including pain, scar, antifungal, and libido creams, as well as vitamin combinations – were reimbursed for thousands of dollars for a one-month supply.

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

Wildman and conspirators working under him recruited public employees covered by the Pharmacy Benefits Administrator to fraudulently obtain compounded medications from the Compounding Pharmacy without any evaluation by a medical professional that they were medically necessary. Wildman secured insurance information from the individuals and passed it along to a conspirator, who had a doctor sign prescriptions without examining the individuals. The prescriptions were faxed to the Compounding Pharmacy, which filled the prescriptions and billed the Pharmacy Benefits Administrator.

The pharmacy then paid one of Wildman’s conspirators a percentage of each prescription filled and paid by the Pharmacy Benefits Administrator, which was then distributed to Wildman and other members of the conspiracy. Wildman paid individuals cash to reward them for obtaining prescriptions. Wildman himself received compounded medications he did not need in order to financially benefit a conspirator.

The Pharmacy Benefits Administrator paid the Compounding Pharmacy more than $50 million for compounded medications mailed to individuals in New Jersey, including $4,879,776 for prescriptions submitted by Wildman and his cohorts. Wildman received $657,040 for his role in the scheme.

Wildman faces a maximum penalty of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for Feb. 25, 2019. As part of his plea agreement, Wildman must forfeit $657,040 in criminal proceeds and pay restitution of at least $4,879,776.

U.S. Attorney Carpenito credited agents of the FBI’s Atlantic City Resident Agency, under the direction of Special Agent in Charge Greg 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 today’s guilty plea. He also thanked the Division of Pensions and Financial Transactions in the State Attorney General’s Office, under the direction of Attorney General Gurbir S. Grewal and Division Chief Eileen Schlindwein Den Bleyker, for its assistance in the investigation.

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

Defense counsel: Mark E. Roddy Esq., Pleasantville, New Jersey

TRENTON, N.J. – A Monmouth County, New Jersey, man was sentenced today to 102 months in prison for perpetrating a long-running scheme to defraud investment clients out of millions of dollars, forging an attorney’s signature without authorization in connection with that scheme, and preparing false tax returns for his clients, U.S. Attorney Craig Carpenito announced.

Scott Newsholme, 43, Farmingdale, New Jersey previously pleaded guilty before U.S. District Judge Anne E. Thompson to a three-count information charging him with wire fraud, aggravated identity theft, and preparing fraudulent tax returns. Judge Thompson imposed the sentence today in Trenton federal court.

In September 2017, Newsholme was charged by criminal complaint with mail fraud, wire fraud, and securities fraud, and was released on bail. In October 2017, after law enforcement discovered that Newsholme continued his fraudulent scheme while out on bail, he was charged in an amended criminal complaint with mail fraud, wire fraud, securities fraud, and aggravated identity theft. Newsholme’s bail was revoked and he was detained pending trial.

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

Since 2002, Newsholme owned and operated at least three different financial advisory and tax return preparation businesses. Between 2007 and 2017, Newsholme recommended to multiple clients that they invest their money with him, which he would use on their behalf to invest in various securities and other investments, including bond instruments issued by a private New Jersey country club, a bond investment in a video-game production company, and investments in the production of a movie.

Newsholme also represented to clients for whom he would invest their money in more traditional securities, including mutual funds, annuities, life insurance policies, college education accounts, money market funds, and an escrow account for the purchase of a house. Newsholme directed his investment clients to write checks to him or one of his companies so that he could execute the investments on their behalf.

Rather than invest the money as he represented, Newsome cashed or deposited the checks and used the funds for personal expenses, including multiple vehicles, bedroom furniture, debits at casinos, bank transfers to Newsholme’s personal bank accounts, and ATM withdrawals.

Newsholme concealed his scheme by diverting incoming investment funds to pay other clients who had requested to withdraw funds from their investment portfolios. Newsholme also provided his clients phony account statements, security instruments, and other documentation that falsely represented to the clients the status of their investments.

In October 2017, Newsholme provided a letter to one of his investment clients from whom he had misappropriated approximately $62,000. The letter, which Newsholme represented had been prepared by an attorney, stated that the client’s funds were held safely in an escrow account established by the attorney. However, Newsholme fabricated the letter and forged the attorney’s signature without the attorney’s authorization in order to conceal his misappropriation of the funds.

Newsholme misappropriated more than $3.1 million from his investment clients, resulting in net investment losses of more than $1.8 million.

In addition to the wire fraud and aggravated identity theft charges, Newsholme also admitted preparing fraudulent tax returns on behalf of his clients. The fraudulent returns that Newsholme prepared claimed inflated deductions for unreimbursed employee business expenses, charitable donations, and medical expenses to which his clients were not entitled.

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

U.S. Attorney Carpenito credited special agents of the FBI, Newark Division, Red Bank Resident Agency, under the direction of Special Agent in Charge Gregory W. Ehrie, and special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge John R. Tafur, with the investigation. He also thanked the SEC’s New York Regional Office, under the direction of Director Mark P. Berger, and the N.J. Bureau of Securities, under the direction of Bureau Chief Christopher Gerold, and the Monmouth County Prosecutor’s Office, under the direction of Prosecutor Christopher J. Gramiccioni, for their assistance with the case.

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

Defense counsel: Lisa Van Hoeck Esq., Assistant Federal Public Defender, Trenton

CAMDEN, N.J. – A Trenton, New Jersey, man was sentenced today to 48 months in prison for robbing Metro PCS stores in Willingboro, New Jersey, Lumberton, New Jersey, and Levittown, Pennsylvania, in September and October 2016, U.S. Attorney Craig Carpenito announced.

Zeldrick Nance, 31, of Trenton, previously pleaded guilty before U.S. District Judge Joseph H. Rodriguez to an information charging him with one count of conspiracy to commit Hobbs Act robberies. Judge Rodriguez imposed the sentence today in Camden federal court.

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

On Sept. 29, 2016, Nance, Rodney Day, 27, of Trenton, and Lisa Anderson, 35, of Griffithville, Arkansas, drove to the Willingboro Metro PCS Store. Day brandished what appeared to be a firearm while Nance duct taped the store occupants and placed them into a store bathroom. Meanwhile, Anderson stole cellular telephones and money from the cash registers. During the robbery, Day demanded the keys to a car owned by one of the victims. Day, Nance, and Anderson fled with the stolen cellular telephones and money in that stolen car.

On Oct. 7, 2016, Day, Nance, and Anderson drove to the Lumberton Metro PCS Store. Day brandished what appeared to be a firearm while Nance duct taped a store occupant, put that victim in a storage room, and took the victim’s wallet and keys. Meanwhile, Anderson stole cellular telephones and money from the cash registers.

On Oct. 12, 2016, Day, Nance, and Anderson drove to the Levittown Metro PCS Store. Day once again brandished what appeared to be a firearm while Nance duct taped the victims inside the store and put them in a store bathroom. Anderson subsequently entered the store and stole cellular telephones and money from the cash registers.

In addition to the prison term, Judge Rodriguez sentenced Nance to three years of supervised release and ordered him to pay restitution of $26,307.

Day previously pleaded guilty and was sentenced Nov. 1, 2018, to 100 months in prison. Anderson has previously pleaded guilty to her role in the robberies and is currently scheduled for sentencing on Dec. 6, 2018.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, with the investigation leading to today’s sentencing. He also thanked the Willingboro, Lumberton, and Levittown police departments, as well as the Burlington and Mercer County Prosecutor’s Offices for their assistance in this case.

The government is represented by Assistant U.S. Attorney Jacqueline M. Carle of the U.S. Attorney’s Office Criminal Division in Camden.

Defense counsel: Peter A. Levin Esq., Philadelphia

NEWARK, N.J. – A Jersey City, New Jersey, man was arrested and appeared in federal court today for allegedly distributing images of child sexual abuse, U.S. Attorney Craig Carpenito announced.

Nader Ahmed, 29, is charged by complaint with one count of distribution of child pornography. He made his initial appearance today in Newark federal court before U.S. Magistrate Judge Cathy L. Waldor and was detained without bail.

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

In January 2018, Ahmed uploaded two videos depicting the sexual abuse of children onto a child pornography website. Computer equipment seized from Ahmed’s residence revealed hundreds of files titled with names indicative of images of child sexual abuse.                      

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

U.S. Attorney Carpenito credited special agents with U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), under the direction of Special Agent in Charge Brian Michael, with the investigation leading to today’s charges.

The government is represented by Assistant U.S. Attorney Ryan L. O’Neill of the U.S. Attorney’s Office Public Protection Unit in Newark.

 

NEWARK, N.J. – An Albuquerque, New Mexico, man has been convicted on federal dog fighting charges, stemming from a case brought by federal authorities in the U.S. District Court in the District of New Mexico. Robert Arellano, 65, pleaded guilty on Nov. 15, 2018, in federal court in Trenton, New Jersey, to three felony counts (Counts 1-3 of the indictment) of possessing a dog intended for use in an animal fighting venture at his home in Albuquerque. U.S. Attorney for the District of New Jersey Craig Carpenito, Assistant Attorney General Jeffrey Bossert Clark of the Justice Department’s Environment and Natural Resources Division, and U.S. Attorney for the District of New Mexico John C. Anderson made the announcement.

“Dog fighting is vicious and cruel. And beyond the needless suffering it inflicts on animals, it exacts a toll on local animal shelters, humane organizations, and the taxpayers of New Jersey,” U.S. Attorney Carpenito said. “The message from this conviction is simple: if you fight dogs in New Jersey, you will face prosecution and imprisonment.”

“Dog fighting is a cruel and brutal practice that has no place in a civilized society,” said Assistant Attorney General Jeffery Bossert Clark. “The Department of Justice is aggressively pursuing those who engage in this inhumane spectacle, which is often linked with many forms of violent and organized criminal activity. Today’s sentencing demonstrates our firm commitment to fight back against those who would abuse these animals, in clear violation of federal law.”

Yesterday’s conviction is separate from and in addition to a verdict rendered against Arellano and three others by a federal jury in Trenton in October. In that case, the jury convicted the four defendants on all 23 counts of violating and conspiring to violate the animal fighting prohibitions of the federal Animal Welfare Act, following a near month-long trial before Judge Sheridan.

From 2012 through June 1, 2016, Arellano possessed dogs at his home in Albuquerque for dog fighting purposes, and trafficked in dogs with other dog fighters in Indiana and New Jersey so that those dogs could be used in fights. He also maintained a collection of dog fighting videos, records, how-to materials, and photographs. Arellano meticulously recorded the dogs’ fighting pedigrees and histories, previous fights and kills, serious injuries they inflicted on other dogs or sustained themselves, and future planned fights for the dogs. He also kept veterinary drugs and equipment to shield the dogs from professional veterinary scrutiny and care, including a used I.V. line containing canine DNA, injectable horse steroids, and injectable veterinary medicines manufactured in Mexico.

This case is part of Operation Grand Champion, an ongoing multi-state dog fighting investigation. The phrase “Grand Champion” is used by dog fighters to refer to a dog with more than five dog fighting “victories.” To date, 123 dogs have been rescued as part of Operation Grand Champion, and either surrendered or forfeited to the government, and eleven defendants have been convicted or indicted in four different states. The case was prosecuted in New Jersey by Assistant U.S. Attorney Kathleen O’Leary of the Health Care and Government Fraud Unit, and in New Mexico by Trial Attorney Ethan Eddy of the Justice Department’s Environmental Crimes Section and Assistant U.S. Attorneys Letitia Simms and Paul Mysliwiec. The case was investigated by the U.S. Department of Agriculture – Office of Inspector General and the Federal Bureau of Investigation.

Each count of conviction carries a maximum of five years in prison and a criminal fine of up to $250,000. Five other defendants in the case previously pleaded guilty to dog fighting and firearms charges and were sentenced to a total of 153 months in prison.

A resident of Albuquerque has been convicted on federal dog fighting charges, stemming from a case brought by federal authorities in the U.S. District Court in the District of New Mexico.  Robert Arellano, 65, pleaded guilty on November 15, 2018, in federal court in Trenton, New Jersey, to three felony counts of possessing a dog intended for use in an animal fighting venture at his home in Albuquerque. Assistant Attorney General Jeffrey Bossert Clark of the Justice Department’s Environment and Natural Resources Division, United States Attorney for the District of New Mexico John C. Anderson, and United States Attorney for the District of New Jersey Craig Carpenito made the announcement.

“Dog fighting is a cruel and brutal practice that has no place in a civilized society,” said Assistant Attorney General Clark. “The Department of Justice is aggressively pursuing those who engage in this inhumane spectacle, which is often linked with many forms of violent and organized criminal activity. This conviction demonstrates our firm commitment to fight back against those who would abuse these animals, in clear violation of federal law.”

“Dogfighting for entertainment and profit is the organized and heinous business of breeding and conditioning dogs to fight each other until one dog kills the other,” said New Mexico U.S. Attorney John C. Anderson.  “These convictions bring to an end Mr. Arellano’s 30 years in this unconscionable business, and hopefully will deter others who seek to profit from forcing animals fight to the death.  In New Mexico, we will continue to seek out and punish those who exploit and abuse animals.”

“Dog fighting is vicious and cruel. And beyond the needless suffering it inflicts on animals, it exacts a toll on local animal shelters, humane organizations, and the taxpayers of New Jersey,” U.S. Attorney Carpenito said. “The message from this conviction is simple: if you fight dogs in New Jersey, you will face prosecution and imprisonment.”

This conviction is separate from and in addition to a verdict rendered against Arellano and three others by a federal jury in Trenton, New Jersey in October. In that case, the jury convicted the four defendants on all 23 counts of violating and conspiring to violate the animal fighting prohibitions of the federal Animal Welfare Act, following a near month-long trial before Judge Sheridan.

From 2012 through June 1, 2016, Arellano possessed dogs at his home in Albuquerque for dog fighting purposes, and trafficked in dogs with other dog fighters in Indiana and New Jersey so that those dogs could be used in fights. He also maintained a collection of dog fighting videos, records, how-to materials, and photographs. Arellano meticulously recorded the dogs’ fighting pedigrees and histories, previous fights and kills, serious injuries they inflicted on other dogs or sustained themselves, and future planned fights for the dogs. He also kept veterinary drugs and equipment to shield the dogs from professional veterinary scrutiny and care, including a used I.V. line containing canine DNA, injectable horse steroids, and injectable veterinary medicines manufactured in Mexico.

This case is part of Operation Grand Champion, an ongoing multi-state dog fighting investigation. The phrase “Grand Champion” is used by dog fighters to refer to a dog with more than five dog fighting “victories.” To date, 123 dogs have been rescued as part of Operation Grand Champion, and either surrendered or forfeited to the government, and eleven defendants have been convicted or indicted in four different states. The case was prosecuted in New Mexico by Trial Attorney Ethan Eddy of the Justice Department’s Environmental Crimes Section and Assistant U.S. Attorneys Letitia Simms and Paul Mysliwiec. The case was investigated by the U.S. Department of Agriculture – Office of Inspector General and the Federal Bureau of Investigation.

Each count of conviction carries a maximum of five years in prison and a criminal fine of up to $250,000. Five other defendants in the case previously pleaded guilty to dog fighting and firearms charges and were sentenced to a total of 153 months in prison.

NEWARK, N.J. – An Essex County, New Jersey, woman was arrested and charged today with managing a variety of moving companies in New Jersey that systematically defrauded hundreds of customers, U.S. Attorney Craig Carpenito announced.

Farah Al-Ibrahim, a/k/a “Farah Alhomsi,” a/k/a “Farah Adam,” a/k/a “Farah Adams,” a/k/a “Sara Adams,” 38, is charged by complaint with one count of conspiracy to commit wire fraud. She made her initial court appearance today before U.S. Magistrate Judge Cathy L. Waldor and was released on $100,000 unsecured bond.

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

Al-Ibrahim and her conspirators operated numerous moving companies that quoted customers “low-ball” price estimates for moves and then raised prices on the day of the move, after the goods were loaded and the customers were subject to the conspirators’ demands. Al-Ibrahim and her conspirators consistently, 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 estimates and the final balances for the customers’ moves was approximately $2 million.   

The conspiracy to commit wire fraud charge carries a maximum penalty of 20 years in prison, and a fine of $250,000, or twice the gross gain to the defendant or twice the gross loss to others, whichever is greater. 

U.S. Attorney Craig 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 U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), under the direction of Special Agent in Charge Angel Melendez, New York Field Office, with the investigation leading to today’s charge. 

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

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

Also Had Role in Fraudulent $20,000 Home Rehabilitation Loan Scheme

NEWARK, N.J. – A former Bayonne, New Jersey, police officer was sentenced today to 42 months in prison for using excessive force during an arrest, falsifying records in an attempt to conceal his conduct and helping a relative fraudulently obtain a home rehabilitation loan, U.S. Attorney Craig Carpenito announced.

Domenico Lillo, 48, of Bayonne, previously pleaded guilty before U.S. District Judge Kevin McNulty in Newark federal court to an indictment charging him with one count of deprivation of civil rights under color of law and one count of falsifying records to impede a civil rights investigation. Lillo also pleaded guilty to an information charging him with assisting in the filing of a false report to the U.S. Department of Housing and Urban Development (HUD) in connection with a federally funded home rehabilitation loan worth $20,000.

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

On the early evening of Dec. 27, 2013, Lillo and other police officers from the Bayonne Police Department went to an address in Bayonne to arrest a man on a warrant from Sussex County. Lillo admitted that he struck the individual they were arresting in the head with a flashlight while the individual was handcuffed and not resisting arrest, injuring him. Lillo also admitted that he falsified a Bayonne Police Department Use of Force Report related to the arrest with the intent to impede an investigation into the case.

Lillo also admitted that on May 10, 2012, he aided a relative in preparing and submitted a fraudulent HUD application to get a federally funded rehabilitation loan on a home Lillo co-owned.

In addition to the prison term, Judge McNulty sentenced Lillo to three years of supervised release and ordered him to pay restitution of $20,000 to the City of Bayonne.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, special agents of the U.S. Department of Housing and Urban Development, Office of the Inspector General, under the direction of Special Agent in Charge Christina Scaringi, and the Hudson County Prosecutor’s Office, under the direction of Prosecutor Esther Suarez, with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorneys Jacques S. Pierre of the U.S. Attorney’s Office Special Prosecutions Division, Assistant U.S. Attorney Lee M. Cortes Jr., Deputy Chief of the Special Prosecutions Division, and Assistant U.S. Attorney Steven G. Sanders of the Appeals Division.

Defense counsel: Frank Arleo Esq. and Thomas Cammarata Esq., West Orange, New Jersey

NEWARK, N.J. – A Burlington, New Jersey, man was arrested Friday for his role in a telemedicine scheme to prescribe expensive compounded medications to patients who did not need them, U.S. Attorney Craig Carpenito announced.

Dr. Bernard Ogon, 45, is charged by complaint with one count of conspiracy to commit health care fraud. He made his initial court appearance this afternoon before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court and was released on $500,000 secured bond.

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

Telemedicine allows health care providers to evaluate, diagnose, and treat patients remotely – without the need for an in-person visit –by interacting with a patient using telecommunications technology, such as the internet or telephone. Ogon was paid by various telemedicine companies to prescribe exorbitantly expensive compounded medications, such as pain creams, scar creams, migraine creams, and metabolic supplements/“wellness capsules,” regardless of whether they were medically necessary for the patient.

The telemedicine companies sent Ogon prescriptions to sign for compounded medications, and Ogon signed the prescriptions without having established any prior doctor-patient relationship, speaking with the patient, or conducting any kind of medical evaluation. 

The telemedicine companies often filled out the prescriptions completely – including selecting the compound medications to be prescribed – before Ogon ever saw them. Once Ogon received the filled-out prescriptions, he needed only to sign them to complete the prescription. 

Ogon often received little or no information about the patients before he signed the prescriptions. As a result, Ogon on multiple occasions signed prescriptions for either expensive compounded scar cream or pain cream even though he had not received any information indicating that the patient needed them. Ogon also signed prescriptions for patients residing in states where he was not licensed to practice medicine.  

After Ogon signed the medically unnecessary prescriptions, they were sent to compounding pharmacies with whom he or other entities involved in the scheme had relationships. The compounding pharmacies then filled the prescriptions and billed the patient’s health care benefit program regardless of medical necessity.

The telemedicine companies paid Ogon on a per-prescription basis for many prescriptions he signed. One telemedicine company paid Ogon between $20 and $30 per prescription. Ogon’s participation in the conspiracy caused a loss to health care benefit programs of more than $20 million, at least $3 million of which was sustained by TRICARE – a health care benefit program for members of the military and their families.

The charge of conspiracy to commit health care fraud is punishable by a maximum of 10 years in prison and a fine of $250,000 fine, or twice the gross gain or loss from the offense.

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

The government is represented by Assistant U.S. Attorneys Jason S. Gould and Erica Liu, Chief of the Opioid Abuse Prevention and Enforcement Unit of the U.S. Attorney’s Office in Newark.

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

NEWARK, N.J. – A former officer with the N.J. Department of Corrections was sentenced today to 60 months in prison for receiving images of child sexual abuse, U.S. Attorney Craig Carpenito announced.

Stephen Salamak, 39, of Lodi, New Jersey, previously pleaded guilty before U.S. District Judge Kevin McNulty to an indictment charging him with receipt of child pornography. Judge McNulty imposed the sentence today in Newark federal court.

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

Salamak used email to seek and obtain images of child pornography, including images of prepubescent children.

In addition to the prison term, Judge McNulty sentenced Salamak to 10 years of supervised release.

U.S. Attorney Carpenito credited special agents of the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Brian Michael, with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorney Danielle Alfonzo Walsman, Chief of the U.S. Attorney’s Office Public Protection Unit in Newark.

Defense counsel: Brian Neary Esq., Hackensack, New Jersey

NEWARK, N.J. – A Union County, New Jersey, woman today admitted making and using phony money orders, cashier’s checks, receipts and other fabricated documents to fraudulently discharge $2 million in mortgages, student loans, and other financial obligations, U.S. Attorney Craig Carpenito announced.

Melissa Reynolds, 43, of Elizabeth, New Jersey, pleaded guilty before U.S. District Judge William H. Walls to an information charging her with conspiracy to commit mail fraud, mail fraud affecting financial institutions, and bank fraud.

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

Beginning in early 2014, Reynolds and Germaine H. King, 41, of Elizabeth, began making fraudulent money orders, cashier’s checks, and other fictitious documents on their home computer. They began mailing these phony money orders to financial institutions and other lenders in their attempt to fraudulently discharge their lawful debts. Reynolds discharged and attempted to discharge more than $2 million in lawful debts.

For example, in May 2014, Reynolds and King mailed fraudulent money orders for $22,260 and $39,585 to a credit union in an effort to fraudulently pay off their Mercedes-Benz cars. They also made and mailed a fraudulent money order for $432,000 to a financial institution as a complete payoff of the mortgage on Reynolds’ home in Elizabeth. The financial institution erroneously accepted the fraudulent payment and credited it as a payoff for her mortgage. Later, a state court reinstated the mortgage.

Reynolds and others unsuccessfully used the same scheme to seek the discharge of other mortgages, including Reynolds’ second residence in Newark, the residence of a conspirator in Hillside, New Jersey, the residence of an individual in West Orange, New Jersey, and the residence of an individual in Bowie, Maryland. Certain of these mortgages were Federal Housing Administration mortgages backed by the U.S. Department of Housing and Urban Development, including the mortgage on Reynolds’ Newark residence. Reynolds and her conspirators mailed fraudulent money orders to HUD or companies acting on behalf of HUD. These payments were rejected.

Reynolds also sought to fraudulently discharge more than $52,000 in student loans with fraudulent money orders and cashier’s checks. On March 20, 2017, Reynolds sent a fraudulent cashier’s check in the amount $67,000 to the Department of Education’s processing company. These payments were rejected.

Beginning in early 2017, Reynolds, King, and Daniel K. Dxrams, a/k/a “Daniel Kusi,” a/k/a “Danny D. Dxrams,” a/k/a “Randy N. Amoateng,” 40, of Maplewood, New Jersey, conspired to fraudulently pay off Dxrams’ auto leases on a 2012 Bentley, 2016 Rolls Royce Coupe, 2015 Mercedes-Benz, 2016 Mercedes-Benz, and Dxrams’ family member’s 2015 Mercedes-Benz. Reynolds sent a bogus $101,000 cashier’s check to a finance company that enabled Dxrams to obtain title to the Bentley, which Dxrams sold to a third party for approximately $85,000 and then issued a genuine cashier’s check to King for approximately $25,000. Reynolds, King, and Dxrams used this scheme to fraudulently pay off the other luxury cars.

The mail fraud and bank fraud conspiracy to which Reynolds pleaded guilty carries 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 Feb. 19, 2019.

On Nov. 9, 2018, a federal grand jury sitting in Newark returned a second superseding indictment against King and Dxrams. This indictment charged King with conspiracy to commit mail and bank fraud conspiracy and bank fraud charges. It also charged King and Dxrams with conspiracy to commit mail fraud related to the luxury car scheme and substantive mail fraud counts. The indictment charged Dxrams with bankruptcy fraud and making a false oath in a bankruptcy proceeding.

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, under the direction of Special Agent in Charge Geoffrey Wood; 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 today’s guilty plea.

The charges and allegations in the second superseding Indictment and previously filed complaint are merely accusations, and those defendants are presumed innocent unless and until proven guilty.

The government is represented by Assistant U.S. Attorney Anthony Moscato, Chief of the U.S. Attorney’s National Security Unit, and Assistant U.S. Attorney Lakshmi Srinivasan Herman, of the National Security Unit, in Newark.

Defense counsel:

Reynolds: Robert J. Degroot Esq., and Oleg Nekritin Esq., Newark

CAMDEN, N.J. – The owner and operator of a Gloucester County bulk mailing company today admitted defrauding the U.S. Postal Service (USPS) of more than $1.5 million in postage, U.S. Attorney Craig Carpenito announced.

Anthony L. Bucolo, 75, of Ridley Park, Pennsylvania, pleaded guilty before U.S. District Judge Renée Marie Bumb in Camden federal court to an information charging him with one count of conspiracy to commit mail fraud.

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

Bucolo owned and operated a business that prepared bulk mail, typically for shipping mass mailings on behalf of other businesses, educational institutions and charitable organizations. With the assistance of one of his employees, Bucolo defrauded the USPS of more than $1.5 million in postage while billing clients as if such postage had been paid. Bucolo and his conspirator underreported the volume of mail pieces actually mailed, altered USPS forms, and added mail onto pallets, trays, tubs or sacks after the mail had been accepted and postage assessed and collected by a postal employee.

The wire fraud conspiracy charge to which Bucolo pleaded guilty carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss resulting from the offense. In his plea agreement, Bucolo agreed to make restitution for the full amount of the loss, $1.5 million, which was paid in full today. Sentencing is scheduled for Feb. 22, 2019.

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

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

Defense counsel: Michael J. Engle Esq., Philadelphia

NEWARK, N.J. – A Georgia man with prior felony convictions was sentenced today to 210 months in prison for illegally possessing weapons and possessing methamphetamine with the intent to distribute, U.S. Attorney Craig Carpenito announced.

Tyheed Jefferson, 36, a/k/a “Solo,” of Albany, Georgia, previously pleaded guilty before U.S. District Judge Stanley R. Chesler to an indictment charging him with six counts of being a felon in possession of a weapon and one count of possession of methamphetamine with the intent to distribute. Judge Chesler imposed the sentence today in Newark federal court.

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

Jefferson was arrested in July 2017 after a 10-month investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) in Georgia, Alabama and New Jersey. He admitted that on various dates between May 7, 2017, and July 18, 2017, he possessed 28 firearms in New Jersey. All of those firearms were recovered by the ATF during the course of the investigation. Jefferson also admitted that on May 24, 2017, a date on which he also possessed illegal firearms, he possessed 1,500 pills containing more than 50 grams of methamphetamine.

In addition to the prison term, Judge Chesler sentenced Jefferson to five years of supervised release.

U.S. Attorney Carpenito credited special agents of the ATF, under the direction of John B. DeVito, Newark Field Division, and Special Agent in Charge Wayne L. Dixie, Atlanta Field Division, as well as the N.J. Department of Corrections, under the direction of Commissioner Gary M. Lanigan and the N.J. State Parole Board, under the direction of Chairman James Plousis, with the investigation leading to today’s sentencing.

The government is represented by Senior Litigation Counsel Robert Frazer of the U.S. Attorney’s Violent Crime Unit in Newark.

Defense counsel: Howard Brownstein Esq., Union City, New Jersey

NEWARK, N.J. – A long-time drug supplier to members and associates of the New Jersey Grape Street Crips today admitted his role in a conspiracy to distribute kilograms of heroin, U.S. Attorney Craig Carpenito announced.

Hanee Cureton, a/k/a “City,” a/k/a “Fat Boy,” 34, of Newark, pleaded guilty before U.S. District Judge Madeline Cox Arleo in Newark federal court to conspiracy to distribute one kilogram or more of heroin (Count Four) and possession with intent to distribute one kilogram of heroin (Count Five) in the seventh superseding indictment.

Cureton and 13 other defendants were previously charged with, among other crimes, RICO conspiracy, conspiracy to distribute one kilogram or more of heroin, and possession with intent to distribute one kilogram of more of heroin. Thirteen of the 14 defendants charged in the indictment have been convicted and one is awaiting trial.

Another 66 members and associates of the Grape Street Crips who were arrested in a coordinated takedown in May 2015 were separately charged with drug-trafficking, physical assaults, and witness intimidation, and all have been convicted.

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

Beginning in 2003, Cureton was a major supplier of heroin to members of the Grape Street Crips at the James Baxter Terrace housing complex until it was demolished in 2009.

After Baxter Terrace was torn down, Cureton continued to distribute heroin, even while he was serving a prior federal prison sentence for conspiracy to distribute heroin. On Nov. 12, 2013, Drug Enforcement Administration agents searched one of Cureton’s heroin mills, seizing more than a kilogram of heroin, cutting agents, and packaging material. In 2014, Cureton sold to DEA confidential informants nearly $10,000 worth of heroin in one transaction alone. Cureton and his drug-trafficking organization were responsible for distributing hundreds of kilograms of heroin across Newark.

Under the terms of the plea agreement, if accepted by the Court, Cureton faces a sentence of 12 years in federal prison and a term of supervised release of five years. Sentencing is scheduled for Feb. 19, 2019.

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 the DEA, under the direction of Special Agent in Charge Valerie A. Nickerson with the investigation. He also thanked the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Theodore N. Stephens II, police officers and detectives of the Newark Police Department, under the direction of Public Safety Director Anthony F. Ambrose, and the Essex County Sherriff’s Office, under the direction of Sheriff Armando B. Fontoura, for their work on the investigation.

The case is being prosecuted by Assistant U.S. Attorney Osmar J. Benvenuto, Chief of the Organized Crime and Gangs Unit, and Assistant U.S. Attorney Richard J. Ramsay of the Appeals Division in Newark.

This case was conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF) and the FBI’s Safe Streets Task Force, a partnership between federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations and those primarily responsible for the nation’s illegal drug supply.

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

Defense counsel: Troy A. Archie Esq., Cinnaminson, New Jersey

NEWARK, N.J. – A Lafayette, New Jersey, tax preparer today admitted he did not pay payroll taxes and failed to make a personal income tax return, U.S. Attorney Craig Carpenito announced.

Thomas Kurczewski, 71, pleaded guilty before U.S. District Court Judge Esther Salas to an information charging him with one count of failing to pay payroll taxes and one count of failing to make personal income tax returns, resulting in a total loss of $338,204.

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

Kurczewski was the sole owner and manager of a tax return preparation business that used the names “Tom K – The Tax Consultant” and “Tom K and Associates – The Tax Consultants.”  During the years 2011 through 2014, the tax return preparation business employed two individuals, but Kurczewski failed to pay payroll taxes for them. He also failed to file an individual tax return and pay federal income taxes for calendar years 2011 through 2015.

The failure to pay payroll taxes count carries a maximum potential penalty of five years in prison and a $250,000 fine. The failure to file personal income tax returns count carries a maximum potential penalty of up to one year in prison and a $100,000 fine. Sentencing is scheduled for Feb. 20, 2019.

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 charges.

The government is represented by Assistant U.S. Attorney J. Stephen Ferketic of the U.S. Attorney’s Office Criminal Division in Newark.

 

NEWARK, N.J. – A Pearl River, New York, man was sentenced today to 300 months in prison for photographing and filming a child engaged in sexually explicit conduct and sharing those images online, U.S. Attorney Craig Carpenito announced.

Richard Murphy, 33, previously pleaded guilty before U.S. District Judge John Michael Vazquez to an information charging him with sexual exploitation of a minor. Judge Vazquez imposed the sentence today in Newark federal court.

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

Murphy admitted that in December 2016, he persuaded a child to engage in sexually explicit conduct for the purpose of taking photos and videos of that conduct. Murphy also admitted that he took video of the child performing a sex act on him. In addition, Murphy admitted that he shared the sexually explicit images with another individual online.

In addition to the prison term, Judge Vazquez sentenced Murphy to 15 years of supervised release. Restitution will be determined at a hearing within 90 days of today’s sentencing.

U.S. Attorney Carpenito credited special agents of Department of Homeland Security, Homeland Security Investigations, under the direction of Acting Special Agent in Charge Brian Michael, with the investigation.

The government is represented Assistant U.S. Attorneys Danielle Alfonzo Walsman, Chief of the U.S. Attorney’s Office Public Protection Unit, and Leticia Vandehaar, Chief of Staff to the U.S. Attorney.

Defense counsel: David I. Goldstein Esq., Chestnut Ridge, New York

TRENTON, N.J. – An Atlantic County, New Jersey, man today admitted receiving images of child sexual abuse, U.S. Attorney Craig Carpenito announced.

Matthew Wolny, 40, of Egg Harbor Township, New Jersey, pleaded guilty before U.S. District Judge Brian R. Martinotti in Trenton federal court to an information charging him with one count of receipt of child pornography. Wolny was previously arrested and charged by complaint on June 6, 2018.

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

In September 2013, Wolny, who was then living in Jackson, New Jersey, used a peer-to-peer file sharing software, which he had installed on his computer, to download video files containing images of child sexual abuse from the internet to his computer hard drive.

The charge of receiving child pornography carries a mandatory minimum sentence of five years in prison, a maximum potential penalty of 20 years in prison, and a $250,000 fine. Sentencing is scheduled for April 8, 2019.

U.S. Attorney Carpenito credited special agents of U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), under the direction of Brian Michael, and the Ocean County Prosecutor’s Office, under the direction of Prosecutor Joseph D. Coronato, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Molly Lorber of the Criminal Division in Trenton.

Defense counsel: Jack Wenik Esq., Newark

CAMDEN, N.J. - A federal grand jury indicted a Camden County police officer for multiple offenses arising from an assault on the streets of Camden, New Jersey, United States Attorney Craig Carpenito announced.

Nicholas Romantino, 25, of Egg Harbor Township, New Jersey was charged in a two-count Indictment that was unsealed today.   The Indictment alleges that Romantino violated a victim’s civil rights by repeatedly punching the victim in the head and then falsified a police report to cover up the assault.  A federal grand jury returned the sealed Indictment on November 7, 2018.

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

On or about February 22, 2018, Romantino was working in his official capacity as a Camden County Police Officer when he responded to a radio dispatcher’s report of a “man with a gun” in the area of Collings and New Hampshire Roads.  Romantino was one of several police officers who responded.

When officers arrived at the location, another officer stopped the victim and told him to put his hands up.  The victim complied.  Romantino approached the victim from behind and tried to pull his arm behind his back, which startled the victim.  The victim reacted by pulling his arm away from Romantino.  Romantino then threw the victim to the ground.

Once on the ground, Romantino rolled the victim over onto his stomach at which point another officer grabbed the victim’s legs and a second officer grabbed the victim’s right arm.  Romantino grabbed the victim’s left hand.

Romantino, without provocation, punched the victim multiple times in the back of his head.  Ultimately, the victim was transported in police custody to Virtua Hospital in Camden, New Jersey, where he received treatment for head injuries, as a result of the punches that he received from Romantino.

After the victim was transported to the hospital, Romantino checked himself into Virtua Hospital where he received treatment for injuries to his right hand, as a result of the punches that he delivered to the victim’s head.

Romantino then returned to the police station to prepare his reports in connection with the victim’s arrest.  To justify his actions against the victim, Romantino prepared and submitted a false and fraudulent police report in which Romantino falsely stated that the victim “placed his left hand under his chest and began to try [to] lift himself off the ground.  Due to the fact that the male was trying to lift himself up and I was unable to see his right hand I began to strike the male in the head with a closed fist . . . .”  Contrary to Romantino’s representations in his report, Romantino held the victim’s left hand while he punched the victim in the back of his head and another officer held the victim’s right arm.

The violation of civil rights count carries a maximum penalty of 10 years in prison. The false records count carries a maximum penalty of 20 years in prison. The maximum fine for each of the charges is $250,000.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Michael T. Harpster of the Philadelphia Division, with the investigation leading to today’s indictment.  U.S. Attorney Carpenito also recognized the contributions of the Internal Affairs Unit of the Camden County Police Department, under the direction of Chief J. Scott Thomson, and investigators assigned to the Special Prosecution Unit of the Camden County Prosecutor’s Office.

The government is represented by Assistant U.S. Attorney Jason M. Richardson 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. – A Hoboken, New Jersey, woman today admitted her role in a conspiracy to promote a voter bribery scheme, U.S. Attorney Craig Carpenito announced. 

Lizaida Camis, 55, pleaded guilty before U.S. District Court Judge William J. Martini in Newark federal court to Count 2 of an indictment charging her with conspiracy to use the mail to promote a voter bribery scheme during the 2013 municipal election in Hoboken.

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

Camis, Dio Braxton, and others, at former Hoboken City Council candidate Frank Raia’s direction, agreed to pay certain Hoboken voters $50 each if those voters applied for and cast mail-in ballots for the November 2013 Hoboken municipal election. Camis and others provided these voters with vote-by-mail applications and then delivered the completed applications to the Hudson County Clerk’s office. After the mail-in ballots were delivered to the voters, Camis and others went to the voters’ residences and, in some cases, instructed the voters to vote for a rent control referendum that Raia supported. Camis, Braxton and others promised the voters that they would be paid $50 for casting their mail-in ballots and told them that they could pick up their checks after the election at Raia’s office in Hoboken. Bank records show that voters who interacted with Camis and Braxton received $50 checks from an entity associated with Raia.

Raia and Braxton were indicted on Oct. 31, 2018, for their roles in the scheme.

The conspiracy charge carries a maximum penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for Feb. 21, 2019.

U.S. Attorney Craig Carpenito credited 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 the 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. Attorney Sean Farrell of the U.S. Attorney’s Office’s Special Prosecutions Division and Assistant U.S. Attorney Rahul Agarwal, Deputy Chief of the Criminal Division.

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

Defense Counsel: Brandon D. Minde, Esq., Cranford, New Jersey

TRENTON, N.J. – The owner and operator of a stock trading operation was sentenced today to 30 months in prison for trading on inside information related to confidentially marketed stock offerings as part of a multimillion-dollar insider trading scheme, U.S. Attorney Craig Carpenito announced.

Steven Fishoff, 61, of Westlake Village, California, previously pleaded guilty before U.S. District Judge Michael A. Shipp to Count Four of an indictment, charging him with securities fraud. Judge Shipp imposed the sentence today in Trenton federal court.

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

On numerous occasions between May 2010 and August 2013, Fishoff, Ronald Chernin, Steven Costantin, Paul Petrello, and Joseph Spera short sold the securities of numerous public companies, on the basis of inside information obtained by Fishoff and others acting with or on behalf of Fishoff.
For each of these offerings, Fishoff or one or more of the day traders that he employed —including his friend, Chernin, and his brother-in-law, Costantin — entered into confidentiality or “wall-crossing” agreements as representatives of Fishoff’s trading entities, whereby they agreed not to disclose or trade on inside information concerning the offerings, such as the name of the issuers and the timing and pricing of the transactions, and were “brought over the wall” for the narrow purpose of determining whether to purchase the offered securities.

In breach of the confidentiality and trading restrictions of the wall-crossing agreements, Fishoff tipped Petrello and Spera (who is identified as CC-1 in the indictment), either directly or through Petrello, with the inside information about the confidentially marketed offerings — specifically, advising them of the stock trading symbols of the companies, and the timing and sometimes the pricing of the upcoming offerings.

Fishoff shorted the stock of the public companies, including Synergy Pharmaceuticals, Inc., based on the inside information, in anticipation of a drop in the stocks’ price when the stock offerings were disclosed to the public. Fishoff and his co-defendants traded through the accounts of their respective trading entities or through related accounts that they controlled, shorting the securities and covering the short positions after the stock offerings were publicly announced.

By trading on this valuable, nonpublic information in violation of the confidentiality agreements, Fishoff and his co-defendants gained more than $3.9 million in profits over the course of the three-year scheme. Petrello and Spera split their profits with Fishoff, generally on a 50-50 basis, as compensation to Fishoff for the inside information that he provided to them. Chernin and Costantin, who executed trades using Fishoff’s capital, also split their combined profits with Fishoff on a 50-50 basis.

In addition to the prison term, Judge Shipp sentenced Fishoff to three years of supervised release and fined him $50,000. Fishoff also agreed to settle the parallel civil forfeiture action, United States of America v. The Contents of Wedbush Securities Account Number 8313 et al., Civil Action No. 17-5334, and to forfeit the property named as defendants in rem in the verified complaint filed in the parallel civil forfeiture action.

Chernin, Costantin, Petrello, and Spera also have pleaded guilty in the insider trading scheme and are awaiting sentencing.

U.S. Attorney Craig Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, for the investigation leading to today’s sentencing. He also thanked the U.S. Securities and Exchange Commission’s New York Regional Office under the direction of Sanjay Wadhwa.

The government is represented by Assistant U.S. Attorney Shirley U. Emehelu, Chief of the Asset Recovery Money Laundering Unit, Assistant U.S. Attorney Nicholas P. Grippo of the Economic Crimes Unit, and Assistant U.S. Attorney Sarah Devlin of the Asset Recovery Money Laundering Unit.

Defense counsel: Daniel Brown Esq. and Lionel André Esq., Washington, D.C.

CAMDEN, N.J. – A Somers Point, New Jersey, woman has been charged with planning the assault of a North Attleboro, Massachusetts, man, U.S. Attorney Craig Carpenito announced today.

Diane Sylvia, 58, is charged by criminal complaint with one count of solicitation to commit a crime of violence. She is scheduled to appear today before U.S. Magistrate Judge Karen M. Williams in Camden federal court.

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

On Sept. 24, 2018, an individual contacted the FBI. The individual is a former member of an organized criminal gang who sought therapy from Sylvia, a licensed clinical social worker who provides mental health counseling at an office in Linwood, New Jersey. Knowing the patient’s past history with this violent gang, Sylvia allegedly asked the individual to conspire to kill a man who resides in Massachusetts, whom Sylvia said had been bilking her for money over the years. The individual alerted law enforcement to Sylvia’s plans and discontinued therapy with her.

In early October, at the direction of law enforcement officials, the individual introduced Sylvia to a purported hitman, who was in reality an undercover FBI agent. Sylvia told the undercover FBI agent that she did not want the Massachusetts man killed; she wanted him beaten and permanently disfigured. Sylvia said, “He needs his pretty little face bashed in, that’s what I really want.” She later added that “a broken arm would help, too,” explaining that “all he has is, like, his big muscles and his cute face.” She later repeated, “I really just want his face punched in, I swear to God. And his arm broken, that’s what I want.” When the undercover agent asked why Sylvia wanted to do this, she claimed the man “ended up with some stuff on me that he was gonna report me to the licensing board, which means I have no job.” When asked how assaulting this man would help Sylvia, she replied, “It’s just gonna make me feel better” and “it’s the only way I can get him back.”

The undercover agent advised Sylvia to purchase a pre-paid phone to communicate with him about the assault, which she did. Sylvia arranged two more meetings with the undercover FBI agent, all at her office. During one of the meetings, Sylvia clarified how she wanted the intended victim assaulted: “Something that makes him not so cute”—while making a slashing motion on her cheek—“something so he can’t do push-ups, so he can’t work out.” During the last two meetings, Sylvia paid the undercover FBI agent a total of $5,000 cash to carry out the assault plan.

The solicitation of a crime of violence charge carries a statutory maximum of five years in prison and $250,000 fine.

U.S. 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. He also thanked the Atlantic County Prosecutor's Office, the Atlantic County Sheriff's Office, the Department of Labor-Office of Inspector General, the N.J. Department of Human Services Police, the N.J. State Police, and the Northfield Police for their roles in the investigation.

The government is represented by Assistant U.S. Attorney Alyson M. Oswald of the U.S. Attorney’s Office in Camden.

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

Defense counsel: Michael Paulhus Esq., Toms River

NEWARK, N.J. – An Essex County, New Jersey, man was sentenced today to 22 months in prison for possessing three guns as a previously convicted felon, including a replica Thompson submachine gun that he modified into a working automatic firearm, U.S. Attorney Craig Carpenito announced.

David Lutter, 69, of Verona, New Jersey, previously pleaded guilty before U.S. District Judge Esther Salas to an indictment charging him with one count of possessing three firearms as a previously convicted felon. Judge Salas imposed the sentence today in Newark federal court.

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

In January 2017, Lutter met with an undercover agent from the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF-E) and negotiated the sale of a functioning Thompson submachine gun. The gun had originally been a replica, but Lutter had modified it with real gun parts to convert it into a functioning automatic firearm, which, according to Lutter, could fire 20 to 25 bullets per second. Lutter had also equipped it with what he called a “rock-and-roll switch,” which could toggle between semi-automatic and automatic mode.

Lutter sold the undercover agent the submachine gun, a .32-caliber revolver, and 100 rounds of ammunition for $525. A few months later, in May 2017, Lutter sold the undercover agent a .45-caliber semi-automatic pistol, bullets, and gun parts for $500. When Lutter was arrested in June 2017, law enforcement searched a storage facility he rented and recovered several hundred additional bullets and firearm parts. All three firearms and the recovered ammunition are in the possession of law enforcement.

At no time was Lutter licensed to sell firearms and was prohibited from possessing them due to his 1993 felony conviction for sexual assault of a minor.

In addition to the prison term, Judge Salas sentenced Lutter to two years of supervised release.

U.S. Attorney Carpenito credited special agents of the ATF Newark Field Division, under the direction of Special Agent in Charge John B. DeVito, with the investigation leading to today’s sentencing.

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

Defense counsel: Kevin Carlucci Esq., Assistant Federal Public Defender, Newark

NEWARK, N.J. – U.S. Attorney Craig Carpenito announced today that the District of New Jersey seized 352 firearms as part of criminal prosecutions in Fiscal Year 2018.

The District of New Jersey worked jointly with its law enforcement partners, including the Bureau of Alcohol, Tobacco, Firearms and Explosives, the FBI, Homeland Security Investigations, the U.S. Marshal’s Service, and numerous agencies of the State of New Jersey.

“As part of our mission to keep the public safe from violent crime, the United States Attorney’s Office has removed more than 300 firearms from the hands of criminals in the last year alone,” U.S. Attorney Carpenito said. “Each one of these firearms represented a clear and present danger to the safety of our citizens, and we are proud to work with our federal, state, and local law enforcement partners to reduce the threat of armed criminals in New Jersey.”

“Taking these guns off the streets is proof that Attorney General Sessions’ initiatives to fight gun violence are successful and are having an impact,” ATF Newark Field Division Special Agent in Charge John B. DeVito said. “The use of Crime Gun Intelligence is instrumental in achieving these objectives, and ATF remains committed to removing the firearms that endanger our communities.”

During the 2018 fiscal year, firearms seizures in the District of New Jersey included:

• Nine AR-15 type assault rifles
• More than a dozen other “long guns,” including shot guns and rifles, and even an M2 machine gun
• More than 300 pistols and revolvers

“To keep New Jersey streets safe, the FBI along with our local and state partners will aggressively pursue the seizure and forfeiture of guns from violent criminals and convicted felons,” Newark FBI Special Agent in Charge Gregory W. Ehrie said.

“Transnational criminal organizations operating in New Jersey rely on firearms as a tool to further their criminal activity,” Brian Michael, Special Agent in Charge, HSI Newark, said. “HSI and all our law enforcement partners are determined to keep these weapons out of the hands of dangerous criminals that pose a threat to public safety and the special agents/officers that pursue them each and every day.”

“When we remove crime guns and the criminals who carry them from our communities, we attack the root of gun violence,” N.J. Attorney General Gurbir S. Grewal said. “The 352 guns forfeited by the U.S. Attorney’s Office in collaboration with law enforcement partners across New Jersey represent 352 guns that will never kill or maim a resident or one of our law enforcement officers. We work best when we work together, and our collaborative efforts to prosecute gun crimes and share intelligence about illegal guns trafficked into New Jersey are having a strong impact.”

“We are pleased to have partnered with the U.S. Attorney’s Office the recovery of over 300 firearms this year,” Newark Public Safety Director Anthony F. Ambrose said. “We will remain vigilant in working with U.S. Attorney Carpenito and his law enforcement partners in the confiscation of illegal firearms with an aim towards an ongoing reduction of violent crime.”

“U.S. Attorney Carpenito’s unwavering leadership to reducing gun violence has facilitated a significant statistical decrease in the number of gun homicides and firearm related aggravated assault incidents in Camden,” Camden County Police Chief J. Scott Thomson said. “Removing violent criminals and their guns from the streets with the promise of federal prosecution continues to serve as a major deterrent that makes neighborhoods safer.” 

The U.S. Attorneys’ Offices, along with their law enforcement partners, are responsible for seizing and forfeiting firearms that are involved in criminal activities. Many of these forfeitures result when previously-convicted felons continue to carry firearms, and are convicted of being felons in possession of weapons, pursuant to Section 922(g) of Title 18 of the United States Code. The law requires that these firearms be forfeited.

NEWARK, N.J. – A Newark man today admitted his role in a conspiracy to distribute more than a kilogram of heroin, 150 grams of fentanyl, and 240 grams of crack cocaine as well as being a previously convicted felon in possession of a firearm, U.S. Attorney Craig Carpenito announced.

Ahmad Johnson, a/k/a “OC,” 38, pleaded guilty before U.S. District Judge Kevin McNulty in Newark federal court to a superseding information charging him with one count of conspiracy to possess with intent to distribute more than one kilogram of heroin, 28 grams of cocaine base, and 40 grams of fentanyl, and one count of being a felon in possession of a firearm.

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

From September 2016 through June 2017, Johnson and other members of the Johnson DTO engaged in a heroin distribution conspiracy that operated in and around Newark.

Through the authorized interception of telephone calls and text messages, controlled purchases of heroin, the use of confidential sources of information, and other investigative means, law enforcement officers learned that Johnson was a leader of the conspiracy and was responsible for obtaining wholesale amounts of narcotics, including heroin and cocaine, and processing and packaging the narcotics for sale in the Newark area. At times, after the narcotics were processed and packaged for sale, Johnson found users to “test” the narcotics to evaluate the quality, potency, and danger for broader distribution. After the narcotics were tested, members of the Johnson DTO sold the narcotics to other distributors and to users.

The conspiracy charge carries a mandatory minimum penalty of 10 years in prison, a maximum potential penalty of life in prison, and a $10 million fine. The charge of being a felon in possession of a firearm is punishable by up to 10 years in prison and a $250,000 fine. Sentencing is scheduled for Feb. 20, 2019.

U.S. Attorney Carpenito credited special agents and officers with the Drug Enforcement Administration’s High-Intensity Drug Trafficking Area (HIDTA) Group 1, under the direction of Special Agent in Charge Valerie A. Nickerson, with the investigation leading to today’s guilty plea.

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

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

NEWARK, N.J. – A Delaware corporation headquartered in Woodcliff Lake, New Jersey, will pay $1.87 million to resolve allegations that it improperly reported Disadvantaged Business Enterprise (DBE) participation on government contracts, U.S. Attorney Craig Carpenito announced today.

On Aug. 25, 2009, Kiewit Constructors Inc. entered into a contract with the Long Island Rail Road (LIRR) to design and implement Phase II of the Atlantic Avenue Viaduct Rehabilitation Project. The Atlantic Avenue Viaduct is an approximately 1.5 mile long bridge connecting Jamaica, New York, with Brooklyn, New York. Kiewit’s work on the project, which was partially funded by federal funds, included furnishing and installing new steel girders and spans, along with related steelwork.

Because of the federal funds used on the project, the LIRR was required to establish a program requiring its contractors to subcontract with DBEs and establish DBE goals to ensure that contractors make “good faith efforts” to achieve those goals. Kiewit subcontracted with Iron Eagle Construction Corp., an established steel erection company certified as a DBE by the State of New York, to furnish and install steel spans.

The settlement resolves allegations that Kiewit failed to meet its DBE obligations under its contract with the LIRR. Under the subcontract, Iron Eagle was obligated to manage the steel fabrication process, conduct inspections, and coordinate steel delivery schedules. The United States contends that Iron Eagle did not perform a commercially useful function for the furnishing of steel spans under the DBE subcontract, in that it did not sufficiently manage the steel fabrication process, conduct necessary inspections, or coordinate steel delivery schedules. The United States asserts that Kiewit did not take contractually mandated steps to address Iron Eagle’s failure to perform a commercially useful function, and that it failed to meet its DBE obligations under the Contract.

U.S. Attorney Carpenito credited special agents of the U.S. Department of Transportation, Office of the Inspector General, under the direction of Inspector General Calvin L. Scovell III; special agents of the Port Authority of New York and New Jersey, Office of Inspector General, under the direction of Inspector General Michael Nestor; and special agents of the Metropolitan Transportation Authority, Office of Inspector General, under the direction of Inspector General Barry L. Kluger, with the investigation.

The government is represented by Assistant U.S. Attorney Mark C. Orlowski of the U.S. Attorney’s Civil Division in Newark, and David E. Dauenheimer, Deputy Chief of the U.S. Attorney's Civil Division in Newark.

Defense counsel: Frederick M. Levy Esq., Washington, D.C.

NEWARK, N.J. – An Elizabeth, New Jersey, man was sentenced today to 45 months in prison for operating a scheme to fraudulently obtain hundreds of thousands of dollars in commercial and residential merchandise from various companies, U.S. Attorney Craig Carpenito announced.

Roy Depack, a/k/a “Ray Depack,” a/k/a “Roy Soriano,” a/k/a “John Soriano,” 44, previously pleaded guilty before U.S. District Judge William J. Martini to an information charging him with one count of conspiracy to commit mail and wire fraud. Judge Martini imposed the sentence today in Newark federal court.

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

Beginning in 2014, Depack and others conspired to fraudulently obtain merchandise – including Apple computers, digital scales, a walk-in freezer, a snow blower, a gas backpack blower, Samsung televisions, and Milwaukee tools kits – from at least six different victim companies. Depack fraudulently obtained and attempted to obtain more than $900,000 in merchandise.

Depack called the victim companies and falsely claimed to be a representative of companies that had pre-existing business relationships, lines of credit, or accounts with the victim companies. Depack would then direct the victim companies to ship the products to various addresses in New York, Newark, Elizabeth, and Union, New Jersey, while the victims billed the companies that Depack was pretending to represent. Depack and others sold the goods to pawn stores and other individuals.

For example, on April 10, 2017, Depack, using the name “Mike Clarke” and falsely claiming to be a representative of a food distribution company, ordered one digital scale, valued at approximately $3,614, from a victim identified in the information as “Company Six,” and directed that it be delivered to Elizabeth. After the scale was delivered on April 11, 2017, Depack and another individual sold it at a pawn store in Newark for approximately $700.

In addition to the prison term, Judge Martini sentenced Depack to three years of supervised release and ordered him to pay restitution of $394,143.

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

The government is represented by Assistant U.S. Attorney Anthony Moscato, Chief of the U.S. Attorney’s Office National Security Unit in Newark.

Defense Counsel: Dennis S. Cleary Esq., West Orange, New Jersey

NEWARK, N.J. – A Monmouth County, New Jersey, doctor to appear in court today on charges of illegally prescribing prescription drugs, U.S. Attorney Craig Carpenito announced.

Martin Fried, 60, a pediatric gastroenterologist in Ocean Township, New Jersey, was charged in a three-count complaint with attempting to distribute oxycodone and distribution of Adderall and Xanax outside the usual course of professional practice and not for a legitimate medical purpose. Fried is scheduled to make his initial appearance today before U.S. Magistrate Judge Steven C. Mannion in Newark federal court.

According to documents filed in this case and statements made in court: Fried owned and was the sole practitioner at a medical practice, Healthy Days LLC, specializing in pediatric gastroenterology, and touting specialties in “nutrition,” “Lyme disease and co-infection,” and “genetic/DNA testing.”

On July 20, 2018, Fried accompanied two men – referred to in the complaint as “Individual-1” and “Individual-2” – to two pharmacies in the area of Toms River, New Jersey, to obtain oxycodone, a Schedule II controlled substance; Adderall, a Schedule II controlled substance; and alprazolam, a Schedule IV controlled substance, using prescriptions Fried had written. When the first pharmacy refused to fill the prescriptions, Fried and the two men went to a second pharmacy. Fried prescribed the controlled substances to Individual-1 and Individual-2 outside the usual course of professional practice and with no legitimate medical purpose.

Two days earlier, Fried had accompanied the same two men to another pharmacy obtain Adderall, Xanax, and gabapentin, using prescriptions he had written. Based on Fried’s prescriptions, Individual-1 obtained approximately 120 tablets of Adderall, 90 tablets of Xanax, and 120 tablets of gabapentin (a drug commonly abused with opioids because it enhances the euphoria caused by the opioid). The drugs were prescribed by Fried outside the usual course of professional practice and with no legitimate medical purpose.

On July 31, 2018, Fried surrendered to the U.S. Drug Enforcement Administration his DEA registration to prescribe controlled substances. In a consent order with the N.J. Board of Medical Examiners filed in September, Fried agreed to an indefinite suspension of his medical license, pending a future demonstration of his fitness to practice, and further action by the Board.
Each count of the complaint is punishable by a maximum of 20 years in prison and a $1 million fine, or twice the gross gain or loss from the offense, whichever is greater.

U.S. Attorney Carpenito credited special agents of the DEA, under the direction of Special Agent in Charge Valerie Nickerson in Newark, with the investigation leading to the charges.

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

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

Defense counsel: Matthew Adams Esq., Morristown, New Jersey

CAMDEN, N.J. – A Trenton, New Jersey, man was sentenced today to 100 months in prison for robbing Metro PCS stores in Willingboro, New Jersey, Lumberton, New Jersey, and Levittown, Pennsylvania, in September and October 2016, U.S. Attorney Craig Carpenito announced.

Rodney Day, 27, previously pleaded guilty before U.S. District Judge Joseph H. Rodriguez to an information charging him with one count of conspiracy to commit Hobbs Act robberies. Judge Rodriguez imposed the sentence today in Camden federal court.

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

On Sept. 29, 2016, Day, Zeldrick Nance, 31, of Trenton, and Lisa Anderson, 35, of Griffithville, Arkansas, drove to the Willingboro Metro PCS Store. Day brandished what appeared to be a firearm while Nance duct taped the store occupants and placed them into a store bathroom. Meanwhile, Anderson stole cellular telephones and money from the cash registers. During the robbery, Day demanded the keys to a car owned by one of the victims. Day, Nance, and Anderson fled with the stolen cellular telephones and money in that stolen car.

On Oct. 7, 2016, Day, Nance, and Anderson drove to the Lumberton Metro PCS Store. Day brandished what appeared to be a firearm while Nance duct taped a store occupant, put that victim in a storage room, and took the victim’s wallet and keys. Meanwhile, Anderson stole cellular telephones and money from the cash registers.

On Oct. 12, 2016, Day, Nance, and Anderson drove to the Levittown Metro PCS Store. Day once again brandished what appeared to be a firearm while Nance duct taped the victims inside the store and put them in a store bathroom. Anderson subsequently entered the store and stole cellular telephones and money from the cash registers.

In addition to the prison term, Judge Rodriguez sentenced Day to three years of supervised release and ordered to pay $26,307 in restitution.

Nance has previously pleaded guilty and is scheduled to be sentenced Nov. 8, 2018. Anderson has previously pleaded guilty to her role in the robberies and is currently scheduled for sentencing on Nov. 13, 2018.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, with the investigation leading to today’s sentencing. He also thanked the Willingboro, Lumberton, and Levittown police departments, as well as the Burlington and Mercer County Prosecutor’s Offices for their assistance in this case.

The government is represented by Assistant U.S. Attorney Jacqueline M. Carle of the U.S. Attorney’s Office Criminal Division in Camden.

Defense counsel: Peter A. Levin Esq., Philadelphia

NEWARK, N.J. – U.S. Attorney Craig Carpenito announced today that Senior Trial Counsel Allen B.K. Urgent will lead the office’s efforts in connection with the Justice Department’s nationwide Election Day Program for the Nov. 6, 2018, general election.

Urgent, Senior Trial Counsel Mark McCarren and Assistant U.S. Attorney Gabriel Vidoni have been appointed to serve as District Election Officers (DEOs) for the District of New Jersey, and are responsible for handling complaints of election fraud and voting rights abuses in consultation with Justice Department Headquarters in Washington.

“Free and fair elections are the cornerstone of our democracy,” U.S. Attorney Carpenito said. “Every voter must be free to cast a ballot without being intimidated or harassed, and their votes must be counted accurately and without being subjected to fraud of any kind.”

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

In order to respond to complaints of election fraud or voting rights abuses on Nov. 6, 2018, and to ensure that such complaints are directed to the appropriate authorities, U.S. Attorney Carpenito said the DEOs will be on duty in this District while the polls are open. They can be reached by the public at: (888) 636-6596.

The FBI will have special agents available in each field office and resident agency throughout the country to receive allegations of election fraud and other election abuses on Election Day. The local FBI field office can be reached by the public at (973) 792-3000.

Complaints about possible violations of the federal voting rights laws can be made directly to the Civil Rights Division’s Voting Section in Washington, by phone at (800) 253-3931 or (202) 307-2767, by fax at (202) 307-3961, by email to voting.section@usdoj.gov or by complaint form at http://www.justice.gov/crt/complaint/votintake/index.php.

CAMDEN, N.J. – A man and woman from Fayetteville, North Carolina, who were arrested for conspiring to engage in illegal gun-trafficking in South Jersey will be making their initial appearances in court in New Jersey today, U.S. Attorney Craig Carpenito announced. 

Anthony Doyle, 27, and Anastacia Thomas, 26, are charged by complaint with conspiring to illegally traffic firearms. Doyle is also charged with being a felon in possession of firearms.

The defendants appeared in federal court in North Carolina following their arrest earlier this month and were detained. They are scheduled to appear in New Jersey this afternoon; Doyle will appear before U.S. Magistrate Judge Joel Schneider in Camden federal court and Thomas will appear before U.S. Magistrate Judge Steven C. Mannion in Newark federal court.

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

On Jan. 25, 2018, law enforcement officers conducted a traffic stop of a car registered to Doyle, who was riding as the front seat passenger while Thomas was driving. The officers observed a Glock handgun in plain view on the front seat passenger floor. Doyle told the officers the gun, which was loaded with 14 hollow tip bullets, belonged to a friend. The officers also observed a firearm box in the backseat of the car, next to a backpack. A search of the car and backpack revealed four additional handguns and two additional firearm boxes. 

Law enforcement officers learned that the four handguns in the backpack had been purchased by Thomas on Jan. 22, 2018, from a pawnshop in Jonesboro, Georgia. Thomas purchased several additional firearms from that same pawnshop over the course of multiple visits, and Doyle accompanied Thomas to the pawnshop on at least two of those visits. 

The investigation revealed that from Nov. 30, 2017, to Jan. 25, 2018, Doyle and Thomas conspired and worked together to engage in the business of dealing in firearms without a license.  Thomas was responsible for purchasing firearms from federally licensed firearms dealers; meanwhile, Doyle used social media to advertise firearms for sale, negotiate pricing for firearms, and arrange for firearm transactions. Doyle discussed the various firearm transactions in great detail over the course of hundreds of pages of online messages that were analyzed by law enforcement.

The charge of conspiring to engage in gun trafficking carries a maximum potential penalty of five years in prison and a $250,000 fine. The charge of possessing a firearm while being a convicted felon carries a maximum potential penalty of 10 years in prison and a $250,000 fine.

U.S. Attorney Carpenito credited special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge John B. Devito, Newark Field Division, with the investigation leading to the charges.

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

The charges and allegations in the complaint are merely accusations, and both Doyle and Thomas are considered innocent unless and until proven guilty.

 

 

Defense counsel:

Doyle: Christopher O’Malley Esq., Assistant Federal Public Defender, Camden

Thomas: Paul A. Sarmousakis Esq., Avalon, New Jersey

NEWARK, N.J. – A former candidate for the Hoboken City Council and a campaign worker were charged today by a federal grand jury with conspiracy to promote a voter bribery scheme by use of the mail, U.S. Attorney Craig Carpenito announced. 

Francis Raia, 67, of Hoboken, New Jersey, was a candidate for city council in 2013. Dio Braxton, 43, of Hoboken, worked for Raia’s campaign. A federal grand jury charged them today with conspiracy to violate the federal Travel Act for causing the mails to be used in aid of voter bribery, contrary to New Jersey state law, during the 2013 election. Lizaida Camis, a conspirator, was charged by indictment on Oct. 17, 2018; her case is pending.

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

Under New Jersey law, registered voters are permitted to cast a ballot by mail rather than in-person. To receive a mail-in ballot, voters must complete and submit to their County Clerk’s Office an Application for Vote By Mail Ballot (VBM Application). After the VBM Application is processed by the County Clerk’s Office, voters receive a mail-in ballot. 

From October 2013 through November 2013, Raia instructed Braxton and other conspirators to pay certain Hoboken voters $50 if those voters applied for and cast mail-in ballots in the November 2013 Hoboken municipal election. Conspirators provided these voters with VBM applications and then delivered the completed VBM Applications to the Hudson County Clerk’s office. After the mail-in ballots were delivered to the voters, the conspirators went to the voters’ residences and, in some cases, instructed the voters to vote for Raia and in favor of a ballot referendum that Raia supported relating to rent control. Conspirators promised the voters that they would be paid $50 for casting their mail-in ballots and told them that they could pick up their checks after the election at Raia’s office in Hoboken. Bank records show that voters living in Hoboken received $50 checks from an entity hired by Raia’s political action committee.   

Raia and Braxton each face a maximum penalty of five years in prison and a $250,000 fine on the conspiracy charge. 

U.S. Attorney Craig Carpenito credited 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 the Inspector General, under the direction of Special Agent in Charge Christina Scaringi, with the investigation leading to today’s indictment. 

The government is represented by Assistant U.S. Attorney Sean Farrell of the U.S. Attorney’s Office’s Special Prosecutions Division and Assistant U.S. Attorney Rahul Agarwal, Deputy Chief of the Criminal Division.  

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

TRENTON, N.J. – The owner of a purported business consulting firm today admitted operating a $1.1 million scheme that artificially inflated the stock price of a publicly traded company he controlled, U.S. Attorney Craig Carpenito announced.

James Farinella, 52, of Springfield, New Jersey, pleaded guilty before U.S. District Judge Anne E. Thompson in Trenton federal court to one count of conspiracy to commit securities fraud.

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

From June 2012 through December 2012, Farinella and others allegedly operated a scheme to profit by fraudulently inflate the prices of Pazoo Inc. (PZOO). Pazoo had little or no real business operations, and when it started trading in June 2012, Farinella controlled 98 percent of the free-trading shares in Pazoo.

Farinella and other conspirators allegedly inflated the price of those shares by orchestrating a series of trades between accounts they controlled to create the appearance that Pazoo stock was rising in price and heavily traded. In order to further inflate the prices, Farinella and his conspirators also disseminated misleading promotional materials to lure investors to purchase the stocks, including touting Pazoo as a leading provider of nutritional supplements for people and their pets.

After inflating the price of the stock, Farinella and his conspirators sold large volumes of the stock to investors at the artificially inflated prices. The company’s stock price then dropped, causing victims of the scheme to suffer losses. The alleged stock manipulation scheme generated approximately $1.1 million in gross trading proceeds.

The conspiracy to commit securities fraud count carries a maximum potential penalty of five years in prison and a $250,000 fine or twice the gross gain or loss from the offense. Sentencing is scheduled for Feb. 5, 2019.

The U.S. Securities and Exchange Commission (SEC) has a civil complaint pending against Farinella.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, with the investigation leading to today’s guilty plea. He also thanked the U.S. Securities and Exchange Commission’s New York Regional Office, under the direction of Marc P. Berger, for its assistance in this matter.

The government is represented by Assistant U.S. Attorney Justin S. Herring, Chief of the Cybercrimes Unit in Newark.

NEWARK, N.J. – A member of MS-13 was sentenced to ten years in prison for orchestrating, from inside a California state prison, the trafficking of methamphetamine, heroin, and cocaine to New Jersey, U.S. Attorney Craig Carpenito announced.

Luis Calderon, 32, a/k/a “Lagrima,” of Los Angeles, previously pleaded guilty before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court to an indictment charging him with conspiracy to distribute, and to possess with intent to distribute, methamphetamine, heroin, and cocaine.  Sentence was imposed today by U.S. District Judge Jose L. Linares.

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

Between August 2015 and November 2015, Calderon was incarcerated at the Calipatria State Prison in California. However, Calderon had access to multiple contraband cellular telephones, which he used to communicate with conspirators outside the prison.

Law enforcement officers lawfully recorded numerous telephone conversations between Calderon and an MS-13 member based in New Jersey, identified in the indictment as “Individual-1.” Among other topics, Calderon and Individual-1 discussed plans to distribute crystal methamphetamine, heroin, and cocaine in the New Jersey area. Calderon and Individual-1 ultimately settled on that plan that involved Calderon and others outside the prison sending a package containing controlled substances to a business center in Edison, New Jersey.

Shortly before the package arrived, Calderon informed Individual-1 by telephone that he was sending Individual-1 a package containing four ounces each of heroin and cocaine. Calderon stated that the package would also likely contain two ounces or more of crystal methamphetamine. Calderon told Individual-1 that the total cost for the heroin, cocaine, and crystal methamphetamine was $9,000, and stated that Individual-1 could keep the proceeds made from selling the drugs once Individual-1 paid Calderon for the shipment. Calderon subsequently gave Individual-1 the names that would appear on the package and the tracking number.

On Nov. 4, 2015, federal agents lawfully intercepted and searched the package. The search revealed approximately 95.5 grams of heroin, 54.7 grams of cocaine, and 52.4 grams of methamphetamine hidden inside a box of Little Debbie Swiss Rolls.

In addition to the prison term, Judge Linares sentenced Calderon to 5 years of supervised release.

U.S. Attorney Carpenito credited special agents of the Department of Homeland Security (DHS), Homeland Security Investigations (HSI), under the direction of Special Agent in Charge Brian Michael, with the investigation leading to today’s sentencing. He also thanked Immigration and Customs Enforcement (ICE) Enforcement Removal Operations (ERO), the Calipatria State Prison, the Plainfield Police Department, the Union County Prosecutor’s Office, and the U.S. Attorney’s Office for the Central District of California for their assistance.

The government is represented by Assistant U.S. Attorneys Jamari Buxton of the U.S. Attorney’s Office Criminal Division and James Donnelly, Chief of the U.S. Attorney’s Office Violent Crimes Unit.

Defense counsel: Stacy Ann Biancamano Esq., Chatham, New Jersey

NEWARK, N.J. – The former CEO of Mariner’s Bank and an accomplice both were charged today for their roles in a scheme to obtain nominee loans from Mariner’s Bank, U.S. Attorney Craig Carpenito announced.

Fred Daibes, the former CEO and Chairman of the Board of Directors at Mariner’s Bank, and Michael McManus, the CFO of Daibes Enterprises, a consortium of companies specializing in real estate development, were charged by a federal grand jury with one count of conspiracy to misapply bank funds and to make false entries to deceive a financial institution and the FDIC. Daibes, 61, of Edgewater, New Jersey, also was charged with five counts of misapplying bank funds, six counts of making false entries to deceive a financial institution and the FDIC, and one count of causing reliance on a false document to influence the FDIC. McManus, 61, of Madison, New Jersey, was charged with four counts of misapplying bank funds, one count of making false entries to deceive a financial institution and the FDIC, one count of causing reliance on a false document to the influence the FDIC, and two counts of loan application fraud. The defendants will have their initial appearances and arraignments at a later date.

According to documents filed in this case:

Daibes was the founder and, until April 2011, Chairman of the Board of Directors of Mariner’s Bank. During the relevant time period, Mariner’s Bank was subject to federal banking regulations that placed limits on the amount of money that the bank could lend to a single borrower (the “Lending Limits”). Between January 2008 and December 2013, Daibes, McManus, and others orchestrated a nominee loan scheme designed to circumvent the Lending Limits by ensuring that millions of dollars in loans (the “Nominee Loans”) flowed from the nominees to Daibes, while concealing his beneficial interests in those loans from both Mariner’s Bank and the FDIC.

Daibes and others recruited nominees, including McManus, to make materially false and misleading statements and material omissions to Mariner’s Bank to obtain the Nominee Loans, including by concealing that Daibes was the true beneficiary. After receiving the proceeds of the Nominee Loans, the nominees distributed these monies to Daibes. Daibes and the nominees also failed to disclose to Mariner’s Bank that, in certain instances, Daibes pledged the collateral for the Nominee Loans, while, in other cases, he arranged to make both the interest and principal payments on the Nominee Loans.

In order to convince Mariner’s Bank to approve two of the Nominee Loans, McManus signed and provided to Mariner’s Bank a false certification attesting to the profitability of gas stations that two of the nominees had pledged as collateral after purchasing the gas stations from Daibes in sham transactions. After the FDIC began an investigation into one of the Nominee Loans, Daibes, McManus, and others created and submitted to the FDIC a backdated sales contract to make it falsely appear as though one of the nominees had obtained one of the nominee loans from Mariner’s Bank in order to pay Daibes for his interest in a real estate venture.

On the count of conspiracy to misapply bank funds and to make false entries to deceive a financial institution and the FDIC, the defendants face a statutory maximum term of imprisonment of 5 years and a maximum fine of $250,000. On the counts of misapplying bank funds, making false entries to deceive a financial institution and the FDIC, and causing reliance on a false document to influence the FDIC, the defendants face a statutory maximum term of imprisonment of 30 years and a maximum fine of $1,000,000. On the counts of loan application fraud, McManus faces a statutory maximum term of imprisonment of 30 years and a maximum fine of $1,000,000.

U.S. Attorney Craig Carpenito credited investigators from the U.S. Attorney’s Office, under the direction of Supervisory Special Agent Thomas Mahoney, special agents of the FDIC, Office of Inspector General, 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.

The government is represented by Assistant United States Attorney Rahul Agarwal, Deputy Chief of the Criminal Division, and Assistant United States Attorney Sean Farrell of the U.S. Attorney’s Office’s Special Prosecutions Division.

The charges and allegations in the indictment are only accusations and the defendants are considered innocent unless and until proven guilty.

Defense counsel: Daibes: Lawrence S. Lustberg, Esq., Newark, New Jersey
McManus: John C. Whipple, Esq., Morristown, New Jersey

NEWARK, N.J. – An Essex County, New Jersey, man admitted today that he took part in a food stamps fraud scheme, U.S. Attorney Craig Carpenito announced.

Manuel Venegas, 54, of Newark, New Jersey, pleaded guilty before U.S. District Judge John Michael Vazquez to an information charging him with one count of Supplemental Nutrition Assistance Program (SNAP) benefit fraud.

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

From March 2015 to March 2018, Venegas was an employee of Jenny’s Deli, a small grocery store in Newark, New Jersey.  Venegas’s daughter, Maria Teresa Venegas, was the listed owner of Jenny’s Deli and pleaded guilty to the same crime in September 2018.

Jenny’s Deli was authorized to accept benefits provided by SNAP, formerly known as the Food Stamp Program. The program is administered by the U.S. Department of Agriculture. Retail food stores approved for participation in SNAP may sell food in exchange for SNAP benefits but may not exchange SNAP benefits for cash.  According to the charges against them, Maria Teresa Venegas and Manuel Venegas exchanged more than $885,000 in SNAP benefits for cash between 2011 and 2018.

Every SNAP recipient receives an Electronic Benefit Transfer (EBT) card, similar to a debit card, to use to make purchases. Every retailer authorized to accept SNAP benefits has an EBT terminal. Food purchases are made by swiping the card at the terminal. After the customer enters a Personal Identification Number (PIN), the EBT terminal verifies the PIN, determines whether the customer’s account balance is sufficient to cover the proposed transaction, and informs the retailer whether the transaction should be authorized or denied. The amount of the purchase is deducted electronically from the SNAP benefits reserved for the customer and the purchase amount is credited to the retailer’s designated bank account.

In addition to the high volume of SNAP benefits redemptions for Jenny’s Deli, indicating fraud, law enforcement agents verified the fraudulent exchange of SNAP benefits for cash through the use of an undercover law enforcement agent who engaged in approximately 20 “purchases” at Jenny’s Deli where Manuel Venegas, Maria Theresa Venegas, or another Jenny’s Deli employee acting at their direction exchanged money for SNAP benefits.

The SNAP fraud charge carries a maximum penalty of 20 years in prison and a fine of $250,000, or twice the gross gain or loss from the offense.  Sentencing is scheduled for March 6 2019.

U.S. Attorney Carpenito credited special agents of the U.S. Department of Agriculture – Office of Inspector General, under the direction of Special Agent in Charge Bethanne M. Dinkins, with the investigation leading to today’s charges.

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

Defense counsel: Laurie Fierro, Esq.

CAMDEN, N.J. – A Tennessee man was sentenced to an additional ten years in prison in connection with a child pornography ring at Federal Correctional Institution Fort Dix that was operated by inmates who were imprisoned for related offenses, U.S. Attorney Craig Carpenito announced.

Charles Wesley Bush, 38, of Knoxville, Tennessee, previously pleaded guilty before U.S. District Judge Joseph H. Rodriguez to an information charging him with one count of possession of child pornography. Judge Rodriguez imposed the sentence today in Camden federal court.

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

Bush admitted that he possessed a micro SD Card containing 2,471 images and 95 videos of child pornography, including depictions of sexual abuse of pre-pubescent children, bestiality, and sadistic and masochistic conduct. In connection with his plea, Bush also admitted that he used a cellular telephone inside the prison to obtain and possess child pornography and that he knowingly engaged in the distribution of child pornography by agreeing to transfer the micro SD card to another inmate.

In addition to the additional prison term, Judge Rodriguez sentenced Bush to 10 years of supervised release. Restitution will be determined at a later date.

Six other inmates – all of whom were serving sentences for prior child pornography offenses while committing the alleged crimes in this case – have pleaded guilty: Erik M. Smith, 36, of Iron Mountain, Michigan; Anthony C. Jeffries, 32, of Orange, Virginia; Brian J. McKay, 47, of Brookhaven, Pennsylvania; Christopher D. Roffler, 30, of Virginia Beach, Virginia; Jacob S. Good, 26, of Fredericksburg, Virginia; and Jordan T. Allen, 31, of Plain City, Ohio. Smith was sentenced to 151 months in prison, Good was sentenced to 10 years in prison; McKay and Allen were sentenced to 160 months in prison, and the other two defendants are awaiting sentencing.

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 officials of the Bureau of Prisons at Federal Correctional Institution Fort Dix for their assistance.

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

Defense counsel: David Rudenstein Esq., Philadelphia

CAMDEN, N.J. – A Salvadoran man previously convicted for sexually assaulting a child was sentenced to 18 months in prison today for failing to register as a sex offender after unlawfully returning to the United States and traveling to New Jersey, U.S. Attorney Craig Carpenito announced.

Samuel De Jesus Corvera-Mata, 43, previously pleaded guilty before U.S. District Judge Jerome B. Simandle in Camden federal court to an information charging him with one count of illegal re-entry subsequent to conviction for an aggravated felony and one count of failing to register as required by the Sex Offender Registration and Notification Act (SORNA).

SORNA requires all sex offenders to register and keep that registration current in each jurisdiction where the sex offender resides.

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

Corvera-Mata admitted that he illegally re-entered the United States after being deported to El Salvador following a 10-year prison sentence in California for committing multiple lewd and lascivious acts upon a seven-year-old child. As a result of his prior offenses, Corvera-Mata was required to register as a sex offender if he ever returned to the United States. Corvera-Mata later illegally re-entered the country and travelled to New Jersey, where he was located and arrested in October 2017.

In addition to the prison term, Judge Simandle sentenced Corvera-Mata to 5 years of supervised release.

U.S. Attorney Carpenito credited special agents of U.S. Immigration and Customs Enforcement’s (ICE) Enforcement and Removal Operations (ERO), under Newark Field Office Director John Tsoukaris, and the U.S. Marshals Service, under the direction of U.S. Marshal Juan Mattos in Newark, with the investigation leading to today’s sentencing.

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

Defense counsel: Maggie Moy Esq., Camden, New Jersey

NEWARK, N.J. – The former CEO of First State Bank, a financier, and a New Jersey business owner were indicted today by a federal grand jury for their roles in an elaborate scheme to deceive the Federal Deposit Insurance Corporation (FDIC) and to deceive and defraud the now defunct First State Bank (FSB), formerly located in Cranford, New Jersey, U.S. Attorney Craig Carpenito announced.

Joseph Natale, Albert Gasparro, and Gary Ketchum were charged with conspiracy to mislead the FDIC and FSB, misleading those two entities, conspiracy to commit bank fraud and bank fraud in a 13-count indictment. Donna Conroy, a conspirator, pleaded guilty in May 2017 and is awaiting sentencing. 

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

From September 2009 to September 2010, Natale, Gasparro, Ketchum, Conroy and others created the appearance that $7 million in new capital had been invested into FSB by three bona fide purchasers when, in fact, nominee investors and FSB’s own assets had been misused for that purpose. FSB was defrauded into paying $715,000 in fees for that fabricated capital to Gasparro, who then split that money with Natale. To conceal this misconduct, three fraudulent loans were subsequently obtained from FSB, from which Ketchum wrongfully received an additional $176,000. The defendants then misrepresented the true facts underlying this misconduct to the FDIC and FSB. FSB also previously attempted to obtain funds from the Trouble Asset Relief Program (TARP), but ultimately withdrew the application.

The substantive bank and regulatory fraud charges each carry a maximum potential penalty of 30 years in prison and a maximum fine of $1 million. The charged conspiracy has a five-year statutory maximum term of imprisonment and a maximum fine of $250,000 or twice the loss caused or gain realized from that offense.

U.S. Attorney Carpenito credited Special Agent in Charge Patricia Tarasca, FDIC, Office of Inspector General; special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark; and Special Inspector Christy Goldsmith Romero of the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP).

The government is represented by Senior Trial Counsel Andrew Leven of the Healthcare & Government Fraud Unit of the U.S. Attorney’s Office, District of New Jersey.

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

Defense counsel:

Gasparro: Lawrence Lustberg Esq., Newark

Natale: Michael Critchley Esq., Livingston, New Jersey

Ketchum: Linda Foster, Assistant Federal Public Defender, Newark