District of New Jersey

Largest Increase in AUSAs in Decades Allocates Seven Prosecutors to the District of New Jersey to Focus on Violent Crime, Civil Enforcement, and Immigration Crimes

NEWARK, N.J. – On the 500th day of the Trump Administration, Attorney General Jeff Sessions and U.S. Attorney for the District of New Jersey Craig Carpenito announced that the Department of Justice is taking a dramatic step to increase resources to combat violent crime, enforce our immigration laws, and help roll back the devastating opioid crisis.

In the largest increase in decades, the Department of Justice is allocating 311 new Assistant United States Attorneys to assist in priority areas. Those allocations are as follows: 190 violent crime prosecutors, 86 civil enforcement prosecutors, and 35 additional immigration prosecutors. Many of the civil enforcement AUSAs will support the newly created Prescription Interdiction & Litigation Task Force, which targets the opioid crisis at every level of the distribution system.

“Under President Trump’s strong leadership, the Department of Justice is going on offense against violent crime, illegal immigration, and the opioid crisis – and today we are sending in reinforcements,” Attorney General Jeff Sessions said. “We have a saying in my office that a new federal prosecutor is ‘the coin of the realm.’ When we can eliminate wasteful spending, one of my first questions to my staff is if we can deploy more prosecutors to where they are needed. I have personally worked to repurpose existing funds to support this critical mission, and as a former federal prosecutor myself, my expectations could not be higher. These exceptional and talented prosecutors are key leaders in our crime fighting partnership. This addition of new Assistant U.S. Attorney positions represents the largest increase in decades.”

In the District of New Jersey, four of these AUSAs will focus on violent crime, two on civil enforcement, and one on immigration. In February, U.S. Attorney Carpenito announced a reorganization of the office to focus its work on areas of criminal and civil enforcement that will pay the biggest dividends in protecting the public.

“The additional Assistant United States Attorneys provided to New Jersey that were announced by Attorney General Sessions today will provide a tremendous boost to our efforts to take dangerous criminals off the streets and protect the public,” U.S. Attorney Carpenito said. “Whether it’s prosecuting dangerous street gangs, pushing back against the tide of opioid abuse or shutting down fraudsters who prey on the most vulnerable among us, our focus is on safety and public protection. These additional prosecutors – along with our existing staff and a growing roster of Special Assistant United States Attorneys who are joining us from our law enforcement partners at the state and local level, will give us the tools we need to accomplish our mission.”

TRENTON, N.J. – An Asbury Park, New Jersey, man was sentenced today to 10 years in prison for being a felon in possession of a firearm while serving as the driver in a drive-by shooting in Asbury Park, U.S. Attorney Craig Carpenito announced.

Roosevelt Dante Harris, 39, of Asbury Park, previously pleaded guilty before U.S. District Judge Peter G. Sheridan to an information charging him with one count of being a felon in possession of a firearm. Judge Sheridan imposed the sentence today in Trenton federal court.

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

Harris admitted that despite having one or more prior felony convictions in Monmouth County, he knowingly possessed a Taurus, model PT709 Slim, 9 mm pistol on Nov. 24, 2016, in Asbury Park. Harris admitted that three days earlier he accompanied another individual to a firearms dealer in South Carolina, where the other individual purchased three firearms –including the Taurus pistol that Harris possessed – on Harris’ behalf. Harris transported the three firearms from South Carolina to New Jersey.

Harris admitted that on Nov. 24, 2016, while he was driving a black minivan in Asbury Park, he possessed the Taurus pistol, which was located behind the glove compartment of the black minivan. Harris admitted that another individual shot a firearm out of the black minivan while Harris was driving.

In addition to the prison term, Judge Sheridan sentenced Harris to three years of supervised release. 

U.S. Attorney Carpenito credited special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge John B. Devito in Newark, New Jersey; officers of the Monmouth County Prosecutor’s Office, under the direction of Monmouth County Prosecutor Christopher J. Gramiccioni; and officers of the Asbury Park Police Department, under the direction of Deputy Chief David Kelso, with the investigation.  U.S. Attorney Carpenito also thanked officers of the Lakewood Police Department, under the direction of Chief Gregory Meyer, for their assistance in the case.

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

Defense counsel: Andrea D. Bergman Esq., Assistant Federal Public Defender, Trenton

NEWARK, N.J. – A doctor practicing in Staten Island, New York, was sentenced today to 48 months in prison for accepting bribes in exchange for test referrals as part of a long-running and elaborate scheme operated by Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, New Jersey, its president and numerous associates, U.S. Attorney Craig Carpenito announced.

Thomas V. Savino, 59, of Staten Island, was found guilty at trial in October 2017 on all 10 counts of an indictment charging him with one count of conspiring to commit violations of the Anti-Kickback Statute, the Federal Travel Act and wire fraud; three substantive violations of the Anti-Kickback Statute; three substantive violations of the Federal Travel Act; and three substantive violations of wire fraud.

Savino was convicted following a six-day trial before U.S. District Judge Stanley R. Chesler, who imposed the sentence today in Newark federal court.

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

From July 2012 through April 2013, Savino received cash bribes totaling at least $25,000 from BLS employees and associates in return for referring his patients’ blood specimens to BLS. Savino’s referrals generated approximately $375,000 in lab business for BLS.

The investigation has resulted in 53 convictions – 38 of them doctors – in connection with the bribery scheme, which its organizers have admitted involved millions of dollars in bribes and resulted in more than $100 million in payments to BLS from Medicare and various private insurance companies. It is believed to be the largest number of medical professionals ever prosecuted in a bribery case. The investigation has recovered more than $15 million through forfeiture. On June 28, 2016, BLS, which is no longer operational, pleaded guilty and was required to forfeit all of its assets.

In addition to the prison terms, Judge Chesler sentenced Savino to three years of supervised release, fined him $100,000 and ordered forfeiture of $27,500.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark; inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Judy Ramos; IRS–Criminal Investigation, under the direction of Acting Special Agent in Charge Bryant Jackson in Newark; and the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert, with the investigation leading to today’s sentencing.

The government is represented by Senior Litigation Counsel Joseph N. Minish; Assistant U.S. Attorney Erica Liu, Chief of the Opioids Unit; Assistant U.S. Attorney Danielle Alfonzo Walsman, Co-Chief of the Public Protection Unit; Jacob T. Elberg, Chief of the U.S. Attorney’s Office Health Care and Government Fraud Unit; and Senior Litigation Counsel Barbara Ward of the office’s Asset Recovery and Money Laundering Unit.

Defense counsel: Eric R. Breslin Esq., Newark, and Melissa S. Geller Esq., New York

TRENTON, N.J. – A revenue officer with the IRS admitted today that she made false statements and submitted false documents to a federal program to defer repayment on a student loan, U.S. Attorney Craig Carpenito announced.

Chandra T. Porter, 53, of North Brunswick, New Jersey, pleaded guilty before U.S. District Judge Brian R. Martinotti in Trenton federal court to an information charging her with one count of making false statements and representations.

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

In June 2008 Porter applied for a Direct Plus Loan under the Federal Family Education Loan Program so that her relative could attend a college program. Between July 2008 and June 2010, the U.S. Department of Education disbursed $49,179 to the college program on behalf of Porter’s relative. After the relative completed the college program, the loan became due in December 2010, and Porter was required to make monthly payments towards the loan. However, beginning in April 2012, Porter began submitting Unemployment Deferment Request applications to defer the loan payments, falsely representing that she was unemployed and was unable to find suitable employment. Porter was, in fact, a full-time employee of the IRS as a revenue officer. Several of the deferment applications she submitted were faxed to the loan handlers from the IRS office where Porter worked.

The count of making false statements carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for Oct. 30, 2018.

U.S. Attorney Carpenito credited special agents of the U.S. Department of Education, Office of Inspector General, under the direction of Assistant Special Agent in Charge Debbi Mayer of the Eastern Regional Office, and the U.S. Department of the Treasury, Treasury Inspector General for Tax Administration, under the direction of Special Agent in Charge Rodney A. Davis, for the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Jacques S. Pierre of the Special Prosecutions Division.

Defense counsel: David A. Schwartz Esq., East Brunswick, New Jersey

NEWARK, N.J. – A Georgia man with prior felony convictions today admitted illegally possessing weapons and possessing methamphetamine with the intent to distribute, U.S. Attorney Craig Carpenito announced.

Tyheed Jefferson, 34, a/k/a “Solo,” of Albany, Georgia, pleaded guilty before U.S. District Judge Stanley R. Chesler in Newark federal court 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.

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.

The counts of being a felon in possession of a firearm each carry a maximum potential penalty of 10 years in prison and a $250,000 fine. The count of possession of more than 50 grams of methamphetamine carries a maximum penalty of 40 years in prison and a $5 million fine. Sentencing is scheduled for Sept. 12, 2018.

U.S. Attorney Carpenito credited special agents of the ATF, under the direction of John 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 guilty plea.

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 City of Paterson police officer was arrested today for allegedly participating in the assault of a patient at a Paterson hospital, recording the conduct on his cellphone, and failing to include the assault in the related police report, U.S. Attorney Craig Carpenito announced.

Roger Then, 29, of Paterson, was arrested by federal agents this morning and charged by complaint with conspiring to violate an individual’s civil rights and with misprision of felony for concealing the civil rights violation. Then is scheduled to appear this afternoon before U.S. Magistrate Judge Leda D. Wettre in Newark federal court.

According to the complaint:

On March 5, 2018, Then and another Paterson police officer – identified in the complaint as “Police Officer 1” – responded to a call from an attempted suicide victim. Then and Police Officer 1 met the victim at St. Joseph’s Medical Center in Paterson.

In the hospital surveillance footage, the victim, while in a wheelchair, appears to throw an object down the hall. Afterwards, Police Officer 1 pushes the wheelchair and punches the victim in the face. As the victim falls, Then grabs him by the back of the neck and pushes him to the ground.

In the second video, which was allegedly taken by Then using his cellphone, the victim is on his back in a hospital bed. After the victim verbally insults Police Officer 1, Police Officer 1 puts on a pair of hospital gloves and violently strikes the victim twice across the face. Police Officer 1 then stands over the victim and says, “I ain’t fucking playing with you.”

Then and Police Officer 1 filed a police report in connection with the events of March 5, 2018. The police report did not mention that Police Officer 1 punched the victim or that Then grabbed the victim by the neck and pushed him towards the ground, as captured in the first video. The police report also did not mention that Police Officer 1 violently struck the victim in a hospital room, as depicted in the second video.

As a result of these assaults, the victim suffered multiple injuries to his face, including an eye injury that required surgery.

The conspiracy to violate civil rights count carries a maximum penalty of 10 years in prison. The misprision of felony count carries a maximum potential penalty of three years in prison. Both counts are also punishable by a fine of up to $250,000.

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

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, with the investigation leading to today’s arrest. He also thanked the Passaic County Prosecutor’s Office, under the direction of Passaic County Prosecutor Camelia M. Valdes, the Paterson Police Department, under the direction of Paterson Police Director Jerry Speziale and Police Chief Troy Oswald, and the Paterson Police Department Office of Internal Affairs, for their assistance in the investigation.

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

NEWARK, N.J. – A Manalapan, New Jersey, man who was previously employed by a family amusement center in Freehold, New Jersey, was arrested today for allegedly convincing children to engage in sexually explicit conduct online, U.S. Attorney Craig Carpenito announced.

Angelo Curato, 26, is charged by complaint with one count of producing visual depictions of a child engaged in sexually explicit conduct. Curato is expected to appear this afternoon before U.S. Magistrate Judge Leda Dunn Wettre in Newark federal court.

According to the complaint:

Curato used online applications, including Skype, to interact with dozens of boys while pretending to be a 17-year-old girl. During these online communications, Curato received naked pictures of the children and watched them engage in sexually explicit conduct on video.

On June 2, 2017, law enforcement officers executed a search warrant at Curato’s residence. A forensic review of Curato’s laptop revealed hundreds of sexually explicit chat messages on his Skype accounts and hundreds of screenshots of boys engaging in sexually explicit conduct.

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

Anyone with information regarding possible victims of this activity is urged to contact 866-DHS-2-ICE.

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

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, and the Monmouth County Prosecutor’s Office, under the direction of Prosecutor Christopher J. Gramiccioni, with the investigation.

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

NEWARK N.J. – A Georgia man was sentenced today to 26 months in prison for using a fake driver’s license in order to obtain a check issued in response to false statements and representations, U.S. Attorney Craig Carpenito announced.

Temilade Adekunle, 32, of Lawrenceville, Georgia, previously pleaded guilty before U.S. District Judge Kevin McNulty to an information charging him with one count of aggravated identity theft and one count of conspiracy to commit wire fraud. Judge McNulty imposed the sentence today in Newark federal court.

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

Adekunle was a member of a conspiracy to fraudulently obtain money, including by committing identity theft, impersonating account holders and obtaining money from their accounts. On Aug. 8, 2017, a member of the conspiracy contacted an entity where an individual (Victim 2) had an account. The caller impersonated Victim 2 and asked to withdraw approximately $85,000 from the account. In response, the entity sent a check through a mail carrier to the account holder’s address.

A member of the conspiracy caused the mail carrier to hold the package containing the check for Victim 2 at one of its branch locations. On Aug. 14, 2017, Adekunle entered the branch and, using a driver’s license with Adekunle’s picture and Victim 2’s name and address, obtained the package containing the check. Sentencing is scheduled for May 30, 2018.

In addition to the prison term, Judge McNulty sentenced Adekunle to three years of supervised release, including 10 months of home confinement.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, and the U.S. Department of Labor, Office of Inspector General, under the direction of Special Agent in Charge Michael C. Mikulka in New York, with the investigation leading to today’s sentencing. He also thanked the Unified Police Department of Greater Salt Lake, Utah, under the direction of Sheriff Rosie Rivera, for its role in the investigation.

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

Defense counsel: Jean Barrett Esq., Montclair, New Jersey

NEWARK, N.J. – A former commissioner with the now-defunct Paterson Municipal Utilities Authority (PMUA) today admitted his role in two schemes to steal funds from the authority, U.S. Attorney Craig Carpenito announced.

Erik Lowe, 50, of Paterson, New Jersey, pleaded guilty before U.S. District Judge Jose L. Linares to an information charging him with one count of conspiring to commit extortion under color of official right and one count of extortion under color of official right.

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

Lowe was a commissioner of the PMUA from February 2009 through May 2015 and exercised control over the authority’s finances. The PMUA was created to manage the hydroelectric plant on the Passaic River in Paterson and to care for and manage certain surrounding properties.

Lowe and Carnell Baskerville, a self-employed contractor, entered into an agreement whereby Lowe would approve payments from the PMUA to Baskerville’s company for services. Both men knew Baskerville had not performed and would not perform any services. Between December 2014 and May 2015, Lowe wrote $146,500 in checks from the PMUA to Baskerville’s company. Lowe directed Baskerville to deposit these checks into Baskerville’s bank account and to kick back to Lowe a significant percentage of this amount in cash to reward Lowe and a fellow MUA commissioner for their official assistance in carrying out the scheme. Baskerville pleaded guilty in February 2018 to his role in the scheme and is scheduled to be sentenced on Sept. 6, 2018.

From August 2012 through November of 2014, Lowe engaged in a similar scheme with a second contractor whose company installed and repaired fences for residential homes and commercial business. Lowe admitted that initially he inflated the checks paid to this contractor substantially above the value of the jobs the contractor performed so that the contractor could kick back thousands of dollars to Lowe. Near the end of the scheme, Lowe was issuing checks worth thousands of dollars to the contractor knowing that no job had been or would be performed. Lowe issued checks totaling $141,700 to the contractor and accepted tens of thousands of dollars in kickbacks.

The two counts to which Lowe pleaded guilty each carry a maximum potential penalty of 20 years in prison and a $250,000 fine. Sentencing is scheduled for Sept. 11, 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 guilty plea.

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

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

NEWARK, N.J. – Two former associates of Parsippany, New Jersey-based Biodiagnostic Laboratory Services LLC (BLS) were each sentenced today to 21 months in prison for their roles in a test referral bribery scheme, U.S. Attorney Craig Carpenito announced.

Cliff Antell, 43, of Rumson, New Jersey, and Craig Nordman, 39, of Whippany, New Jersey, had previously pleaded guilty before U.S. District Judge Stanley R. Chesler to informations charging each with one count of conspiracy to violate the Anti-Kickback Statute and the Federal Travel Act and one count of money laundering. Judge Chesler imposed the sentences today in Newark federal court.

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

Nordman was a BLS employee and the CEO of Advantech Sales LLC – an entity used by BLS to make illegal payments. Antell was an associate who used an entity – Brown’s Dock Consulting – to disguise the bribe payments to doctors.

The investigation has resulted in 53 convictions – 38 of them doctors – in connection with the bribery scheme, which its organizers have admitted involved millions of dollars in bribes and resulted in more than $100 million in payments to BLS from Medicare and various private insurance companies. It is believed to be the largest number of medical professionals ever prosecuted in a bribery case. The investigation has recovered more than $15 million through forfeiture. On June 28, 2016, BLS, which is no longer operational, pleaded guilty and was required to forfeit all of its assets.

In addition to the prison terms, Judge Chesler sentenced Antell to three years of supervised release and fined him $10,000. Nordman was sentenced to one year of supervised release.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark; inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Judy Ramos; IRS–Criminal Investigation, under the direction of Acting Special Agent in Charge Bryant Jackson in Newark; and the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert, with the ongoing investigation.

The government is represented by Senior Litigation Counsel Joseph N. Minish; Assistant U.S. Attorney Danielle Alfonzo Walsman, Co-Chief of the Public Protection Unit; Jacob T. Elberg, Chief of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark; and Senior Litigation Counsel Barbara Ward of the office’s Asset Recovery and Money Laundering Unit.

Defense counsel: Nordman: Timothy R. Anderson Esq., Red Bank, New Jersey
Antell: Robert A. Weir Esq., Red Bank

TRENTON, N.J. – A Bronx, New York, man who was arrested in Warren County on Christmas Eve in 2014 was sentenced today to 41 months in prison for his role in an international drug trafficking organization, U.S. Attorney Craig Carpenito announced.

Vionel Rondon Cortorreal, 29, previously pleaded guilty before U.S. District Judge Peter G. Sheridan to an information charging him with conspiracy to distribute heroin. Judge Sheridan imposed the sentence today in Trenton federal court.

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

In December 2014, Cortorreal and Dany Francisco-Valerio, 44, of Bronx, New York, conspired with members of the drug trafficking organization to transport and distribute kilogram quantities of heroin. On Dec. 24, 2014, Cortorreal and Francisco-Valerio were arrested in Warren County, New Jersey while transporting 15 kilograms of heroin contained in a hidden compartment in a vehicle they were operating. Francisco-Valerio was previously sentenced to 51 months in prison by Judge Sheridan.

Three other members of the conspiracy, Harry Madrid, 26, of Anaheim, California, his brother, Wilson Madrid, 32, of Norcross, Georgia, and Henry Zamora, 38, of DeKalb, Illinois, previously entered guilty pleas for their roles on behalf of the organization. Harry Madrid has been sentenced to 46 months in prison while Wilson Madrid and Zamora both received seven-year prison sentences from Judge Sheridan.

In addition to the prison term, Judge Sheridan sentenced Cortorreal to three years of supervised release.

U.S. Attorney Carpenito praised special agents of the DEA, Newark Division, under the direction of Special Agent in Charge Valerie A. Nickerson, officers from the N.J. State Police under the direction of Acting Superintendent Colonel Patrick J. Callahan, and officers from the DeKalb (Illinois) Police Department, under the direction of Chief Gene Lowrey, with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorney Thomas S. Kearney of the U.S. Attorney’s Office OC/Gangs Unit in Newark and Assistant U.S. Attorney Jamari Buxton of the U.S. Attorney’s Office Economic Crimes Unit in Newark.

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

NEWARK, N.J. – A civilian employee at Picatinny Arsenal today admitted his role in a scheme that traded bribes and other gratuities for favorable treatment on government contracts, U.S. Attorney Craig Carpenito announced.

Joseph Gooch, 60, of Morristown, New Jersey, pleaded guilty before U.S. District Judge John Vazquez in Newark federal court to an information charging him with accepting or receiving things of value in return for favorable assistance with government contracts and making false claims against the United States.

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

Gooch was assigned as a general engineer and was authorized by the U.S. Army to act as its representative on contracts made with federal contracting companies. As such, he had the authority to evaluate a contracting company’s work and could influence whether additional contracts should be granted.

From January 2006 through December 2017, Gooch conspired with other Picatinny Arsenal employees and employees of a defense contracting firm identified in the information as “Company A” to seek and accept gifts and other items of value, such as Apple products, luxury handbags, Beats headphones, and tickets to a luxury sky box at professional sporting events, valued at least $150,000 to $250,000, in exchange for government contracts and other favorable assistance for Company A at Picatinny Arsenal.

Gooch also conspired with other Picatinny Arsenal and Company A employees to file false bills to the United States that wrote off the cost of the bribes as “materials” needed on the government contracts.

The conspiracy charge to which Gooch pleaded guilty 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 Sept. 11, 2018.

Irene Pombo, a Company A employee, and her daughter, Nicole Pier, another Picatinny Arsenal employee, pleaded guilty to their roles in the conspiracy in March 2018 and await sentencing.

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, Defense Criminal Investigative Service, under the direction of Special Agent in Charge Leigh-Alistair Barzey; and the U.S. Army, Major Procurement Fraud Unit, Criminal Investigation Command, under the direction of Special Agent in Charge L. Scott Moreland, with the ongoing investigation.

The government is represented by Senior Litigation Counsel Margaret Ann Mahoney of the U.S. Attorney’s Office’s National Security Unit in Newark.

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

NEWARK, N.J. – A Newark man with at least six felony convictions in New Jersey courts was sentenced today to 162 months in prison on multiple counts of illegal firearms possession and drug distribution, U.S. Attorney Craig Carpenito announced.

Carlos Bess, 39, previously pleaded guilty before U.S. District Judge Susan D. Wigenton to an indictment charging him with two counts of illegal possession of a firearm as a convicted felon and four counts of distribution and possession with intent to distribute heroin and cocaine. Judge Wigenton imposed the sentence today in Newark federal court.

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

Since June 2015, agents with the Drug Enforcement Agency (DEA) and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) have been investigating the sales of narcotics, including heroin and cocaine, as well as the unlawful possession of firearms by convicted felons. The investigation has revealed that on July 23, 2015, Bess unlawfully possessed two Rebel Arms AR-15 rifles. On Sept. 30, 2015, and Dec. 1, 2015, Bess sold heroin to another individual in Newark. During a search of a residence controlled by Bess in Newark, federal agents recovered an additional five firearms illegally possessed by Bess—a loaded .357 revolver, 2 loaded .380 pistols, a loaded 9 millimeter pistol, a 12-gauge shotgun. Agents also recovered more heroin and more than 500 grams of cocaine.

U.S. Attorney Carpenito credited special agents with the ATF, under the direction of Special Agent in Charge John Devito in Newark, and special agents with the DEA, under the direction of Special Agent in Charge Valerie A. Nickerson, with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorney Melissa Wangenheim of the OCDETF/Narcotics Unit in Newark.

Defense Counsel: Frank P. Arleo Esq., West Orange, New Jersey

NEWARK, N.J. – A Kissimmee, Florida, man was convicted at trial today of tax fraud, U.S. Attorney Craig Carpenito announced.

Sixto Rodriguez, 55, was found guilty of all 17 counts of an indictment charging him with three counts of filing false tax returns on behalf of himself and fourteen counts of aiding and assisting in the preparation and presentation of false tax returns on behalf of his tax preparation clients. He was convicted following a one-week trial before U.S. District Judge Kevin McNulty.

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

From 2004 through 2012, Rodriguez operated a tax preparation business in Teaneck, New Jersey, by the name of 1-2-3 Taxes. Rodriguez personally met with clients, prepared their individual income tax returns and filed the returns with the IRS.

Rodriguez inflated education credits, charitable donations, unreimbursed business expenses and rental losses that he knew his clients had not actually incurred. On average, for the clients charged in the indictment, this resulted in his clients receiving more than $4,000 in refunds per return, to which they were not entitled. Rodriguez also failed to report more than $230,000 in net profits he made from his business from 2007 through 2009 and personally avoided paying more than $89,000 in taxes as a result.

The charges on which Rodriguez was convicted each carry a maximum potential penalty of three years in prison and a $250,000 fine. Sentencing is scheduled for Aug. 21, 2018.

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

The government is represented by Senior Litigation Counsel Daniel V. Shapiro of the Economic Crimes Unit in Newark and Assistant U.S. Attorney David M. Eskew, Deputy Chief of the U.S. Attorney’s Office Criminal Division.

NEWARK, N.J. – An Essex County, New Jersey, man today admitted embezzling over $220,000 in campaign funds while serving as the treasurer for a Newark mayoral campaign, U.S. Attorney Craig Carpenito announced.

Frederick Murphy Jr., 56, of Bloomfield, New Jersey, pleaded guilty before Chief U.S. District Judge Jose L. Linares in Newark federal court to Counts One, Two, and Five of an information charging him with wire fraud, bank fraud, and tax evasion.

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

Between January 2014 and March 2017, Murphy served as the treasurer for election campaign accounts associated with a Newark mayoral candidate. Murphy admitted that during that time, he embezzled over $220,000 from those accounts by writing phony checks in the names of various consultants and vendors for services that were never performed.

Murphy cashed the checks by presenting them to a bank in Essex County with the forged signature of the check payees as well as Murphy’s own signature as a double endorsement. Murphy then reported the fraudulent checks as legitimate campaign expenditures in quarterly filings with the New Jersey Election Law Enforcement Commission. The false reports were uploaded by the Election Law Enforcement Commission onto its website for public reference.

Murphy also admitted under-reporting $102,954 in embezzled campaign funds on his personal income tax return for 2016.

The wire fraud charge carries a maximum potential penalty of 20 years in prison and a $250,000 fine. The bank fraud charge carries a maximum potential penalty of 30 years in prison and a $1 million fine. Murphy also faces a maximum potential penalty of five years in prison and a $250,000 fine on the tax evasion charge. Sentencing is currently scheduled for Sept. 11, 2018.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, and IRS–Criminal Investigation, under the direction of Acting Special Agent in Charge Bryant Jackson in Newark, with the investigation.

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

Defense counsel: Alan Dexter Bowman Esq., Newark

TRENTON, N.J. – A Perth Amboy, New Jersey, man was sentenced today to 12 months and one day in prison for stealing Social Security benefits that were mistakenly paid to his deceased great aunt, U.S. Attorney Craig Carpenito announced.

Lance D. Nelson, 56, previously pleaded guilty before U.S. District Judge Anne E. Thompson to Count 1 of an indictment charging him with theft of government funds. Judge Thompson imposed the sentence today in Trenton federal court.

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

Nelson’s great aunt received Social Security retirement benefits that were sent to a joint bank account that she shared with Nelson. The Social Security Administration, unaware of her death in February 1998, continued to issue her monthly retirement benefits.

Nelson admitted that he intentionally failed to notify the Social Security Administration of her death so that he could continue to receive her benefits, which he withdrew from their joint account and used for his personal benefit. In total, Nelson, who was employed as an assistant zoning officer for the City of Perth Amboy through the end of 2017, admitted that he took $184,936 in Social Security benefits to which he was not entitled.

In addition to the prison term, Judge Thompson sentenced Nelson to three years of supervised release and ordered him to pay restitution of $184,936.

U.S. Attorney Carpenito credited special agents with the Social Security Administration - Office of the Inspector General, under the direction of Special Agent in Charge John F. Grasso of the New York Field Division, with the investigation leading to today’s sentencing.

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

Defense counsel: Carol Gillen Esq., Assistant Federal Public Defender, Newark

NEWARK, N.J. – The chief executive officer of a publicly traded microcap company was convicted at trial for orchestrating a multi-million securities fraud scheme using false reports with the U.S. Securities and Exchange Commission, U.S. Attorney Craig Carpenito announced today.

Cary Lee Peterson, 38, of Phoenix, Arizona, was found guilty of all three counts of an indictment charging him with two counts of false certification in SEC filings and one count of securities fraud. He was convicted following a two-week trial before U.S. District Judge Anne E. Thompson in Trenton federal court. The jury deliberated for approximately an hour before returning its verdict on May 23, 2018.

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

Peterson, as CEO of RVPlus Inc., filed numerous false reports with the SEC, including:

• On Aug. 21, 2012, Peterson falsely certified on SEC Form 8-K that RVPlus had entered into a contract worth $1.8 billion with the Ministry of Environment for Katsina State within the Federal Republic of Nigeria to provide unspecified green energy products and services.
   
• On Nov. 16, 2013, Peterson falsely certified on SEC Form 8-K that RVPlus had entered into a contract worth $90 million with the Commission of the Foreign Affairs to the Senate for the Republic of Haiti.
   
• On Dec. 21, 2012, Peterson falsely certified on Form 10-Q that RVPlus held $8,653,846 in short-term accounts receivable for services rendered under the Nigeria agreement, despite prior warnings from RVPlus’ auditors that reporting these receivables as revenue was improper.
   
• On Dec. 27, 2012, Peterson falsely certified on SEC Form 8-K that RVPlus had entered into a contract worth $10.5 million with the Federal Ministry of Planning & Economic Affairs for the Republic of Liberia.
   
• On March 28, 2013, Peterson falsely certified on SEC Form 10-Q that RVPlus held $17,590,837 in short-term accounts receivable from, among other sources, the Haiti and Liberia agreements.

The SEC suspended trading in RVPlus on July 19, 2013, due to questions concerning the accuracy of RVPlus’ periodic financial filings, including reported accounts receivable, assets, and operations.

Peterson also claimed that ECCO2 Corp., a not-for-profit owned by Peterson was an “affiliate organization” of the U.N. Convention on Climate Change. Peterson claimed that “[t]his status held with the sectors of the United Nations opens many windows of opportunity to over $100 billion in financial aid to fund ECCO2 projects.”  ECCO2 was never an affiliate of the U.N. Convention on Climate Change. In fact, the U.N. wrote to Peterson on two separate occasions demanding that ECCO2 stop claiming that it was.

The false certification counts each carry a maximum potential penalty of 10 years in prison and a $1 million fine. The securities fraud count carries a maximum penalty of 20 years in prison and $5 million fine. Sentencing will be scheduled at a later date.

The SEC has a pending civil complaint against Peterson in New Jersey federal court alleging multiple counts of securities fraud.

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 FBI special agents under the direction of Special Agent in Charge John F. Bennett in San Francisco for their assistance with Peterson’s arrest, and the U.S. Securities and Exchange Commission’s New York Regional Office, under the direction of Regional Director Marc P. Berger and Senior Associate Regional Director Sanjay Wadhwa, for its assistance. 

The government is represented by Assistant U.S. Attorney Ari Fontecchio of the U.S. Attorney’s Office Criminal Division and Executive Assistant U.S. Attorney Zach Intrater.

Defense counsel: Eric J. Marcy Esq., Woodbridge, New Jersey

CAMDEN, N.J. – A Tennessee man became the seventh defendant to plead guilty while a Massachusetts man was indicted in connection to 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, pleaded guilty today before Senior U.S. District Judge Joseph H. Rodriguez in Camden federal court to an information charging him with one count of possession of child pornography.

William H. Noble, 52, of Lowell, Massachusetts, was charged by indictment today with conspiracy to receive and distribute child pornography, receipt of child pornography, distribution of child pornography, possession of child pornography, and accessing child pornography with intent to view on federal property. He will be arraigned at a later date.

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.

Noble allegedly transferred the same micro SD card to a government informant at FCI-Fort Dix on April 19, 2017. Noble allegedly downloaded the child pornography himself and with the assistance of another inmate in the prison. Noble previously pleaded guilty in the District of Massachusetts to transportation and distribution of child pornography and was serving an 81-month sentence with a scheduled release date of March 8, 2018 at the time the alleged offenses were committed. He is currently in custody pending trial on the charges in today’s indictment.

At sentencing, Bush faces a mandatory minimum term of 10 years in prison and a lifetime of supervised release. Bush’s sentencing is scheduled for Sept. 10, 2018.

If convicted, Noble faces mandatory minimum terms of 10 and 15 years in prison, a potential maximum of 40 years in prison, and a lifetime of supervised release. The pending charges and allegations against Noble are merely accusations, and he is presumed innocent unless and until proven guilty.

Bush, Noble, and six other inmates were arrested in April 2017 and February 2018 following an FBI investigation involving multiple covert recordings and several cooperating inmates. The investigation revealed that Bush, Noble, and other inmates utilized contraband cellphones, micro SD cards, and access to the internet to obtain, view, and distribute child pornography within the prison. A co-defendant organized and helped facilitate this criminal activity by maintaining cloud accounts that were used as repositories for child pornography.

Five other inmates – Anthony C. Jeffries, 32, of Orange, Virginia, Jordan T. Allen, 31, of Plain City, Ohio, Brian J. McKay, 47, of Brookhaven, Pennsylvania, Jacob S. Good, 26, of Fredericksburg, Virginia, and Christopher D. Roffler, 30, of Virginia Beach, Virginia – have also pleaded guilty to possession of child pornography and await sentencing.

A sixth inmate, Erik M. Smith, 36, of Iron Mountain, Michigan, pleaded guilty to the same charge and was sentenced on May 7, 2018 to an additional 151 months in prison.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, with the investigation. 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:

Bush: David Rudenstein Esq., Philadelphia
Noble: Martin Isenberg, Esq., Gibbsboro, New Jersey

NEWARK, N.J. – A Flushing, New York, woman today admitted her plan to distribute counterfeit Nike sneakers, Louis Vuitton handbags, and other phony merchandise that was shipped into the Port of Newark, U.S. Attorney Craig Carpenito announced.

Xiao Xia Zhao, 41, pleaded guilty before U.S. District Judge Jose L. Linares in Newark federal court to an information charging her with one count of trafficking in counterfeit goods. Zhao was originally arrested and charged by complaint on June 23, 2017.

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

From November 2013 through February 2017, Zhao received certain shipping container numbers from an individual overseas that identified at least three containers containing counterfeit merchandise. Zhao asked individuals working at the Port of Newark to remove the containers from the port before they could be examined by U.S. Customs and Border Protection. Once the containers were removed, Zhao directed that they be delivered to other individuals, who would then distribute the merchandise in New Jersey and elsewhere.

However, law enforcement intercepted the containers before Zhao could distribute the goods. At no time was Zhao authorized to import Nike footwear, Louis Vuitton handbags, or any of the other counterfeit merchandise in the containers.

In total, Zhao trafficked in thousands of pairs of fake Nike footwear, Louis Vuitton handbags, and other counterfeit items, with a total estimated retail value of over $3 million. Zhao also paid individuals over $75,000 in exchange for the delivery of the containers.

The trafficking in counterfeit goods charge carries a maximum potential penalty of 10 years in prison and a $2 million fine. Zhao’s sentencing is scheduled for Sept. 5, 2018.

U.S. Attorney Carpenito credited officers of U.S. Customs and Border Protection, under the direction of Leon Hayward, Acting Director, New York Field Operations; and special agents of the 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 by Assistant U.S. Attorney Jason S. Gould of the U.S. Attorney’s Office Criminal Division in Newark.

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

NEWARK N.J. – A Georgia man was sentenced today to 27 months in prison for using fake driver’s licenses in order to obtain checks issued in response to false statements and representations, U.S. Attorney Craig Carpenito announced. 

Abdulrasheed Yusuf, 30, of Lilburn, Georgia, previously pleaded guilty before U.S. District Judge Katharine S. Hayden to an information charging him with one count of aggravated identity theft and one count of conspiracy to commit wire fraud. Judge Hayden imposed the sentence today in Newark federal court.

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

Yusuf was a member of a conspiracy to obtain money fraudulently, including by committing identity theft, impersonating account holders and obtaining money from their accounts. On Aug. 8, 2017, a member of the conspiracy contacted an entity where an individual (Victim 1) had an account. The caller impersonated Victim 1 seeking to withdraw $34,636 from the victim’s account. The entity sent a check through a mail carrier to the account holder at caller’s address. 

A member of the conspiracy caused the mail carrier to hold the packages containing the check for Victim 1 at one of its branch locations. On Aug. 14, 2017, Yusuf entered the branch and, using a driver’s license with Yusuf’s picture and Victim 1’s name and address, obtained a package he believed contained the check to Victim 1. Yusuf used a separate fake driver’s license in connection with obtaining a different check similarly issued in response to fraudulent statements. 

In addition to the prison term, Judge Hayden sentenced Yusuf to three years of supervised release and ordered him to pay restitution of $46,425.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, and the U.S. Department of Labor, Office of Inspector General, under the direction of Special Agent in Charge Michael C. Mikulka in New York, with the investigation leading to today’s guilty plea. He also thanked the Unified Police Department of Greater Salt Lake, Utah, under the direction of Sheriff Rosie Rivera, for its role in the investigation.

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

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

NEWARK, N.J. – A former broker and investment adviser was arrested today for allegedly stealing more than $2.1 million from two clients in order to pay for personal expenses, U.S. Attorney Craig Carpenito announced. 

Gary Basralian, 70, of Springfield, New Jersey, is charged by complaint with two counts of wire fraud and one count of investment adviser fraud. Basralian was arrested earlier today at his home and is scheduled to appear this afternoon before U.S. Magistrate Judge U.S. Magistrate Judge Steven C. Mannion in Newark federal court.     

According to the complaint:

From 1989 through December 2017, Basralian was registered with an investment adviser and broker dealer referred to in the complaint as “Securities Firm A.”

From August 2007 through November 2017, Basralian, while serving in his capacity as an investment adviser, misappropriated at least $738,000 from a client identified in the complaint as “Victim 1” and at least $1.4 million from a client identified in the complaint as “Victim 2.” 

Basralian said he would invest these funds in brokerage accounts at Securities Firm A or in real estate and high-interest loans, and manage them on behalf of the victims. However, Basralian used the victims’ money to fund his own personal expenditures, including BMW payments and tens of thousands of dollars in credit card bills.

Victim 1 routinely provided funds to investment accounts managed by Basralian at Securities Firm A. At Basralian’s direction, Victim 1 eventually began addressing checks to “Masters Financial” based on Basralian‘s representations that the checks would ultimately be deposited into her investment accounts at Securities Firm A. Instead, the funds were deposited into an account controlled by Basralian, which he used for personal expenses.

In 2009, Basralian began wiring funds from Victim 2’s investment account at Securities Firm A into various accounts that he controlled and used the proceeds for his own benefit. When Victim 2 asked why her account at Securities Firm A had diminished in value, Basralian sent her a phony spreadsheet showing that her money was being invested as loans to various companies that would be paid back with interest.

Each of the wire fraud counts carries a maximum potential penalty of 20 years in prison and $250,000 fine, or twice the gross gain or loss from the offense. The investment adviser fraud count carries a maximum potential penalty of five years in prison and a $10,000 fine, or twice the gross gain or loss from the offense.

On May 22, 2018, the New Jersey Bureau of Securities, within the Office of the New Jersey Attorney General, issued a Summary Revocation Order against Basralian that revoked his agent and investment adviser representative registrations.

U.S. Attorney Carpenito credited postal inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Ruth M. Mendonca, and Special Agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie, with the investigation leading to today’s charges. He also thanked the New Jersey Bureau of Securities, under the direction of Bureau Chief Christopher Gerold, for its assistance.

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

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

NEWARK, N.J. – The former chief financial officer of a New Jersey orthopedic care provider was sentenced today to 24 months in prison for stealing more than $1 million from the company for his personal use, U.S. Attorney Craig Carpenito announced.

Harry Wolfmuller, 70, formerly of Belmar, New Jersey, previously pleaded guilty before U.S. District Judge Claire C. Cecchi to an information charging him with one count of wire fraud. Judge Cecchi imposed the sentence today in Newark federal court.

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

From 2007 through 2015, Wolfmuller was employed as the chief financial officer for “Company A,” an orthopedic care provider with offices in Ocean and Monmouth Counties. As such, Wolfmuller controlled Company A’s bank accounts and financial records.

Wolfmuller cashed checks from Company A’s business accounts to pay for unapproved personal expenses, including meals at restaurants, golf, gambling and lottery tickets. Wolfmuller then misrepresented the nature of these transactions in Company A’s accounting records to make them appear as legitimate business expenses. Altogether Company A lost approximately $1,175,720 as a result of Wolfmuller’s conduct.

In addition to the prison term, Judge Cecchi sentenced Wolfmuller to three years of supervised release and ordered him to pay restitution of $1,175,720.

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

The government is represented by Assistant U.S. Attorneys Nicholas P. Grippo of the Economic Crimes Unit and Christopher Amore of the Asset Recovery and Money Laundering Unit in Newark.

Defense counsel: Salvatore T. Alfano Esq., Bloomfield, New Jersey, and Louis Esposito Esq., Cedar Grove, New Jersey

NEWARK, N.J. – Five individuals were charged today with allegedly using stolen and altered identities to fraudulently obtain credit cards and make over $2.5 million in charges that were never repaid, U.S. Attorney Craig Carpenito announced.

Talat Ali Maan, 44, of Germantown, Maryland, Syed Rehman, 51, of Jersey City, New Jersey, Kashif Idrees, 36, of Germantown, Jaheed Wahed Ahmed, 54, of Jersey City, and Fatou Djambo, 37, of Philadelphia, are each charged by complaint with one count of conspiring to defraud financial institutions.

Rehman and Djambo were arrested this morning and are scheduled to appear this afternoon before U.S. Magistrate Judge Steven C. Mannion in Newark federal court. Maan was arrested in Maryland and will appear before a U.S. Magistrate Judge in the District of Maryland. Ahmed and Idrees remain at large.

According to the complaint:

The defendants engaged in a fraudulent scheme to use stolen and fraudulently altered identities to obtain credit cards from banks and then use those credit cards to make purchases that they had no intention to repay, leaving the banks to bear the losses of the scheme.

Specifically, the defendants stole the identities of actual people and then, in many cases, created “synthetic identities” by pairing the name and social security number for an actual person with a fictitious birth date. When creating the synthetic identities, the defendants often used the name and social security number of an actual minor and combined them with a fictitious birth date that made the identity appear to be that of an adult.

The defendants then used the stolen and synthetic identities to obtain lines of credit, primarily through opening credit card accounts at banks. These cards were maintained in good standing with the banks long enough to establish the creditworthiness of the stolen and synthetic identities. The defendants then “busted out” the cards by making large purchases and never repaying the debts associated with those purchases.

The defendants also incorporated and registered in various states numerous purported companies that did little or no legitimate business. The defendants obtained credit card processing equipment by opening merchant processing accounts in the names of these sham companies, and then used that equipment to make the charges on the fraudulent credit cards.

In addition, Rehman maintained a Jersey City convenience store located at the same address as a gas station. From time to time, the defendants used that business to make charges to the fraudulent cards. The defendants also used the fraudulent cards to purchase merchandise from a Secaucus, New Jersey, warehouse store that they then sold for a profit at the convenience store.

The defendants routinely used “drop addresses” in New Jersey, New York, Pennsylvania, and Maryland as the purported mailing addresses for the phony cards and the sham companies.

The charge of conspiring to defraud financial institutions carries a maximum penalty of 30 years in prison and a $1 million fine, or twice the gross gain or loss from the offense.

U.S. Attorney Carpenito credited special agents of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Ruth Mendonca, with the investigation leading to today’s arrests.

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

The government is represented by First Assistant U.S. Attorney Rachael A. Honig.

NEWARK, N.J. – A Bergen County, New Jersey, man was sentenced today to 65 months in prison for participating in the December 2015 robbery of a North Jersey bar and the violent carjacking and kidnapping that took place shortly afterwards, U.S. Attorney Craig Carpenito announced.

Wilbur Jonathon Barahona, 22, of Ridgewood, New Jersey, previously pleaded guilty before U.S. District Judge Jose L. Linares to a three-count information charging him with conspiracy to commit Hobbs Act Robbery, carjacking, and kidnapping. Judge Linares imposed the sentence today in Newark federal court.

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

Barahona admitted that on Dec. 25, 2015, he and others forcibly robbed a bar in Hawthorne, New Jersey, and subsequently fled with approximately $200 in cash.

In the early morning hours of Dec. 26, 2015, Barahona and others hailed a taxi in Paterson, New Jersey, and forcibly took the taxi from the driver. Barahona admitted that he and others forced the driver into the back of the vehicle and took over driving. Barahona also admitted that during the carjacking, other conspirators caused seriously bodily injury to the driver by hitting him in the head with a beer bottle and slicing his throat with a knife before eventually leaving him on the side of the road in New York. The taxicab driver survived. 

In addition to the prison term, Judge Linares sentenced Barahona to five years of supervised release and fined $1,500.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, the Bergen County Prosecutor’s Office, under the direction of Acting Prosecutor Dennis Calo, and the Ridgewood and Hawthorne Police Departments, with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorneys Elaine K. Lou and Karen D. Stringer of the U.S. Attorney’s Office’s Criminal Division in Newark.

NEWARK, N.J. – A Jackson, New Jersey, man was sentenced today to 18 months in prison for his role in a large-scale mortgage fraud scheme that used phony documents and straw buyers to acquire more than $6 million in loans, U.S. Attorney Craig Carpenito announced.

Joseph DiValli previously pleaded guilty before U.S. District Judge Susan D. Wigenton to a superseding information charging him with one count of conspiracy to commit wire fraud, one count of wire fraud and one count of tax evasion. Judge Wigenton imposed the sentence today in Newark federal court.

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

From March 2011 through November 2012, DiValli and other conspirators agreed to fraudulently obtain mortgage loans for properties located in North Jersey. After recruiting “straw buyers” to purchase the properties, DiValli and others submitted false and fraudulent loan applications and supporting documents so the straw buyers could qualify for the loans. DiValli and others also used another conspirator, who worked at a bank, to create misleading certifications showing certain bank accounts held more money than they actually had. DiValli and other conspirators also submitted false appraisal reports, backdated deeds and used unlicensed title agents to close transactions and disburse the mortgage proceeds.

As a loan officer for a North Jersey mortgage lender, DiValli facilitated some of these fraudulent transactions, including a $244,855.26 mortgage on a property located on Smith Street in Elizabeth, New Jersey. Overall, the scheme induced lenders to issue more than $6 million in loans, resulting in several defaults and exposing lenders and the Federal Housing Administration (FHA) to more than $2 million in potential losses.

DiValli also admitted using a separate scheme to modify the mortgage on his personal residence. From March 2011 through June 2012, Divalli used false payroll ledgers and earnings statements to deceive a loan officer into believing that his net earnings were lower than his actual income level.

DiValli also admitted receiving income of more than $450,000 in 2012. In order to avoid taxes of $79,000, DiValli failed to file taxes for 2012 and cashed his paychecks at a check-cashing facility to conceal his income.

In addition to the prison term, Judge Wigenton sentenced DiValli to three years of supervised release and ordered to pay restitution of $2,322,045.

U .S. Attorney Carpenito credited law enforcement agents of the FBI Newark Mortgage Fraud Task Force, under the direction of Special Agent in Charge Gregory W. Ehrie; postal inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Ruth M. Mendonca; special agents of the U.S. Department of Housing and Urban Development, Office of Inspector General, under the direction of Special Agent in Charge Christina Scaringi; special agents of the Federal Housing Finance Agency, Office of Inspector General, under the direction of Special Agent in Charge Steven Perez; special agents of the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), under the direction of Special Inspector General Christy Goldsmith Romero; special agents of IRS–Criminal Investigation, under the direction of Acting Special Agent in Charge Bryant Jackson; and the Hudson County Prosecutor’s Office, under the direction of Prosecutor Esther Suarez, for the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorneys Lakshmi Srinivasan Herman of the National Security Unit, Andrew Kogan of the Cyber Unit, and Senior Litigation Counsel Barbara Ward of the Asset Recovery and Money Laundering Unit.

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

TRENTON, N.J. – A Middlesex County, New Jersey, woman today admitted participating in a credit card fraud and aggravated identity theft conspiracy, U.S. Attorney Craig Carpenito announced.

Alexus Omowole, 22, of North Brunswick, New Jersey, pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton federal court to an information charging her with one count of conspiracy to commit bank fraud and one count of aggravated identity theft.

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

From July 2017 to January 2018, Omowole and Henry Abdul, a conspirator who was charged by criminal complaint in January 2018 in connection with the scheme, participated in a conspiracy to obtain control of and use credit card accounts of others through a fraudulent scheme commonly referred to as a “credit card takeover” scheme. In a takeover scheme, a person who is not the account owner or authorized user of a credit card account contacts the financial institution and poses as the account owner in order to change the personal information associated with the account to information familiar to the unauthorized user. The information changed may include the residence, email address, or telephone number associated with the account. These changes to the account are designed to give the unauthorized user control of the account without the actual account owners’ knowledge or authorization, and may permit the unauthorized user to receive new credit cards associated with the compromised accounts. Once in control of the account, the unauthorized users make purchases, transfer funds to other accounts under the user’s control, or sell the account information to third parties.

Abdul’s residential address was used as part of the takeover conspiracy, and both Abdul and Omowole profited from the conspiracy by using several compromised credit cards at various retail locations in New Jersey and elsewhere. Omowole admitted that the scheme caused between $150,000 and $250,000 in losses, and involved more than 10 separate victims.

The bank fraud conspiracy charge carries a maximum potential penalty of up to 30 years in prison and a fine of up to $1 million. The aggravated identity theft charge carries a mandatory sentence of two years in prison, which must run consecutive to any other term of imprisonment imposed by the Court. Sentencing is scheduled for Sept. 10, 2018.

U.S. Attorney Carpenito credited special agents with the U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI), under the direction of Acting Special Agent in Charge Brian Michael in Newark, New Jersey; and the U.S. Postal Inspection Service under the direction of Acting Inspector in Charge Ruth M. Mendonca, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorneys Nicholas P. Grippo and David M. Eskew, Deputy Chief of the U.S. Attorney’s Office Criminal Division in Newark.

The charges and allegations against Abdul are merely accusations, and he is presumed innocent unless and until proven guilty

Defense counsel: Joseph Benedict Esq. New Brunswick, New Jersey

NEWARK, N.J. – A Middlesex County, New Jersey, man today admitted possessing images of child sexual abuse, U.S. Attorney Craig Carpenito announced.

Sam Cynamon, 67, of Monroe Township, New Jersey, and formerly of Springfield, New Jersey, pleaded guilty before U.S. District Judge Madeline Cox Arleo in Newark federal court to an indictment charging him with one count of possession of child pornography.

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

On July 10, 2017, law enforcement officers lawfully obtained multiple computers and electronic storage media belonging to Cynamon from his residence. The computers and electronic storage media contained multiple images and videos of child pornography, including images of prepubescent children being sexually abused.

In March 2005, Cynamon pleaded guilty in the District of New Jersey to possession of child pornography and was sentenced to 27 months in prison. Because of his prior conviction, the count of possession of child pornography to which Cynamon pleaded guilty today carries a mandatory minimum potential penalty of 10 years in prison, a maximum potential penalty of 20 years in prison, and a $250,000 fine. Sentencing is scheduled for Sept. 19. 2018.

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

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

Defense counsel: Robert Degroot Esq., Newark

NEWARK, N.J. – Five individuals were sentenced today for bribing doctors in exchange for test referrals as part of a long-running and elaborate scheme operated by Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, New Jersey, its president and numerous associates, U.S. Attorney Craig Carpenito announced.

Doug Hurley, 38, of Hillsborough, New Jersey, and Kevin Kerekes, 52, of Florham Park, New Jersey, were both sentenced to 24 months in prison. Luke Chicco, 45, of Garden City, New York, was sentenced to 21 months in prison. Kristina Hamdan, 40, of Paterson was sentenced to 41 months in prison. David McCann, 45, of Lyndhurst, New Jersey, was sentenced to three years of probation. U.S. District Judge Stanley R. Chesler imposed all five sentences today in Newark federal court.

Hurley, Kerekes, and Chicco previously pleaded guilty in June 2013 to separate informations charging them with one count of conspiracy to violate the Anti-Kickback Statute and the Federal Travel Act and one count of money laundering.

Hamdan pleaded guilty to Counts One and Thirteen of an indictment charging her with conspiracy to violate the Anti-Kickback Statute, the Federal Travel Act and the honest services wire fraud statute, and conspiracy to commit money laundering. McCann pleaded guilty to an information charging him with conspiring to violate the Anti-Kickback Statute and the Travel Act.

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

Hurley, Kerekes, and Chicco each admitted that from the fall of 2010 through April 2013, they conspired with BLS president and part owner, David Nicoll and his brother, Scott Nicoll, to pay bribes to doctors in the forms of cash, checks and other means in order to induce them to refer patient blood specimens to BLS. Hurley, Kerekes, and Chicco also admitted that in some instances, they paid bribes to doctors through sham consulting companies, which they created and controlled, in order to hide the fact that BLS was the true source of the bribes.

Hamdan admitted that from November 2009 through April 2013, she paid doctors illegal bribes in exchange for blood specimen referrals to BLS. For example, Hamdan bribed Yousef Zibdie, an internal medicine doctor with a practice in Woodland Park, in exchange for generating more than $900,000 in lab business for BLS. The bribes were funded by BLS and, in an effort to obscure that BLS was the true source of the payments paid to the doctors by Hamdan, she made the payments through a sham consulting company that she created and controlled.

McCann paid thousands of dollars in cash on a monthly basis between December 2011 and April 2013 to numerous physicians on behalf of BLS in exchange for the doctors’ referral of blood specimens to BLS.

In addition to the prison term, Judge Chesler sentenced Hurley, Chicco, Kerekes, and Hamdan a year of supervised release. Hurley, Chicco, and Kerekes must also pay forfeiture of $800,000, $850,000, and $1.2 million, respectively. Hamdan must pay forfeiture of $1,209,890.36.

The investigation has thus far resulted in 53 convictions – 38 of them doctors – in connection with the bribery scheme, which its organizers have admitted involved millions of dollars in bribes and resulted in more than $100 million in payments to BLS from Medicare and various private insurance companies. It is believed to be the largest number of medical professionals ever prosecuted in a bribery case.

The investigation has to date recovered more than $13 million through forfeiture. On June 28, 2016, BLS, which is no longer operational, pleaded guilty and was required to forfeit all of its assets.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark; inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Ruth M. Mendonca; IRS–Criminal Investigation, under the direction of Acting Special Agent in Charge Bryant Jackson in Newark; and the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert, with the ongoing investigation.

The government is represented by Senior Litigation Counsel Joseph N. Minish, Assistant U.S. Attorneys Danielle Alfonzo Walsman, Chief of the U.S. Attorney’s Office Public Protection Unit and Jacob T. Elberg, Chief of the Health Care and Government Fraud Unit, as well as Assistant U.S. Attorney Barbara Ward of the Asset Forfeiture and Money Laundering Unit.

Defense counsel: Luke Chicco: Robert J. Anello Esq., New York
Doug Hurley: Michael Baldassare Esq., Newark
Kevin Kerekes: Nace Naumoski Esq., Roseland and Alan Bowman Esq., Newark
McCann: Benjamin Choi Esq. and Joseph Horn, Esq., Rutherford, New Jersey
Kristina Hamdan: Edward J. Bilinkas Esq., Randolph, New Jersey

NEWARK, N.J. – A River Edge, New Jersey, man was arrested today for allegedly concealing prior criminal activity involving sexual intercourse with a child on his naturalization application, U.S. Attorney Craig Carpenito announced.

Kyung Lim Park, a/k/a “Howard Kyung Lim Park,” 65, was arrested today and charged with knowingly procuring his own naturalization contrary to law by providing false information and concealing material facts. Park appeared this afternoon before U.S. Magistrate Judge Mark Falk and was released on $150,000 bond.  

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

On Oct. 13, 2011, Park, who lawfully entered the United States from South Korea in March 1998, completed a naturalization application to obtain U.S. Citizenship. Park was required to truthfully answer a question asking if he had ever committed a crime or offense for which he was not arrested. However, Park did not disclose that he had engaged in sexual intercourse with a child between December 2002 and April 2003. 

After he received his citizenship, Park pleaded guilty in March 2016 in New Jersey Superior Court, Bergen County, to child endangerment and sexual conduct by a non-caretaker. During his plea hearing, Park admitted engaging in sexual intercourse with a child on at least three occasions between December 2002 and April 2003. He was later sentenced in October 2016 to five years’ probation, including community service for life and a requirement to register as a sex offender under Megan’s Law.

If convicted of the charge in today’s complaint, Park faces a maximum potential penalty of 10 years in prison, a $250,000 fine, and the possibility of losing his naturalization.   

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

18-176

Defense counsel: K. Anthony Thomas Esq. 

NEWARK, N.J. – The former owners of a restaurant in Paterson, New Jersey, today admitted failing to pay over $240,000 in taxes by concealing income from their cash-only business, U.S. Attorney Craig Carpenito announced.

Elio Federico, 71, of Totowa, New Jersey, and his brother, Ralph Federico, 68, of Saddle Brook, New Jersey, each pleaded guilty before U.S. District Judge Susan D. Wigenton in Newark federal court to one count of tax evasion.

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

Elio and Ralph Federico co-owned an Italian restaurant in Paterson that had been in business since 1967. The brothers operated the restaurant on a cash-only basis, paid a substantial portion of the employee payroll in cash, and paid virtually all of their suppliers in cash.

Elio and Ralph Federico admitted that they concealed a portion of their income from the IRS by among other things, taking a cash “skim” from the restaurant’s gross receipts, which they did not report as income; reprogramming the cash register so it would not maintain a gross receipt balance for more than a few days; and deliberately failing to provide the restaurant’s accountant with invoices that reflected the true cost of goods sold and the actual amount of gross income that the business generated.

Elio and Ralph Federico admitted that they failed to pay the necessary income and employment taxes that they owed from 2011 through 2014, resulting in a tax loss to the United States of $241,219.

The tax evasion charge to which they pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for Sept. 4, 2018.

U.S. Attorney Carpenito credited special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Bryant Jackson in Newark, with the investigation leading to today’s guilty pleas.

The government is represented by Assistant U.S. Attorney Bernard J. Cooney of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark.

Defense counsel: Elio Federico: Frank Agostino Esq. and Jeffrey Dirmann Esq., Hackensack
Ralph Federico: Richard J. Sapinski Esq. and Joseph B. Shumofsky Esq. Newark

The former CEO, CFO and an executive director of a publicly traded health care services company were charged today with allegedly orchestrating a widespread scheme to defraud investors and others out of hundreds of millions of dollars in connection with a merger transaction designed to convert the company into a private entity, Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division and U.S. Attorney Craig Carpenito announced today. 

Parmjit “Paul” Parmar, 48, of Colts Neck, New Jersey; Sotirios “Sam” Zaharis, 51, of Weehawken, New Jersey; and Ravi Chivukula, 44, of Freehold, New Jersey, are charged by complaint with one count of conspiracy to commit securities fraud and one count of securities fraud.  FBI special agents arrested Parmar earlier today near his home.  He is scheduled to appear this afternoon before U.S. Magistrate Judge Leda Dunn Wettre in Newark, New Jersey federal court. Chivukula and Zaharis remain at large.      

According to the complaint unsealed today, from May 2015 through September 2017, the defendants orchestrated an elaborate scheme to defraud a private investment firm and others out of hundreds of millions of dollars in connection with the funding of a transaction to take private a company (Company A) traded publicly on the London Stock Exchange’s Alternative Investment Market.  To fund the transaction, the private investment firm put up approximately $82 million in equity, and a consortium of financial institutions provided another approximately $130 million in debt.  The scheme allegedly utilized fraudulent methods to grossly inflate the value of Company A and trick others into believing that Company A was worth substantially more than its actual value.

The complaint alleges that to present a positive picture of the company’s financial wealth, the defendants allegedly sought to raise tens of millions of dollars in the public markets, purportedly to fund Company A’s acquisitions of various operating subsidiaries.  In reality, a number of those entities either did not exist or had only a fraction of the operating income attributed to them.  The conspirators allegedly funneled the proceeds of these secondary offerings through bank accounts they controlled and used the money for a variety of purposes that had nothing to do with acquiring the purported targets.  The money was instead used to make it appear as if the operating subsidiary had substantial customer revenue when, in fact, the funds were simply transfers of the money that had been raised in the secondary offering.  The defendants allegedly went to great lengths to make it appear that these funds were revenue, concocting phony customers and altering bank statements to make it appear as if the funds were coming from customers.     

The conspirators allegedly:

• Created fictitious operating companies that Company A purportedly acquired in sham acquisitions;
• Falsified and fabricated bank records of subsidiary entities in order to generate a phony picture of Company A’s revenue streams;
• Generated fake income streams and phony customers of Company A and its subsidiaries; and
• Made material misrepresentations and omissions to the private investment firm and others.

The defendants’ alleged actions caused the private investment firm and others to value Company A at more than $300 million for purposes of financing the transaction to take the company private.     

The alleged scheme was uncovered around September 2017, when the defendants resigned from their positions with Company A or were terminated.  On March 16, 2018, Company A and numerous of its affiliated entities filed for bankruptcy, attributing the company’s financial demise, in large part, to the alleged fraud scheme.

Separately, the United States filed a separate civil complaint today seeking forfeiture of four properties that Parmar owns or controls, including a house on Colt’s Neck and three apartments in New York City.  The U.S. Securities and Exchange Commission filed a civil complaint today against Parmar, Zaharis and Chivukula.

The investigation was conducted by the FBI Newark Field office with the assistance of the U.S. Securities and Exchange Commission’s New York Regional Office.

The government is represented by Trial Attorney Leslie Lehnert of the Criminal Division’s Money Laundering and Asset Recovery Section, Chief Paul A. Murphy of the U.S. Attorney’s Office’s Economic Crimes Unit, Assistant U.S. Attorney Nicholas P. Grippo of the Economic Crimes Unit, and Assistant U.S. Attorney Sarah Devlin of the U.S. Attorney’s Office for the District of New Jersey’s Asset Recovery Money Laundering Unit.

The charges and allegations contained in the complaint are merely accusations, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Defendants Allegedly Inflated Company’s Value and Revenue to Defraud Investors

NEWARK, N.J. – The former CEO, CFO and an executive director of a publicly traded health care services company were charged today with allegedly orchestrating a widespread scheme to defraud investors and others out of hundreds of millions of dollars in connection with a merger transaction designed to convert the company into a private entity, U.S. Attorney Craig Carpenito and Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division announced.

Parmjit “Paul” Parmar, 48, of Colts Neck, New Jersey; Sotirios “Sam” Zaharis, 51, of Weehawken, New Jersey; and Ravi Chivukula, 44, of Freehold, New Jersey, are charged by complaint with one count of conspiracy to commit securities fraud and one count of securities fraud. FBI agents arrested Parmar earlier today near his home. He is scheduled to appear this afternoon before U.S. Magistrate Judge Leda Dunn Wettre in Newark federal court. Chivukula and Zaharis remain at large.

According to the complaint unsealed today:

From May 2015 through September 2017, the defendants orchestrated an elaborate scheme to defraud a private investment firm and others out of hundreds of millions of dollars in connection with the funding of a transaction to take private a healthcare services company (Company A) traded publicly on the London Stock Exchange’s Alternative Investment Market. To fund the transaction, the private investment firm put up $82 million and a consortium of financial institutions put up another $130 million. The scheme utilized fraudulent methods to grossly inflate the value of Company A and trick others into believing that Company A was worth substantially more than its actual value.

The complaint alleges that to present a positive picture of the company’s financial wealth, the defendants allegedly sought to raise tens of millions of dollars in the public markets, purportedly to fund Company A’s acquisitions of various operating subsidiaries. In reality, a number of those entities either did not exist or had only a fraction of the operating income attributed to them. The conspirators allegedly funneled the proceeds of these secondary offerings through bank accounts they controlled and used the money for a variety of purposes that had nothing to do with acquiring the purported targets. The money from one of the offerings was instead used to make it appear as if the operating subsidiary had substantial customer revenue when, in fact, the funds were simply transfers of the money that had been raised in the secondary offering. The defendants went to great lengths to make it appear that these funds were revenue, concocting phony customers and altering bank statements to make it appear as if the funds were coming from customers.

The conspirators allegedly:

• Created fictitious operating companies that Company A purportedly acquired in sham acquisitions.
• Falsified and fabricated bank records of subsidiary entities in order to generate a phony picture of Company A’s revenue streams.
• Generated fake income streams and phony customers of Company A and its subsidiaries.
• Made material misrepresentations and omissions to the private investment firm and others.

The defendants’ alleged actions caused the private investment firm and others to value Company A at more than $300 million for purposes of financing the transaction to take the company private.

The alleged scheme was uncovered around September 2017, when the defendants resigned from their positions with Company A or were terminated. On March 16, 2018, Company A and numerous of its affiliated entities filed for bankruptcy, attributing the company’s financial demise, in large part, to the fraud scheme.

The United States is expected to file a separate civil complaint today seeking forfeiture of four properties that Parmar owns or controls, including a house in Colt’s Neck and three apartments in New York City. Separately, the U.S. Securities and Exchange Commission also filed a civil complaint today against Parmar, Zaharis and Chivukula.

The conspiracy count with which the defendants are charged carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gain or loss from the offense. The securities fraud count carries a maximum potential penalty of 20 years in prison and a $5 million fine.

U.S. Attorney Carpenito and Acting Assistant Attorney General Cronan credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie, with the investigation leading to today’s charges. They also thanked the U.S. Securities and Exchange Commission’s New York Regional Office, under the direction of Regional Director Marc P. Berger and Associate Regional Director Lara S. Mehraban, for its assistance.

The government is represented by Paul A. Murphy, Chief of the U.S. Attorney’s Office’s Economic Crimes Unit, Assistant U.S. Attorney Nicholas P. Grippo of the Economic Crimes Unit, Trial Attorney Leslie Lehnert of the Justice Department Criminal Division’s Money Laundering and Asset Recovery Section, and Assistant U.S. Attorney Sarah Devlin of the U.S. Attorney’s Office’s Asset Recovery Money Laundering Unit.

The charges and allegations contained in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

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

Mark Derzko, 74, of Mine Hill, New Jersey, pleaded guilty before U.S. District Judge William H. Walls in Newark federal court to an information charging him with one count of distribution of child pornography. Derzko remains on bail pending sentencing.

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

Derzko used a peer-to-peer file-sharing program, which he installed on his computer several years ago, to download videos and images of child sexual abuse. In May, August and September of 2016, law enforcement downloaded more than two dozen videos of child sexual abuse from Derzko’s computer. After executing a search warrant at Derzko’s home in October 2016, agents located more than 2,000 videos and over 8,000 images of child sexual abuse on Derzko’s computers. Derzko admitted that he was making available for others to download videos he had previously saved on his computer.

The distribution of child pornography charge to which Derzko pleaded guilty carries a maximum potential penalty of 20 years in prison, a mandatory minimum sentence of five years in prison and a $250,000 fine. Derzko will be required to register as a sex offender. Sentencing is scheduled for Aug. 28, 2018.

U.S. Attorney Carpenito credited special agents with the Department of Homeland Security, Homeland Security Investigations, under the direction of Newark Acting Special Agent in Charge Brian Michael, with the investigation leading to today’s guilty plea. He also thanked the Morris County Prosecutor’s Office and the Wharton, New Jersey, Police Department for their assistance with the case.

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

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

NEWARK, N.J. – A former fire inspector for Middlesex Borough and other New Jersey municipalities today admitted conspiring with another person to commit a strongarm extortion, U.S. Attorney Craig Carpenito announced today.

Billy A. Donnerstag, 49, of Hackettstown, New Jersey, pleaded guilty before U.S. District Judge Madeline Cox Arleo in Newark federal court to an indictment returned against him charging him with conspiring to commit extortion using threats of force, violence, and fear.

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

From December 2016 through June 2017, Donnerstag conspired with Joseph P. Martinelli of Kenvil, New Jersey, to extort the owner and operator of a real estate development and construction company – referred to in the indictment as “Individual 1” – using threats of physical harm if Individual 1 did not pay Donnerstag and Martinelli thousands of dollars. In a series of telephone and in-person conversations with Individual 1, Donnerstag and Martinelli told Individual 1 that, in addition to being a fire inspector for Middlesex Borough, Donnerstag also collected debts. Donnerstag and Martinelli wanted Individual 1 to pay Martinelli, stating that Individual 1 had not paid Martinelli enough money for the sale of a property a decade earlier. During the course of the conspiracy, both Donnerstag and Martinelli made a series of threatening statements to Individual 1 that the consequences of failing to pay Donnerstag and Martinelli would involve physical harm to Individual 1.

Donnerstag told Individual 1:

• “if you were in front of me right now, you’d be on the floor. Okay? Cause I don’t talk—I don’t get talked to like that. You don’t know who I am.”
• “You need to iron this out with Joe. Again, if, if I have to come meet you now—again, it, it, it, it’d become, it’s gonna be a problem.”
• “What I do, is I make sure that people don’t take advantage of other people. Do you understand that? Now I also do other things, but this is one of the things that I do. Now, again if you’re not figuring wh, what my business is by now, you’re either, and again I, I say this with as much respect as I can, either an idiot, or you’re just lying because you don’t want to, to, to understand that I come from somewhere that most people don’t wanna see.”

Ultimately, over two separate meetings (both of which were lawfully recorded), Donnerstag and Martinelli obtained $15,000 in cash from Individual 1. The cash had been provided by the FBI.

The count of conspiracy to commit extortion carries a maximum potential penalty of up to 20 years in prison and a fine of up to $250,000 or twice the gross gain or loss. Martinelli previously pleaded guilty before Judge Arleo on March 2, 2018, to conspiring with Donnerstag to commit extortion. Sentencing for Donnerstag is scheduled for Sept. 25, 2018. Martinelli’s sentencing is scheduled for June 12, 2018.

U.S. Attorney Carpenito credited special agents with the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, New Jersey, with the investigation leading to the guilty pleas of Donnerstag and Martinelli.

The government is represented by Assistant U.S. Attorney Lee M. Cortes Jr., Deputy Chief of the U.S. Attorney’s Office Special Prosecutions Division in Newark.

Defense counsel: Zahid N. Quraishi Esq., Morristown, New Jersey

NEWARK, N.J. – A former IRS attorney today admitted possessing a federal agency identification card without authorization and using it during multiple traffic stops, U.S. Attorney Craig Carpenito announced.

Deon Owensby, 42, of Trenton, New Jersey, pleaded guilty before U.S. Magistrate Judge Leda Dunn Wettre in Newark federal court to an information charging him with knowingly possessing an official identification card of a federal agency without authorization.

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

Owensby obtained an official IRS identification card known as an IRS Pocket Commission during his employment as an attorney with the IRS. The IRS Pocket Commission, which IRS employees use to identify themselves to the public when performing official duties, was to be returned to the IRS upon the end of his employment in April 2015.

However, from August 2015 to April 2017, Owensby continued to possess the IRS Pocket Commission and displayed it during multiple law enforcement stops of his vehicle in Essex and Middlesex Counties.

The count of possessing an official identification card of a federal agency without authorization is punishable by a maximum potential penalty of six months in prison and a $5,000 fine. Owensby’s sentencing is scheduled for Aug. 28, 2018.

U.S. Attorney Carpenito credited special agents of the U.S. Treasury Inspector General for Tax Administration, under the direction of Special Agent in Charge Rodney A. Davis, with the investigation. He also thanked the N.J. State Police, under the direction of Superintendent Col. Patrick J. Callahan, and the Millburn Police Department, under the direction of Chief Brian Gilfedder, for their assistance.

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

Defense counsel: Patrick McMahon Esq., Assistant Federal Public Defender, Newark

CAMDEN, N.J. – The psychiatrist of a nonprofit mental health services provider for Camden’s poorest residents today admitted signing fraudulent treatment plans meant to mislead New Jersey Medicaid inspectors, U.S. Attorney Craig Carpenito announced.

Lyda Monte, 78, of Bellmawr, New Jersey, pleaded guilty before U.S. District Judge Noel L. Hillman in Camden federal court to an information charging her with making false statements to a health care benefit program.

According to documents filed in this case and statements made in court:   Monte was a psychiatrist at Nueva Vida Behavioral Health Center of New Jersey, a nonprofit provider of mental health services to the Camden Hispanic community. Most of Nueva Vida’s patients were Medicaid beneficiaries and the center was periodically inspected and audited by New Jersey Medicaid authorities. 

Between January 2010 and August 2016, Cesar Tavera, the Executive Director of Nueva Vida, directed Nueva Vida therapists to prepare false treatment plans, including plans reflecting treatment that was not actually performed on patients, in order to mislead New Jersey Medicaid inspectors. Tavera then directed Monte to sign these fabricated treatment plans. Monte admitted today that she signed the treatment plans knowing that they were fraudulent and that they were intended to mislead New Jersey Medicaid inspectors. 

Monte faces a maximum penalty of five years in prison and a $250,000 fine, or twice the gain or loss caused by the offense. Sentencing is scheduled for Aug. 28, 2018.

Cesar Tavera previously pleaded guilty to defrauding New Jersey Medicaid out of $2.5 million and embezzling more than $1.5 million from Nueva Vida. He was sentenced to 70 months in prison. Maria Tavera, a Nueva Vida administrator, pleaded guilty to embezzling from Nueva Vida and was sentenced to six months of home detention and three years of probation. Andres Ayala, a Nueva Vida therapist, previously pleaded guilty to conspiracy to commit health care fraud and awaits sentencing.

U.S. Attorney Carpenito credited agents of the FBI’s South Jersey Resident Agency, under the direction of Special Agent in Charge Michael Harpster in Philadelphia, and special agents from the Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert, with the investigation. He also thanked the Medicaid Fraud Division of the New Jersey Office of the State Comptroller.  

The government is represented by Assistant U.S. Attorney R. David Walk Jr. of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Camden.

18-168

Defense counsel:  Rocco C. Cipparone Jr. Esq., Haddon Heights, New Jersey

CAMDEN, N.J. – An El Salvadorian man previously convicted for sexually assaulting a child today admitted to 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, 42, pleaded guilty before Senior U.S. District Judge Jerome B. Simandle in Camden federal court to a two-count information charging him with illegal re-entry subsequent to conviction for an aggravated felony and 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.

Corvera-Mata faces a maximum potential penalty of 20 years in prison and a $250,000 fine for the illegal re-entry charge, and 10 years in prison and a $250,000 fine for the SORNA charge. Sentencing is scheduled for Sept. 7, 2018.

U.S. Attorney Carpenito credited officers 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.

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

TRENTON, N.J. – One employee of an Essex County, New Jersey, tax preparation business pleaded guilty and three others were arraigned in federal court for their roles in a false income tax return conspiracy that caused tax losses of over $900,000, U.S. Attorney Craig Carpenito announced today.

Rudolph Sanders, 41, of Newark, New Jersey, pleaded guilty today before U.S. District Judge Michael A. Shipp in Trenton federal court to an information charging him with one count of conspiracy to defraud the IRS from February 2011 through March 2013.

Joseph Kenny Batts, 49, of Elkridge, Maryland, Angelo K. Thompson, 38, of Reistertown, Maryland, and Tony V. Russell, 47, of Stone Mountain, Georgia, were arraigned before Judge Shipp on May 9, 2018. They are each charged by indictment with one count of conspiracy to defraud the IRS from February 2013 through February 2017. In addition, Batts is charged with five counts of aiding and assisting in the preparation of false federal income tax returns, Thompson is charged with two counts of aiding and assisting in the preparation of false federal income tax returns, and Russell is charged with one count of aiding and assisting in the preparation of false federal income tax returns.

In June 2017, Damien Askew, 39, of Union, New Jersey, pleaded guilty to his role in the scheme from 2011 to 2015 and awaits sentencing. All five defendants have been released on bail.

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

From 2009 through April 2015, Batts and Askew co-owned Tax Pro’s, a tax return preparation and payroll business in Essex County where Sanders, Batts, Thompson, Russell, and Askew all prepared tax returns. 

In order to boost their business, the defendants conspired to falsify their clients’ income tax returns for the purpose of generating refunds in amounts that their clients were not entitled to receive. For instance, Sanders, Batts, Thompson, Russell, and Askew fabricated or inflated their clients’ education credits, child care deductions, charitable contributions, unreimbursed employee expenses, and certain business losses. 

Sanders and other members of the conspiracy also permitted Batts to use their identification numbers in order to conceal Batts’ identity as the actual tax return preparer, partly due to Batts’ prior tax fraud conviction. 

After law enforcement executed a search warrant at Tax Pro’s in April 2015, Batts discontinued Tax Pro’s and opened Tax Solutions and Associates in Union, New Jersey, where Batts, Thompson, and Russell continued preparing false federal income tax returns. 
 
By inflating the tax refunds through fraudulent means, Batts, Askew, Thompson, Russell, and Sanders caused a total tax loss to the United States of over $900,000.

The conspiracy charge carries a maximum potential penalty of five years in prison. The aiding and assisting in the preparation of a false return charge carries a maximum potential penalty of three years in prison. Both charges carry a $250,000 fine, or twice the gross gain or loss from the offense.

Sanders’ sentencing is scheduled for Aug. 14, 2018. The charges and allegations against Batts, Thompson, and Russell are merely accusations, and they are presumed innocent unless and until proven guilty.

U.S. Attorney Carpenito credited special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Bryant Jackson in Newark, with the investigation.

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

Defense counsel: 

Sanders: Carol Gillen Esq.
Batts: Fred Klepp Esq.
Russell: Anthony Simonetti Esq.
Thompson: Scott A. Krasny Esq.
Askew: David Glassman Esq.

NEWARK, N.J. – A Monmouth County doctor with practices in Colts Neck, New Jersey, and Staten Island, New York, was sentenced today to 24 months in prison for accepting bribes in exchange for test referrals as part of a long-running and elaborate scheme operated by Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, New Jersey, its president and numerous associates, U.S. Attorney Craig Carpenito announced.

Ralph Messo, 56, of Colts Neck, New Jersey, previously pleaded guilty before U.S. District Judge Stanley R. Chesler to an information charging him with one count of accepting bribes. Judge Chesler imposed the sentence today in Newark federal court.

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

Messo admitted he accepted bribes in return for referring patient blood specimens to BLS and was paid approximately $3,000 per month. Messo’s referrals generated at least $828,000 in lab business for BLS.

In addition to the prison term, Judge Chesler sentenced Messo to two years of supervised release and fined him $4,000.

The investigation has thus far resulted in 53 convictions – 38 of them doctors – in connection with the bribery scheme, which its organizers have admitted involved millions of dollars in bribes and resulted in more than $100 million in payments to BLS from Medicare and various private insurance companies. It is believed to be the largest number of medical professionals ever prosecuted in a bribery case.

The investigation has to date recovered more than $13 million through forfeiture. On June 28, 2016, BLS, which is no longer operational, pleaded guilty and was required to forfeit all of its assets.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark; inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Ruth M. Mendonca; IRS–Criminal Investigation, under the direction of Acting Special Agent in Charge Bryant Jackson in Newark; and the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert, with the ongoing investigation.

The government is represented by Senior Litigation Counsel Joseph N. Minish, Assistant U.S. Attorney Danielle Alfonzo Walsman and Jacob T. Elberg, Chief of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark, as well as Assistant U.S. Attorney Barbara Ward, of the office’s Asset Forfeiture and Money Laundering Unit.

TRENTON, N.J. - The former managing clerk for an international law firm was resentenced today to 37 months in prison for stealing sensitive, confidential information from the law firm for use in a five-year insider trader scheme that yielded net profits of more than $2 million, U.S. Attorney Craig Carpenito announced.

Steven Metro, 44, formerly of Katonah, New York, was sentenced today to 37 months in prison. U.S. District Judge Michael A. Shipp imposed the sentence in Trenton federal court.

In November 2015, Metro pleaded guilty to the first two counts of an indictment charging him with securities fraud and conspiracy to commit securities and tender offer fraud, and was sentenced to 46 months in prison in September 2016.  Metro appealed his sentence to the U.S. Court of Appeals for the Third Circuit, which vacated Metro’s sentence in February 2018 and remanded the case to the District Court for resentencing after further factual findings pertaining to the total loss amount attributable to Metro.

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

From 2009 to 2013, Metro stole material nonpublic information from Simpson Thacher & Bartlett LLP related to corporate transactions, such as mergers and acquisitions or tender offers, in which the firm represented a party or financial advisor to the transaction. As the firm’s managing clerk, Metro did not personally work on most of these transactions. Instead, Metro stole the inside information by scouring the firm’s computer system for client names and the keywords “merger agreement,” “bid letter,” “engagement letter,” and “due diligence.”

After obtaining the inside information, Metro would meet his friend, Frank Tamayo, 44, of Brooklyn, New York, at a bar, coffee shop, or other location near their respective workplaces in midtown Manhattan. During these meetings, Metro provided Tamayo material information pertaining to, among other things, the names and/or ticker symbols of the companies whose securities should be purchased. Tamayo would write the security’s ticker symbol on a small piece of paper or napkin and commit the rest of the inside information to memory.

Afterwards, Tamayo would meet Vladimir Eydelman, 46, formerly of Colts Neck, New Jersey, usually at a location near Eydelman’s workplace, such as at the large clock in New York City’s Grand Central Terminal. Tamayo would show Eydelman the paper or napkin with the ticker symbol of the company whose securities should be purchased. After Eydelman memorized the ticker symbol, Tamayo would place the paper or napkin into his mouth and chew it until it was destroyed.

After receiving the inside information provided by Metro, whom Eydelman knew as Tamayo’s “source,” Eydelman then purchased securities for himself, family members, friends, and clients, including Tamayo. Eydelman quickly sold the shares and covered any positions once the relevant deal was publicly announced and the stock price rose.  

Throughout the course of the approximately five-year scheme, Tamayo reinvested the approximately $7,000 in profits that Metro made on the first deal, and updated Metro on the running balance of his profits from the insider trading scheme. As of October 2013, by which time the conspirators had traded ahead of at least 13 planned corporate transactions, Metro’s share of the profits had reached approximately $168,000. Metro sought to “cash out” his share of the accrued profits from the insider trading scheme, pressing Tamayo to “liberate some cash” during a meeting in January 2014. Eydelman paid approximately $7,000 in cash to Tamayo in February 2014, with the expectation that Tamayo would use the cash to compensate his law firm source – i.e., Metro – for providing them the inside information.

By exploiting the information that Metro stole from the firm, Metro, Tamayo and Eydelman personally, or on behalf of close affiliates, such as family members, netted more than $2 million in illicit profits over five years.

In addition to the prison term, Judge Shipp sentenced Metro to three years of supervised release.

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 the U.S. Securities and Exchange Commission’s New York Regional Office, under the direction of Regional Director Marc P. Berger and Senior Associate Regional Director Sanjay Wadhwa, for its assistance

The government is represented by Assistant U.S. Attorney Shirley U. Emehelu, Chief of the Asset Recovery and Money Laundering Unit, Senior Litigation Counsel R. Joseph Gribko of the U.S. Attorney’s Office in Trenton, and Senior Litigation Counsel Barbara A. Ward of the Asset Recovery and Money Laundering Unit.

Defense counsel:  Lawrence S. Lustberg Esq., and Anne M. Collar Esq., Newark

CAMDEN, N.J. – A Virginia Beach, Virginia, man today admitted possessing images and videos of child sexual abuse while imprisoned at Federal Correctional Institution Fort Dix for a previous offense involving the transportation of child pornography, U.S. Attorney Craig Carpenito announced.

Christopher D. Roffler, 30, pleaded guilty before Senior U.S. District Judge Joseph H. Rodriguez in Camden federal court to an information charging him with one count of possession of child pornography.  

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

Roffler admitted that he possessed a micro SD Card containing 305 videos and 16 images of child pornography, including depictions of sexual abuse of pre-pubescent children and sadistic and masochistic conduct. In connection with his plea, Roffler also admitted that he used a cellular telephone inside the prison to obtain and possess child pornography and that he transferred a micro SD card containing child pornography to another inmate. 
 
Roffler and seven other inmates were arrested in April 2017 and February 2018 following an FBI investigation involving multiple covert recordings and several cooperating inmates. The investigation revealed that Roffler and other inmates utilized contraband cellphones, micro SD cards, and access to the internet to obtain, view, and distribute child pornography within the prison. A co-defendant organized and helped facilitate this criminal activity by maintaining cloud accounts that were used as repositories for child pornography. 

At sentencing, Roffler faces a mandatory minimum term of 10 years in prison and a lifetime of supervised release. Sentencing is scheduled for Sept. 12, 2018.   

Four other inmates – Anthony C. Jeffries, 32, of Orange, Virginia, Jordan T. Allen, 31, of Plain City, Ohio, Brian J. McKay, 47, of Brookhaven, Pennsylvania, and Jacob S. Good, 26, of Fredericksburg, Virginia – have also pleaded guilty to possession of child pornography and await sentencing. 
A fifth inmate, Erik M. Smith, 36, of Iron Mountain, Michigan pleaded guilty to the same charge and was sentenced on May 7, 2018 to an additional 151 months in prison. 

Charges remain pending against William H. Noble, 52, of Lowell, Massachusetts, and Charles Wesley Bush, 38, of Knoxville, Tennessee, both of whom were serving sentences for prior child pornography offenses while committing the alleged crimes in this case. The pending charges and allegations against them are merely accusations, and these defendants are 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 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.

18-163

Defense counsel: Tamika McKoy Esq., Camden

NEWARK, N.J. – An Irvington, New Jersey, man today admitted his role in a phony check scheme that stole over $2 million in merchandise from multiple home-improvement stores throughout the country, U.S. Attorney Craig Carpenito announced.  
                        
Koreen Higgs, 44, pleaded guilty before U.S. District Judge Katharine S. Hayden in Newark federal court to an information charging him with one count of conspiracy to commit wire fraud.

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

Starting in December 2013 and continuing through February 2017, several individuals, including Higgs, conspired to obtain merchandise or store credit from home-improvement stores in locations along the eastern United States, including New Jersey, by purchasing items with fraudulent checks.
    
Higgs and others entered home-improvement and other retail stores and gathered several high-value items like air conditioners or hardwood flooring. Higgs and others then typically “purchased” the items either by handing a cashier a fraudulent check with a phony name but authentic account and routing numbers, or by pretending to be an authorized signatory on a store credit account that Higgs and others had previously opened with a phony check.
    
During some of the transactions, Higgs and others displayed fake driver’s licenses that had been created by one of the other conspirators, which either duplicated the phony name imprinted on the fraudulent check they presented for payment or matched the name of an authorized signatory on a store credit account that they had previously opened.
    
In total, Higgs and others stole over $2 million in merchandise from various retailers in New Jersey, New York, Pennsylvania, Delaware, North Carolina, Georgia, Virginia, Connecticut, Massachusetts, and South Carolina.
    
Higgs faces 20 years in prison and a $250,000 fine for the wire fraud conspiracy charge. Sentencing is scheduled for Sept. 17, 2018.
            
U.S. Attorney Carpenito credited postal inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Ruth M. Mendonca, and special agents of the U.S. Attorney’s Office, District of New Jersey, with the investigation. He also thanked the Union Township Police Department, the Holmdel Police Department, the Passaic County Prosecutor's Office, the Totowa Police Department, and the Monroe Township Police Department for their assistance.
    
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: Alexander Booth Esq., Jersey City, New Jersey
 

NEWARK, N.J. - A Fairfield, Connecticut, man was sentenced today to 19 months in prison for his role in a securities scheme that defrauded investors out of more than $5 million, U.S. Attorney Carpenito said.

James Trolice, 64, previously pleaded guilty before U.S. District Judge William J. Martini to a two-count information charging him with securities fraud and transacting in criminal proceeds. Judge Martini imposed the sentence today in Newark federal court.

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

Trolice was the president and owner of Trolice Consulting Services LLC and the president and chief marketing officer of eAgency, a California-based company that developed mobile security products. Trolice and Lee Vaccaro, 46, of Las Vegas, sold investors interests in Trolice Consulting Services and companies Vaccaro controlled and falsely represented to investors that those companies held warrants in eAgency. Warrants are derivative securities that give the holder the right to purchase common stock at a specific price within a certain time frame.

Trolice admitted that he made oral and written misrepresentations concerning the existence, number, validity, and term of eAgency warrants purportedly owned by the investment companies; the amount of money he had personally invested in and raised for eAgency; and his current position at eAgency.

Trolice also admitted that beginning in January 2011, the dollar amount of interests Trolice and Vaccaro sold in the investment companies began to surpass the dollar amount of valid warrants held by the investment companies. Neither Trolice nor Vaccaro disclosed to investors the risk that their investments would be diluted by the sale of additional interests in the companies. Altogether, Trolice and Vaccaro defrauded investors out of more than $5 million.

In addition to the prison term, Judge Martini sentenced Trolice to three years of supervised release and ordered him to pay $5,000,512.65 representing the proceeds of his offense.

Vaccaro previously pleaded guilty to his role in the scheme and was sentenced Feb. 17, 2017 to 78 months in prison.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, and special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Bryant Jackson in Newark, with the investigation. He also thanked the U.S. Securities and Exchange Commission’s New York Regional Office, under the direction of Regional Director Marc P. Berger and Senior Associate Regional Director Sanjay Wadhwa, for its assistance.

The government is represented by Senior Litigation Counsel Daniel Shapiro of the U.S. Attorney’s Office Economic Crimes Unit and Executive Assistant U.S. Attorney Zach Intrater.

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

CAMDEN, N.J. – A federal inmate already serving a lengthy sentence for a child pornography conviction was sentenced today to 151 months in prison for possessing images of child pornography while incarcerated, U.S. Attorney Craig Carpenito announced.

Erik M. Smith, 36, of Iron Mountain, Michigan, previously pleaded guilty before U.S. District Judge Joseph H. Rodriguez to an information charging him with possession of child pornography through the use of a contraband micro SD card. Smith was already serving a 235-month sentence at Federal Correctional Institution Fort Dix (FCI Fort Dix) for his conviction in the Western District of Michigan for receipt of child pornography. Judge Rodriguez imposed today’s sentence in Camden federal court.

According to documents filed in this case and statements made in court: Smith possessed a 16-gigabyte micro SD card containing 263 images of child pornography, including 213 sexually explicit images of prepubescent children. He told another inmate the SD card included “mostly boy stuff,” referring to images of boys. Smith admitted that he downloaded these and other images of child pornography from a cloud account on behalf of other inmates.

Smith and seven other inmates were arrested in April 2017 and February 2018 following an FBI investigation involving multiple covert recordings and several cooperating inmates. The investigation revealed that Smith and other inmates utilized contraband cellphones, micro SD cards, and access to the internet to obtain, view, and distribute child pornography within the prison. A co-defendant organized and helped facilitate this criminal activity by maintaining cloud accounts that were used as repositories for child pornography.

In addition to the prison term, Judge Rodriguez sentenced Smith to five years of supervised release.

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 Vidoni and Alyson M. Oswald of the U.S. Attorney’s Office’s Criminal Division in Camden.

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

NEWARK N.J. – A Connecticut man who defrauded credit card companies of hundreds of thousands of dollars was found guilty on stolen goods charges today, U.S. Attorney Craig Carpenito announced.

Nikolay Krechet, 47, of West Hartford, Connecticut, was found guilty on all counts on which he was indicted – one count of conspiracy to sell, receive or possess stolen goods and two counts of sale, receipt or possession of stolen goods following a two-and-a-half week trial before U.S. District Judge William H. Walls in Newark federal court. The jury deliberated 25 minutes before returning the guilty verdicts.

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

Krechet bought and used millions of dollars of gift cards purchased with stolen credit card information. The substantive counts corresponded to the purchase of tens of thousands of dollars of gift cards in cash and bartered electronics for gift cards at a considerable discount off their face value.

The conspiracy count carries a maximum penalty of five years in prison and the two substantive counts each carry a maximum penalty of 10 years in prison. Sentencing is scheduled for July 31, 2018.

U.S. Attorney Carpenito credited special agents of FBI, under the direction of Special Agent in Charge Gregory W. Ehrie; the U.S. Secret Service, under the direction of Special Agent in Charge Mark McKevitt; and the U.S. Postal Inspection Service, under the director of Acting Inspector in Charge Ruth M. Mendonca, with the investigation leading to today’s conviction.

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

Defense counsel: Thomas Ambrosio Esq., Lyndhurst, New Jersey
 

NEWARK, N.J. – A Keasbey, New Jersey, tax preparer was indicted today for allegedly using false information to increase his clients’ tax refunds and secretly diverting a portion of those funds into accounts that he controlled, U.S. Attorney Craig Carpenito announced.

David Patterson, 37, is charged by indictment with 16 counts of aiding and abetting in the filing of false tax returns. Patterson will be arraigned at a later date.

According to the indictment:

Patterson owned D&D Tax Service LLC, a tax preparation business located in Keasbey. Patterson allegedly prepared multiple fraudulent tax returns on behalf of his clients by falsifying their income, charitable contributions, employee business expenses, and education costs, all so his clients would receive higher refunds than those to which they were actually entitled. Patterson then diverted a portion of the tax refunds to bank accounts he controlled without his clients’ knowledge or consent.

According to the indictment, Patterson allegedly prepared 53 phony tax returns on behalf of 19 clients for tax years 2010 through 2015, which resulted in a tax loss to the United States of $290,321.

The false filing charges each carry a maximum potential penalty of three years in prison and a $250,000 fine.

U.S. Attorney Carpenito credited special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Bryant Jackson in Newark, and special agents of the U.S. Attorney’s Office, District of New Jersey, with the investigation.

The government is represented by Assistant U.S. Attorney Deborah J. Gannett of the U.S. Attorney’s Office Asset Recovery and Money Laundering Unit.

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

Defense counsel: Patrick Mullin Esq., Fort Lee, New Jersey

Laron L. James, a/k/a/ “Juelz Santana,” 36, of Totowa, New Jersey, is now charged by indictment with one count of possession of a firearm by a convicted felon and one count of carrying a weapon on an aircraft. The indictment was returned April 30, 2018. He was originally arrested and charged by complaint with the same counts, as described in the historic press release of March 12, 2018. His arraignment is scheduled for Thursday, May 10, 2018 at 10:30 a.m. EST before U.S. District Judge Stanley R. Chesler in Newark federal court. The indictment is attached. 

TRENTON, N.J. – An Ocean County, New Jersey, cargo pilot who travels abroad frequently has been arrested for allegedly coercing a minor to participate in acts of child sexual abuse, which he recorded on camera and imported to the United States, U.S. Attorney Craig Carpenito announced.

Frank William Maile, 62, of New Egypt, New Jersey, was arrested May 1, 2018, by agents of the Department of Homeland Security, Homeland Security Investigations (HSI). Maile is retired from the U.S. Air Force and currently works as a cargo pilot. He is charged by complaint with one count of producing visual depictions of child sexual abuse outside the United States, with the intent that the depictions be imported into the United States. Maile made his initial appearance today before U.S. Magistrate Judge Douglas E. Arpert and was remanded without bail.

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

On Dec. 2, 2015, and December 3, 2015, while in the Philippines, Maile created images and videos of two minor females engaging in multiple sex acts.

The charge of producing child pornography abroad carries a mandatory minimum sentence of 15 years in prison, a maximum potential penalty of 30 years in prison, and a $250,000 fine.

U.S. Attorney Carpenito credited special agents of the Department of Homeland Security (DHS), Homeland Security Investigations (HSI), Cherry Hill office, under the direction of Resident Agent in Charge Richard Reinhold, with the investigation leading to the charges. He also thanked the Ocean County Prosecutor’s Office, under the direction of Prosecutor Joseph D. Coronato, and the Plumsted Township Police Department, under the direction of Chief Earl Meroney, for their assistance with the investigation.

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

Anyone with information regarding possible victims of this activity is urged to contact HSI’s tip line at 866-DHS-2-ICE.

Defense counsel: Hercules Pappas Esq., Haddonfield, New Jersey

NEWARK, N.J. – A Southampton, New Jersey, construction company will pay $1.5 million to resolve allegations that it committed multiple False Claims Act violations by contracting for public construction jobs despite paying its workers a lower hourly wage than required under state and federal law, U.S. Attorney Craig Carpenito and New Jersey Attorney General Gurbir S. Grewal announced today.

The settlement resolves a joint state and federal investigation of Ranco Construction’s labor practices conducted by the U.S. Attorney’s Office and the New Jersey Attorney General. The investigation began after a former Ranco employee filed a federal qui tam, or “whistle-blower,” lawsuit against the company.

In that lawsuit, the relator claimed that Ranco routinely entered into construction contracts with various state and federal entities and certified to the government that its employees were paid hourly wage rates set under federal and New Jersey prevailing wage laws.

The relator alleged, however, that Ranco systematically underpaid several of its workers and then falsified company payroll records to disguise the conduct. The relator worked for Ranco for a total of nine years – first as a laborer and then as an electrician – and left the company in 2016. He alleged in his lawsuit that Ranco forced him out for objecting to the company’s allegedly unlawful practices.

“Companies that contract with the federal government undertake an obligation to pay their employees a fair wage,” said U.S. Attorney Carpenito. “When contractors pay substandard wages and then falsely certify their compliance to the government, they not only cheat their employees, they also gain an unfair advantage in the contract bidding process, all at taxpayer expense.”

“The rules are simple: if a construction company wants to do business with the State of New Jersey, it has to pay its workers a fair wage. Ranco took the State’s money but then failed to keep up its end of the bargain,” said Attorney General Grewal. “As part of today’s settlement, we are recovering nearly half-a-million dollars for New Jersey taxpayers. Just as importantly, we are sending an important message – vendors who do business with public entities in New Jersey must act with integrity and honesty, and will be held accountable if they don’t.”

"The integrity of the DoD procurement system is a priority for the Defense Criminal Investigative Service (DCIS)," stated Special Agent-in-Charge Leigh-Alistair Barzey, DCIS Northeast Field Office. "This settlement agreement is the direct result of a joint effort by DCIS, the U.S. Attorney's Office and the New Jersey Attorney General to ensure that contractors do not gain an unfair competitive advantage by failing to comply with required federal labor laws."

The relator in the underlying qui tam will receive more than $150,000 as his statutory share of the recovery and to resolve his employment based claims in accordance with the False Claims Act. The civil lawsuit was filed in the District of New Jersey and is captioned United States ex rel. Robert Kleinow and the State of New Jersey ex rel. Robert Kleinow and Robert Kleinow individually v. Ranco Construction, Civ. Action No. 15-7278.

The civil settlement is not an admission of liability or improper conduct by Ranco.

U.S. Attorney Carpenito thanked special agents of the U.S. Department of Defense, Defense Criminal Investigative Service, under the direction of Special Agent in Charge Leigh-Alistair Barzey, for their assistance in the investigation.

The government is represented by the Assistant U.S. Attorney David Dauenheimer, Deputy Chief of the U.S. Attorney’s Office Civil Division, and Assistant Attorney General and Section Chief Janine Matton, Deputy Attorney Generals Paul Juzdan, Carla Pereira and Nicholas Kant of the New Jersey Attorney General’s Government & Healthcare Fraud Section.

Counsel for relator: Jennifer M. Carlson Esq., Vineland, New Jersey
Counsel for defendant: Linda D. Hoffa Esq., Philadelphia

NEWARK, N.J. – Two Essex County, New Jersey, men have been charged with robbing six convenience stores at gunpoint in November and December 2017, U.S. Attorney Craig Carpenito announced.

Tione Davis, 35, of East Orange, New Jersey, and Meshach Whagar, 29, of Newark, are charged by complaint with one count of conspiring to commit Hobbs Act robberies, six substantive counts of Hobbs Act robbery, and one count of using a firearm during a crime of violence. Whagar appeared this afternoon before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court and was detained. Davis is expected to make his initial appearance tomorrow.

Both defendants were previously arrested in December 2017 and have been held in state custody on related charges since that time.

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

The FBI is investigating a string of approximately 20 armed robberies of convenience stores and gas stations that took place throughout New Jersey between November and December 2017. Davis and Whagar are charged with robbing six convenience stores during that time, including locations in Middlesex, Morris, Bergen, Union, Hudson, and Passaic Counties. During those robberies, Davis, while wearing dark clothing and hiding his face with masks or scarves, allegedly brandished a handgun and demanded money from store clerks. After stealing cash from the stores, Davis fled with Whagar, who acted as the getaway driver.

Before being apprehended, the defendants led law enforcement on a high-speed vehicle pursuit in Morris County. Among the items found in their vehicle were two handguns matching the description of those Davis used during the robberies.

The Hobbs Act charges each carry a maximum potential penalty of 20 years in prison. The brandishing a firearm charge carries a maximum potential penalty of life in prison and a mandatory minimum sentence of seven years in prison, which must run consecutively to any other prison term. Each count also carries a potential $250,000 fine, or twice the gross gain or loss from the offense.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, with the investigation. He also thanked the Morris, Union, Middlesex, Hudson, Passaic, Bergen, and Essex County Prosecutor’s Offices, as well as the Morris Plains, Springfield, Middlesex, Lodi, Roselle Park, Rahway, Parsippany, Rockaway, Mahwah, Elmwood Park, Bayonne, West Orange, East Brunswick, South River, Edison, Hoboken, Union, Clark, Kearny, Clifton, and Maplewood police departments for their work on this case.

The government is represented by Assistant U.S. Attorneys Heather Suchorsky and Jamari Buxton of the U.S. Attorney’s Office Criminal Division in Newark.

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

Defense counsel: Davis: Nabil Kassem Esq., Clifton, New Jersey
Whagar: Linda Foster Esq., Newark, New Jersey