District of New Jersey

NEWARK N.J. – A Nutley, New Jersey, man was charged today with using fraudulent documents to deceive his employer into approving a loan, U.S. Attorney Craig Carpenito announced.

Richard Patino, 42, is charged by complaint with one count of wire fraud. He made his initial appearance before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court and was released on bail.

According to the complaint:

Patino was a loan officer with a mortgage company based in New Jersey. On Aug. 15, 2013, a person identified in the complaint as “Individual A” signed a loan application in connection with Individual A’s purchase of a property in Elizabeth, New Jersey. Patino signed the loan application indicating that he had reviewed and approved it.

However, the bank statements that were included in the application were allegedly Patino’s own bank statements that he altered to make them appear as though they belonged to Individual A. Afterwards, the mortgage company approved the application and issued the loan to Individual A.

The loan was later sold to another financial institution, which was provided with both the loan application and supporting documents, including the fraudulent statements Patino created. The Federal Housing Administration (FHA) guaranteed the loan based in part on those phony documents.

As of January 2018, Individual A has ceased paying the loan and the financial institution has begun foreclosure proceedings on the property. Overall, law enforcement is aware of approximately 23 loans that Patino approved that are suspected of fraudulent activity.

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

U .S. Attorney Carpenito credited special agents of the U.S. Department of Housing and Urban Development, Office of Inspector General, under the direction of Special Agent in Charge Christina Scaringi, with the investigation leading to today’s charge.

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.

Defense counsel: Aidan P. O’Connor Esq., Hackensack, New Jersey 

A Chinese national living in the United States on a student visa pleaded guilty today for his role as a counterfeit distributor in a scheme to traffic and smuggle counterfeit electronics purporting to be Apple iPhones and iPads, from China into the United States.

Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, U.S. Attorney Craig Carpenito of the District of New Jersey, Deputy Special Agent in Charge Michael S. McCarthy of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) in Newark and Acting Bergen County Prosecutor Dennis Calo made the announcement. 

Jianhua “Jeff” Li, 43, pleaded guilty before U.S. District Court Judge Kevin McNulty of the District of New Jersey to one count of conspiracy to traffic in counterfeit goods and labels and to smuggle goods into the United States, and one count of trafficking in counterfeit goods.  Li will be sentenced on May 30.

According to the documents filed in this case and statements made in court, from July 2009 through February 2014, Mr. Li, working through his company Dream Digitals, conspired with Andreina Becerra, Roberto Volpe, Rosario LaMarca, and others to smuggle and traffic into the United States from China more than 40,000 electronic devices and accessories, including iPads and iPhones, along with labels and packaging bearing counterfeit Apple trademarks.  Mr. Li also received payments totaling over $1.1 million in sales proceeds from U.S. accounts into his bank accounts.  Becerra, Volpe and LaMarca have also pleaded guilty to their roles in the conspiracy. LaMarca was sentenced on July 20, 2017 to 37 months in prison and Becerra and Volpe are awaiting sentencing.

Further, the documents filed in this case and statements made in court showed that Mr. Li shipped devices separately from the labels bearing counterfeit trademarks for later assembly to avoid detection by U.S. Customs and Border Protection officials.  The devices were then shipped to conspirators all over the United States.  Proceeds from the sales of the devices were funneled back to the co-conspirators’ accounts in Florida and New Jersey via structured cash deposits and a portion of the proceeds was then transferred to conspirators in Italy, further disguising the source of the funds.  

The HSI Newark Seaport Investigations Group and the Bergen County Prosecutor’s Financial Crimes Unit investigated the case with significant assistance from Europol and Italy’s Guardia di Finanza.

Senior Trial Attorney Kebharu Smith of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Leslie Schwartz of the District of New Jersey are prosecuting the case.    

NEWARK, N.J. - A Chinese national living in the United States on a student visa today admitted his role in a scheme to traffic and smuggle counterfeit Apple products, including phony iPhones and iPads, from China into the United States.

U.S. Attorney Craig Carpenito of the District of New Jersey; Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division; Acting Special Agent in Charge Michael McCarthy of Homeland Security Investigations (HSI) in Newark, and Acting Bergen County Prosecutor Dennis Calo made the announcement.

Jianhua “Jeff” Li, 43, pleaded guilty before U.S. District Judge Kevin McNulty in Newark federal court to one count of conspiracy to traffic in counterfeit goods and labels and to smuggle goods into the United States and one count of trafficking in counterfeit goods.

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

From July 2009 through February 2014, Li, working through his company Dream Digitals, conspired with Andreina Becerra, Roberto Volpe, Rosario LaMarca, and others to smuggle and traffic into the United States from China more than 40,000 electronic devices and accessories, including iPads and iPhones, along with labels and packaging bearing counterfeit Apple trademarks.

Li shipped the devices separately from the labels to avoid detection by U.S. Customs and Border Protection officials. The devices were then shipped to conspirators all over the United States. Proceeds were funneled back to conspirator accounts in Florida and New Jersey via structured cash deposits and then a portion was transferred to conspirators in Italy, further disguising the source of the funds. Over $1.1 million in sales proceeds were wired from U.S. accounts into accounts Li controlled overseas.

The conspiracy charge to which Li pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine. The trafficking charge carries a maximum potential penalty of 10 years in prison and a $2 million fine. His sentencing is scheduled for May 30, 2018.

LaMarca previously pleaded guilty to his role in the scheme and was sentenced July 21, 2017 to 37 months in prison. Becerra and Volpe have also pleaded guilty and await sentencing.

The HSI Newark Seaport Investigations Group and the Bergen County Prosecutor’s Financial Crimes Unit investigated the case with significant assistance from Europol and Italy’s Guardia di Finanza.

Assistant U.S. Attorney Leslie Schwartz of the District of New Jersey and Senior Trial Attorney Kebharu Smith of the Criminal Division’s Computer Crime and Intellectual Property Section and are prosecuting the case.

Defense counsel: Perry Primavera Esq., Hackensack, New Jersey 

CAMDEN, N.J. – A guidance counselor with the Pleasantville public school district today admitted defrauding New Jersey state health benefits programs and other insurers out of over $3 million by submitting fraudulent claims for medically unnecessary prescriptions, U.S. Attorney Craig Carpenito and New Jersey Attorney General Gurbir S. Grewal announced.

Michael Pilate, 39, of Williamstown, New Jersey, pleaded guilty before U.S. District Judge Robert B. Kugler in Camden federal court to an information charging him with conspiracy to commit health care fraud.

“Pilate was part of a network of recruiters, doctors, and state and local government employees who abused their access to state benefits plans to rack up millions in reimbursements for medically unnecessary prescriptions, all while profiting off the backs of New Jersey tax payers,” U.S. Attorney Carpenito said. “His guilty plea, which marks the 13th conviction in the ongoing investigation, is a testament to the combined success of our federal law enforcement partners and the New Jersey Attorney General’s office to find those responsible for this brazen scheme and bring them to justice.”

“The health care fraud committed by this individual and his co-defendants costs us all, and cannot be tolerated,” said New Jersey Attorney General Grewal. “We appreciate the vigorous pursuit of this conspiracy by our partners at the U.S. Attorney’s Office, and we're glad to collaborate in the effort. As Attorney General, I am committed to investigating health care fraud on behalf of New Jersey taxpayers, and to holding those engaged in such conduct accountable.”

“Today’s plea is a direct result of the commitment by federal, state and local law enforcement to aggressively pursue and charge those who willingly defraud our citizens," stated Special Agent in Charge Timothy Gallagher of the Newark FBI Field Office. “Health Care fraud costs our country billions each year, which is not just absorbed, it is passed down to the consumer. We will remain vigilant to assure that unscrupulous individuals are brought to justice."

“In today's plea, the thirteenth in this case, Michael Pilate admitted to conspiring to cause the submission of fraudulent insurance claims for medically unnecessary compounded prescription medications. We will continue to work with our law enforcement partners to aggressively investigate illegal prescription drug schemes, particularly when they impact patients of programs administered by the Department," said Peter Nozka, Acting Special Agent-in-Charge, U.S. Department of Labor, Office of Inspector General New York Region.

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

From January 2015 through April 2016, Pilate and others recruited individuals in New Jersey to obtain very expensive and medically unnecessary compounded medications from an out-of-state pharmacy, identified in the informations as the “Compounding Pharmacy.”

Certain compound medication prescriptions – including pain, scar, antifungal, and libido creams, as well as vitamin combinations – were reimbursed for thousands of dollars for a one-month supply. The conspirators knew that some New Jersey state and local government and education employees, including teachers, firefighters, municipal police officers, and state troopers, had insurance coverage for these particular compound medications.

An entity referred to in the information as the “Pharmacy Benefits Administrator” provided pharmacy benefit management services for the State Health Benefits Program, which covers qualified state and local government employees, retirees, and eligible dependents, and the School Employees’ Health Benefits Program, which covers qualified local education employees, retirees, and eligible dependents. The Pharmacy Benefits Administrator would pay prescription drug claims and then bill the State of New Jersey for the amounts paid.

Pilate agreed to personally receive compounded prescription creams that he did not need without being examined by a doctor and helped recruit other public employees and individuals covered by the Pharmacy Benefits Administrator to fraudulently obtain medically unnecessary medications from the Compounding Pharmacy. Pilate secured insurance information from the individuals and passed it along to another conspirator, who had a doctor sign the prescriptions without examining the individuals. The prescriptions were faxed to the Compounding Pharmacy, which filled the prescriptions and billed the Pharmacy Benefits Administrator.

The pharmacy then paid one of Pilate’s conspirators a percentage of each prescription filled and paid by the Pharmacy Benefits Administrator, which was then distributed to Pilate and other members of the conspiracy. Pilate paid individuals with the insurance coverage $500 to reward them for obtaining the prescriptions.

According to the information, the Pharmacy Benefits Administrator paid Compounding Pharmacy over $50 million for compounded medications mailed to individuals in New Jersey.

As part of the plea agreement, Pilate must forfeit $392,684.20 in criminal proceeds he received for his role in the scheme and pay restitution of at least $3,493,170.18.

Pilate faces a maximum penalty of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for May 11, 2018.

Twelve other conspirators – Matthew Tedesco, Robert Bessey, Michael Pepper, Thomas Hodnett, Steven Urbanski, John Gaffney, Judd Holt, George Gavras, Richard Zappala, Michael Neopolitan, Andrew Gerstel, and Timothy Frazier – have pleaded guilty to their roles in the scheme and await sentencing.

U.S. Attorney Carpenito credited agents of the FBI’s Atlantic City Resident Agency, under the direction of Special Agent in Charge Timothy Gallagher in Newark, IRS – Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen in Newark, and the U.S. Department of Labor, Office of Inspector General, under the direction of Acting Special Agent in Charge Peter Nozka in New York, with the investigation leading to the guilty plea. He also thanked the Pensions and Financial Transactions Section of the Division of Law, within the Attorney General’s Office, under the direction of Attorney General Grewal and Division Chief Eileen Schlindwein Den Bleyker, for its assistance in the investigation.

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

Defense counsel: Teri Lodge Esq., Marlton, New Jersey 

Agrees to 60-Month Prison Term

NEWARK, N.J. – A Harrisburg, Pennsylvania, man today admitted his role in a conspiracy that fraudulently obtained more than $24 million from the Post 9/11 GI Bill, a federal education benefits program designed to help veterans who served in the armed forces following the terrorist attacks on Sept. 11, 2001, U.S. Attorney Craig Carpenito announced.

David Alvey, 51, 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.

“Alvey and his codefendants stole money that was intended to provide educational opportunities to the armed services members who served following the attacks on 9/11,” U.S. Attorney Carpenito said. “Their scam targeted unwitting veterans, enrolling them in unapproved online courses without their knowledge. Our office will always work together with our law enforcement partners to find and stop this kind of government fraud, especially when it seeks to victimize those who serve our country with such courage.”

“The VA’s Post-9/11 GI Bill is a comprehensive educational program meant to help our nation’s veterans advance their education and careers as they move from military service to civilian life. Defrauding this important VA program costs our nation’s taxpayers and VA and does a tremendous disservice to our veterans,” Sean Smith, Special Agent in Charge, Northeast Field Office, U.S. Department of Veterans, Office of Inspector General, said. “VA OIG is committed to working closely with our fellow law enforcement partners and thanks the U.S. Attorney’s Office, District of New Jersey, for its dedication to this time-intensive, complex case.”

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

The Post-9/11 GI Bill provides educational assistance to eligible veterans of the U.S. Armed Forces by paying for veterans’ tuition, housing costs, and other educational expenses as long as their courses meet certain criteria. Because these tuition benefits are paid by the United States directly to the school, all entities involved in developing and administering the courses must be fully disclosed to the United States in order to assess the courses for approval.

From 2009 through August 2013, Alvey – founder and president of Ed4Mil – Lisa DiBisceglie and Helen Sechrist, both of whom previously pleaded guilty to a similar wire fraud conspiracy count, and others, conspired to fraudulently obtain millions of dollars in tuition assistance and other education-related benefits under the Post-9/11 GI Bill.

DiBisceglie, then an associate dean at Caldwell University, helped Alvey get approval from Caldwell’s administration to develop and administer a series of non-credit online courses for veterans in Caldwell’s name. In order for the courses to be eligible for education benefits under the Post-9/11 GI Bill, DiBisceglie, Alvey, and others prepared and submitted an application with the Veterans Administration stating that the courses were developed, taught, and administered by Caldwell faculty and met Caldwell’s stringent educational standards. The courses were subsequently approved, and Alvey, Sechrist, and others aggressively marketed the courses to veterans who were eligible to receive the benefits.

However, Caldwell did not participate in developing or teaching the online courses. The veterans were instead enrolled in online correspondence courses developed and administered by a sub-contractor of Ed4Mil. Neither Ed4Mil nor its sub-contractor were disclosed to the government, and neither were eligible to receive Post-9/11 GI Bill benefits.

Alvey and others concealed the true nature of the courses from the government and the veterans who enrolled in the courses. Thousands of veterans enrolled in the online courses believing they were taking courses from Caldwell. The scheme caused the United States to pay more than $24 million in tuition benefits under the Post-9/11 GI Bill.

“David Alvey knowingly and willfully abused his position for personal gain and did so at the expense of those who truly deserve better – our veterans who were looking to make their dreams of a higher education a reality,” Debbi Mayer, Assistant Special Agent in Charge of the U.S. Department of Education Office of Inspector General's Eastern Regional Office, said. “I’m proud of the work of OIG Special Agents and our law enforcement partners for holding Mr. Alvey accountable for his criminal actions. America’s veterans and students deserve nothing less.”

“The guilty plea by David Alvey sends a clear and unequivocal message that the FBI and our law enforcement partners will relentlessly pursue those who defraud the government.  This is the third conspirator who pleaded guilty in this fraud scheme. These crimes are especially egregious since they target our veterans and the educational system,” Timothy Gallagher, Special Agent in Charge of the Newark FBI Field Office, said.

The wire fraud conspiracy charge carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. As part of his plea agreement, Alvey has agreed to a prison term of five years and to forfeit proceeds of the crime, including $702,073 in cash proceeds, as well as artwork, and stock.  Sentencing is scheduled for May 15, 2018.

U.S. Attorney Carpenito credited special agents of the U.S. Department of Veterans Affairs, Office of Inspector General, Criminal Investigation Division, Northeast field office, under the direction of Special Agent in Charge Smith in Newark; the FBI, under the direction of Special Agent in Charge Gallagher in Newark; and the U.S. Department of Education, Office of Inspector General Eastern Regional Office, under the direction of Assistant Special Agent in Charge Mayer, with the ongoing investigation.

The government is represented by Assistant U.S. Attorneys David M. Eskew and David Malagold of the U.S. Attorney’s Office Criminal Division in Newark, Assistant U.S. Attorney Nicole Mastropieri of the Healthcare and Government Fraud Unit, and Assistant U.S. Attorney Jafer Aftab of the Asset Recovery and Money Laundering Unit.

NEWARK, N.J. – An owner of two IT staffing and consulting companies today admitted using phony documents to fraudulently obtain H1-B visas for foreign workers and submitting false tax returns, U.S. Attorney Craig Carpenito announced.

Sowrabh Sharma, 33, of New York, pleaded guilty before U.S. District Judge Kevin McNulty in Newark federal court to a superseding information charging him with conspiracy to commit visa fraud and subscribing to false tax returns.  

“For years, Sharma and others working at SCM Data and MMC systems lied about hiring full-time foreign workers in order to secure H1-B visas,” U.S. Attorney Carpenito said. “In reality and contrary to immigration laws, these workers were often ‘benched’ without pay while the companies created false documents to cover-up the scheme. This investigation, which has resulted in the conviction of an owner and several employees, including an  immigration attorney, shows that businesses that use the H1-B visa program better do so with the utmost adherence to this nation's immigration and labor laws.”

“This conviction shows that even those with powerful business interests are not immune from HSI’s long and expert investigative reach when it comes to visa fraud and worker exploitation,” said Michael McCarthy, Acting Special Agent in charge of HSI Newark. “Such activities not only have a negative impact on the U.S. economy, but are harmful to the overall work environment of companies and individuals.”

“Sowrabh Sharma misused the H-1B program in order to enrich himself at the expense of the foreign workers he sponsored for H-1B visas. His company submitted false documents to the Departments of Labor and Homeland Security in order to perpetrate this fraud. The U.S. Department of Labor Office of Inspector General will continue to work with Homeland Security Investigations and our other law enforcement partners to vigorously pursue those who commit fraud involving the foreign labor certification programs which are jointly administered by the Departments of Labor, Homeland Security and State,” stated Peter Nozka, Acting Special Agent-in-Charge, U.S. Department of Labor Office of Inspector General New York Region.

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

SCM Data Inc. and MMC Systems Inc. offered consultants to clients in need of IT support. Both companies recruited foreign nationals with purported IT expertise, often student visa holders or recent college graduates, and sponsored them for H-1B visas with the stated purpose of working for SCM Data and MMC Systems’ clients throughout the United States.

Sharma admitted today that from 2010 through April 2015, he and others falsely represented to U.S. Department of Homeland Security, U.S. Citizenship and Immigrations Services (USCIS) that dozens of foreign workers had full-time “in-house” positions, and would be paid an annual salary, as required to secure the visas. However, Sharma and his companies only paid the foreign workers when they were placed at a third-party client, or a company that entered into a contract for services with SCM Data and MMC Systems.

Sharma also admitted that in some instances, foreign workers who were “benched” between projects and not working were told that if they wanted to maintain their H-1B visa status, they would need to come up with what their gross wages would be in cash and give it to SCM Data and MMC Systems to generate phony payroll checks.
 
In addition, Sharma also admitted that he intentionally overstated and claimed false expenses pertaining to SCM Data and MMC Systems on his individual tax returns for 2011, 2012, 2013, and 2014, resulting in a tax loss to the United States of approximately $1,114,824.  

Sharma faces a maximum potential penalty of five years in prison on the visa fraud conspiracy count and three years in prison on the tax fraud count. Both charges carry a maximum $250,000 fine. His sentencing is scheduled for May 30, 2018.

U.S. Attorney Carpenito credited special agents of the U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), Newark Field Office, under the direction of Acting Special Agent in Charge Michael McCarthy, the U.S. Department of Labor, Office of Inspector General, under the direction of Acting Special Agent in Charge Peter Nozka in New York, and IRS – Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen in Newark, with the investigation.

The government is represented by Assistant U.S. Attorneys Joyce M. Malliet and Francisco J. Navarro of the U.S. Attorney’s Office’s National Security Unit in Newark.

Defense Counsel: John P. Lacey Esq., and Leo J. Hurley Esq.

NEWARK N.J. – A Georgia man today admitted 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, 29, of Lilburn, Georgia, pleaded guilty before U.S. District Judge Katharine S. Hayden in Newark federal court to an information charging him with one count of aggravated identity theft and one count of conspiracy to commit wire fraud.

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

Yusuf 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 1) had an account. The caller impersonated Victim 1 and stated that he/she wanted to withdraw $34,636 from his/her account. The entity sent a check through a mail carrier to the account holder at his/her 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.

The conspiracy to commit wire fraud charge carries a maximum penalty of 20 years in prison, and a fine of $250,000, or twice the gross gain to the defendant or twice the gross loss to others, whichever is greater. The aggravated identity theft charge carries a sentence of two years in prison, which must be consecutive to any imprisonment ordered concerning the conspiracy to commit wire fraud charge, and a fine of $250,000, or twice the gross gain to the defendant or twice the gross loss to others, whichever is greater. Sentencing is scheduled for May 10, 2018.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher 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 pleas. He also thanked the Salt Lake City, Utah, Police Department 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: David B. Glazer Esq., Livingston New Jersey

TRENTON, N.J. – A Bronx, New York, man who was arrested in Warren County on Christmas Eve in 2014 while transporting 15 kilograms of heroin pleaded guilty today in Trenton federal court, U.S. Attorney Craig Carpenito announced.

Vionel Rondon Cortorreal, 29, pleaded guilty before U.S. District Judge Peter G. Sheridan to an information charging him with conspiracy to distribute heroin.   

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

In December 2014, Rondon Cortorreal engaged in a conspiracy with members of a drug trafficking organization to transport and distribute kilogram quantities of heroin. On Dec. 24, 2014, Rondon Cortorreal was arrested after law enforcement seized 15 kilograms of heroin from a hidden compartment in the vehicle that he and another conspirator, Dany Francisco-Valerio, 44, of Bronx, were operating. 

The narcotics charge to which Rondon Cortorreal pleaded guilty carries a maximum penalty of life in prison and a $10 million fine. Sentencing is scheduled for May 30, 2018.

Francisco-Valerio previously pleaded guilty to the same charge before Judge Sheridan on Oct. 26, 2017 and awaits sentencing.      
    
U.S. Attorney Carpenito credited special agents of the Drug Enforcement Administration’s New Jersey Division, under the direction of Special Agent in Charge Valerie Nickerson in Newark, and officers of the N.J. State Police, under the direction of Acting Superintendent Col. Patrick J. Callahan, with the investigation leading to today’s guilty plea.  

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

Last of 22 Defendants Convicted and Sentenced

TRENTON, N.J. – A New York man and a Middlesex County, New Jersey, man were sentenced to today to federal prison terms for their respective roles in one of the largest credit card fraud schemes ever charged by the Justice, U.S. Attorney Craig Carpenito announced.

Qaiser Khan, 53, of Valley Stream, New York, previously pleaded guilty to an information charging him with one count of conspiracy to commit bank fraud. He was sentenced today to six months in prison. Sat Verma, 65, of Iselin, New Jersey, previously pleaded guilty to an information charging him with one count of access device fraud. He was sentenced to one year in prison. U.S. District Judge Anne E. Thompson imposed both sentences today in Trenton federal court.

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

Khan and Verma were originally charged in February 2013 as part of a conspiracy to fabricate more than 7,000 false identities to obtain tens of thousands of credit cards. They are the last of 22 defendants to be sentenced in this scheme.

The scheme involved a three-step process in which the defendants would make up a false identity by creating fraudulent identification documents and a phony credit profile with the major credit bureaus; pump up the credit of the false identity by providing bogus information about that identity’s creditworthiness; then borrow or spend as much as they could without repaying the debts. The scheme caused more than $200 million in confirmed losses to businesses and financial institutions.

The scope of the criminal fraud enterprise required the conspirators to construct an elaborate network of false identities. Across the country, the conspirators maintained more than 1,800 “drop addresses,” including houses, apartments and post office boxes, which they used as the mailing addresses for the false identities.

Khan admitted he helped obtain credit cards in the name of third parties – many of which were fictional – then directed the credit cards to be mailed to addresses controlled by members of the conspiracy. He also admitted they knew the cards would be used fraudulently at businesses. Verma admitted he effected transactions with access devices issued to another person.

In addition to the prison terms, Judge Thompson sentenced Qaiser to five years of supervised release and fined him $10,000. Verma was sentenced to three years of supervised release, ordered to forfeit $270,000 and fined $1,000.

U.S. Attorney Carpenito credited special agents of the FBI’s Cyber Division, under the direction of Special Agent in Charge Timothy Gallagher in Newark, with the investigation. He also thanked postal inspectors with the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Ruth M. Mendonca, Newark Division, special agents of the U.S. Secret Service, under the direction of Special Agent in Charge Mark McKevitt, and the U.S. Social Security Administration for their assistance.

The government is represented by Assistant U.S. Attorneys Zach Intrater and Daniel Shapiro of the U.S. Attorney’s Office Economic Crimes Unit, as well as Assistant U.S.
Attorney Sarah Devlin of the Asset Forfeiture and Money Laundering Unit.

This case was brought in coordination with the Financial Fraud Enforcement Task Force, which was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.

Defense counsel: Khan: Christopher Adams Esq., Roseland, New Jersey
Verma: Jerard A. Gonzalez Esq., Hackensack, New Jersey

CAMDEN, N.J. – A Philadelphia, Pennsylvania, man today admitted his role in fraudulently cashing stolen U.S. Postal Service money orders, resulting in more than $22,000 in losses, U.S. Attorney Craig Carpenito announced.

 

Anthony J. Bell, 38, pleaded guilty before U.S. District Judge Joseph H. Rodriguez to an information charging him with one count of transmitting and presenting unlawfully issued U.S. Postal Service money orders with intent to defraud the United States. 

 

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

 

Bell admitted that a former U.S. Postal Service employee, Marc. E Saunders, 39, of Sicklerville, New Jersey, provided Bell with stolen money orders and told him to recruit others to cash them. Bell admitted that he recruited individuals to cash the money orders and paid them a small fee, while keeping the rest of the money from the fraudulently cashed money orders for Saunders and himself. Bell also admitted he recruited an individual in York, Pennsylvania, to cash the money orders and paid the individual a small fee, keeping the rest of the money from the fraudulently cashed money orders for himself.  

 

The charge for transmitting and presenting unlawfully issued U.S. Postal Service money orders carries a maximum penalty of five years in prison and $250,000 fine. Sentencing is scheduled for May 2, 2018.

 

U.S. Attorney Carpenito credited special agents of the U.S. Postal Inspection Service, under the direction of Executive Special Agent in Charge Kenneth Cleevely of the Eastern Area Field Office with the investigation leading to today’s guilty plea.

 

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

 

NEWARK, N.J. – A Bronx, New York, man is charged with carrying out a scheme to use bogus information and simultaneous loan applications at multiple banks to fraudulently obtain home equity lines of credit, a practice known as “shotgunning,” U.S. Attorney Craig Carpenito announced today.

Saoud “Sam” Rihan, 57, was arrested Jan. 28, 2018 and charged by complaint with one count of conspiracy to commit bank fraud. He is scheduled to appear this afternoon before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court.

According to the complaint:

Rihan was a business partner of Simon Curanaj, 63, of Yonkers, New York. From 2012 through January 2014, Rihan, Curanaj, and others conspired to fraudulently obtain multiple home equity lines of credit (HELOC) from banks on residential properties in New Jersey and New York.

For example, Rihan and Curanaj executed a deed to transfer ownership of a Bronx property to people identified in the complaint as “Individual 1” and “Individual 2,” neither of whom lived at the property. Rihan and Curanaj then applied for three HELOCs from multiple banks in the name of Individual 2.

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

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

The conspiracy to commit bank fraud charge carries a maximum potential penalty of 30 years in prison and a $1 million fine, or twice the gross gain or loss from the offense.

The charge and allegations against Rihan are merely accusations, and he is presumed innocent unless and until proven guilty.

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

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

NEWARK, N.J. – A political consultant from Essex County, New Jersey, today admitted her role in a fraud scheme related to contracts with the Newark Watershed Development Corp. (NWCDC) and kickbacks to officials there, U.S. Attorney Craig Carpenito announced.

Dianthe Martinez Brooks, 42, of West Orange, New Jersey, pleaded guilty before U.S. District Judge Jose L. Linares in Newark federal court to an information charging her with one count of wire fraud.

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

Martinez Brooks was the owner and proprietor of a consulting company called DMart127 LLC, which provided political consulting services to local candidates and elected officials, among others, in the Essex County area. Between May 2011 and March 2013, she participated in a scheme with Linda Watkins Brashear, the former NWCDC Executive Director, and Donald Bernard, the former Director of Special Projects, to defraud the NWCDC of the honest services of Brashear and Bernard, and of money and property.

Martinez Brooks submitted fraudulent invoices to the NWCDC in the name of DMart127 detailing services that were purportedly performed, but which sought payments that overstated the value of any services she or her company performed. Martinez-Brooks also assisted in obtaining contracts between companies owned by Kevin Gleaton and the NWCDC and contracts between a company owned by her relative and the NWCDC through Bernard and Brashear. Fraudulent invoices were submitted in the name of those companies to the NWCDC detailing services that were purportedly performed, but were never rendered by Gleaton, his companies, or Martinez Brooks’ relative. Based on the fraudulent invoices, the NWCDC issued checks to DMart127, Gleaton’s companies and company belonging to Martinez’s relative totaling $225,666. Martinez Brooks kicked back a substantial amount of those proceeds to Brashear and Bernard.

The wire fraud charge carries a maximum potential penalty of 20 years in prison and a $250,000 fine. Sentencing is scheduled for May 21, 2018.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; IRS – Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; and special agents of the U.S. Department of Housing and Urban Development, Office of Inspector General, under the direction of Special Agent in Charge Christina Scaringi, with the investigation leading to today’s guilty plea.

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

Defense counsel: Paulette Pitt Esq., Woodbridge, New Jersey

Plea Deal Calls for 45-year Prison Sentence

NEWARK, N.J. – The leader of one of Newark’s most violent street gangs today admitted his role in five murders, an armed carjacking, an armed robbery of a drug dealer, two counts of assault with a deadly weapon, and drug conspiracy as part of a racketeering conspiracy involving the South Side Cartel, U.S. Attorney Craig Carpenito announced.

 

Farad Roland, 33, had been charged with violations of the Racketeer Influenced and Corrupt Organizations Act (RICO) as part of a 27-count second superseding indictment, which was returned in June 2013.

 

“With today’s guilty plea, Farad Roland’s reign as the leader of the South Side Cartel is over.”  U.S. Attorney Carpenito said.  “It is the mission of this office to make the streets of New Jersey safe for all of its citizens.  The Roland case is a perfect example of cooperation between my office, the FBI, Newark police and the Essex County prosecutor effectively working to remove a dangerous felon from our community.”

“Today's plea is a direct result of the hard work and dedication shared between state, local and federal authorizes in their efforts to combat violent gangs in our communities,” FBI Special Agent in Charge Timothy A. Gallagher said.  “We are committed to combating this epidemic of violence that often takes young lives and creates fear in our communities. The FBI and our partners will aggressively pursue gangs wherever they surface and are steadfast to making Newark and the surrounding communities, a safe place for our citizens.” 

 

According to documents filed in this case:

 

The South Side Cartel was a sub-set of the Bloods street gang that operated primarily on Hawthorne Avenue in Newark. Originally a neighborhood-based gang whose main activities were selling drugs and committing violent acts to aid the drug-trafficking business, many of the gang’s members were officially brought into the Bloods gang in 2002 and 2003. The gang often operated out of apartments located at 496-500 Hawthorne Avenue, which were dubbed “the Twin Towers.” Local law enforcement made repeated narcotics and gun arrests at this location. Many of the South Side Cartel members had tattoos showing the Twin Towers and the logo “SSC,” which represented the gang’s initials.

 

Between 2003 and 2010, the South Side Cartel was generally known among law enforcement and the FBI as the most violent street gang in Newark, committing numerous murders, shootings, robberies and other violent acts in furtherance of the enterprise. At its peak, the South Side Cartel had about 20 members or associates, many of whom have since been killed in gang-related murders or who are serving prison sentences for gang-related crimes. Roland’s two co-defendants, Malik Lowery and Mark Williams, previously pleaded guilty in federal court.  Lowery was sentenced in August 2016 to more than 26 years in federal prison. Williams is awaiting sentencing.

 

Today’s admission of guilt includes Roland’s participation in a host of racketeering acts to further the South Side Cartel’s goals, including:

 

• The Feb. 20, 2005, murder of a Newark resident who was shot during a robbery attempt that Roland ordered one of his gang associates to carry out;
• The Feb. 23, 2005, murder of the 19-year-old gang associate who committed the Feb. 20, 2005 robbery-murder, to prevent him from cooperating with law enforcement and implicating Roland;
• The Oct. 20, 2007, murder of a fellow South Side Cartel member who had fallen into disfavor with the gang;
• The retaliation murders of two people on March 27, 2008, outside the Oasis Bar located on Lyons Avenue in Newark.

 

Roland also admitted committing an armed carjacking; an assault with a dangerous weapon in the 2008 shooting of a fellow gang member with whom Roland had a dispute; an assault with a dangerous weapon in the 2009 shooting of a rival gang member; the armed robbery of a drug dealer in East Orange, New Jersey; and conspiracy to distribute more than a kilogram of heroin and 280 grams of crack cocaine.

 

Under terms of the plea agreement, Farad agreed to a prison term of 45 years. He is scheduled to be sentenced May 14, 2018.

 

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher; the Newark Police Division, under the direction of Department of Public Safety Director Anthony F. Ambrose; and Acting Essex County Prosecutor Robert D. Laurino, with the investigation leading to today’s guilty plea.

 

The government is represented by Senior Litigation Counsel Robert Frazer, Assistant U.S. Attorney Courtney Howard of the Organized Crime/Gangs Unit, and Assistant U.S. Attorney Desiree Grace Latzer of the General Crimes Unit.

 

Defense counsel:

Farad Roland: Richard Jasper Esq. and Michael Bachrach Esq., New York; and Stephen Turano Esq., Newark

TRENTON, N.J. –The owner of a New Jersey trucking company was sentenced today to 18 months in prison for committing tax evasion and bankruptcy fraud while operating his wine delivery business, U.S. Attorney Craig Carpenito announced.

Giacomo Giorlando, 54, of Morganville, New Jersey, previously pleaded guilty before U.S. District Judge Peter G. Sheridan to an information charging him with three counts of tax evasion and one count of bankruptcy fraud. Judge Sheridan imposed the sentence today in Trenton federal court.

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

As an owner of 4 G’s Trucking, Giorlando comingled business revenue with his personal funds, utilized a check-casher to cash business checks, deposited the proceeds of his business into various bank accounts, and then significantly inflated expenses to reduce his taxable income for the years 2011, 2012 and 2014. He admitted he was responsible for a $460,012 tax loss from those three years.

When Giorlando filed for bankruptcy in May 2014, he failed to accurately report his assets from at least 10 accounts at TD Bank and one account at Provident Bank that he maintained during the time frame covered by the bankruptcy. The bankruptcy was approved based upon this false and incomplete information. He was discharged on March 13, 2015.

In addition to the prison term, Judge Sheridan sentenced Giorlando to three years of supervised release and ordered him to pay $750,000 in restitution to the IRS and $65,000 to victims of the fraud.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher, and IRS–Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation.

The government is represented by Senior Litigation Counsel V. Grady O’Malley of the U.S. Attorney’s Office’s Criminal Division in Newark.

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

NEWARK, N.J. – The former owner and president of a Glassboro, New Jersey, drum reconditioning company was indicted today for allegedly illegally storing and disposing of hazardous waste, U.S Attorney Craig Carpenito and Acting Assistant Attorney General Jeffrey H. Wood of the Environment and Natural Resources Division of the U.S. Department of Justice, announced.

Thomas Toy, 73, of Elmer, New Jersey, was charged with one count of illegal storage and disposal of hazardous waste at the site of Superior Barrel and Drum Company Inc. (Superior) in Glassboro, New Jersey, in violation of the Resource Conservation and Recovery Act (RCRA).

According to the Indictment:

Superior received drums from various industrial customers, cleaned and processed those drums, and then resold them. Toy directed and supervised the operations of Superior, including the storage and disposal of large amounts of waste – including hazardous waste – at the company’s site. Superior did not have a permit to store or dispose of hazardous waste there. From Sept. 27, 2013, to Sept. 25, 2014, the U.S. Environmental Protection Agency (EPA) removed waste stored at Superior’s site. Approximately 1,800 containers of waste were removed, and much of the waste was found to be hazardous. The EPA’s removal cost was $4.2 million.

Toy was charged under RCRA, which was enacted in 1976 to address a growing nationwide problem with industrial and municipal waste. The law is designed to protect human health and the environment and provided controls on the management and disposal of hazardous waste. It prohibits the treatment, storage or disposal of any hazardous waste without a permit.

The charge on which Toy was indicted carries a maximum penalty of five years in prison and a maximum fine of $250,000 or twice the gain or loss caused by the offense.

U.S. Attorney Carpenito credited special agents of the U.S. Environmental Protection Agency-Office of Criminal Enforcement, under the direction Special Agent in Charge Tyler C. Amon, with the investigation leading to today’s charge.

The government is represented by Assistant U.S. Attorney Kathleen P. O’Leary of the Health Care and Government Fraud Unit in Newark and Trial Attorney Adam Cullman of the Environmental Crimes Section of the U.S. Department of Justice.

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

CAMDEN, N.J. - A Vineland, New Jersey, man today admitted stealing a car and using it as part of a South Jersey bank robbery spree in September and October 2016, U.S. Attorney Craig Carpenito announced.

Nathan L. Wallace, 29, pleaded guilty before U.S. District Judge Renée Marie Bumb to an information charging him with three counts of bank robbery. Wallace has been in custody since his arrest in October 2016.

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

Wallace admitted stealing a 2003 Chrysler Sebring on Sept. 22, 2016 by threatening the victim with a toy revolver resembling an actual firearm. Wallace also admitted taking the Sebring on Sept. 24, 2016 to a BB & T Bank in Buena Vista Township, New Jersey, where he used the toy revolver to threaten bank employees and demand money. After taking cash from the employees, Wallace fled in the Sebring.

Wallace also admitted traveling in the same stolen Sebring with Quintin L. Jones, 35, of Vineland, to rob a Newfield National Bank in Newfield, New Jersey, on Oct. 7, 2016, and a Cape Bank in Upper Deerfield Township, New Jersey, on Oct. 11, 2016. During both robberies, one of the defendants used a toy revolver to threaten bank employees and steal money before they both fled in the stolen Searing.

In addition, Wallace admitted that he and Jones set fire to the Sebring on Oct. 15, 2016 in order to destroy evidence of the robberies.

Each bank robbery count is punishable by a maximum potential penalty of 20 years in prison and a $250,000 fine. Wallace’s sentencing is set for April 30, 2018.

Jones pleaded guilty on Nov. 8, 2017 and is scheduled to be sentenced on March 23, 2018.

U.S. Attorney Carpenito credited special agents of the FBI’s Atlantic City Resident Agency, under the direction of Special Agent in Charge Timothy Gallagher in Newark, the FBI’s South Jersey Resident Agency, under the direction of Special Agent in Charge Michael Harpster in Philadelphia, the N.J. State Police, under the direction of Acting Superintendent Col. Patrick J. Callahan, as well as the Vineland Police Department, the Hamilton Township Police Department, the Newfield Police Department, the Cumberland County Prosecutor’s Office, and the Salem County Prosecutor’s Office, with the investigation.

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

Defense counsel: Maggie F. Moy Esq., Camden

NEWARK, N.J. – A Marlboro, New Jersey, man was charged today for his role in a conspiracy to falsely bill public and private insurance providers for medications that were never dispensed to patients, U.S. Attorney Craig Carpenito announced.

Ruben Sevumyants, 34, is charged by criminal complaint with one count of conspiracy to commit health care fraud. He appeared today before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court and was released on $100,000 unsecured bond.

According to the complaint: 

From June 2014 through Sept. 11, 2017, Sevumyants worked as the operations manager for a specialty pharmacy in Union City, New Jersey.  

While employed at the pharmacy, Sevumyants allegedly forged documents and submitted false bills to Medicare, Medicaid, and other payors for medications that were never actually dispensed to patients. When health insurance providers, such as Amerihealth Caritas and Connecticut Medicaid, questioned the specialty pharmacy and Sevumyants about charges for medications that patients never received, Sevumyants allegedly forged Federal Express shipping records to make it appear that the medications were shipped to the patients.

Based on billing and shipping records, the specialty pharmacy received over $1.5 million from health insurance providers for prescriptions that were never actually dispensed to patients.

The count of conspiracy to commit health care fraud carries a maximum potential penalty of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; and the U.S. Department of Health and Human Services – Office of the Inspector General, under the direction of Special Agent in Charge Scott J. Lampert, with the ongoing investigation.

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

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

The New Jersey U.S. Attorney’s Office reorganized its health care practice in 2010 and created a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since that time, the office has recovered more than $1.38 billion in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.

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Defense Counsel: Thomas Calcagni Esq., Newark

 

NEWARK, N.J. – A man and woman from Middlesex County, New Jersey, were arrested today for their alleged participation in a credit card fraud and aggravated identity theft conspiracy, U.S. Attorney Craig Carpenito announced.

Henry Abdul, 30, and Alexus Omowole, 22, both of North Brunswick, New Jersey, are each charged by complaint with one count of bank fraud conspiracy and one count of aggravated identity theft. Abdul and Omowole are expected to make their initial appearances this afternoon before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court.

According to the complaint:

Between October 2015 and the present, Abdul and Omowole 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. 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 criminal. 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 criminal control of the account without the actual account owners’ knowledge or authorization, and may permit the criminal to receive new credit cards associated with the compromised accounts. Once in control of the account, the criminals profit by using the compromised accounts to make purchases, transfer funds to other accounts under the criminal’s control, or sell the account information to third parties.

In this case, 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.

The bank fraud conspiracy charge carries a maximum potential penalty of 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.

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 Michael McCarthy 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 arrests.

The government is represented by Assistant U.S. Attorneys David M. Eskew and Nicholas Grippo 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 presumed innocent unless and until proven guilty

NEWARK, N.J. – A former IRS attorney appeared in federal court today to face charges related to his alleged unauthorized use of a federal agency identification card during multiple traffic stops, U.S. Attorney Craig Carpenito announced.

Deon Owensby, 42, of Trenton, New Jersey, is charged by criminal complaint with one count of impersonating a federal officer and one count of possessing an official identification card of a federal agency without authorization. He appeared today before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court and was released on $20,000 unsecured bond.

According to the complaint:

From August 2015 to April 2017, after the termination of his employment with the IRS, Owensby allegedly pretended to be an IRS employee and displayed federal employee identification, including an official IRS identification card known as an “IRS Pocket Commission,” to law enforcement officers after committing traffic violations.

Owensby obtained the IRS Pocket Commission during his employment as an attorney with the IRS. The IRS Pocket Commission, which IRS employees use as a means of identifying 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, Owensby told his supervisor that it was stolen.

Afterwards, Owensby allegedly displayed the IRS Pocket Commission or some form of federal employee identification to state or local police on three separate occasions from August 2015 to April 2017 after he was stopped for committing traffic infractions, once by a Millburn police officer and twice by N.J. State Police officers. During one of the encounters, Owensby claimed that the IRS Pocket Commission was still valid even after the police officer pointed out that the expiration date on it had passed.  

The count of impersonating a federal officer is punishable by a maximum potential penalty of three years in prison and a $250,000 fine. 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. 
 
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 Acting 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 Jihee G. Suh of the U.S. Attorney Office’s Special Prosecutions Division in Newark.   

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

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

NEWARK, N.J. – A Passaic County, New Jersey, man today admitted embezzling millions of dollars from a New York-based hospitality company where he was the chief operating officer, U.S. Attorney Craig Carpenito announced.

George Dfouni, 47, of Wayne, New Jersey, pleaded guilty before U.S. District Judge Katharine S. Hayden in Newark federal court to an information charging him with one count of wire fraud and one count of tax evasion. He was released on $150,000 unsecured bond.

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

From 1996 through 2015, Dfouni worked as the chief operating officer for a company identified in the information as “Company A,” which owns and operates hotels in New York and New Jersey.

From 2007 through September 2015, Dfouni negotiated multiple contracts on behalf of Company A, whereby two other companies – identified as “Company B” and “Company C” in the information – leased New York hotel properties from Company A. As consideration for the leases, Company B and Company C agreed to pay millions of dollars to Company A. Each contract included a signing bonus for Dfouni, who arranged for Company B and Company C to transmit their payments directly to him in New Jersey.

Dfouni was expected to keep his signing bonus and pay the remaining balances to Company A. Instead, Dfouni skimmed a portion of the payments due to Company A to support his lavish lifestyle and gambling expenses. In total, Dfouni embezzled approximately $13,807,034 from Company A.

In addition, Dfouni willfully failed to report $27,739,114 in income to the IRS between 2007 and 2014, including the funds that he embezzled from Company A.

The wire fraud charge is punishable by a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. The tax evasion charge is punishable by a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for April 30, 2018.

U.S. Attorney Carpenito credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, and special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, with the investigation leading to today’s plea.

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

Defense counsel: Peter Carter Esq., Newark, New Jersey 

NEWARK, N.J. – A Staten Island, New York, man was sentenced today to 30 months in prison for attempting to distribute more than $2.5 million of counterfeit UGG-brand boots that were shipped into the Port of Newark, U.S. Attorney Craig Carpenito announced.

Shi Wei Zheng, 42, previously pleaded guilty before U.S. District Judge John Michael Vazquez to an information charging him with one count of trafficking in counterfeit goods. Judge Vazquez imposed the sentence today in Newark federal court.

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

From September 2016 through February 2017, Zheng received certain shipping container numbers from an individual overseas that identified at least three containers containing counterfeit UGG boots. Cheng 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, Zheng directed that they be delivered to other individuals working for him, who would then distribute the boots in New Jersey and elsewhere.

However, before Zheng could distribute the goods, law enforcement intercepted the containers, examined their contents, and determined the boots were counterfeit. At no time was Zheng authorized to import authentic or counterfeit UGG merchandise.

In total, Zheng trafficked in over 15,000 pairs of counterfeit UGG boots, with a total estimated retail value of over $2.5 million. Zheng also paid individuals over $50,000 in exchange for the delivery of the containers.

In addition to the prison sentence, Judge Vazquez sentenced Zheng to two years of supervised release.

U.S. Attorney Carpenito credited special agents of U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), Newark Field Office, under the direction of Acting Special Agent in Charge Michael McCarthy, and U.S. Customs and Border Protection (CBP), under the direction of Acting Director of Field Operations Leon Hayward, New York Field Office, 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: Scott B Tulman Esq., New York
 

The U.S. Attorney’s Office for the District of New Jersey and the Justice Department’s Civil Rights Division hosted a roundtable today for community organizations, U.S. Attorney Craig Carpenito announced.

The event included local law enforcement agencies, legal aid offices, fair housing organizations, shelters and transitional housing providers. Each organization was invited because they often work with New Jersey’s most vulnerable populations, who could also become victims of sexual harassment in housing.

“Sexual harassment in housing situations might not be as visible as harassment in the workplace, but can be just as egregious,” U.S. Attorney Carpenito said. “Landlords and superintendents using the power they have over tenants to extort sexual favors, or even commit assaults, is intolerable. We’re extremely proud that New Jersey is holding one of the first community discussions about how to combat the problem.”

In October 2017, the Justice Department’s Civil Rights Division announced the Sexual Harassment Initiative, an effort to combat sexual harassment in housing. The Civil Rights Division launched a pilot of the initiative in two jurisdictions—Washington, DC and western Virginia—where it is working with legal service providers and local law enforcement to raise awareness about this issue.

As part of the pilot, the Civil Rights Division and the United States Attorney’s Office for the District of Columbia hosted a summit on November 9, 2017. The summit convened representatives from the Executive Office of the Mayor of the District of Columbia, Metropolitan Police Department, Office of Human Rights (Washington, D.C.), Office of the Tenant Advocate (Washington, D.C.), Office of the Attorney General for the District of Columbia, Office of Congresswoman Eleanor Holmes Norton, and U.S. Department of Housing and Urban Development.

The U.S. Attorney’s Office for the District of New Jersey is the first office outside of the Sexual Harassment Initiative’s pilot program to host a roundtable on these issues. The office is collaborating with the Civil Rights Division to spread the word about options to help victims experiencing sexual harassment. Our community organizations, such as local law enforcement, legal aid offices, fair housing organizations, shelters and transitional housing providers can identify the misconduct and recommend that victims report sexual harassment to the Civil Rights Division.

The Department of Justice, through the U.S. Attorney’s Offices and the Civil Rights Division, enforces the Fair Housing Act, which prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin, and disability. Sexual harassment is a form of sex discrimination prohibited by the Act.

While most people are familiar with the problem of sexual harassment in the workplace, harassment also occurs in the housing context, and the Fair Housing Act prohibits it. Sexual harassment by landlords, property managers, maintenance workers, and others with power over housing often affects the most vulnerable populations – single mothers, women who are financially unstable, and women who have suffered sexual violence in their past. And these women often do not know where to turn for help.

The Justice Department brings cases each year involving egregious conduct, including allegations that defendants have exposed themselves sexually to current or prospective tenants, requested sexual favors in exchange for reduced rents or making necessary repairs, made unrelenting and unwanted sexual advances to tenants, and evicted tenants who resisted their sexual overtures.

In 2017, the Justice Department recovered for harassment victims more than $1 million in damages.  Many instances of sexual harassment in housing continue to go unreported. The Justice Department’s investigations frequently uncover sexual harassment that has been ongoing for years or decades and identify numerous victims who never reported the conduct to federal authorities.

In remarks this week at the “Conversation with the Women of America” event in Washington, D.C., Associate Attorney General Rachel Brand addressed the issue:

“We want women – and men – to know that if this happens to them, there is someone they can call,” Associate Attorney General Brand said. “No one should have to choose between sexual abuse and losing the roof over her head.”

 Not only should victims of sexual harassment be aware of the Justice Department’s enforcement efforts, but people or organizations they may tell about the sexual harassment should also be aware where to refer them to report the misconduct.  Local police departments or legal aid offices may be able to help survivors, if the behavior is a crime or if there is an imminent eviction. Therefore, organizations should also recommend that the victim report the harassment to the Civil Rights Division and the U.S. Attorney’s Office.

The Justice Department’s initiative seeks to identify barriers to reporting sexual harassment in housing, increase awareness of its enforcement efforts – both among victims and those they may report to – and collaborate with federal, state, and local partners to increase reporting and help women quickly and easily connect with federal resources. The Department encourages anyone who has experienced sexual harassment in housing, or knows someone who has, to contact the Division by calling (844) 380-6178 or emailing: fairhousing@usdoj.gov .

Individuals who believe they may have been victims of discrimination may also file a complaint with the U.S. Attorney’s Office at: http://www.justice.gov/usao-nj/civil-rights-enforcement/complaint or may call the U.S. Attorney’s Office’s Civil Rights Complaint Hotline at (855) 281-3339.

NEWARK, N.J. – The U.S. Attorney’s Office for the District of New Jersey and the Justice Department’s Civil Rights Division hosted a roundtable today for community organizations, U.S. Attorney Craig Carpenito announced.

The event included local law enforcement agencies, legal aid offices, fair housing organizations, shelters and transitional housing providers. Each organization was invited because they often work with New Jersey’s most vulnerable populations, who could also become victims of sexual harassment in housing.

“Sexual harassment in housing situations might not be as visible as harassment in the workplace, but can be just as egregious,” U.S. Attorney Carpenito said. “Landlords and superintendents using the power they have over tenants to extort sexual favors, or even commit assaults, is intolerable. We’re extremely proud that New Jersey is holding one of the first community discussions about how to combat the problem.”

In October 2017, the Justice Department’s Civil Rights Division announced the Sexual Harassment Initiative, an effort to combat sexual harassment in housing. The Civil Rights Division launched a pilot of the initiative in two jurisdictions—Washington, DC and western Virginia—where it is working with legal service providers and local law enforcement to raise awareness about this issue.

As part of the pilot, the Civil Rights Division and the United States Attorney’s Office for the District of Columbia hosted a summit on November 9, 2017. The summit convened representatives from the Executive Office of the Mayor of the District of Columbia, Metropolitan Police Department, Office of Human Rights (Washington, D.C.), Office of the Tenant Advocate (Washington, D.C.), Office of the Attorney General for the District of Columbia, Office of Congresswoman Eleanor Holmes Norton, and U.S. Department of Housing and Urban Development.

The U.S. Attorney’s Office for the District of New Jersey is the first office outside of the Sexual Harassment Initiative’s pilot program to host a roundtable on these issues. The office is collaborating with the Civil Rights Division to spread the word about options to help victims experiencing sexual harassment. Our community organizations, such as local law enforcement, legal aid offices, fair housing organizations, shelters and transitional housing providers can identify the misconduct and recommend that victims report sexual harassment to the Civil Rights Division.

The Department of Justice, through the U.S. Attorney’s Offices and the Civil Rights Division, enforces the Fair Housing Act, which prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin, and disability. Sexual harassment is a form of sex discrimination prohibited by the Act.

While most people are familiar with the problem of sexual harassment in the workplace, harassment also occurs in the housing context, and the Fair Housing Act prohibits it. Sexual harassment by landlords, property managers, maintenance workers, and others with power over housing often affects the most vulnerable populations – single mothers, women who are financially unstable, and women who have suffered sexual violence in their past. And these women often do not know where to turn for help.

The Justice Department brings cases each year involving egregious conduct, including allegations that defendants have exposed themselves sexually to current or prospective tenants, requested sexual favors in exchange for reduced rents or making necessary repairs, made unrelenting and unwanted sexual advances to tenants, and evicted tenants who resisted their sexual overtures.

In 2017, the Justice Department recovered for harassment victims more than $1 million in damages.  Many instances of sexual harassment in housing continue to go unreported. The Justice Department’s investigations frequently uncover sexual harassment that has been ongoing for years or decades and identify numerous victims who never reported the conduct to federal authorities.

In remarks this week at the “Conversation with the Women of America” event in Washington, D.C., Associate Attorney General Rachel Brand addressed the issue:

“We want women – and men – to know that if this happens to them, there is someone they can call,” Associate Attorney General Brand said. “No one should have to choose between sexual abuse and losing the roof over her head.”

Not only should victims of sexual harassment be aware of the Justice Department’s enforcement efforts, but people or organizations they may tell about the sexual harassment should also be aware where to refer them to report the misconduct.  Local police departments or legal aid offices may be able to help survivors, if the behavior is a crime or if there is an imminent eviction. Therefore, organizations should also recommend that the victim report the harassment to the Civil Rights Division and the U.S. Attorney’s Office.

The Justice Department’s initiative seeks to identify barriers to reporting sexual harassment in housing, increase awareness of its enforcement efforts – both among victims and those they may report to – and collaborate with federal, state, and local partners to increase reporting and help women quickly and easily connect with federal resources. The Department encourages anyone who has experienced sexual harassment in housing, or knows someone who has, to contact the Division by calling (844) 380-6178 or emailing: fairhousing@usdoj.gov .

Individuals who believe they may have been victims of discrimination may also file a complaint with the U.S. Attorney’s Office at: http://www.justice.gov/usao-nj/civil-rights-enforcement/complaint or may call the U.S. Attorney’s Office’s Civil Rights Complaint Hotline at (855) 281-3339.

NEWARK, N.J. – U.S. Attorney Craig Carpenito announced today that the District of New Jersey collected $51.6 million in criminal and civil actions in Fiscal Year 2017.  Of this amount, $19.7 million was collected in criminal actions and $31.8 million was collected in civil actions. 

The District of New Jersey also worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $737.7 million in cases pursued jointly with these offices.  Of this amount, $155,000 was collected in criminal actions and $737.5 million was collected in civil actions.         

Overall, the Justice Department collected just over $15 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2017.

During the 2017 fiscal year, significant recoveries in the District of New Jersey included:

• $7.485 million as part of a civil settlement with Omnicare Inc. to resolve allegations that Omnicare, in an effort to increase business efficiency and profit, designed and implemented an automated label verification system that resulted in the submission by Omnicare of claims for generic drugs different from those actually dispensed to Medicare and Medicaid beneficiaries. It also resulted in the dispensing of drugs with patient-specific labels displaying the incorrect manufacturer or NDC.

 

• $4.47 million in cash and proceeds from the sale of real property in a large-scale home health care aide fraud case. Eight other real properties are in the process of being sold. 

 

• $1.22 million from bank accounts of individuals associated with a New Jersey company that alleged laundered millions in street cash for narcotics traffickers from Mexico and elsewhere. A total of approximately $2.7 million has been forfeited in the case to date.

 

In addition, $6.34 million in funds forfeited in 2017 and prior fiscal years was returned to victims of the criminal offenses upon which the forfeitures were based.  This included $4.8 million forfeited from a husband and wife who owned a mobile diagnostic testing company that received insurance reimbursements for diagnostic testing and reports that were never interpreted by a licensed physician.  The forfeited funds were used to compensate Medicare and private insurance companies in full for their losses.

The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims.  The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss.  While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.

The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws.  In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.

Additionally, the U.S. Attorney’s office in the District of New Jersey, working with partner agencies and divisions, collected $18.8 million in asset forfeiture actions in FY 2017.  Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.

Reality television personality Michael “The Situation” Sorrentino and his brother, Marc Sorrentino, pleaded guilty today to violating federal tax laws, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division, U.S. Attorney Craig Carpenito for the District of New Jersey and Internal Revenue Service Criminal Investigation (IRS CI) Special Agent in Charge Jonathan D. Larsen.

 

According to documents and information provided to the court, Michael Sorrentino, 36, pleaded guilty to one count of tax evasion and Marc Sorrentino, 38, pleaded guilty to one count of aiding in the preparation of a fraudulent tax return.

 

“Today’s pleas are a reminder to all individuals to comply with the tax laws, file honest and accurate returns and pay their fair share,” said Principal Deputy Assistant Attorney General Zuckerman. “The Tax Division is committed to continuing to work with the IRS to prosecute those who seek to cheat the system, while honest hardworking taxpayers play by the rules.”

 

“What the defendants admitted to today, quite simply, is tantamount to stealing money from their fellow taxpayers,” said U.S. Attorney Carpenito. “All of us are required by law to pay our fair share of taxes. Celebrity status does not provide a free pass from this obligation.”

 

 “As we approach this year’s filing season, today’s guilty pleas should serve as a stark reminder to those who would attempt to defraud our nation’s tax system,” stated Jonathan D. Larsen, Special Agent in Charge, IRS-Criminal Investigation, Newark Field Office.  “No matter what your stature is in our society, everyone is expected to play by the rules, and those who do not will be held accountable and brought to justice.”

 

Michael Sorrentino was a reality television personality who gained fame on “The Jersey Shore,” which first appeared on the MTV network.  According to documents and information provided to the court, he and his brother, Marc, created businesses, such as MPS Entertainment LLC and Situation Nation Inc., to take advantage of Michael’s celebrity status. 

 

Michael Sorrentino admitted that in tax year 2011, he earned taxable income, including some that was paid in cash, and that he concealed a portion of his income to evade paying the full amount of taxes he owed.  He also made cash deposits into bank accounts in amounts less than $10,000, in an effort to ensure that these deposits would not come to the attention of the IRS. 

 

Marc Sorrentino admitted that for tax year 2010, he earned taxable income and that he assisted his accountants in preparing his personal tax return by willfully providing them with false information and fraudulently underreporting his income. 

 

U.S. District Judge Susan D. Wigenton scheduled sentencing for April 25.  Michael Sorrentino faces a statutory maximum sentence of five years in prison for tax evasion. Marc Sorrentino faces a statutory maximum sentence of three years in prison for aiding in the preparation of a fraudulent tax return. Both also face a period of supervised release, restitution and monetary penalties.  Gregg Mark, the accountant for the Sorrentino brothers, previously pleaded guilty in 2015 to conspiring to defraud the United States with respect to their tax liabilities.  

 

Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Carpenito praised special agents of IRS CI, who conducted the investigation, and Trial Attorneys Yael T. Epstein and Jeffrey B. Bender of the Tax Division of the U.S. Department of Justice and Assistant U.S. Attorney Jonathan W. Romankow, who are prosecuting the case.

 

Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.

NEWARK, N.J. – Television personality Michael “The Situation” Sorrentino and his brother, Marc Sorrentino, both admitted today to violating federal tax laws, U.S. Attorney Craig Carpenito, District of New Jersey; Principal Deputy Assistant Attorney General Richard E. Zuckerman of the U.S. Department of Justice, Tax Division; and IRS Special Agent in Charge Jonathan D. Larsen announced.

Michael Sorrentino, 36, pleaded guilty to Count 13 of the superseding indictment, which charges him with tax evasion. Marc Sorrentino, 38, pleaded guilty to Count 5, which charges him with aiding in the preparation of a false and fraudulent tax return. The brothers entered their guilty pleas before U.S. District Judge Susan D. Wigenton in Newark federal court.

“What the defendants admitted to today, quite simply, is tantamount to stealing money from their fellow taxpayers,” U.S. Attorney Carpenito said. “All of us are required by law to pay our fair share of taxes. Celebrity status does not provide a free pass from this obligation.”

“As we approach this year’s filing season, today’s guilty pleas should serve as a stark reminder to those who would attempt to defraud our nation’s tax system,” Jonathan D. Larsen, Special Agent in Charge, IRS-Criminal Investigation, Newark Field Office, said. “No matter what your stature is in our society, everyone is expected to play by the rules, and those who do not will be held accountable and brought to justice.”

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

Michael Sorrentino was a reality television personality who gained fame on “The Jersey Shore,” which first appeared on the MTV network. He and his brother, Marc, created businesses, such as MPS Entertainment LLC and Situation Nation Inc., to take advantage of Michael’s celebrity status. 

Michael Sorrentino admitted that in tax year 2011, he earned taxable income, including some that was paid in cash, and that he took certain actions to conceal some of his income to avoid paying the full amount of taxes he owed. He made cash deposits into bank accounts in amounts less than $10,000 each so that these deposits would not come to the attention of the IRS. 

Marc Sorrentino admitted that during tax years 2010, 2011 and 2012, he earned taxable income and that he assisted his accountants in preparing his personal tax return for those years, willfully providing them with false information. His personal tax returns under-reported his total income and taxable income.

The tax evasion charge to which Michael Sorrentino pleaded guilty carries a maximum penalty of five years in prison. The charge of aiding in the preparation of false and fraudulent tax return to which Marc Sorrentino pleaded guilty carries a maximum penalty of three years in prison. Both charges are punishable by a potential $250,000 fine. Sentencing is scheduled for April 25, 2018.

U.S. Attorney Carpenito and Principal Deputy Attorney General Zuckerman credited special agents of the IRS, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s guilty pleas.

The government is represented by Assistant U.S. Attorney Jonathan W. Romankow of the U.S. Attorney’s Office Criminal Division in Newark; Trial Attorneys Yael T. Epstein and Jeffrey B. Bender of the Tax Division of the U.S. Department of Justice.

The Department of Justice announced today that a federal court in New Jersey imposed a $5 million civil penalty and entered a consent decree of permanent injunction against Dr. Reddy’s Laboratories Inc.  Dr. Reddy’s is the North American subsidiary of Dr. Reddy’s Laboratories Limited, a pharmaceutical company headquartered in India.  The case involves allegations that Dr. Reddy’s failed to comply with the Poison Prevention Packaging Act (PPPA) and the Consumer Product Safety Act (CPSA).  Under the terms of the consent decree, Dr. Reddy’s will implement a compliance program designed to ensure compliance with the PPPA and the CPSA. 

 

The Department filed a complaint in the District of New Jersey on Dec. 18, 2017 on behalf of the Consumer Product Safety Commission (CPSC).  As alleged in the complaint, Dr. Reddy’s knowingly violated the CPSA with respect to household oral prescription drugs in blister packs that were not child resistant as required by the PPPA.  As set forth in the complaint, Dr. Reddy’s distributed such prescription drugs until 2012, despite being previously warned by its own employees that the blister packs had not been tested for PPPA compliance and that certain blister packs were expected to fail the PPPA’s child test protocol.

 

In addition, the complaint charges that Dr. Reddy’s failed to notify the CPSC “immediately,” as required by law, that its products were not compliant with the PPPA, that the products contained a defect presenting a substantial product hazard, and that the products created an unreasonable risk of serious injury or death.  The complaint further asserts that Dr. Reddy’s failed to certify that its products were in conformance with the PPPA.

 

“Dr. Reddy’s failed to ensure that children were protected from potentially harmful prescription drugs,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “The government will continue to take seriously alleged violations of laws meant to protect consumer safety.”

 

“Child-resistant packaging is a critical safety measure put in place to protect our country’s children,” said CPSC Acting Chairman Ann Marie Buerkle. “I appreciate and value the support from and collaboration with the Department of Justice.”

 

In addition to the $5 million civil penalty, the consent decree generally enjoins Dr. Reddy’s from distributing household oral prescription drugs in violation of the PPPA and CPSA and requires Dr. Reddy’s to implement a compliance program.  The injunction further requires Dr. Reddy’s to maintain internal controls and procedures designed to ensure timely, truthful, complete, and accurate reporting to the CPSC as required by law. 

 

In agreeing to settle this matter, Dr. Reddy’s has not admitted that it violated the law.

 

The matter is being jointly handled by Trial Attorneys Claude Scott and Shannon Pedersen, from the Civil Division’s Consumer Production Branch. Assistant U.S. Attorney in the Eastern District of Pennsylvania Judith Amorosa, Assistant U.S. Attorney in the District of New Jersey Charles Graybow, and Patricia Vieira with the CPSC’s Office of the General Counsel, provided significant assistance.

 

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

CAMDEN, N.J. – An Audubon, New Jersey, woman was sentenced today to 144 months in prison for conspiring with her former boyfriend to produce sexually explicit images of two children, U.S. Attorney Craig Carpenito announced. 
 
Janine Kelley, 36, previously pleaded guilty before U.S. District Judge Jerome B. Simandle to an information charging her with one count of conspiring with Alexander Capasso, 44, of Collingswood, New Jersey, to engage in the sexual exploitation of two children. Judge Simandle imposed the sentence today in Camden federal court.

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

Kelley, a registered nurse, entered into a sexual relationship with Capasso in or about 2011, during which Capasso expressed an interest in engaging in sexual conduct with children. From November 2011 through October 2012 Kelley took, and allowed Capasso to take, recorded images of her engaged in sexually explicit conduct with two children. Kelley also took, or allowed Capasso to take, images of Capasso engaged in sexually explicit conduct with one of the children.  

In addition to the prison term, Judge Simandle sentenced Kelly to 10 years of supervised release.

Capasso previously pleaded guilty to his role in the conspiracy and was sentenced Jan. 17, 2018 to 20 years in prison.

U.S. Attorney Carpenito credited special agents of the FBI Philadelphia Division, under the direction of Special Agent in Charge Michael Harpster, and the FBI Washington D.C., Field Office, under the direction of Assistant Director in Charge Andrew Vale, with the investigation.

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

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

NEWARK, N.J. – A Long Valley, New Jersey, man today admitted writing illegal prescriptions for oxycodone and conspiring to bill Medicare and Medicaid for certain allergy tests without performing the required patient examinations, U.S. Attorney Craig Carpenito announced.

    Jose Leyson, 71, of Long Valley, New Jersey, pleaded guilty before U.S. District Judge William J. Martini in Newark federal court to an information charging him with one count of illegally distributing oxycodone and one count of conspiracy to commit health care fraud. 

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

Leyson was a physician specializing in urology who owned and served as the medical director of a clinic in Newark. The medical clinic purportedly provided various services to patients, including pain management and allergy testing.

On four occasions between Nov. 11, 2013 and Jan. 6, 2014, Leyson illegally sold prescriptions for oxycodone to a confidential source acting at law enforcement’s direction. In each instance, Leyson wrote these prescriptions without performing any medical treatment or patient examination and in exchange for cash payments or access to welfare benefits. In total, Leyson provided the confidential source with oxycodone 30 mg prescriptions for at least 420 pills.

In addition, from April 2010 to January 2013, Leyson and others at the medical clinic conspired to submit phony bills to Medicare and Medicaid for certain allergy tests that Leyson prescribed without examining the patients to determine if the tests were medically necessary. As a result, Leyson and the other conspirators were able to fraudulently obtain at least $30,000 from Medicare and Medicaid.

The unlawful distribution of oxycodone charge carries a maximum potential penalty of 20 years in prison and a $1 million fine, or twice the gross gain or loss from the offense. The healthcare fraud conspiracy charge carries a maximum potential penalty of 10 years in prison and a $250,000 fine. Leyson’s sentencing is scheduled for April 26, 2018.
 
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, and the U.S. Department of Health and Human Services – Office of the Inspector General, under the direction of Special Agent in Charge Scott J. Lampert.

The government is represented by Assistant U.S. Attorney Bernard J. Cooney of the U.S. Attorney’s Criminal Division in Newark.

Defense counsel: John Roberts Esq., Chatham, New Jersey.

NEWARK, N.J. – Four women appeared in federal court today to face charges of running an oxycodone distribution conspiracy in Flemington, New Jersey, and elsewhere, U.S. Attorney Craig Carpenito announced.

Alicia Balaban, 35, of Wellington, Florida, Michele Call, 63, of Flemington, Nelida Rios, 55, of Flemington, and Marie DeJulia, 42, of Lodi, New Jersey, are each charged by criminal complaint with one count of conspiracy to distribute oxycodone. 

Balaban was arrested this morning in Wellington and appeared before U.S. Magistrate Judge James J. Hopkins in West Palm Beach federal court. Call, DeJulia, and Rios were taken into custody this morning in New Jersey and appeared this afternoon before U.S. Magistrate Judge Mark Falk in Newark federal court. All four defendants were released on bail.

According to the complaint:

Balaban, who is Calls’s daughter and DeJulia’s friend, is the alleged leader of the drug trafficking conspiracy. From April 2016 through January 2018, Balaban, Call, and Rios allegedly worked together to secure prescriptions for oxycodone, fill them at pharmacies in Flemington, and then distribute the pills to DeJulia from Call and Rios’s Flemington residences. The conspirators allegedly distributed thousands of 30 mg oxycodone pills.  

The drug distribution conspiracy charge carries a a maximum potential penalty of 20 years in prison and a $1 million fine.

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

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 Assistant U.S. Attorney Danielle Alfonzo Walsman of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark.

Defense counsel:  DeJulia: Steven Lember Esq., Flemington
Balaban: Michael Caruso Esq., Federal Public Defender, Southern District of Florida
Call: Linda Foster Esq., Assistant Federal Public Defender, Newark
Rios: Linwood A. Jones Esq., East Orange, New Jersey    
 

TRENTON, N.J. B A Florida man who admitted trading on material, nonpublic information concerning Gilead Sciences Inc.’s $11 billion acquisition of New Jersey-based Pharmasset Inc. was sentenced today to 12 months and one day in prison, U.S. Attorney Craig Carpenito  announced.

Jay Fung of Delray Beach, Florida, previously pleaded guilty before U.S. District Judge Anne E. Thompson to an information charging him with conspiracy to commit securities fraud. Judge Thompson imposed the sentence today in Trenton federal court.

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

In November 2011, a conspirator who worked at a global wealth management firm learned that Pharmasset was going to be sold for a significant profit per share. On Nov. 18, 2011, the conspirator passed the inside information to Fung, who then purchased call options and shares of Pharmasset.

On Nov. 21, 2011, Gilead publicly announced that it had entered into an agreement to acquire Pharmasset for approximately $11 billion, or $137 per share in cash. The purchase price represented an approximately 89 percent premium over Pharmasset’s closing price of $72.67 on Nov. 18, 2011.

Following the public announcement of Gilead’s acquisition of Pharmasset, Fung sold the Pharmasset shares and options he had purchased on Nov. 18, 2011, for total illegal profits of more than $250,000.

In addition to the prison term, Judge Thompson sentenced Fung to three years of supervised release. He has already forfeited $345,245.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, with the investigation leading to today’s sentencing. He also thanked the SEC for the assistance provided by its Market Abuse Unit, under the direction of Joseph Sansone and Robert Cohen, and its Philadelphia Regional Office, under the direction of Sharon Binger.

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

Today’s sentencing is part of efforts underway by the Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed more than18, 000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov

CAMDEN, N.J. – A Collingswood, New Jersey, man was sentenced today to 240 months in prison for conspiring with his former girlfriend to produce sexually explicit images of two children, U.S. Attorney Craig Carpenito announced.

Alexander Capasso, 44, previously pleaded guilty before U.S. District Judge Jerome B. Simandle to Count One of an indictment charging him with conspiring with Janine Kelley, 36, of Audubon, New Jersey, to engage in the sexual exploitation of children. Judge Simandle imposed the sentence today in Camden federal court. Capasso has been in federal custody since his July 20, 2015 arrest.

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

Capasso began a sexual relationship with Kelley in 2010. During that relationship, Capasso took, or allowed Kelley to take, recorded images of Capasso engaged in sexually explicit conduct with a child. Capasso also took, or allowed Kelley to take, recorded images of Kelley engaged in sexually explicit conduct with two children. 

In addition to the prison term, Judge Simandle sentenced Capasso to a lifetime of supervised release.

Kelley has also pleaded guilty to her role in the conspiracy and is scheduled to be sentenced Jan. 19, 2018. 

U.S. Attorney Carpenito credited special agents of the FBI Philadelphia Division, under the direction of Special Agent in Charge Michael Harpster, and the FBI Washington D.C., Field Office, under the direction of Assistant Director in Charge Andrew Vale, with the investigation.

The government is represented by Assistant U.S. Attorneys Diana Carrig and Sara Aliabadi of the U.S. Attorney’s Office Criminal Division in Camden. 
 
Defense counsel: Terri Lodge Esq., Cinnaminson, New Jersey

NEWARK, N.J. – An Elizabeth, New Jersey, man today admitted robbing four banks in January 2017, including a TD Bank in Bergen County, New Jersey, U.S. Attorney Craig Carpenito announced today.  
                        
Israel Cosme, 36, pleaded guilty before U.S. District Judge Esther Salas in Newark federal court to an information charging him with four counts of bank robbery. Cosme was originally arrested Jan. 24, 2017 in connection with two of the bank robberies committed in Maryland.

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

Cosme admitted that on Jan. 15, 2017, he robbed a TD Bank in Little Ferry, New Jersey. During the robbery, Cosme verbally demanded money and told a teller that he would shoot her if she didn’t comply.

Cosme also admitted robbing a TD Bank in New York on Jan. 12, 2017; a TD Bank in Essex, Maryland, on Jan. 22, 2017; and a TD Bank in Baltimore, Maryland, on Jan. 23, 2017. During all three of these robberies, Cosme handed tellers a note demanding money and stating that he had a gun.
    
Each bank robbery charge carries a maximum potential penalty of 20 years in prison and a $250,000 fine. Sentencing is scheduled for May 7, 2018.
            
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, with the investigation. He also thanked the Little Ferry Police Department, under the direction of Chief Ralph Verdi, for its 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: K. Anthony Thomas Esq., Assistant Federal Public Defender, Newark
 

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

Zachary Motta, 23, of Iselin, New Jersey, pleaded guilty before U.S. District Judge Freda L. Wolfson to an information charging him with one count of online enticement of a minor to engage in criminal sexual activity.

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

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

The count to which Motta pleaded guilty carries a mandatory minimum of 10 years in prison, a maximum of life in prison and a fine of $250,000, or twice the gross gain or loss caused by the offense. Sentencing is scheduled for May 10, 2018.

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

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

NEWARK, N.J. – A suspended Essex County, New Jersey, lawyer was sentenced today to three years’ probation, including 10 months of home confinement, for failing to pay personal and employment payroll taxes, U.S. Attorney Craig Carpenito announced.

Richard Roberts, 80, of Bloomfield, New Jersey, previously pleaded guilty before U.S. District Judge U.S. District Judge Esther Salas to an information charging him with one count of failing to pay payroll taxes and one count of failing to pay personal income taxes. Judge Salas imposed the sentence today in Newark federal court.

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

Roberts was the sole owner of legal practice he operated out of a law office in Newark. He maintained at least one employee, besides himself, and managed all aspects of the law office. Roberts was required to deduct and withhold federal income and insurance taxes from his employees’ wages. He was required to prepare and file quarterly forms that reported to the IRS the total amount of wages paid by an employer to all employees (Forms 941). Roberts was required to pay the employer’s portion of the payroll tax to the IRS. For the 12 quarters of the tax years 2009 through 2011, Roberts failed to make any payroll tax payment to the IRS. In each quarter, Roberts either failed to file a Form 941 or failed to pay the payroll tax reflected on the form.

Roberts has not paid personal income taxes since at least 2000. On June 24, 2012, Roberts filed a tax return for the tax years 2007 through 2010, listing the amount of tax due on each return. For example, on the 2010 tax return, Roberts listed a tax due of $20,361, but he has to date failed to pay the tax for tax years 2007 through 2010.

In addition to the probationary term, Judge Salas sentenced Roberts to 100 hours of community service and ordered him to pay $224,962 in restitution.

U.S. Attorney Carpenito credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, and investigators of the U.S. Attorney’s Office with the investigation leading to today’s sentencing.

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

Defense counsel: Lisa Mack Esq., Assistant Federal Public Defender, Newark

TRENTON, N.J. – Two Trenton men were sentenced today to prison terms for their respective roles in a drug trafficking organization that distributed hundreds of grams of heroin in the Trenton area, U.S. Attorney Craig Carpenito announced.

Ishmael Abdullah, a/k/a “Ish,” a/k/a “Gangsta,” a/k/a “Papi,” 27, pleaded guilty on Aug. 16, 2017, before U.S. District Judge Freda L. Wolfson in Trenton federal court to an information charging him with one count of conspiracy to distribute and possess with intent to distribute 100 grams or more of heroin and one count of unlawful possession of a firearm by a convicted felon. He was sentenced to 176 months in prison.

Prince Sarnoe, 30, pleaded guilty on Sept. 8, 2017, before Judge Wolfson to an information charging him with one count of being a felon in possession of a firearm. He was sentenced to 120 months in prison.

In December 2016, Abdullah and nine other members of a drug trafficking organization operating in Trenton were charged by criminal complaint with conspiracy to distribute heroin. The complaint referred to the drug trafficking organization as the “Abdullah DTO” after the organization’s leader.

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

From May 2015 through December 2016, Abdullah and others participated in a drug trafficking organization that operated in the area of Spring and Passaic streets in the Trenton. Multiple members of the organization, including Sarnoe – a previously convicted felon – possessed and maintained access to firearms.

Through the authorized interception of telephone calls and text messages, controlled purchases of heroin, the use of confidential sources of information, and other investigative means, law enforcement learned that Abdullah was a leader of the organization and was responsible for obtaining significant quantities of heroin from multiple suppliers. Members of the Abdullah DTO used temporary prepaid phones, stash houses and cars, and spoke in code to avoid detection by law enforcement.
Abdullah admitted that he conspired with others to distribute at least 400 grams of heroin. Abdullah, who is a previously convicted felon, also admitted knowingly possessing a SCCY Industries CPX-2 firearm.

In addition to the prison term, Judge Wolfson sentenced Abdullah to five years of supervised release and Sarnoe to three years of supervised release.

U.S. Attorney Carpenito credited agents and officers with the Greater Trenton Safe Streets Task Force, including special agents of the FBI, Newark Division, Trenton Resident Agency, under the direction of Special Agent in Charge Timothy Gallagher; special agents of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), Newark Division, Trenton Field Office, under the direction of Special Agent in Charge John B. Devito; officers of the Trenton Police Department, under the direction of Director Ernest Parrey Jr.; officers of the Princeton Police Department, under the direction of Chief Nicholas Sutter; officers of the Ewing Police Department, under the direction of Chief John P. Stemler III; and detectives of the Mercer County Prosecutor’s Office, under the direction of Prosecutor Angelo J. Onofri, with the investigation leading to today’s sentencings.

He also thanked special agents of the FBI’s Philadelphia Field Office, under the direction of Special Agent in Charge Michael Harpster; special agents of Homeland Security Investigations, under the direction of Acting Special Agent in Charge Debra Parker; officers of the N.J. State Police, under the direction of Superintendent Col. Joseph R. Fuentes; and officers of the Mercer County Sheriff’s Office, under the direction of Sheriff John A. Kemler, for their assistance in the case.

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

Defense counsel: Abdullah: David E. Schafer Esq., Trenton
Sarnoe: John S. Furlong Esq., West Trenton, New Jersey

TRENTON, N.J. – A Perth Amboy, New Jersey, man today admitted stealing Social Security benefits that were mistakenly paid to his deceased great aunt, U.S. Attorney Craig Carpenito announced.

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

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 today that he took $184,936 in Social Security benefits to which he was not entitled.  

The charge to which Nelson pleaded guilty carries a maximum potential penalty of 10 years in prison and a $250,000 fine. As part of his plea agreement, Nelson must forfeit the $184,936 he stole from the Social Security Administration. Sentencing is scheduled for April 17, 2018.

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 plea.

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.

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

NEWARK, N.J. – A California man who swallowed plastic bags containing approximately 600 grams of heroin and later admitted that he possessed the drug with intent to distribute it was sentenced today to 30 months in prison, U.S. Attorney Craig Carpenito announced.

Omar Vasques, 24, of Bakersfield, California, previously pleaded guilty before U.S. District Court Judge John Michael Vazquez to an information charging him with one count of possession of heroin with intent to distribute and distribution of heroin. Judge Vazquez imposed the sentence today in Newark federal court.

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

On Sept. 15, 2016, Vasques landed at Newark Liberty International Airport on a commercial flight after having swallowed 81 “pellets” of heroin wrapped in plastic baggies. He intended to distribute the heroin after his arrival but was apprehended by law enforcement authorities, who escorted Vasques to a hospital. Vasques underwent emergency surgery after hospital staff discovered that one of the baggies had ruptured.

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

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher, and the Drug Enforcement Administration, under the direction of Special Agent in Charge Valerie Nickerson, in Newark for the investigation that led to today’s sentencing.

The government is represented by Assistant U.S. Attorney Jonathan M. Peck of the U.S. Attorney’s Office Organized Crime/Drug Enforcement Task Force Unit.

Defense Counsel: Anthony C. Mack Esq., Newark

NEWARK, N.J. – U.S. Attorney Craig Carpenito pledged the office’s strong support for a Drug Enforcement Administration (DEA) initiative announced in Camden today to address the problem of opioid and heroin abuse in New Jersey.

“The misuse of prescription opioid painkillers, heroin and the synthetic drug fentanyl are wreaking havoc in our communities and destroying thousands of lives,” U.S. Attorney Carpenito said. “The program announced by DEA Special Agent in Charge Valerie Nickerson attacks the epidemic on three fronts: coordinated targeting of drug organizations and gangs, encouraging smarter prescribing practices and use of painkillers, and outreach to affected communities. We will work closely with DEA and all of the ‘DEA 360 Strategy’ partners in this important battle.”

As part of this effort, the District of New Jersey – like all other U.S. Attorney’s Offices in the country – has designated an Opioid Coordinator, who is responsible for facilitating intake of cases involving prescription opioids, heroin, and fentanyl. The coordinator – Assistant U.S. Attorney Erica Liu – is also responsible for convening a task force of federal, state, and local law enforcement to identify opioid cases for federal prosecution, facilitating interdiction efforts, and tailoring the district’s response to the needs of the community. To enhance our efforts and capabilities, Assistant U.S. Attorney Liu is providing legal advice and training to other AUSAs regarding the prosecution of opioid offenses; maintaining a close watch on the advancement of opioid prosecutions in the district; and developing and continually evaluating the effectiveness of the office’s strategy to combat the opioid epidemic.

“Erica was specifically chosen for this assignment because of her unique experience,” U.S. Attorney Carpenito said. “With a Bachelor of Science in Pharmacy and experience as a county and federal prosecutor, she has the bonafides for this job. Erica is passionate about this issue and well-suited for the task.”

In September 2016, the Department of Justice directed each U.S. Attorney to consult with local stakeholders and draft a district-specific strategy to combat the opioid epidemic. The office’s role in the DEA 360 Strategy will be part of that effort.

NEWARK, N.J. – An Essex County, New Jersey, man today admitted robbing a TD bank in Newark in May 2017, U.S. Attorney Craig Carpenito announced.

Tyrone Anderson, 46, of Newark, pleaded guilty before U.S. District Judge Esther Salas in Newark federal court to an indictment charging him with one count of bank robbery.

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

Anderson admitted that during the May 26, 2017 bank robbery, he handed a teller a hand-written note demanding cash and threatening the teller to “make it quick.” Anderson then took cash from the teller and fled. Fingerprints recovered from the scene of the robbery led to Anderson’s arrest several days later.  

The bank robbery charge carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Anderson’s sentencing is scheduled for April 16, 2018.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Robert D. Laurino, and the Newark Department of Public Safety, under the direction of Director Anthony F. Ambrose, with the investigation.

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

Defense counsel: Leticia Olivera Esq., Assistant Federal Public Defender, Newark
 

CAMDEN, N.J. – A Camden man was sentenced today to 60 months in prison for conspiring to sell crack cocaine and possess a firearm in furtherance of a drug conspiracy operating in Camden, U.S. Attorney Craig Carpenito announced.

Preston J. Thomas, a/k/a “Boo,” 31, previously pleaded guilty before U.S. District Judge Jerome B. Simandle to an information charging him with one count of conspiracy to distribute and possess with intent to distribute 28 grams or more of cocaine base and one count of conspiracy to possess a firearm in furtherance of a drug trafficking crime. Judge Simandle imposed the sentence today in Camden federal court.

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

Thomas admitted that he sold, and directed others to sell, crack cocaine on and around the 1100 block of Lansdowne Avenue in Camden. Thomas also admitted that he provided crack cocaine to other members of the conspiracy, collected proceeds from the sales, and conspired with members of the conspiracy to possess a firearm in furtherance of its drug trafficking activities.

Thomas, Jason Boyd, Joseph Boyd, Tony Wilson, Derek Stallworth, Jeffrey Whitaker, Nafeez Griffin, and Julian Dickerson were originally charged by complaint on Sept. 9, 2016 following a long-term investigation by the FBI’s South Jersey Violent Offender and Gang Task Force. Law enforcement officers seized drugs and recovered several firearms that were kept by members of the conspiracy in connection with the organization’s drug trafficking activities. Investigators also intercepted communications pursuant to court-authorized wiretaps on cellular telephones used by members of the conspiracy.

In addition to the prison term, Judge Simandle sentenced Thomas to four years of supervised release. 

Jason Boyd, Joseph Boyd, Wilson, Stallworth, Nafeez Griffin, and Julian Dickerson pleaded guilty to related drug and firearm offenses and have been sentenced to prison. Whitaker is charged in a superseding indictment with one count of conspiracy to distribute and to possess with intent to distribute cocaine base. The charges against Whitaker are still pending.  

U.S. Attorney Carpenito credited special agents of the FBI’s South Jersey Violent Offender and Gang Task Force, South Jersey Resident Agency, under the direction of Special Agent in Charge Michael Harpster in Philadelphia; the Camden County Police Department, under the direction of Chief J. Scott Thomson; the Camden County Prosecutor’s Office, under the direction of Prosecutor Mary Eva Colalillo; and the N.J. State Police, under the direction of Acting Superintendent Col. Patrick J. Callahan, with the investigation. 

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

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

Defense counsel:  Maggie F. Moy Esq., Assistant Federal Public Defender
 

NEWARK, N.J. – An Indian national who admitted that he assaulted a girl on a flight from Seattle, Washington, to Newark Liberty International Airport, was sentenced today to 90 days in prison, U.S. Attorney Craig Carpenito  announced.

Vijaykumar Krishnappa, 29, pleaded guilty Nov. 8, 2017, before U.S. Magistrate Judge James B. Clark in Newark federal court to a superseding information charging him with assault in the special aircraft jurisdiction of the United States. 

According to documents filed in this case and statements made in court, while on a United Airlines flight from Seattle to Newark on July 23, 2017, Krishnappa intentionally assaulted a girl who was unknown to him and seated next to him on the flight. Krishnappa admitted that while the victim was asleep, he intentionally touched her near her groin over her leggings without her consent. 

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, and the Port Authority of New York-New Jersey, with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorney Tazneen Shahabuddin of the U.S. Attorney’s Criminal Division in Newark.

NEWARK, N.J. – Three Essex County, New Jersey, men today admitted their roles in a massive drug distribution ring responsible for dealing millions of dollars’ worth of heroin out of a residential building near a high school in Newark, U.S. Attorney Craig Carpenito announced.  

Quawee Jones, a/k/a “Hatman,” 34, of Newark, Shaahid Cureton, a/k/a “Dills,” 33, of Newark, and Rashard Johnson, a/k/a “Drama,” 39 of East Orange, New Jersey, pleaded guilty before U.S. District Judge Jose L. Linares in Newark federal court to separate superseding informations charging them each with conspiracy to distribute heroin. 

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

The defendants operated a heroin distribution marketplace out of the first floor hallway of a residential building at 25 Johnson Ave in Newark. The building is just a few doors away from the Malcolm X. Shabazz High School and the Terrell James Park playground. The conspiracy was led by Quawee Jones and Almalik Anderson, who, along with other heroin dealers that worked with them – including Cureton and Johnson – took advantage of the building’s location on a dead-end street, making it difficult for law enforcement to infiltrate the distribution network despite a constant stream of buyers entering the building at all hours of the day. 

“Lookouts” were paid by the defendants to alert them to any police activity coming onto the block from the only access point on Clinton Avenue.  Police could not infiltrate the building without lookouts detecting their presence and signaling the sellers. Members of the drug trafficking organization also set up an escape route whereby residents were paid to keep their doors unlocked. The dealers in the hallways would run through the building and exit via fire escapes at the rear of the building or simply hide within the apartments before police could apprehend them. 

The drug conspiracy operated nearly 24 hours a day and was well-known among heroin users, who came from several different counties across New Jersey. The defendants allegedly worked in carefully planned “shifts” in order to handle the constant flow of heroin buyers. The heroin was sold in various “brands,” which were stamped onto the glassine envelopes that contained the heroin, allowing buyers to identify and purchase the brands that they preferred. 
The defendants sold on average one to two kilograms of heroin per week between January 2013 and November 2015. Based upon the quantities sold, information from court-authorized wiretaps, and other evidence, the profit from the heroin distribution at 25 Johnson Avenue was estimated to be between $4 million and $7 million a year. 

The drug conspiracy charge to which Jones pleaded guilty carries a statutory minimum prison term of 10 years in prison and a maximum potential penalty of life in prison. The drug conspiracy charges that Cureton and Johnson pleaded guilty to carry a maximum potential sentence of 20 years in prison.

With today’s pleas, all 16 defendants indicted for their roles in the heroin distribution conspiracy, including Anderson, have been convicted.

U.S. Attorney Carpenito credited special agents of the FBI and task force officers assigned to the FBI’s Safe Streets Task Force, under the direction of Special Agent in Charge Timothy Gallagher in Newark, with the investigation. He also thanked officers of the Newark Department of Public Safety, under the direction of Director Anthony F. Ambrose, the Essex County Sheriff’s Office under the direction of Armando B. Fontoura; the N.J. State Parole Board, under the direction of Chairman James T. Plousi; and the Orange Police Department, under Director Todd Warren, for their work on the investigation.

The government is represented by Assistant U.S. Attorneys Jonathan M. Peck and David E. Malagold, and Senior Litigation Counsel Robert Frazer of the U.S. Attorney’s Office Criminal Division in Newark.  

Defense counsel: 

Jones: Stacy Ann Biancamano Esq., Cranford
Cureton: Ruth M. Liebesman Esq., Paramus
Johnson: Henry Klingeman Esq., and Kristen Santillo Esq., Newark
 

TRENTON, N.J. – The former Jersey City Chief of Police today admitted defrauding the Jersey City Housing Authority (JCHA) by obtaining compensation for off-duty work that he did not perform, U.S. Attorney Craig Carpenito announced.  

Philip D. Zacche, 61, of Manalapan, New Jersey, pleaded guilty before U.S. District Judge Freda L. Wolfson in Trenton federal court to an information charging him with one count of embezzling, stealing, obtaining by fraud, misapplying, and without authority knowingly converting money belonging to the JCHA. 

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

Zacche was a member of the Jersey City Police Department who was available to perform off-duty work. The JCHA was responsible for the administration of certain housing units in Jersey City. Between 2010 and 2014, the JCHA hired and paid Jersey City police officers to provide security at some of their housing sites. 

Zacche admitted defrauding the JCHA by filling out and submitting time sheets representing that he completed certain security shifts even though he was not present at the JCHA site. As such, Zacche was paid a total of $31,713 for work that he did not perform. 

Zacche faces a maximum potential penalty of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Pursuant to the plea agreement, Zacche is required to forfeit $24,700. His sentencing is scheduled for April 9, 2018.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Timothy A. Gallagher in Newark, and special agents of the U.S. Department of Housing and Urban Development, Office of the Inspector General, under the direction of Special Agent in Charge Christina Scaringi, with the investigation leading to today’s guilty plea.    

The Jersey City Police Department is cooperating with the investigation.    

The government is represented by Assistant U.S. Attorney Vikas Khanna, Deputy Chief of the Health Care and Government Fraud Unit.    

Defense counsel: Anthony J. Iacullo Esq., Nutley, New Jersey
 

NEWARK, N.J. – A Waldwick, New Jersey, man today admitted carjacking a taxi and striking the victim on the head with a beer bottle, Acting U.S. Attorney William E. Fitzpatrick announced.

Arlyn Jowany Carrasco Cruz, 27, pleaded guilty before U.S. District Judge Jose L. Linares in Newark federal court to an information charging him with one count of carjacking.

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

In the early morning hours of Dec. 26, 2016, Cruz and at least five others forcibly took a 2008 Dodge Caravan from a taxicab driver. Cruz and the others forced the taxicab driver into the back of the vehicle and took over driving. As they drove toward Waldwick, Cruz struck the victim in the head with a beer bottle before being let out of the cab.

After dropping Cruz off, the others continued driving the cab to New York, and one individual caused further serious bodily injury to the victim by slicing his throat with a knife before leaving him on the side of the New York State Thruway near Woodbury, New York. The taxicab driver survived.

The carjacking charge carries a maximum potential penalty of 25 years in prison. Cruz’s sentencing is scheduled for April 11, 2018.

Four other men have pleaded guilty to their respective roles in the carjacking, subsequent kidnapping, and an earlier bar robbery in Hawthorne, New Jersey. Guillermo Carrillo-Iraheta, 20, and Juan Chiliseo-Vega, 21, both of Suffern, New York, were sentenced to 150 and 168 months in prison, respectively. Wilbur Jonathon Barahona, 22, or Ridgewood, New Jersey, and Jostin Reyes, 22, also of Walwick, New Jersey, await sentencing.

Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, investigators from the Bergen County Prosecutor’s Office, under the direction of Prosecutor Gurbir S. Grewal, and the Ridgewood and Hawthorne Police Departments with the investigation leading to today’s guilty plea.

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.

Defense counsel: Susan C. Cassell Esq., Ridgewood, New Jersey 

NEWARK, N.J. – Attorney General Jeff Sessions today announced the appointment of Craig Carpenito as Interim United States Attorney pursuant to 28 U.S.C. § 546, which provides that “the Attorney General may appoint a United States Attorney for the district in which the office of United States Attorney is vacant.” This appointment will take effect Jan. 5, 2018.

“Craig Carpenito has experience in private practice, with the Securities and Exchange Commission, and as an Assistant United States Attorney,” Attorney General Sessions said. “He has successfully prosecuted white collar criminals and fraudsters, and as Interim United States Attorney for New Jersey, he will continue to put criminals out of business—and behind bars.”

Mr. Carpenito is currently a partner at Alston & Bird LLP, where he is a co-chair of the firm’s Litigation and Trial Practice Group and its Government and Internal Investigations Team. He served as an Assistant U.S. Attorney in the U.S. Attorney’s Office for the District of New Jersey from 2005 to 2008.

Between August 2000 and September 2005, Mr. Carpenito was Senior Counsel in the Securities and Exchange Commission’s Division of Enforcement, New York Regional Office. He received his B.A. from Rider University in Lawrenceville, New Jersey, and his J.D. from Seton Hall University School of Law in Newark.

Upon the appointment of Mr. Carpenito as Interim United States Attorney, Acting United States Attorney William E. Fitzpatrick will resume his role as First Assistant United States Attorney.

CAMDEN, N.J. – An Atlantic County man was sentenced today to 235 months in prison for distribution and possession with the intent to distribute cocaine in the Atlantic County, New Jersey area, Acting U.S. Attorney William E. Fitzpatrick announced.

Tozine Tiller, 43, of Galloway, New Jersey, previously pleaded guilty before U.S. District Judge Jerome B. Simandle in Camden federal court for his distribution and possession with intent to distribute crack cocaine on June 11, 2013.

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

Tozine Tiller was responsible for distributing in excess of 840 grams of crack cocaine from February 2010 through Dec. 10, 2014. The conspiracy that Tiller participated in was extensive and involved the trafficking of cocaine, crack cocaine and heroin. Tiller and others used residences in Pleasantville and Absecon to store and package cocaine and crack cocaine.

Twelve individuals have been charged for their participation in this drug trafficking conspiracy and all but one of those charged have been convicted. One defendant remains a fugitive.

The following individuals have been sentenced:

Francisco Rascon-Muracami –70 months in prison; John Wellman –130 months in prison; Ronald Douglas Byrd – 96 months in prison; Talib Tiller – 57 months in prison; Tejohn Cooper – 96 months in prison; and
Kabaka Atiba – 120 months in prison.

The other defendants are awaiting sentencing.

Acting U.S. Attorney Fitzpatrick credited special agents of the FBI’s Newark Division, Atlantic City Resident Agency, under the direction of Special Agent in Charge Timothy Gallagher; the Drug Enforcement Administration’s Newark Division, under the direction of Special Agent in Charge Valerie Nickerson; the Atlantic County Prosecutor’s Office, under the direction of Prosecutor Damon G. Tyner; and the Atlantic City Police Department, under the direction of Police Chief Henry White, with the investigation leading to these convictions.

He also thanked the N.J. State Police; the Bureau of Alcohol, Tobacco and Firearms; U.S. Immigration and Customs Enforcement (ICE)-Homeland Security Investigation (HSI); U.S. Postal Inspection Service; Cumberland County Sheriff’s Office and the Ventnor, Northfield and Millville police departments for their assistance.

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

Defense counsel: Gilbert Scutti Esq. Somerdale, New Jersey

NEWARK, N.J. – A High Bridge, New Jersey, man today admitted distributing images of child sexual abuse over the Internet, Acting U.S. Attorney William E. Fitzpatrick announced.

Darrel Underhill, 73, pleaded guilty before U.S. District Judge Kevin McNulty in Newark federal court to an information charging him with one count of distributing child pornography.

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

Underhill used a peer-to-peer file sharing program on his computer to download videos and images of child sexual abuse. In October 2016, law enforcement downloaded over three dozen such videos from Underhill’s computer. After executing a search warrant at Underhill’s home in March of 2017, agents located nearly 1000 videos and over 12,000 images of child sexual abuse on Underhill’s computers. Underhill admitted today that he was making videos available for others to download.

The distribution of child pornography charge to which Underhill pleaded guilty carries a maximum potential penalty of 20 years in prison and a $250,000 fine. Underhill will be required to register as a sex offender. Under the terms of the plea agreement, if accepted by the court, Underhill will be sentenced to 121 months in prison. He remains in custody pending his March 28, 2018 sentencing date.

Acting U.S. Attorney Fitzpatrick credited special agents with the U.S. Department of Homeland Security (DHS), Homeland Security Investigation’s (HSI) Newark Division, under the direction of Acting Special Agent in Charge Michael McCarthy, with the investigation.

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

Defense counsel: Lisa Mack Esq., Assistant Federal Public Defender 

NOTE: Charges against Stephan Durham were dismissed by court order on Jan. 29, 2018.

NEWARK, N.J. – Two California men were arrested today for their alleged roles in a large-scale opioid distribution conspiracy that involved the shipment of at least 500,000 fentanyl pills to New Jersey, Acting U.S. Attorney William E. Fitzpatrick announced.

Andrew Tablack, 26, of Beverly Hills, California, and Stephan Durham, 43, of Altadena, California, were both charged by complaint with one count of conspiracy to distribute and possess with intent to distribute 400 grams or more of cyclopropyl fentanyl. Tablack is also charged with distribution of 400 grams or more of cyclopropyl fentanyl. Both defendants were arrested this morning and appeared this afternoon before U.S. Magistrate Judge Patrick J. Walsh in Los Angeles federal court.

According to the complaint:

Beginning in August 2017, the Drug Enforcement Administration began an investigation into the distribution of fentanyl in the Monmouth County, New Jersey, area. Agents executed a search warrant at a Monmouth County residence that resulted in the seizure of a substantial quantity of controlled substances, including approximately 300,000 cyclopropyl fentanyl pills that allegedly had been shipped by Tablack to New Jersey. Tablack and his customers across the United States, including New Jersey, allegedly used the Dark Web – a part of the internet that is not accessible without specific software – to arrange shipments of quantities of cyclopropyl fentanyl to various places throughout the country. Tablack also used end-to-end encrypted communication applications to take orders for fentanyl from customers in New Jersey. 

The New Jersey customers allegedly provided Tablack with residential addresses in Monmouth County to which the packages of fentanyl could be mailed and arranged to intercept the packages before they were delivered. Customers paid Tablack with Bitcoin, a form of cryptocurrency that is increasingly common in the narcotics trade due to its relative anonymity.

One such set of packages, mailed by Tablack in September 2017, was intercepted by law enforcement when it reached New Jersey. When the packages were opened, agents found that they contained 226,520 cyclopropyl fentanyl pills that weighed nearly 20 kilograms.

Tablack allegedly maintained a pill production facility in California.  Shipping records revealed that Tablack had purchased at least nine pill press machines that were shipped to an industrial building in California. Records showed that a company ostensibly run by Durham was registered as the lessee of that industrial property. 

Tablack allegedly purchased quantities of fentanyl from a laboratory in China that shipped the packages disguised as food and beauty products. Law enforcement officers in California were able to intercept several additional packages sent from various parts of Asia bound for properties controlled by Tablack and Durham, including fentanyl and dies used to mark illicitly manufactured pills.

The charges carry a mandatory minimum penalty of 10 years in prison, a potential maximum penalty of life in prison, and a $10 million fine.

The government is represented by Assistant U.S. Attorney Tazneen Shahabuddin of the U.S. Attorney’s Office General Crimes Unit in Newark.

Acting U.S. Attorney Fitzpatrick credited the special agents of DEA in Newark, under the direction of Special Agent in Charge Valerie Nickerson; special agents of DEA in Los Angeles, under the direction of Special Agent in Charge David Downing; the U.S. Department of Homeland Security (DHS), Homeland Security Investigation’s (HSI) Newark Division, under the direction of Acting Special Agent in Charge Michael McCarthy; DHS-HSI, Los Angeles Division, under the direction of Special Agent in Charge Joseph Macias; inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Joseph W. Cronin; and special agents of the U.S. Postal Service Office of Inspector General, under the direction of Acting Special Agent in Charge Kenneth Cleevely, Eastern Area Field Office, with the investigation leading to the charges.

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

NEWARK, N.J. – A Paterson, New Jersey, man today admitted robbing a TD Bank in Paterson in June 2017 and an Investors Bank in Clifton, New Jersey, in July 2017, Acting U.S. Attorney William E. Fitzpatrick announced.

James M. Chestnut, 62, pleaded guilty before U.S. District Judge William H. Walls in Newark federal court to an information charging him with two counts of bank robbery.

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

On June 30, 2017, Chestnut entered a TD Bank in Paterson and handed a teller a note stating “Put 100s and 50s in the envelope. No dye pack.”

On July 5, 2017, Chestnut entered an Investors Bank in Clifton and approached a teller, this time brandishing what appeared to be a firearm. He told the teller to “Open your drawer. Give me your money. All the 100s. Don’t call the cops or I’ll shoot you.”

During the plea, Chestnut also admitted attempting to rob a Chase Bank in Saddle Brook, New Jersey, on July 3, 2017.

Both bank robbery counts carry a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for March 21, 2018.

Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, with the investigation leading to today’s guilty plea. He also thanked the Paterson Police Department, under the direction of Director Jerry Speziale; the Saddle Brook Police Department, under the direction of Chief Robert Kugler; the Clifton Police Department, under the direction of Chief Mark Centurione; and the Passaic Police Department, under the direction of Chief Luis A. Guzman, for their assistance.

In addition, the investigation was aided by the FBI Violent Crime Task Force, which is comprised of law enforcement personnel from the Bergen County Prosecutor’s Office, the Passaic County Prosecutor’s Office, the Roxbury Police Department, the Paterson Police Department, and the N.J. State Police.

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

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