District of New Jersey

TRENTON, N.J. - A former broker of two New York investment banking firms today admitted accepting hundreds of thousands of dollars in bribe payments in exchange for more favorable stock allocations, Acting U.S. Attorney William E. Fitzpatrick announced.

Brian M, Hirsch, 42, of Farmingdale, New York, pleaded guilty before U.S. District Judge Michael A. Shipp in Trenton federal court to an information charging him with one count of violating the Travel Act by engaging in a commercial bribery scheme.

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

Hirsch was employed at the New York offices of two investment banking firms, identified as “Firm A” and “Firm B” in the information. Hirsch was responsible for allocating securities from initial and secondary public stock offerings to the firms’ clients.

Between January 2012 and November 2016, Hirsch accepted numerous cash kickbacks from three individuals – identified in the information as “CC#1,” “CC#2,” and “CC#3” – in exchange for securities from public stock offerings marketed by Firms A and B. The kickback payments were based on an agreed-upon percentage of the profits that CC#1, CC#2, and CC#3 would make from the stock offerings.

Hirsch did not disclose any of these payments to Firms A and B and took steps to conceal his corrupt arrangements with CC#1, CC#2, and CC#3. For instance, Hirsch signed periodic certifications to Firm A falsely representing that he had complied with the firm’s prohibition on “quid pro quo” arrangements or similar pre-determined agreements with investor clients in connection with stock allocations. Hirsch also falsely certified that he had complied with Firm A’s policies concerning conflicts of interest. Hirsch made similar misrepresentations and omissions to Firm B.

Over the course of the scheme, Hirsch accepted between $550,000 and $1.5 million in kickback payments from CC#1, CC#2, and CC#3.

Hirsch faces a maximum potential penalty of five years in prison and a $250,000 fine. Hirsch also agreed to pay a forfeiture money judgment in an amount to be determined prior to or at the time of sentencing, which is currently scheduled for Apr. 11, 2018.

In a separate civil action, the U.S. Securities and Exchange Commission (SEC) today filed a complaint against Hirsch in Trenton federal court.
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Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, for the investigation leading to today’s guilty plea. He also thanked the SEC’s New York Regional Office for its assistance.

The government is represented by Assistant U.S. Attorney Nicholas P. Grippo of the Economic Crimes Unit in Newark.

Defense counsel: Elliot G. Sagor Esq., New York

CAMDEN, N.J. – A doctor and his chiropractor son were sentenced to prison today for conspiring to defraud Medicare by using unqualified people to give physical therapy to Medicare recipients, Acting U.S. Attorney William E. Fitzpatrick announced.

Robert Claude McGrath D.O., 66, and his son Robert Christopher McGrath, 48, both of Cherry Hill, New Jersey, were sentenced to 30 and 12 months in prison, respectively. Both defendants previously pleaded guilty before U.S. District Judge Robert B. Kugler to separate informations charging them each with conspiracy to commit health care fraud. Judge Kugler imposed both sentences today in Camden federal court.

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

The McGraths owned and operated Atlantic Spine & Joint Institute, a medical practice with offices in Westmont, New Jersey, and Wayne, Pennsylvania. Under Medicare rules, physical therapy had to be provided by Robert Claude McGrath or by a trained physical therapist under his supervision. However, from January 2011 through April 2016, the McGraths sought to defraud Medicare by employing unlicensed, untrained persons to give physical therapy to Medicare patients, at times when Robert Claude McGrath was not even in the office to supervise. They then submitted bills to Medicare fraudulently identifying Robert Claude McGrath as the provider of physical therapy.

In addition to the prison terms, Judge Kugler sentenced both defendants to three years of supervised release and ordered them to pay restitution of $890,000.

In a related civil settlement that was announced at the time of their guilty pleas, the McGraths and Atlantic Spine agreed to pay $1.78 million plus interest to the federal government to resolve allegations that the fraudulent bills submitted under the McGraths’ scheme caused false claims to be submitted to Medicare in violation of the False Claims Act.

Acting U.S. Attorney Fitzpatrick credited agents of the FBI’s South Jersey Resident Agency, under the direction of Special Agent in Charge Michael Harpster in Philadelphia, special agents from the Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert, and special agents from the Food and Drug Administration, Office of Criminal Investigations, under the direction of Special Agent in Charge Mark S. McCormack, with the investigation.

Assistant U.S. Attorneys R. David Walk Jr. and Andrew A. Caffrey III of the U.S. Attorney’s Office Health Care and Government Fraud Unit represented the government in the criminal case and the civil case, respectively.

The New Jersey U.S. Attorney’s Office reorganized its health care practice in 2010 and created a stand-along 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 $1.33 billion in health care and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act, and other statutes.

Defense counsel: Robert Christopher McGrath and Atlantic Spine & Joint Institute: Riza I. Dagli Esq., Roseland, New Jersey.
Robert Claude McGrath: Perry Primavera Esq., Hackensack, New Jerse

NEWARK, N.J. – A Yardley, Pennsylvania, man today admitted his role in an insider trading conspiracy that profited from yet-to-be public information concerning a pharmaceutical company that developed a drug to treat cancer, Acting U.S. Attorney William E. Fitzpatrick announced.

Daniel Perez, 28, pleaded guilty before U.S. District Judge Michael A. Shipp to an information charging him with one count of securities fraud.

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

Celator Pharmaceuticals Inc. (Celator) was a biopharmaceutical company headquartered in Ewing Township, New Jersey, that developed the drug Vyxeos to treat acute myeloid leukemia. In December 2012, Celator began Phase 3 clinical trials for Vyxeos, the results of which were highly confidential within the company. On March 14, 2016, Celator issued a press release announcing that the clinical trial results were positive.

Prior to the March 2016 announcement, Evan Kita, 27, of Yardley, who was a Celator employee from June 2013 through April 2016, learned that the Vyxeos clinical trials had produced positive results. Kita then shared that information with Perez and Richard Yu, 27, of Pennington, New Jersey, who both traded on the information.

On May 31, 2016, Celator and Jazz Pharmaceuticals PLC (Jazz) – a publicly-traded company headquartered in Dublin, Ireland – announced that they had entered an agreement for Jazz to purchase Celator in a transaction valued at approximately $1.5 billion. Jazz completed the acquisition of Celator in 2016, and now operates Celator as a wholly-owned subsidiary.

Kita learned of the potential acquisition prior to the public announcement from two close friends who still worked at Celator. Again, Kita shared the information with Perez and Richard Yu, who both traded on the information. Richard Yu, in turn, shared the information with his father, Chiang Yu, 55, of Pennington, who also traded on the information.

Perez admitted that the gain resulting from his insider trading scheme was more than $150,000, but less than $250,000.

The securities fraud charge carries a potential penalty of 20 years in prison and a $5 million fine. Kita, Richard Yu, and Chiang Yu pleaded guilty to their roles in the scheme on Aug. 31, 2017. Sentencing for all four defendants is currently set for April 18, 2017.

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. He also thanked the SEC for the assistance provided by its Market Abuse Unit, under the direction of Joseph Sansone, and its Philadelphia Regional Office, under the direction of G. Jeffrey Boujoukos.

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

This case 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’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. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.

Defense counsel: Louis R. Busico Esq., Newton, Pennsylvania

CAMDEN, N.J. – A Knoxville, Tennessee, resident today admitted recruiting individuals to cash fraudulent money orders that he received from a former South Jersey U.S. Postal Service (USPS) employee, Acting U.S. Attorney William E. Fitzpatrick announced.

Eugene Bowen, 35, pleaded guilty before U.S. District Judge Joseph H. Rodriguez to an information charging him with one count of transmitting and presenting unlawfully issued USPS money orders with intent to defraud the United States.  

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

Bowen admitted that Marc Saunders, 39, of Sicklerville, New Jersey, a former employee at the USPS branch in New Lisbon, New Jersey, provided him with stolen money orders and told him to recruit others to cash them. Bowen admitted that he recruited individuals to cash the money orders and paid them a small fee, while keeping the rest of the money for Saunders and himself.  

The charge for transmitting and presenting unlawfully issued USPS money orders carries a maximum penalty of five years in prison and $250,000 fine. Bowen’s sentencing is scheduled for March 21, 2018.

On Dec. 12, 2017, Saunders pleaded guilty to his role in the scheme, including producing the money orders with a stolen imprinting machine and giving them to others to cash. His sentencing is set for March 20, 2018.

Acting U.S. Attorney Fitzpatrick credited special agents of the USPS, Office of the Inspector General, under the direction of Acting Special Agent in Charge Kenneth M. 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.

Defense counsel: John Brennan Esq., Marlton, New Jersey 
 

Defendants Responsible for Rutgers University Hack, Creating Mirai and clickfraud Botnets, Infecting Hundreds of Thousands of Devices with Malicious Software

TRENTON, N.J. – The Justice Department announced today guilty pleas in three cybercrime cases. In the District of New Jersey, one defendant also pleaded guilty to launching a cyber attack on the Rutgers University computer network, and in the District of Alaska, that defendant and two others pleaded guilty to creating and operating two botnets, which targeted “Internet of Things” (IoT) devices.

Acting U.S. Attorney William E. Fitzpatrick of the District of New Jersey; Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division; Special Agent in Charge Timothy Gallagher of the FBI’s Newark Division; U.S. Attorney Bryan D. Schroder of the District of Alaska; and Special Agent in Charge Marlin L. Ritzman of the FBI’s Anchorage Division and made the announcement.

Paras Jha, 21, of Fanwood, New Jersey, pleaded guilty today before U.S. District Judge Michael Shipp in Trenton federal court in the District of New Jersey to violating the Computer Fraud & Abuse Act. Between November 2014 and September 2016, Jha executed a series of attacks on the networks of Rutgers University. Jha’s attacks effectively shut down Rutgers University’s central authentication server, which maintained, among other things, the gateway portal through which staff, faculty, and students delivered assignments and assessments. At times, Jha succeeded in taking the portal offline for multiple consecutive periods, causing damage to Rutgers University, its faculty, and its students. The count to which Jha pleaded guilty is punishable by a maximum of 10 years in prison and a fine of $250,000, or twice the gross amount of any pecuniary gain or loss derived from the offense, whichever is greater. Sentencing is scheduled for March 13, 2018.

On Dec. 8, 2017, Jha, Josiah White, 20, of Washington, Pennsylvania, and Dalton Norman, 21, of Metairie, Louisiana, pleaded guilty to criminal informations in the District of Alaska charging them each with conspiracy to violate the Computer Fraud & Abuse Act in operating the Mirai Botnet. In the summer and fall of 2016, White, Jha, and Norman created a powerful botnet – a collection of computers infected with malicious software and controlled as a group without the knowledge or permission of the computers’ owners. The Mirai Botnet, targeted IoT devices – non-traditional computing devices that have been connected to the Internet, including wireless cameras, routers, and digital video recorders. The defendants attempted to discover both known and previously undisclosed vulnerabilities that allowed them to surreptitiously attain administrative or high-level access to victim devices for the purpose of forcing the devices to participate in the Mirai Botnet. At its peak, Mirai consisted of hundreds of thousands of compromised devices. The defendants used the botnet to conduct a number of powerful “distributed denial of service” (DDOS) attacks, which occur when multiple computers acting in unison flood the Internet connection of a targeted computer or computers. The defendants’ involvement with the original Mirai variant ended in the fall of 2016, when Jha posted the source code for Mirai on a criminal forum. Since then, other criminal actors have used Mirai variants in a variety of other attacks.

Jha and Norman also pleaded guilty to criminal informations in the District of Alaska charging each with conspiracy to violate the Computer Fraud & Abuse Act. From December 2016 to February 2017, the defendants successfully infected more than 100,000 primarily U.S.-based Internet-connected computing devices, such as home Internet routers, with malicious software. That malware caused the hijacked home Internet routers and other devices to form a powerful botnet. The defendants then used the compromised devices as a network of proxies through which they routed Internet traffic. The victim devices were used primarily in advertising fraud, including “clickfraud,” a type of Internet-based scheme that utilizes “clicks,” or the accessing of URLs and similar web content, for the purpose of artificially generating revenue.

“Paras Jha has admitted his responsibility for multiple hacks of the Rutgers University computer system,” Acting U.S. Attorney Fitzpatrick said. “These computer attacks shut down the server used for all communications among faculty, staff and students, including assignment of course work to students, and students’ submission of their work to professors to be graded. The defendant’s actions effectively paralyzed the system for days at a time and maliciously disrupted the educational process for tens of thousands of Rutgers’ students. Today, the defendant has admitted his role in this criminal offense and will face the legal consequences for it.”

“Today's guilty plea is a testament to the countless hours of hard work and dedication by law enforcement in the fight against cyber criminals,” FBI Newark Special Agent in Charge Timothy Gallagher said. “Cybercrime knows no boundaries. Dismantling these operations is possible only by working closely with our partners.”

“The Mirai and Clickfraud botnet schemes are powerful reminders that as we continue on a path of a more interconnected world, we must guard against the threats posed by cybercriminals that can quickly weaponize technological developments to cause vast and varied types of harm,” Acting Assistant Attorney General Cronan said. “The Criminal Division will remain constantly vigilant in combating these sophisticated schemes, prosecuting cybercriminals, and protecting the American people.”

For additional information on cybersecurity best practices for IoT devices, please visit: https://www.justice.gov/criminal-ccips/page/file/984001/download .

All three cases were investigated by the FBI. The Rutgers University case is being prosecuted by Assistant U.S. Attorney Shana Chen of the District of New Jersey. The Mirai Botnet and Clickfraud Botnet cases are being prosecuted by Assistant U.S. Attorney Adam Alexander of the District of Alaska and Trial Attorney C. Alden Pelker of the Computer Crime and Intellectual Property Section of the Criminal Division. Additional assistance was provided by the FBI Newark Cyber Task Force, Rutgers University Police Department, N.J. State Police, the Federal Protective Service, FBI’s New Orleans and Pittsburgh Field Offices, the U.S. Attorney’s Office for the Eastern District of Louisiana, the United Kingdom’s National Crime Agency, the French General Directorate for Internal Security, the National Cyber-Forensics & Training Alliance, Palo Alto Networks Unit 42, Google, Cloudflare, Coinbase, Flashpoint, Yahoo and Akamai.

Defense counsel: Robert Stahl Esq., Westfield, New Jersey

TRENTON, N.J. – An Anaheim, California, man was sentenced today to 46 months in prison for laundering money on behalf of an international drug trafficking organization, Acting U.S. Attorney William E. Fitzpatrick announced. 

Harry Madrid, 26, previously pleaded guilty before U.S. District Judge Peter G. Sheridan to Count Two of an indictment charging him with conspiracy to launder money. Judge Sheridan imposed the sentence today in Trenton federal court.

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

From June 2014 through November 2014, Madrid conspired with other members of an international drug trafficking organization, which included cells operating in New Jersey, to launder more than $150,000 in United States currency related to the distribution of heroin.  

Several of Madrid’s co-defendants have also pleaded guilty before Judge Sheridan and await sentencing. Madrid’s brother, Wilson Madrid, pleaded guilty to conspiracy to launder money. Henry Zamora pleaded guilty to conspiring to distribute four kilograms of heroin that were recovered from a hidden compartment in his vehicle. Dany Francisco-Valerio pleaded guilty to conspiring to distribute 15 kilograms of heroin that were recovered from a hidden compartment in his vehicle when it was stopped in Warren County, New Jersey.

In addition to the prison term, Judge Sheridan sentenced Madrid to three years of supervised release.  
    
Acting U.S. Attorney Fitzpatrick credited the Drug Enforcement Administration (DEA)’s New Jersey Division, under the direction of Special Agent in Valerie Nickerson, officers of the N.J. State Police, under the direction of Acting Superintendent Col. Patrick J. Callahan, and officers from the DeKalb, Illinois, police department, under the direction of Chief Gene Lowrey, with the investigation.  

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

Defense counsel: John Holliday Esq., Hamilton, New Jersey

CAMDEN, N.J. – A Williamstown, New Jersey, man was sentenced today to 180 months in prison for receiving images and videos of child sexual abuse and for producing child pornography using a hidden camera in his bathroom, Acting U.S. Attorney William E. Fitzpatrick announced.

Eric Ziegler, 39, previously pleaded guilty before U.S. District Judge Joseph H. Rodriguez to an information charging him with one count of receiving child pornography and one count of possessing child pornography. Judge Rodriguez imposed the sentence today in Camden federal court.

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

Ziegler admitted that from February 2015 through Dec. 3, 2015, he received and possessed multiple images of child sexual abuse over the Internet which he saved to his computer, external hard drives, compact discs and other electronic media located inside his home. Among the content on Ziegler’s devices were images focusing on the genitalia of several girls, which Ziegler admitted producing using a camera hidden in a bathroom at his Williamstown residence.

In addition to the prison term, Judge Rodriguez ordered Ziegler to serve a lifetime of supervised release and pay $215,000 in restitution.

Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Michael Harpster in Philadelphia, with the investigation. He also thanked the Monroe Township Police Department under the direction of Chief John McKeown for its assistance.

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

Defense Attorney: Bruce Warren Esq., Sewell, New Jersey

CAMDEN, N.J. – A Sicklerville, New Jersey, man today admitted his role in a scheme to steal and convert over 100 blank U.S. Postal Service (USPS) money orders, resulting in nearly $100,000 in losses, Acting U.S. Attorney William E. Fitzpatrick announced.

Marc Saunders, 39, pleaded guilty before U.S. District Judge Joseph H. Rodriguez to an information charging him with one count of transmitting and presenting unlawfully issued USPS money orders with intent to defraud the United States.  

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

Saunders was employed as a letter carrier at the USPS branch in New Lisbon, New Jersey.  

Saunders admitted that while working at the New Lisbon branch, he stole a money order imprinting machine and more than 100 USPS money orders. Saunders used the machine to produce completed money orders that appeared legitimate, which he then gave to middle men that he recruited. The middle men recruited individuals to cash the money orders for a small fee. The middle men and Saunders kept the rest of the money.

The charge for transmitting and presenting unlawfully issued USPS money orders carries a maximum penalty of five years in prison and $250,000 fine. Sentencing is scheduled for March 20, 2018.

Acting U.S. Attorney Fitzpatrick credited special agents of the USPS, Office of the Inspector General, under the direction of Acting Special Agent in Charge Kenneth M. 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.
                    
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Defense counsel: Teri S. Lodge Esq., Marlton, New Jersey

TRENTON, N.J. – A professional day-trader admitted today to repeatedly trading on inside information related to confidentially marketed stock offerings, personally netting hundreds of thousands of dollars in illicit profits, Acting U.S. Attorney William E. Fitzpatrick announced. 

Joseph Spera, 56, of Boca Raton, Florida, pleaded guilty before U.S. District Judge Michael A. Shipp in Trenton federal court to an information charging him with one count of conspiracy to commit securities fraud and one count of securities fraud.

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

On numerous occasions between June 2010 and July 2013, Spera and his conspirators short-sold the securities of at least 13 public companies, based on inside information obtained by Spera’s conspirator, Steven Fishoff, and others. 

For each of these offerings, Fishoff or other day-traders he employed – including his friend, Ronald Chernin, and his brother-in-law, Steven Costantin – entered into confidentiality or “wall-crossing” agreements as representatives of Fishoff’s trading entities. They agreed not to disclose or trade on inside information concerning the offerings, such as the name of the issuers and the timing and pricing of the transactions, and were “brought over the wall” for the narrow purpose of determining whether to purchase the offered securities. Spera himself entered into a confidentiality agreement and was brought over the wall in connection with one of the offerings.   

Spera admitted that in breach of the wall-crossing agreements, Fishoff allegedly tipped Spera, directly or through his conspirator, Paul Petrello, with the inside information about the confidentially marketed offerings. Specifically, he allegedly advised Spera of the stock trading symbols of the companies, and the timing and sometimes the pricing of the upcoming offerings. Spera also received the inside information directly from the issuer for one of the offerings.

Based on this inside information, Spera shorted the stock of the public companies in anticipation of a drop in the stocks’ price when the offerings were disclosed to the public. Spera and his conspirators traded through the accounts of their respective trading entities or through related accounts that they controlled, shorting the securities and covering the short positions after the stocks offerings were publicly announced. 

By trading on this valuable, nonpublic information in violation of the confidentiality agreements, Spera and his conspirators made more than $3.9 million in profits over the course of the three-year scheme, with Spera personally making more than $768,000. Spera allegedly split his profits with Fishoff, generally on a 50-50 basis, as compensation to Fishoff for the inside information that he provided.

Spera faces a maximum potential penalty of five years in prison and a fine of $250,000 on the conspiracy count and a maximum potential penalty of 20 years in prison and a fine of $5 million on the securities fraud count. Spera also agreed to pay a forfeiture money judgment of $768,766. He is scheduled to be sentenced April 12, 2018.

In a separate civil action, the U.S. Securities and Exchange Commission (SEC) today filed a complaint against Spera in Trenton federal court.

Fishoff has been indicted, and his trial is scheduled for March 19, 2018. Chernin, Costantin and Petrello have pleaded guilty for their involvement in the scheme and 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, with the investigation leading to today’s guilty plea. He also thanked the SEC’s New York Regional Office for its assistance.

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

Defense counsel: Alain Leibman Esq., Princeton, New Jersey

NEWARK, N.J. – A Pennsylvania man was charged today in connection with his role in two conspiracies in connection with construction projects at Picattiny Arsenal (PICA) and at the Joint Base McGuire-Dix Lakehurst (Ft. Dix) and for endeavoring to obstruct justice, Acting U.S. Attorney William E. Fitzpatrick announced.

 

Kevin Joseph Leondi, 57, was indicted by a federal grand jury in Newark on a charge of conspiring to defraud the United States in connection with his acceptance of repeated bribes given by other conspirators to influence Leondi to take official action for the benefit of his conspirators and their companies and to violate his duties as an employee of the U.S. Army. He is also charged with causing another to travel across state lines to facilitate a portion of this bribery scheme and with conspiring to steer kickbacks from one conspirator to another in connection with the award and administration of a prime contractor’s subcontracts.

 

Leondi had been charged in March 2017 with conspiring to defraud the United States through bribes and contactor kickbacks in connection with the conduct that now is charged in the indictment. He currently remains free on bail.      

 

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

 

Leondi was employed by the U.S. Army’s Contracting Command in New Jersey and represented the Army with respect to renovation projects at PICA and Ft. Dix. There was a construction company referred to as Construction Company No. 1 in the indictment, which served as a Job Order Contractor, also known as a “prime contractor,” for construction projects at PICA and Ft. Dix. James Conway was employed by Construction Company No. 1 as a regional project manager of large-scale construction projects at PICA and Ft. Dix. George Grassie ran a construction, excavation and landscaping business in Pennsylvania that did subcontracting work at the bases.

 

From December 2010 through August 2015, Leondi allegedly conspired with Conway and Grassie to accept more than $125,000 in bribes from them in return for task orders and other favorable assistance at the bases and in not denying them future work. The bribes included direct cash payments to Leondi (in one instance Conway traveled from New Jersey to Pennsylvania to pay Leondi $5,000 in cash). In some instances, Leondi and the conspirators would disguise the bribes in the form of facially legitimate transactions, with Leondi buying vehicles and equipment from the conspirators at cut-rate prices or selling them equipment at inflated prices. In another instance, Leondi had Grassie absorb the costs that another contractor incurred in renovating Leondi’s property in East Stroudsburg, Pennsylvania. 

 

Leondi also allegedly conspired to steer at least $46,000 in corporate kickbacks from Grassie to Conway to improperly obtain and reward Conway for his giving subcontracts and other favorable assistance to Grassie relating to Conway’s employer’s contracts with the federal government at PICA and Fort Dix.

 

As alleged in the indictment, Leondi also endeavored to obstruct the federal grand jury investigation by submitting a false document to federal authorities in response to a federal grand jury subpoena in order to conceal part of his bribe-taking involving Grassie.

 

Grassie pleaded guilty to one count of conspiracy and one count of providing unlawful kickbacks in February 2017 for his role in the bribery and kickback conspiracies. Conway pleaded guilty to accepting unlawful kickbacks and a wire fraud charge involving other fraudulent conduct in August 2016. Both cases are pending before U.S. District Judge Susan D. Wigenton.    

 

The conspiracy charges and the travel in aid of bribery charge each carry a maximum penalty of five years in prison; the obstruction of justice charge carries a maximum penalty of 10 years in prison. Each charge carries a maximum $250,000 fine.

 

Acting U.S. Attorney Fitzpatrick credited special agents with the FBI, under the direction of Special Agent in Charge Timothy Gallagher; the U.S. Department of Defense, Defense Criminal Investigative Service, under the direction Special Agent in Charge Leigh-Alistair Barzey, Northeast Field Office; and the U.S. Army, Major Procurement Fraud Unit, Criminal Investigation Command, under the direction of Special Agent in Charge Larry Scott Moreland.    

 

 The government is represented by Senior Litigation Counsel Leslie Faye Schwartz, of the U.S. Attorney’s Office’s Special Prosecutions Division and Assistant U.S. Attorney Barbara Llanes, Chief of the General Crimes Unit, in Newark.     

NEWARK, N.J. – An internal medicine doctor with a practice in West New York, New Jersey, was sentenced today to 37 months in prison for accepting bribes in exchange for test referrals as part of a long-running scheme operated by Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, N.J., its president and numerous associates, Acting U.S. Attorney William E. Fitzpatrick announced.

 

Jorge J. Figueroa, 59, of Wayne, New Jersey, previously pleaded guilty before U.S. District Judge Stanley R. Chesler to accepting bribes. Judge Chesler imposed the sentences today in Newark federal court.

 

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

 

Figueroa admitted that he had accepted checks, cash and other bribe payments totaling approximately $200,000 from BLS employees and associates between May 2007 and April 2013. In exchange, Figueroa generated more than $1.4 million in lab business for BLS.

The investigation has thus far resulted in 51 convictions – 37 of them doctors – in connection with the bribery scheme, which its organizers have admitted involved millions of dollars in bribes and resulted in more than $100 million in payments to BLS from Medicare and various private insurance companies. It is believed to be the largest number of medical professionals ever prosecuted in a bribery case.

 

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

In addition to the prison term, Judge Chesler sentenced Figueroa to one year of supervised release and fined him $7,500. He must also forfeit $199,899.

 

U.S. Attorney Fitzpatrick credited special agents of the New Jersey FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert; IRS–Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; and inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Joseph V. Cronin in Newark, with the ongoing investigation leading to today’s sentencing.

 

The government is represented by Assistant U.S. Attorneys Joseph N. Minish, Danielle Alfonzo Walsman; Jacob T. Elberg, Chief of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark; and Assistant U.S. Attorney Barbara Ward, deputy chief of the asset forfeiture program.

 

The New Jersey U.S. Attorney’s Office reorganized its health care fraud 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 $1.37 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.

TRENTON, N.J. – A senior member of a large-scale drug trafficking organization was sentenced today to 12 years in prison for distributing heroin in Ocean and Monmouth Counties and elsewhere in New Jersey, Acting U.S. Attorney William E. Fitzpatrick announced.

Robert Britt, a/k/a “True,” 45, of Asbury Park, New Jersey, previously pleaded guilty before U.S. District Judge Peter G. Sheridan to an indictment charging him with conspiracy to distribute heroin. Judge Sheridan imposed the sentence today in Trenton federal court.

Between March and May 2014, 21 other individuals, including numerous members of the drug trafficking organization, were charged in two separate criminal complaints with conspiring to distribute heroin and other related offenses. The complaint referred to the drug trafficking organization as the “Britt-Young DTO,” after two of its leading members, Britt and Rufus Young, a/k/a “Equan,” a/k/a “E-Money,” a/k/a “Kintock.”

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

Between July 2010 and March 2014, Britt conspired with others to distribute heroin in Ocean and Monmouth counties as part of the Britt-Young DTO. During his plea hearing, Britt admitted that he distributed between one and three kilograms of heroin in furtherance of the conspiracy and that he served as a manager or supervisor of the conspiracy.

In addition to the prison term, Judge Sheridan sentenced Britt to five years of supervised release.

Acting U.S. Attorney Fitzpatrick credited special agents of the FBI Red Bank Resident Office, under the direction of Special Agent in Charge Timothy Gallagher, with the investigation leading to today’s sentencing.

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

Defense Counsel: Alyssa A. Cimino Esq., Fairfield, New Jersey

NEWARK, N.J. – An Oradell, New Jersey, man and a Hasbrouck Heights, New Jersey, woman, were charged today for their alleged roles in a Bergen County bank robbery, Acting U.S. Attorney William E. Fitzpatrick announced.

Joel Robbins, 47, and Wanda Soel, 52, were arrested Dec. 3, 2017, and are scheduled to make their initial appearances today before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court. They are each charged by complaint with one count of bank robbery.

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

On Dec. 3, 2017, Robbins allegedly robbed the TD Bank in Mahwah, New Jersey. According to video surveillance and witness reports, Robbins walked into the bank wearing gray pants, a black jacket, sunglasses, a dark skull cap, and light-colored latex gloves. As he entered the bank, Robbins pulled a bandana over his face. Soel allegedly waited for Robbins in a Toyota Corolla parked outside the bank.

Robbins pulled a black handgun (later determined to be fake) from his waistband and pointed it at two bank tellers, who said Robbins demanded money from them and warned them not to “make me have to kill you.” The tellers complied and handed Robbins money. Robbins took the money and walked out of the bank, dropping several bills as he departed.

Robbins allegedly got into the passenger seat of the Corolla and Soel drove away. Nearby law enforcement officers, who had received a report of the bank robbery while it was in progress, pursued the Corolla. Soel drove into the parking lot of a nearby hotel, where she and Robbins tried to switch places so Robbins could drive. When Soel got out of the Corolla, she tripped and fell, and Robbins drove away without her. Law enforcement officers arrested Soel in the hotel parking lot.

Robbins drove out of the hotel parking lot but eventually hit a curb, blew a tire, and crashed. Law enforcement officers caught up to the Corolla and arrested Robbins. They recovered U.S. currency sticking out of Robbins’s pants and other cash bills strewn inside the Corolla, along with a fake black handgun. Officers also recovered sunglasses, a bandana, a dark knit cap, and latex gloves from the Corolla, resembling the items Robbins was seen wearing when he robbed the bank. Robbins was wearing a black jacket when he was arrested.

The count of bank robbery with which Robbins and Soel are charged carries a maximum punishment of 20 years in prison and a $250,000 fine.

Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher, with the investigation leading to the charge. He also thanked the Mahwah Township Police Department for its contribution to the case.

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

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

CAMDEN, N.J. – A South Jersey man today admitted defrauding New Jersey state health benefits programs and other insurers of $800,000 by submitting fraudulent claims for medically unnecessary prescriptions, Acting U.S. Attorney William E. Fitzpatrick and N.J. Attorney General Christopher S. Porrino announced.

Timothy Frazier, 42, a commercial construction estimator from Galloway, 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

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

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

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

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

Frazier and others recruited public employees and other individuals covered by the Pharmacy Benefits Administrator to fraudulently obtain compounded medications from the Compounding Pharmacy, which were not medically necessary. Frazier secured insurance information from the individuals and passed it along to a conspirator, who had a doctor sign prescriptions without examining the individuals. The prescriptions were faxed to the Compounding Pharmacy, which filled the prescriptions and billed the Pharmacy Benefits Administrator. 

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

According to the information, the Pharmacy Benefits Administrator paid Compounding Pharmacy more than $50 million for compounded medications mailed to individuals in New Jersey. Frazier received $145,425 for his role in the scheme.  

As part of the plea agreement, Frazier must forfeit $145,425 in criminal proceeds and pay restitution of at least $801,119.

The defendant 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 March 29, 2017.

Eleven other conspirators – Matthew Tedesco, Robert Bessey, Michael Pepper, Thomas Hodnett, Steven Urbanski, John Gaffney, Judd Holt, George Gavras, Richard Zappala, Michael Neopolitan, and Andrew Gerstel – have pleaded guilty from August through November 2017 and await sentencing.

Acting U.S. Attorney Fitzpatrick 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, New York Region, under the direction of Special Agent in Charge Michael C. Mikulka, with the investigation leading to today’s guilty plea. He also thanked the Division of Pensions and Financial Transactions in the State Attorney General’s Office, under the direction of Attorney General Porrino 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:  Robert G. Stahl Esq., Westfield, New Jersey

NEWARK, N.J. – A New York woman today admitted running an investment scheme that defrauded victims of hundreds of thousands of dollars, Acting U.S. Attorney William E. Fitzpatrick announced.

Alisa Adler, 57, of New York, pleaded guilty before U.S. District Judge Claire C. Cecchi in Newark federal court to an information charging her with two counts of wire fraud.

According to documents filed Information:

From January 2009 through August 2014, Adler took loans and investments from multiple victims and told them that their money would be used for certain specified investments through her company, ASG Real Estate Services Group Inc. To induce potential victim investors to give her money, Adler provided them with promotional materials and other documents, and told them that their money would be repaid within a certain amount of time. Adler did not use the majority of invested funds for the specific real estate investments she had presented to the investors. Instead, she used it to, among other things, repay prior investors and pay her own personal expenses.

Each count of wire fraud carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the amount of the loss caused by the offense.

Acting U.S. Attorney Fitzpatrick credited special agents with the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, with the investigation leading to today’s guilty plea.

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

Defense counsel: Jacob Laufer Esq., New York

NEWARK, N.J. – A Newark man was sentenced today to 79 months in prison for robbing five banks in October and November 2016, Acting U.S. Attorney William E. Fitzpatrick announced.

Jermaine Mason, a/k/a “Asim Harris,” 40, previously pleaded guilty before U.S. District Judge William J. Martini to an information charging him with five counts of bank robbery. Judge Martini imposed the sentence today in Newark federal court.

According to documents filed in this case and statements made in court, Mason robbed the following banks on the dates set forth below:

Bank

Location

Date

Kearny Bank

Harrison

Oct. 21, 2016

PNC Bank

Jersey City

Nov. 3, 2016

Popular Community Bank

Newark

Nov. 17, 2016

Provident Bank

Jersey City

Nov. 18, 2016

Provident Bank

Kearny

Nov. 29, 2016

Mason admitted that during each of the above robberies, he either presented a note demanding cash from bank tellers or verbally demanded money.

In addition to the prison term, Judge Martini sentenced Mason to three years of supervised release and ordered him to pay $16,429 in restitution.

Mason was originally arrested by state authorities on Nov. 30, 2016 and has been in custody since that time. Prior to his arrest, he was on federal supervised release for a federal bank robbery conviction after he robbed several banks in 2006 and 2007.

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 sentencing. He also thanked the U.S. Marshals, the Kearny, Jersey City, Harrison, and Newark police departments, as well as the Hudson County and Essex County Prosecutor’s Offices for their efforts in the investigation and apprehension of Mason.

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

TRENTON, N.J. – A Bronx, New York, man was sentenced today to 110 months in prison for knowingly possessing two handguns despite being a previously convicted felon, Acting U.S. Attorney William E. Fitzpatrick announced.

Jamal Williams, 41, previously pleaded guilty before U.S. District Judge Michael A. Shipp to an information charging him with being a felon in possession of a firearm. Judge Shipp imposed the sentence today in Trenton federal court.

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

On Nov. 11, 2014, law enforcement officers arrested Williams in Trenton. After searching his residence and a storage unit he rented, they found two 9mm Ruger pistols and 16 rounds of ammunition. Williams had previously been convicted of narcotics trafficking and unlawful weapons possession felonies in New Jersey and New York state courts.

Acting U.S. Attorney Fitzpatrick credited special agents with the DEA, under the direction of Special Agent in Charge Valerie A. Nickerson in Newark, and the Mercer County Prosecutor’s Office, under the direction of Mercer County Prosecutor Angelo J. Onofri, with the investigation.

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

Defense counsel: David R. Oakley Esq., Princeton, New Jersey

Newark, N.J. – The former chief financial officer of a New Jersey orthopedic care provider today admitted stealing over $1 million from the company for his personal use, Acting U.S. Attorney William E. Fitzpatrick announced.   

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

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

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

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

The wire fraud charge carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gain or loss from the offense. As part of the plea agreement, Wolfmuller must pay $1,175,720 in restitution. Sentencing is scheduled for March 13, 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. 

The government is represented by Assistant U.S. Attorney Nicholas P. Grippo of the Economic Crimes Unit in Newark.

Defense Counsel: Salvatore T. Alfano Esq. and Louis Esposito Esq.
 

NEWARK, N.J. – A former employee at the Jersey City tax assessor’s office admitted accepting a cash bribe in exchange for changing the tax description for a Jersey City property, Acting U.S. Attorney William E. Fitzpatrick announced.

Bennie Anderson, 60, of Jersey City, pleaded guilty before U.S. District Judge Kevin McNulty in Newark federal court to an information charging him with one count of attempting to obstruct, delay and affect interstate commerce by extortion under color of official right.

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

Jersey City tax descriptions reference how many units a particular property can have. Owners who wanted to change a property’s tax description would have to seek approval from the Jersey City zoning board. The tax assessor's office would change the tax description only if the zoning board approved a zoning variance.

Anderson, by virtue of his position, had the ability to improperly change the tax description without going through the required process. In December 2012, Anderson changed the tax description of a particular property from two to three units in exchange for a cash bribe from the owner.

The extortion count to which Anderson pleaded guilty is punishable by up to 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for March 5, 2018.

Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy A. Gallagher in Newark, with the investigation.

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

Defense counsel: Gerald Miller Esq., Jersey City

NEWARK, N.J. – A tax preparer was sentenced today to 13 months in prison for preparing fraudulent income tax returns on behalf of her clients, causing losses of over $130,000, Acting U.S. Attorney William E. Fitzpatrick announced.

Shirley Arias, a/k/a “Shirley Zambrano,” 43, previously pleaded guilty before U.S. District Judge Esther Salas to an information charging her with one count of aiding and assisting others in the preparation of false and fraudulent tax returns. Judge Salas imposed the sentence today in Newark federal court.

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

Arias was an owner and operator of Santos & Associates in Union City, New Jersey. For the tax years 2012 through 2014, Arias assisted in the filing of income tax returns based on false information. She used a number of fraudulent practices, including falsely claiming deductions and fabricating educational credits in order to obtain refunds for her clients in amounts greater than those to which they were entitled. The bogus returns resulted in a tax loss to the government of approximately $130,279.

In addition to the prison term, Judge Salas sentenced Arias to one year of supervised release and ordered her to pay restitution of $130,279.

Acting U.S. Attorney Fitzpatrick credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, and inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Joseph W. Cronin, with the investigation. He also thanked special agents with the U.S. Secret Service, under the direction of Special Agent in Charge Mark McKevitt in Newark, for their assistance.

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

Defense counsel: Katey Theurer Esq., Jersey City, New Jersey

NEWARK, N.J. – The former executive director of a Newark-based childcare and community program and a partner in a political fundraising and consulting company today admitted committing wire fraud and tax evasion, Acting U.S. Attorney William E. Fitzpatrick announced.

Kiburi D. Tucker, 42, of Newark, pleaded guilty before U.S. District Judge Jose L. Linares in Newark federal court to an information charging him with one count of wire fraud and four counts of tax evasion.

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

As the executive director of The Centre Inc., Tucker embezzled Centre Inc. funds, through ATM, debit card and bank withdrawal transactions to fund his personal expenditures such as gambling, travel, and furnishing his home. Tucker defrauded The Centre Inc. of $332,116 from 2012 through 2015.

Tucker also intentionally under-reported the proceeds that he took from The Centre Inc. to the IRS. He intentionally under-reported the income that he received for tax year 2015 from his partnership in Elite Strategies, a political fundraising and consulting company, by filing false federal personal income tax returns. Tucker admitted that he was responsible for underreporting $177,040 in income from the above sources for the 2015 tax year, resulting in a tax loss of $56,509.

The count of wire fraud is punishable by a maximum penalty of 20 years in prison and a $250,000 fine. The count of tax evasion is punishable by a maximum penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for Feb. 27, 2018.

Acting U.S. Attorney Fitzpatrick 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 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: Timothy M. Donohue Esq., West Orange, New Jersey

NEWARK, N.J. – A Bergen County, New Jersey, woman today admitted using bogus litigation support companies to obtain millions of dollars from two law firms where she was a partner, Acting U.S. Attorney William E. Fitzpatrick announced.

Keila Ravelo, 52, of Englewood Cliffs, New Jersey, pleaded guilty before U.S. District Judge Kevin McNulty in Newark federal court to two counts of an indictment charging her with conspiracy to commit wire fraud (Count One) and tax evasion (Count Nine).

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

Ravelo worked as a partner for a company identified in the indictment as “Law Firm 1” from July 1, 2005, through October 2010. She then became partner in another law firm, identified in the indictment as “Law Firm 2,” and worked there from October 2010 through November 2014.

From 2008 through July 2014, Ravelo and her husband, Melvin Feliz, 51, conspired to defraud Law Firm 1 and Law Firm 2, forming two limited liability companies, “Vendor 1” and “Vendor 2,” which purported to provide litigation support to the firms, but in fact provided no actual services to the firms. Ravelo and Feliz controlled Vendor 1 and Vendor 2 bank accounts and submitted invoices to Law Firm 1 and Law Firm 2 for work that was never performed for the law firms or their clients. Ravelo, in her capacity as a partner at the law firms, approved payments to Vendor 1 and Vendor 2, which Ravelo and Feliz later used for personal expenses. The law firms paid Vendor 1 and Vendor 2 approximately $7.8 million. Ravelo and Feliz willfully failed to report the fraudulent earnings on their tax returns.

On Aug. 25, 2015, Feliz pleaded guilty before U.S. District Judge Kevin McNulty in Newark federal court to an information charging him with one count of conspiracy to commit wire fraud and one count of tax evasion. Feliz admitted that from 2008 through July 2014, he and Ravelo controlled the Vendor 1 and Vendor 2 bank accounts and submitted invoices to Law Firm 1and Law Firm 2 for work that was never performed for the law firms or their clients. He admitted that Ravelo, in her capacity as a partner at the law firms, approved payments to Vendor 1 and Vendor 2 that Ravelo and Feliz later used for personal expenses. Before pleading guilty for the role he played in this wire fraud and tax evasion conspiracy, Feliz pleaded guilty to an indictment which charged him and two other men with conspiring to distribute approximately 20 kilograms of cocaine.

The charge of conspiracy to commit wire fraud is punishable by a maximum potential penalty of 20 years in prison and $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 $250,000 fine. Sentencing for Ravelo is scheduled for March 5, 2018. Feliz is awaiting sentencing.

Acting U.S. Attorney Fitzpatrick credited law enforcement officers of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, and law enforcement officers of the Drug Enforcement Administration, Newark Division, under the direction of Special Agent in Charge Valerie A. Nickerson, with the investigation leading to today’s plea.

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

The government is represented by Assistant U.S. Attorneys Andrew Kogan, Brian Urbano and Ronnell Wilson of the U.S. Attorney’s Office Criminal Division and Assistant U.S. Attorneys Jafer Aftab and Barbara Ward, Acting Chief of the Asset Forfeiture and Money Laundering Unit.

Defense counsel: Lawrence S. Lustberg Esq., Newark, New Jersey, and Steven H. Sadow Esq., Atlanta, Georgia

NEWARK, N.J. – A New Jersey attorney and another man were charged with running a large-scale mortgage fraud scheme that involved dozens of properties in Jersey City, Clifton, Union, and elsewhere in New Jersey and caused losses of more than $30 million, Acting U.S. Attorney William E. Fitzpatrick announced.

Christopher Goodson, 44, of Newark, and Anthony Garvin, 47, of Jersey City, New Jersey, are charged by complaint with one count of conspiracy to commit bank fraud. Both defendants were arrested this morning and are expected to appear this afternoon before U.S. Magistrate Judge Leda Dunn Wettre in Newark federal court.

According to the Complaint:

From January 2011 through August 2017, Goodson, Garvin, and others engaged in a short sale mortgage fraud conspiracy targeting various New Jersey properties with mortgages that were in default.

As part of the scheme, the conspirators arranged simultaneous fraudulent transactions on the same target property. In the first transaction, which involved the sale by the current owner, the conspirators convinced the financial institution holding the mortgage to accept the sale of the target property at a loss, usually to a buyer who was secretly a conspirator or an entity controlled by the conspiracy.

In the second transaction, the conspirators flipped the same target property from the first buyer to a second buyer, who typically obtained a mortgage from another financial institution using false loan applications, pay stubs, bank account statements and title reports provided by members of the conspiracy. As a result, the second transaction frequently closed for significantly more or even double the price of the first transaction.

Goodson, Garvin, and others allegedly rigged the short sale process at each step in order to maximize the difference in price between the two transactions and keep the victim financial institutions from detecting the fraud.

For instance, Goodson, an attorney, concealed the fact that he played multiple-roles in the short sale transactions, including allegedly generating false preapproval letters from a New Jersey corporation he owned that purported to be a short-term lending company operating out of California. These letters were used to deceive banks into believing that the purchaser – typically a conspirator or entity controlled by Goodson – had the credit necessary for the transaction. Goodson also negotiated the fraudulent short sales with the banks, generated phony deeds that backdated the closing date of the first transactions, and even served as the closing attorney during some of the short sales.

Garvin was a real estate agent and investor who allegedly coordinated fraudulent transactions as part of the scheme.

The conspirators disbursed the funds into various accounts they controlled to conceal their illegal activities and split the profits. In total, the conspiracy defrauded financial institutions out of more than approximately $30 million.

The conspiracy to commit bank fraud count is punishable by a maximum potential penalty of 30 years in prison and a $1 million fine.

Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, postal inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Joseph W. Cronin, and special agents of the Federal Housing Finance Agency (FHFA) – Office of Inspector General, under the direction of Special Agent in Charge Steven Perez in Newark, with the investigation

The government is represented by Assistant U.S. Attorneys David Feder and Zach Intrater 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 defendants are considered innocent unless and until proven guilty.

NEWARK, N.J. – A resident of Jamaica, West Indies, was sentenced today to 63 months in prison for swindling elderly residents of the United States by falsely telling them they had won millions of dollars in Jamaican lotteries, Acting U.S. Attorney William E. Fitzpatrick announced.

Ricardo Reid, 32, previously pleaded guilty before U.S. District Judge Susan D. Wigenton to an indictment charging him with one count of conspiracy to commit mail and wire fraud. Judge Wigenton imposed the sentence today in Newark federal court.

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

From 2011 to 2016, Reid purchased mailing lists that contained addresses and other information of elderly individuals and then solicited these individuals by tricking them into believing they had won millions in lotteries and sweepstakes. He also told the elderly individuals that in order to redeem these fictitious winnings, they had to pay registration fees and other fees and taxes. Reid told the victims that the calls were from officials of the United States, such as the IRS, and from lottery or bank officials.

Reid admitted that he used aliases like “Robert Gates,” “Mr. Bogohazian,” and “Damien Boswel,” and used call forwarding and Voice Over Internet Protocol services to make and receive calls, all while masking his phone number and location.

In addition to the prison term, Judge Wigenton sentenced Reid to three years of supervised release and ordered him to pay restitution of $577,703.78.

Anyone with information regarding possible victims of this activity is urged to contact the U.S. Postal Inspectors in Newark at 973-693-5400.

Acting U.S. Attorney Fitzpatrick credited inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Joseph W. Cronin, and 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, with the investigation.

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

Defense counsel: K. Anthony Thomas Esq., Assistant Federal Public Defender, Newark

NEWARK, N.J. – A Jersey City, New Jersey, man was sentenced today to 210 months in prison for distributing heroin in Hoboken, New Jersey, on multiple occasions, Acting U.S. Attorney William E. Fitzpatrick announced.

Travis Thomas, a/k/a “Mush,” 27, previously pleaded guilty before U.S. District Judge Susan D. Wigenton to an indictment charging him with one count of conspiracy to distribute heroin and seven substantive counts of heroin distribution. Judge Wigenton imposed the sentence today in Newark federal court.

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

Between July 2015 and December 2015, Thomas conspired with others to distribute heroin in Hudson County, including Hoboken. Thomas admitted that he distributed over 100 grams of heroin and worked with others, including Sterling McCoy, a/k/a “Boogs,” 34, of Pleasantville, New Jersey, and Jason Henderson Wheeler, a/k/a “J,” 29, of Hoboken, in furtherance of the conspiracy.

In addition to the prison term, Judge Wigenton sentenced Thomas to eight years of supervised release. McCoy and Wheeler have also been convicted and sentenced for their roles in the conspiracy.

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.

The government is represented by Assistant U.S. Attorneys Brian Urbano and Erica Liu of the U.S. Attorney’s Office Criminal Division in Newark.

Defense Counsel: Jason N. Orlando Esq., Jersey City

NEWARK, N.J. – A cardiologist with a practice in Paterson, New Jersey, and his wife pleaded guilty today to their involvement in a test-referral bribe scheme operated by Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, New Jersey, its president and numerous associates, Acting U.S. Attorney William E. Fitzpatrick announced.

Aiman Hamdan, 50, pleaded guilty before U.S. District Judge Stanley R. Chesler to a superseding information charging him with accepting bribes in violation of the Federal Travel Act. His wife, Kristina Hamdan, 39, pleaded guilty before Judge Chesler to Counts One and Thirteen of an indictment charging her with conspiracy to violate the Anti-Kickback Statute, the Federal Travel Act and the honest services wire fraud statute, and conspiracy to commit money laundering.

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

In September 2008, Aiman Hamdan was given a $500,000 loan by BLS in exchange for his agreement to refer patient blood samples to BLS. From October 2008 through November 2008, Aiman Hamdan caused approximately $53,000 of blood samples to be referred to BLS, resulting in the lab being paid that amount by Medicare and private insurance companies.

From November 2009 through April 2013, Kristina Hamdan, a former sales employee of the lab, agreed with others to pay doctors illegal bribes in exchange for the doctors’ agreement to refer patient blood specimens to BLS. For example, Kristina Hamdan bribed Yousef Zibdie, 53, of Wayne, an internal medicine doctor with a practice in Woodland Park, in exchange for generating more than $900,000 in lab business for BLS. The bribes were funded by BLS and, in an effort to obscure the source and nature of the payments, paid to the doctors by Kristina Hamdan through a sham entity that also paid the Hamdans’ household and personal expenses.

Aiman Hamdan faces a maximum potential penalty of five years in prison on the Federal Travel Act charge. Kristina Hamdan faces a maximum potential penalty of five years in prison on Count One of the indictment and a maximum potential penalty of 20 years in prison on Count Thirteen of the indictment. Each count also carries a maximum $250,000 fine, or twice the gross gain or loss from the offense.

As part of their guilty pleas, Aiman and Kristina Hamdan agreed to forfeit and pay back $15,000 and $1.2 million in criminal proceeds, respectively. Sentencing for both defendants is scheduled for Feb. 14, 2018.

Zibdie previously pleaded guilty on June 21, 2017 and awaits sentencing.

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

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

Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Joseph W. Cronin; IRS–Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; and the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert, with the ongoing investigation.

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

The New Jersey U.S. Attorney’s Office reorganized its health care fraud 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 $1.37 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.
 

Defense counsel: Aiman Hamdan: Lee Vartan Esq., West Orange, New Jersey, and Joseph A. Hayden, Jr., Esq., Hackensack, New Jersey
Kristina Hamdan: Edward J. Bilinkas Esq., Randolph, New Jersey

NEWARK, N.J. – Two insurance companies that are part of one of the largest providers of automobile insurance in the United States have agreed to pay more than $2 million to resolve allegations that they violated the False Claims Act by causing Medicare and Medicaid to pay for claims for which the companies were responsible, Acting U.S. Attorney William E. Fitzpatrick announced today.

Progressive Casualty Insurance Co., of Cleveland, Ohio, and Progressive Garden State Insurance Co., of West Trenton, New Jersey, are part of the Progressive Group of Insurance Companies, one of the nation’s largest auto insurance providers.

If an individual has Medicare or Medicaid and other private health insurance coverage, each type of coverage constitutes a “payer.” The insurance coverage that pays first, referred to as the “primary payer,” typically pays to the limits of its coverage for an individual’s health care claims. Generally, if there are health care costs that the primary payer does not cover, these costs may then be paid by the individual’s other insurance coverage, referred to as the “secondary payer.”

Under federal and New Jersey state law, if an individual has both private insurance and Medicare or Medicaid, neither Medicare nor Medicaid may serve as the primary payer for certain claims and the private insurer must remain as the primary payer.

According to the allegations in this case, under “health first” automobile insurance policies that it offered, Progressive designated the policyholder’s health insurance carrier as the primary payer for medical claims that arose in connection with an automobile accident. Even though, under the law, Progressive could not decline to make primary payment to Medicare or Medicaid beneficiaries, the company permitted Medicare and Medicaid beneficiaries to elect a “health first” policy. Many of these policyholders in New Jersey who were Medicare or Medicaid beneficiaries incurred medical claims in connection with an automobile accident. Because Progressive’s “health first” policies designated the company as the secondary payer, Medicare and Medicaid improperly paid for claims that Progressive should have paid. The United States and New Jersey alleged that this conduct violated the Medicare Secondary Payer Act and Medicaid regulations and, as a result, Progressive caused false claims to be submitted to Medicare and Medicaid.

The allegations were raised in a lawsuit filed under the qui tam, or whistleblower, provisions of the False Claims Act. The act allows private citizens with knowledge of fraud to bring civil actions on behalf of the government and to share in any recovery. The whistleblower will receive more than $600,000 of the more than $2 million that the United States and New Jersey recovered.

The settlement is the culmination of an investigation conducted by special agents of 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 Office in Newark.

The U.S. Attorney’s Office reorganized its health care fraud practice in 2010, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $1.37 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.

The claims settled by this agreement are allegations only, and there has been no determination of liability. The case is captioned United States ex rel. Nergon v. Progressive Casualty Insurance Company, et al. (D.N.J.).
 

Defense counsel: Michael K. Loucks Esq., Boston

Relator’s counsel: Jeremy Abay Esq. and John Weston Esq., Philadelphia

NEWARK, N.J. – A Brooklyn, New York, man was arrested this morning for allegedly collecting drug distribution proceeds and laundering money on behalf of a heroin distribution conspiracy operating out of Nigeria, Acting U.S. Attorney William E. Fitzpatrick announced.

Anderson Ajimavo, 62, is charged by complaint with one count of conspiracy to distribute and possess with intent to distribute one kilogram or more of heroin and one count of conspiracy to commit money laundering. He is scheduled to appear this afternoon before U.S. Magistrate Leda Dunn Wettre in Newark federal court.

According to the complaint:

The FBI and Homeland Security Investigations (HSI) have been investigating a drug trafficking organization operating in Nigeria, New York, New Jersey, and elsewhere. During that investigation, law enforcement learned that the drug trafficking organization employed individuals to ingest heroin pellets and fly to the United States to deliver the drugs to other members of the organization.

Ajimavo was allegedly employed by the drug trafficking organization to collect, transmit, and launder the narcotics proceeds. A confidential source (CS-1) who received the heroin from the couriers after they arrived in the United States was instructed by the leader of the drug trafficking organization to pay for the heroin through Ajimavo.

On a least four occasions from November 2016 through March 2017, CS-1 met with Ajimavo and paid him a total of over $75,000 in narcotics proceeds, which Ajimavo was to transmit to the drug trafficking organization in Nigeria.

The heroin distribution conspiracy charge carries a mandatory minimum penalty of 10 years in prison, a maximum of life imprisonment, and a $10 million fine. The money laundering conspiracy charge carries a maximum potential penalty of 20 years in prison and a $500,000 fine, or twice the gross gain or loss from the offense.

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

Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; 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 Meredith Williams of the U.S. Attorney’s Office OCDETF/Narcotics Unit in Newark.

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

TRENTON, N.J. – A Trenton man today admitted his role in a conspiracy to distribute over a kilogram of cocaine and crack cocaine in the Trenton area, Acting U.S. Attorney William E. Fitzpatrick announced.

Bobby Williams, 37, pleaded guilty before U.S. District Judge Michael A. Shipp in Trenton federal court to Count One of a superseding indictment charging him with conspiracy to distribute and possess with intent to distribute 500 grams or more of cocaine and to manufacture, distribute, and possess with intent to distribute 28 grams or more of cocaine base.

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

From September 2013 through his arrest on Jan. 13, 2016, Williams conspired with co-defendants Khalfini Richardson, William Enmond and Capitol T. Wellons to distribute cocaine and manufacture and distribute crack cocaine primarily from two adjacent residences in Trenton.

At his plea hearing, Williams admitted conspiring to distribute a total of 1.72 kilograms of cocaine and 82.9 grams of crack cocaine.

The count to which Williams pleaded guilty carries a mandatory minimum sentence of five years in prison, a maximum potential penalty of 40 years in prison and a $5 million fine. Sentencing is scheduled for March 6, 2018.

Enmond entered a guilty plea and was sentenced on July 20, 2017 to 60 months in prison. Richardson and Wellons have also pleaded guilty and await sentencing.
Acting U.S. Attorney Fitzpatrick credited special agents of the Drug Enforcement Administration, under the direction of Special Agent in Charge Valerie A. Nickerson in Newark, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorneys Molly Lorber and Joseph Gribko of the U.S. Attorney’s Office Criminal Division in Trenton.

Defense counsel: John S. Furlong Esq.

CAMDEN, N.J. – An Atlantic County, New Jersey, woman today admitted her role in a more than $200,000 mortgage fraud conspiracy involving a property she purchased in Mays Landing, New Jersey, Acting U.S. Attorney William E. Fitzpatrick announced.

Betsy Borges, 38, of Mays Landing, pleaded guilty before Senior U.S. District Judge Jerome B. Simandle in Camden federal court to an information charging her with one count of conspiracy to commit bank fraud.

Borges was originally charged by complaint in May 2017 with Iraida Fuentes, 35, of Pleasantville, New Jersey.

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

In December 2002, Borges purchased 4957 Cardigan Court in Mays Landing.  Despite failing to make mortgage payments to Wachovia and its successor, Wells Fargo, Borges collected rental income from tenants living in the property and concealed that income from the banks. Borges also falsely represented to Wells Fargo, on multiple occasions, that she could not make the mortgage payments for the property.

Borges subsequently arranged with Wells Fargo for Fuentez to purchase the property through a short sale. Not only did Borges and Fuentez conceal their familial relationship from Wells Fargo, they also concealed the fact that Borges and another conspirator provided Fuentez the funds to purchase the property.

On Sept. 20, 2012, Fuentez purchased the property at a price well below its actual value. On Nov. 22, 2016, B&B Properties – a company owned in part by Borges – purchased the property from Fuentez for $25,000. On Feb. 3, 2017, Borges then individually purchased the property from B&B Properties for a dollar. 

The bank fraud conspiracy charge carries a maximum potential penalty of five years in prison and a $250,000 fine. As part of her plea agreement, Borges must forfeit $206,450 in criminal proceeds from the scheme. Sentencing is scheduled for Feb. 23, 2018.

Fuentes previously pleaded guilty on Nov. 6, 2017 to making a false declaration in the grand jury in relation to this matter and awaits sentencing. 

Acting U.S. Attorney Fitzpatrick credited agents of the FBI’s Atlantic City Resident Agency, 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 Atlantic County Prosecutor’s Office, under the direction of Prosecutor Damon Tyner, and the Ocean County Prosecutor’s Office, under the direction of Prosecutor Joseph D. Coronato, for their assistance.
            
The government is represented by Assistant U.S. Attorney Jacqueline M. Carle of the U.S. Attorney’s Office Criminal Division in Camden.

Defense counsel: Louis M. Barbone Esq., Atlantic City, New Jersey.
 

CAMDEN, N.J. – A Galloway, New Jersey, man today admitted defrauding New Jersey state health benefits programs and other insurers out of nearly $500,000 by submitting fraudulent claims for medically unnecessary prescriptions, Acting U.S. Attorney William E. Fitzpatrick and New Jersey Attorney General Christopher S. Porrino announced.

Andrew Gerstel, 39, a pharmaceutical sales representative, pleaded guilty before U.S. District Judge Robert B. Kugler in Camden federal court to an information charging him with conspiracy to commit health care fraud.

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

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

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

Gerstel recruited public employees and other individuals covered by the Pharmacy Benefits Administrator to fraudulently obtain compounded medications that were reimbursed for the highest amounts, without regard to their medical necessity. The prescriptions were then faxed to Compounding Pharmacy, which filled the prescriptions and billed the Pharmacy Benefits Administrator.

The pharmacy paid one of Gerstel’s conspirators a percentage of each prescription filled and paid by the Pharmacy Benefits Administrator, which was then distributed to Gerstel and other members of the conspiracy. Gerstel paid recruiters under him and individuals with insurance coverage 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 his plea agreement, Gerstel must forfeit $184,389.05 in criminal proceeds he received for his role in the scheme and pay restitution of at least $483,946.72.

Gerstel faces a maximum penalty of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for Feb. 26, 2018.

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

Acting U.S. Attorney Fitzpatrick 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 Special Agent in Charge Michael C. Mikulka in New York, with the investigation leading to the guilty plea. He also thanked the Division of Pensions and Financial Transactions in the State Attorney General’s Office, under the direction of Attorney General Porrino 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: Ralph A. Paolone Esq., Galloway

Former Chief Financial Officer Has Pleaded Guilty to Related Charge

NEWARK, N.J. – The minority owner of Cinelli Iron & Metal Co. (CIMCO) today admitting operating a 17-year conspiracy that defrauded customers out of millions of dollars, Acting U.S. Attorney William E. Fitzpatrick announced.

Craig Cinelli, 47, of Allendale, New Jersey, pleaded guilty before U.S. District Judge Susan D. Wigenton in Newark federal court to Count One of an indictment that charged him with conspiracy to commit wire fraud.

David Barteck, 53, of Wood Ridge, New Jersey, the former chief financial officer of CIMCO, and Michael A. Valenti III, 43, of Hasbrouck Heights, New Jersey, the former senior vice president of sales at CIMCO, each previously pleaded guilty before Judge Wigenton to participating in the conspiracy.

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

CIMCO, which was headquartered in Secaucus, New Jersey, purchased scrap metal for resale and operated three scrap metal recycling facilities in New Jersey. CIMCO trucks would deliver scrap metal containers to customer jobsites and remove them after they were filled. CIMCO then purportedly paid customers based on the type and net weight of the scrap material.

From 1999 through March of 2016, Craig Cinelli, his brother, Joseph Cinelli Sr., Barteck, Valenti, and others allegedly used a variety of fraudulent business practices to buy scrap metal from CIMCO’s customers for less than CIMCO should have paid. The company then resold the scrap metal at a profit.

Instead of paying the proper, agreed-upon amounts for the actual weight, members of the conspiracy used a variety of techniques to misrepresent the true weight and type of the scrap metal, including altering documents to reflect a lower weight, removing scrap metal from a haul before it was weighed and misrepresenting the types of scrap metal contained in a haul. Cinelli admitted that the loss caused by the conspiracy that was reasonably foreseeable to him was more than $9.5 million, but less than $25 million.

The wire fraud conspiracy and substantive wire fraud counts each carry a maximum potential penalty of up to 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for Feb. 15, 2018.

Charges against Joseph Cinelli Sr., remain pending, and he is presumed innocent unless and until proven guilty.

Acting U.S. Attorney Fitzpatrick credited special agents with the U.S. Department of Labor, Office of Inspector General, under the direction of Special Agent in Charge Michael Mikulka in New York; special agents with the U.S. Department of Transportation, Office of Inspector General, under the direction of Special Agent in Charge Douglas Shoemaker in New York; 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 guilty plea.

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

This case 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’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. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.

Defense counsel: Ray Flood Esq., Hackensack, New Jersey

NEWARK, N.J. – An Indian national admitted that he assaulted a girl on a flight from Seattle, Washington, to Newark Liberty International Airport, Acting U.S. Attorney William E. Fitzpatrick announced today.

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.  
 
Under the terms of the plea agreement, Krishnappa will be sentenced to between 30 and 90 days in prison. Sentencing is scheduled for Jan. 17, 2018.

Acting U.S. Attorney Fitzpatrick 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 the charges.

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

Defense counsel: John H. Yauch Esq., Newark
 

NEWARK, N.J. – John M. Fietkiewicz, Counsel to the U.S. Attorney for the District of New Jersey, was honored today with the Charles J. Hollenbeck Award at the N.J. Commission on Professionalism in the Law awards luncheon in Somerset.

“John has served our office with distinction and professionalism for more than three decades,” Acting U.S. Attorney William E. Fitzpatrick said. “His role in overseeing the preparation of cases for trial has been invaluable in ensuring that when our Assistant U.S. Attorneys walk into court, they are completely prepared. He embodies the highest principles of what public service is all about.”

Fietkiewicz has held a variety of positions in the U.S. Attorney’s Office since starting in October 1985. Prior to becoming a member of the U.S. Attorney’s Front Office as Counsel to the U.S. Attorney in March 2013, he was the Chief Litigation Counsel for three years, a Senior Litigation Counsel in the Special Prosecutions Division for seven years, the Deputy Chief of the Fraud Division for 11 years, and an AUSA in the Fraud Division, Criminal Division, and Appeals Division for six years. Since 2005, he has been the Office’s Professional Responsibility Officer. He created the office’s Trial Supervision Program in 2010 and has run it ever since

Fietkiewicz received his J.D., cum laude, from the Fordham University School of Law, where he was Editor-in-Chief of the Fordham Law Review. He received his B.A., magna cum laude, from Montclair State College. Prior to coming to the U.S. Attorney’s Office, he clerked for the Honorable Gerard L. Goettel, United States District Judge, Southern District of New York, and he was associated with the New York law firm of Cahill Gordon & Reindel.

The Hollenbeck award is given annually to someone who is “licensed to practice law in the state of New Jersey; employed by a governmental agency at the federal, state, county or municipal level, or by a nonprofit organization that serves the needs of the legal community; and has served with diligence, competence and dedication to the profession.” The award is named for Charles Hollenbeck who dedicated a majority of his nearly four-decade career as an attorney to improving the quality of legal services throughout the state.

One Defendant Also Pleads Guilty to Assaulting Federal Officers

 

TRENTON, N.J. – Two New Jersey men today admitted their roles in a conspiracy to distribute 140 kilograms of narcotics in New Jersey, Acting U.S. Attorney William Fitzpatrick announced.

Gemal Singleton, 27, of Edison, New Jersey, and Siddeeq Q. Williams, 39, of Cranford, New Jersey, pleaded guilty before U.S. District Judge Brian R. Martinotti in Trenton federal court to separate informations charging them each with one count of conspiracy to possess with intent to distribute more than one kilogram of heroin and five kilograms of cocaine. Williams also pleaded guilty to one count of assaulting federal officers. 

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

Singleton, Williams, and others arranged for cocaine and heroin to be shipped to New Jersey via tractor trailer. On Aug. 27, 2017, the tractor trailer arrived in New Jersey and law enforcement conducted a vehicle stop after the driver committed several traffic violations. A subsequent search of the tractor-trailer recovered five large duffle bags containing a total of 56 kilograms of heroin and 85 kilograms of cocaine. Singleton and Williams admitted that they were supposed to meet the tractor-trailer to collect the narcotics for eventual distribution.

On Aug. 30, 2017, law enforcement went to speak with Singleton and Williams. Williams admitted that when two law enforcement officers operating an undercover vehicle attempted to pull him over, he sped away in a Honda Pilot. Williams also admitted that during the ensuing pursuit, he rammed the Pilot into the officers’ vehicle and drove away.

The drug conspiracy charge carries a mandatory minimum penalty of 10 years in prison, a maximum potential penalty of life in prison, and a $10 million fine. The charge of assaulting a federal officer carries a maximum penalty of 20 years in prison and a $250,000 fine. Sentencing for both defendants is scheduled for Feb. 20, 2018. 

Acting U.S. Attorney Fitzpatrick credited special agents with the Drug Enforcement Administration, under the direction of Special Agent in Charge Valerie A. Nickerson in Newark, with the investigation leading to today’s guilty pleas.

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

Defense counsel:

Singleton: Robert DeGroot Esq., Newark

Williams: Jon Kearney Esq., Kearny, New Jersey    

NEWARK, N.J. – An internal medicine doctor practicing in Staten Island, New York, was sentenced today to 33 months in prison for taking bribes in connection with a long-running and elaborate test referral scheme operated by Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, New Jersey, its president and numerous associates, Acting U.S. Attorney William E. Fitzpatrick announced.

Ahmed El Soury, 45, of Monmouth Junction, New Jersey, previously pleaded guilty before U.S. District Judge Stanley R. Chesler to Count One of an indictment charging him with conspiracy to violate the Anti-Kickback Statute, the Federal Travel Act, and the honest services wire fraud statute. Judge Chesler imposed the sentence today in Newark federal court.

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

El Soury admitted accepting cash bribes in return for referring patient blood specimens to BLS. From March 2011 through April 2013, El Soury received bribes totaling more than $66,000 from BLS employees and associates. El Soury’s referrals generated approximately $650,000 in lab business for BLS.

The investigation has thus far resulted in 51 convictions – 37 of them doctors – in connection with the bribery scheme, which its organizers have admitted involved millions of dollars in bribes and resulted in more than $100 million in payments to BLS from Medicare and various private insurance companies. It is believed to be the largest number of medical professionals ever prosecuted in a bribery case.

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

In addition to the prison term, Judge Chesler sentenced El Soury to three years of supervised release and fined him $7,500.

Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Joseph W. Cronin; IRS–Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; and the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert, with the ongoing investigation.

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

The New Jersey U.S. Attorney’s Office reorganized its health care fraud 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 $1.37 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.

Defense counsel: Albert Dayan Esq., Kew Gardens, New York

CAMDEN, N.J. – A Cumberland, County, New Jersey, man today admitted robbing two banks with an accomplice, Acting U.S. Attorney William E. Fitzpatrick announced.

Quintin L. Jones, 35, pleaded guilty before U.S. District Court Judge Renée Marie Bumb to an information charging him with two counts of bank robbery.

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

On Oct. 11, 2016, Jones and an accomplice robbed a Cape Bank in Upper Deerfield Township, New Jersey. According to bank employees and video surveillance, two men wearing black hooded sweatshirts entered the bank. While one man crouched near the entrance and pointed what appeared to be a black revolver at employees, the other man approached bank tellers and directed them to place cash into a bag.

Afterwards, both robbers fled with $24,926 in stolen money from the bank. Employees observed a tan or gold vehicle with a black soft-top rapidly exit the parking lot and turn in the direction of Vineland. Security cameras at the bank and an employee also captured pictures of the car. Investigators determined that the car matched the description of a Chrysler Sebring that was stolen on Sept. 22, 2016, during a carjacking in the parking lot of a Walmart in Mays Landing, New Jersey.

The following Saturday, on Oct. 15, 2016, troopers with the N.J. State Police responded to a vehicle fire at a parking lot in Parvin State Park in Pittsgrove Township, New Jersey. After fire personnel extinguished the flames, troopers determined that the vehicle was the same car that had been stolen in the carjacking on Sept. 22, 2016.

Subsequent investigation revealed that Jones and the accomplice had purchased a gas can at a Walmart in Vineland and then took a cab to a Wawa gas station near Parvin State Park, where they purchased gas shortly before police responded to the vehicle fire. Investigators also learned that Jones, who had been staying at a local hotel on Oct. 15, 2016, had been observed by an employee placing a large amount of cash in a bag. Acting on this and other information, the State Police later obtained state arrest warrants for Jones and the accomplice along with search warrants for their residences. Law enforcement personnel who searched the accomplice’s residence also found clothing consistent with the outfits worn by the two men during the Cape Bank robbery as well as a toy revolver, cash, gloves, and a car key that appeared to be for the Chrysler Sebring.

Jones also admitted robbing Newfield National Bank in Newfield, New Jersey, on Oct. 7, 2016, with the accomplice. During that robbery, Jones and the accomplice stole $5,557 before fleeing in the same stolen Chrysler Sebring.

The counts with to which Jones pleaded guilty each carry a maximum punishment of 20 years in prison and a $250,000 fine. Sentencing is scheduled for Feb. 16, 2018.

The charges against Jones’ accomplice, Nathan L. Wallace of Vineland, remain pending, and he is considered innocent unless and until proven guilty.

Acting U.S. Attorney William E. 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 FBI’s Philadelphia Division, South Jersey Resident Agency, under the direction of Special Agent in Charge Michael Harpster; the N.J. State Police, under the direction of Col. Rick Fuentes. He also thanked 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 for their roles in 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: Megan J. Davies Esq., Cherry Hill, New Jersey

TRENTON, N.J. – A Miami man today admitted his role in a conspiracy to distribute over 45 kilograms of narcotics, including heroin, fentanyl, cocaine, and morphine, Acting U.S. Attorney William E. Fitzpatrick announced.

Sauro D. Estevez Figueredo, 49, pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton federal court to Count One of an indictment charging him with conspiracy to possess with intent to distribute more than one kilogram of heroin, five kilograms or more of cocaine, 400 grams or more of fentanyl, and morphine.

Figueredo was originally arrested with Edwin Alamo Jr., 22, Emmanuel Gonzalez, 33, both of Bronx, New York, Alberto Mora, 53, of Morriston, Florida, and Porfirio Peralta-Nunez, 38, of Jersey City, New Jersey, in February 2016. All five defendants have since pleaded guilty to their roles in the drug distribution conspiracy.

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

On Feb. 5, 2016, law enforcement observed a tractor trailer, driven by Figueredo and Mora, parked at an intersection near a store in Clifton, New Jersey. That afternoon, Gonzalez and Alamo drove to the tractor trailer and left with a suitcase given to them by Mora. Later, Peralta-Nunez arrived at the tractor trailer with two empty bags and left shortly afterwards with the bags filled.

Figueredo admitted that he collected narcotics and transported them via tractor trailer to New Jersey. He also admitted that Mora handed out a suitcase with 22 kilograms of heroin and afterwards, another conspirator took two bags containing fentanyl, morphine and heroin from the tractor trailer. He further admitted that there were two additional bags on the tractor trailer – one that contained 10 kilograms of fentanyl and one that contained 10 kilograms of cocaine – that would have been provided to other conspirators if not for law enforcement’s intervention.

The drug distribution conspiracy charge carries a mandatory minimum penalty of 10 years in prison, a maximum potential penalty of life in prison and a $10 million fine. Figueredo’s sentencing is scheduled for Feb. 15, 2017.

The government is represented by Assistant U.S. Attorneys Meredith Williams and Elaine Lou of the Criminal Division in Newark.

Acting U.S. Attorney Fitzpatrick credited special agents with the Drug Enforcement Administration, under the direction of Special Agent in Charge Valerie A. Nickerson in Newark, with the investigation leading to today’s guilty plea.

Defense Counsel: Michael D’Alessio Esq., West Orange, New Jersey

NEWARK, N.J. – A Newark woman today admitted evading taxes while operating her political fundraising and consulting business in 2015, Acting U.S. Attorney William E. Fitzpatrick announced.

Linda O. Jumah, 35, pleaded guilty before Chief U.S. District Judge Jose L. Linares in Newark federal court to an information charging her with one count of tax evasion. She was released on $75,000 unsecured bond.

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

As owner of Elite Strategies LLC, Jumah intentionally under-reported income that she received from the business for tax year 2015 by filing a false federal personal income tax return. Jumah admitted that after sharing proceeds with a business partner, she under-reported $121,941 in income for the 2015 tax year, resulting in a tax loss of $39,633.

The tax evasion charge carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for Feb. 14, 2018.

Acting U.S. Attorney Fitzpatrick credited special agents of IRS – Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; and the U.S. Department of Housing and Urban Development, Office of Inspector General, under the direction of Special Agent in Charge Christina Scaringi, with the investigation leading to today’s guilty plea.

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

Defense counsel: Robert G. Stahl Esq., Westfield, New Jersey.

NEWARK, N.J. – A Bronx, New York, man today admitted his role in an extensive scheme to obtain money through fraudulently obtained refund checks issued by the U.S. Treasury, Acting U.S. Attorney William E. Fitzpatrick announced.          

 

Hector Urena pleaded guilty before U.S. District Judge John Michael Vazquez in Newark federal court to an information charging him with one count each of conspiracy to steal government funds, theft of government funds, and aggravated identity theft (Count Three). 

 

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

 

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

 

The investigation revealed that Urena and others participated in a classic SIRF scheme.  Urena’s conspirators obtained stolen identities to file fraudulent Form 1040s. He and his conspirators then used false and fraudulent documents to convert treasury checks into cash or other proceeds for their own profit at a check cashing business Urena owned. From August 2013 through May 2015, the scheme caused more than $2.7 million in losses to the U.S. Treasury.

 

The counts of conspiracy to steal government funds is punishable by up to five years in prison. The count of theft of government funds is punishable by a maximum potential penalty of 10 years in prison. Both counts are also punishable by a fine of up to $250,000, or twice the gain or loss caused by the offense. The count of aggravated identity theft is punishable a statutory mandatory prison sentence of two years that must be served consecutively to any term of imprisonment imposed for the violation of any other count. Sentencing is scheduled for Jan. 25, 2018.          

 

Acting U.S. Attorney Fitzpatrick credited special agents of the IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; postal inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Joseph W. Cronin; special agents of the U.S. Postal Service Office of Inspector General, under the direction of Special Agent in Charge Monica Weyler; and special agents of the U.S. Secret Service, under the direction of Special Agent in Charge Mark McKevitt; with the investigation leading to today’s guilty plea. 

 

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

 

Defense counsel: James Kousouros Esq., New York 

                                                                                   

NEWARK, N.J. – A Nigerian national was arrested for his role in a conspiracy to use ingested pellets to smuggle heroin from Nigeria into the United States, Acting U.S. Attorney William Fitzpatrick announced today.

Michael Awotunde, 52, of Lagos, Nigeria, is charged by complaint with one count of conspiracy to import 100 grams or more of heroin.

Awotunde was arrested at John F. Kennedy International Airport on Nov. 3, 2017. He appeared this afternoon before U.S. Magistrate Judge James B. Clark III in Newark federal court and was detained.

According to the complaint:

The FBI and Homeland Security Investigations (HSI) have been investigating a drug trafficking organization operating in Nigeria, New York, New Jersey, and elsewhere. During that investigation, law enforcement learned that the drug trafficking organization employed individuals to ingest heroin pellets and fly to the United States to deliver the drugs to other members of the organization.

On Jan. 26, 2017, one such courier, Ramota Okuleye, 64, also of Lagos, traveled from Nigeria to the United States after ingesting heroin for delivery to a confidential source (CS-1). On Jan. 27, 2017, Okuleye arrived in Newark and provided CS-1 with approximately 68 heroin pellets totaling 979 grams of heroin.

During their conversations, Okuleye explained that she primarily worked for Awotunde, but was transporting drugs for a different person. She told CS-1 to reach out to Awotunde for future transactions and provided CS-1 with a telephone number for Awotunde.

On Feb. 8, 2017, CS-1 spoke with Awotunde and the two agreed to work together in the future. On Sept. 8, 2017, Awotunde agreed to sell CS-1 heroin.

On Oct. 19, 2017, Okuleye returned to the United States after ingesting approximately 51 pellets that tested positive for heroin. She was arrested in October 2017 and charged by federal criminal complaint. Afterwards, Awotunde reached out to CS-1 and expressed concern over her arrest.

Awotunde faces a mandatory minimum penalty of five years in prison, a maximum potential penalty of 40 years in prison, and a $5 million fine.

The charges and allegations against Awotunde and Okuleye are merely accusations, and both defendants are considered innocent unless and until proven guilty.

Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), Newark Field Office, under the direction of Acting Special Agent in Charge Debra Parker; 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 Meredith Williams of the U.S. Attorney’s Office OCDETF/Narcotics Unit in Newark.

Defense counsel: Thomas F.X. Dunn Esq., Glen Rock, New Jersey.

NEWARK, N.J. – A Bayonne, New Jersey, man today admitted robbing Bayonne Community Bank in Jersey City, New Jersey, on May 25, 2016, Acting U.S. Attorney William E. Fitzpatrick announced.

Patrick O’Boyle, 60, pleaded guilty before U.S. District Judge Susan D. Wigenton in Newark federal court to an indictment charging him with one count of bank robbery.

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

On May 25, 2016, O’Boyle robbed the Bayonne Community Bank by approaching the teller and demanding all “your 100s, 50s, and 20s and make it quick because my car is double parked outside.” O’Boyle had his left arm clutched at his side as if he had something under his hooded sweatshirt, which the teller thought might have been a gun. The teller handed him cash, and O’Boyle fled the bank.

The bank robbery charge carries a maximum 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 Feb. 20, 2018.

Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, and officers of the Jersey City Police Department, under the direction of Director James Shea, with the investigation leading to the charges.

The government is represented by Assistant U.S. Attorney Ari B. Fontecchio of the U.S. Attorney’s Office Criminal Division in Newark.

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

NEWARK, N.J. – Two New York men today admitted their roles in a $3.5 million scheme to use false information and simultaneous loan applications at multiple banks to fraudulently obtain home equity lines of credit, a practice known as “shotgunning,” Acting U.S. Attorney William E. Fitzpatrick announced.

Simon Curanaj, 62, of Yonkers, New York, and Michael Arroyo, 59, of Bronx, New York, each pleaded guilty before U.S. District Judge John Michael Vazquez in Newark federal court to separate informations charging them with conspiracy to commit bank fraud.

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

From 2012 through January 2014, Curanaj, Arroyo, and others conspired to fraudulently obtain multiple home equity lines of credit (HELOCs) from banks on residential properties in New Jersey and New York, including a residential property on Havermeyer Avenue in the Bronx. In 2013, Curanaj, Arroyo, and others transferred ownership of the property to an individual living at the property and his family friend.

Curanaj, Arroyo, and others then applied, in the family friend’s name, for two HELOCs from two banks using the Havermeyer Avenue property as collateral. They hid from the lenders the fact that the property was either already subject to senior liens that had not yet been recorded, or that the same property was offered as collateral for a line of credit from another lender. The applications also falsely inflated the family friend’s income without his knowledge. In addition, the equity in the property was far less than the amount of the HELOC loans Curanaj, Arroyo, and others applied for.

The victim banks eventually issued loans to the family friend in excess of $500,000. After the victim banks deposited money into the family friend’s bank accounts, portions of the funds were disbursed to Curanaj, Arroyo, and others.  Eventually, the family friend defaulted on the two HELOC loans.

The overall scheme resulted in $3.5 million in losses to the victim banks.

The conspiracy to commit bank fraud count carries a maximum potential penalty of 30 years in prison and a $1 million fine, or twice the gross gain or loss from the offense. Sentencing for Curanaj and Arroyo is scheduled for Feb. 27, 2018.

Acting U.S. Attorney Fitzpatrick credited special agents of the Federal Housing Finance Agency (FHFA) – Office of Inspector General, under the direction of Special Agent in Charge Steven Perez in Newark, and special agents of the FBI, under the direction of Special Agent in Charge 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, Office of the Inspector General.

Defense counsel:

Curanaj: Anthony Iacullo Esq.
Arroyo: Telesforo Del Valle Esq.

CAMDEN, N.J. – Two Trenton, New Jersey, men admitted robbing Metro PCS stores in Willingboro, New Jersey, Lumberton, New Jersey, and Levittown, Pennsylvania, in September and October 2016, Acting U.S. Attorney William E. Fitzpatrick announced today.

Rodney Day, 26, pleaded guilty today before U.S. District Judge Joseph H. Rodriguez in Camden federal court to an information charging him with one count of conspiracy to commit Hobbs Act robberies. Zeldrick Nance, 30, pleaded guilty before Judge Rodriguez to a separate information with the same charge on Oct. 30, 2017. Both defendants have been in custody since their arrest on Jan. 3, 2017.

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

On Sept. 29, 2016, Day, Nance and Lisa Anderson, 34, of Griffithville, Arkansas, drove to the Willingboro Metro PCS Store. Day brandished what appeared to be a firearm while Nance duct taped the store occupants and placed them into a store bathroom. Meanwhile, Anderson stole cellular telephones and money from the cash registers. During the robbery, Day demanded the keys to a car owned by one of the victims. Day, Nance, and Anderson fled with the stolen cellular telephones and money in that stolen car.

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

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

The charge of conspiracy to commit Hobbs Act robberies carries a maximum potential penalty of 20 years in prison and a $250,000 fine. Sentencing for Day and Nance is set for Feb. 14, 2018 and Feb. 7, 2018, respectively.

Anderson has been in custody since her arrest on Jan. 3, 2017. She has pleaded guilty to her role in the robberies and is currently scheduled for sentencing on Dec. 5, 2017.

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 this week’s guilty pleas. He also thanked the Willingboro, Lumberton, and Levittown police departments, as well as the Burlington and Mercer County Prosecutor’s Offices for their assistance in this case.

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

Defense counsel:

Day: Peter A. Levin Esq., Philadelphia

Nance: Robert Wolf Esq., Westmont, New Jersey

CAMDEN, N.J. – The retired chief of the Bordentown Township Police Department was arrested and charged today with committing a hate crime and violating a man’s civil rights by using excessive force during an arrest, Acting U.S. Attorney William E. Fitzpatrick and FBI Special Agent in Charge Timothy Gallagher announced. 

 

Frank M. Nucera Jr., 60, of Bordentown, New Jersey, was arrested by FBI agents this morning and charged with a hate crime assault and the deprivation of civil rights under color of law. Nucera, who was the township administrator as well as its police chief before he retired earlier this year, will make his initial appearance before U.S. Magistrate Judge Ann Marie Donio in Camden federal court.

 

“The nobility of police officers is rooted in their selfless commitment to protect our communities and their pledge to honor our constitutional values. As Chief of the Bordentown Township Police Department, the defendant dishonored the profession by doing neither,” Acting U.S. Attorney Fitzpatrick said. “The complaint alleges that the defendant harbored an intense racial animosity towards African Americans, and on September 1, 2016, that senseless hatred led to the unlawful assault of a handcuffed and defenseless prisoner. The conduct alleged is a shocking breach of the duty of every police officer to provide equal justice under the law and never to mistreat a person in custody. As a result, the former chief of police is now a charged federal criminal defendant.”

 

“Police officers take an oath to uphold the law. The FBI works to ensure that they are held accountable when they violate that oath and break the law,” SAC in Charge of the Newark FBI Field Office said. “We rely on the police to protect the public. The few who take advantage of that public trust, at any level, will be investigated and prosecuted to the full extent of the law."

 

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

 

On Sept. 1, 2016, two Bordentown Township police officers responded to a phone call from the Bordentown Ramada, complaining that two teenagers had stayed in a room at the hotel without paying. The teens were listed in the complaint as “Civilian 1,” an 18-year-old African American man, and “Civilian 2,” a 16-year-old African American girl. After the officers arrived and questioned the teenagers, the situation escalated into a physical confrontation, with both teens attempting to resist arrest. The officers called for backup, and numerous officers, including then-Chief Nucera, arrived on the scene.

 

After Civilian 1 was handcuffed and was being escorted out of the hotel by police, Nucera allegedly approached him from behind and slammed the man’s head into a metal doorjamb. A subordinate police officer later surreptitiously recorded Nucera making racist and hostile remarks about Civilian 1, Civilian 2, and African Americans more generally. He  repeatedly used racial slurs to refer to Civilian 1 and Civilian 2, and said: “[t]hese fucking people” should “[s]tay the fuck out of Bordentown.”  He also said it “would have been nice” if officers could have used a police dog during the arrest.

 

The use of excessive force and hate crime counts with which Nucera is charged each carry a maximum penalty of 10 years in prison and a $250,000 fine. 

 

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 arrest.

 

The government is represented by Assistant U.S. Attorneys Molly S. Lorber and Sarah M. Wolfe of the Criminal Division in Trenton.

 

Defense counsel: Tracy Riley Esq., Mount Holly, New Jersey

CAMDEN, N.J. – A federal inmate already serving a lengthy sentence for a child pornography conviction today admitted possessing images of child pornography while in prison, Acting U.S. Attorney William E. Fitzpatrick announced.

Erik M. Smith, 36, of Iron Mountain, Michigan, pleaded guilty before U.S. District Judge Joseph H. Rodriguez in Camden federal court to an information charging him with possession of child pornography through the use of a contraband micro SD card. Smith was already serving a 235-month sentence at Federal Correctional Institution Fort Dix (FCI Fort Dix) for his conviction in the Western District of Michigan for receipt of child pornography. Smith had a scheduled release date of March 26, 2027, prior to today’s guilty plea.

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

Smith possessed a 16-gigabyte micro SD card containing 263 images of child pornography, including 213 sexually explicit images of prepubescent children. He told another inmate the SD card included “mostly boy stuff,” referring to images of boys. Smith admitted that he downloaded these and other images of child pornography from a cloud account on behalf of other inmates. Smith was one of five federal inmates arrested on April 26, 2017, on the East Compound of FCI Fort Dix and charged with new counts of distributing images and videos of child sexual abuse within the prison through the use of contraband cellphones and micro SD cards, as well as selling and possessing with intent to sell such images and videos on federal property, and conspiracy to commit these offenses.

The count of possession of child pornography to which Smith pleaded guilty carries a mandatory minimum sentence of 10 years in prison, due to Smith’s prior conviction, a maximum potential penalty of 20 years in prison, and a $250,000 fine. Sentencing is scheduled for Feb. 13, 2017.

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 officials of the Bureau of Prisons at FCI Fort Dix for their assistance with the investigation.

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

The charges and allegations in the complaints against the remaining four federal inmates –Anthony Jeffries, 32, of Orange, Virginia; Brian J. McKay, 46, of Brookhaven, Pennsylvania; Jordan T. Allen, 30, of Plain City, Ohio; and Christopher Roffler, 30, of Virginia Beach, Virginia – are merely accusations, and those defendants are considered innocent unless and until proven guilty.

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

CAMDEN, N.J. – A Virginia man was sentenced today to 87 months in prison for robbing four banks – two in New Jersey and two in Baltimore, Maryland – during a spree in December 2016, Acting U.S. Attorney William E. Fitzpatrick announced.

Bruce Wayne Higgins, 43, of Herndon, Virginia, previously pleaded guilty before U.S. District Court Judge Renée Marie Bumb to a four-count information charging him with robbing: (1) Dec. 10, 2016 – Howard Bank in Baltimore; (2) Dec. 13, 2016 -- Northwest Bank in Baltimore; (3) Dec.15, 2016 – TD Bank N.A. in Ocean City, New Jersey; and (4) Dec. 16, 2016 – Wells Fargo Bank in Atlantic City, New Jersey.  Judge Bumb imposed the sentence today in Camden federal court

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

On Dec. 15, 2016, a man entered a TD Bank in Ocean City and presented a teller with a note that read: “GUN IN Pocket, MONEY NOW or –BANG-.” He then took cash from the teller and fled on foot. Law enforcement officers issued a bulletin with a bank surveillance photograph. The robber was later identified as Higgins.

Through coordination with the FBI in Baltimore, Maryland, New Jersey agents learned that a robber with a similar physical description had robbed two banks and a business earlier that week in Baltimore. 

On Dec. 16, 2017, a man fitting Higgins’ description walked into a TD Bank in Atlantic City. After recognizing Higgins from the police bulletin, a bank employee triggered the bank’s “hold-up” alarm, and Higgins left the bank and got into a taxicab. Officers from the Atlantic City Police Department (ACPD) arrived at the TD Bank and, following up on information provided by witnesses, issued a bulletin describing the taxicab’s number and direction of travel.

Having received the bulletin describing the taxicab, another ACPD officer located the taxicab near a Wells Fargo Bank in Atlantic City while Higgins was allegedly in the process of robbing that bank. Higgins entered the Wells Fargo Bank and presented a teller with a note that read, “Gun in Pocket, Money Now or Bang now.” After Higgins took the money and fled the bank, ACPD officers arrested him.

Higgins admitted to robbing two banks and a business in Baltimore, Maryland, as well as the two New Jersey banks. During each of the bank robberies, Higgins threatened the bank’s employees and fled.

In addition to the prison term, Judge Bumb sentenced Higgins to three years of supervised release and ordered him to pay restitution of $23,390. 

Acting U.S. Attorney Fitzpatrick credited special agents with the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark and Special Agent in Charge Gordon Johnson in Baltimore; the Ocean City Police Department, under the direction of Chief Chad Callahan; the Atlantic City Police Department, under the direction of Chief Henry White; the Cape May County Prosecutor’s Office, under the direction of Prosecutor Robert L. Taylor; the Atlantic County Prosecutor’s Office, under the direction of Prosecutor Damon Tyner; the Baltimore County Police, under the direction of Chief Terrance Gordon; and the Fairfax County Police, under the direction of Chief of Police Col., Edwin C. Roessler Jr., with the investigation leading to today’s sentencing.

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

NEWARK, N.J. – A member of the International Longshoremen’s Association (ILA) and general foreman for a Port Elizabeth terminal operator was convicted at trial today for fraudulently collecting a nearly $500,000 annual salary, much of which was for work he never performed, Acting U.S. Attorney William E. Fitzpatrick announced.

Paul Moe Sr., 66, of Atlantic Highlands, New Jersey, was convicted on all 14 counts of an indictment charging him with one count of wire fraud conspiracy and 13 substantive counts of wire fraud. He was convicted following a 10-day trial before U.S. District Court Judge Katharine S. Hayden in Newark federal court. The jury deliberated for two hours before returning its verdict.

According to statements made in court and the evidence at trial:

From September 2015 through March 2017, Moe fraudulently collected a compensation package that paid him almost $500,000 annually while showing up at his job site for as little as eight hours per week. In order for Moe to collect his $9,300 weekly paycheck, other conspirators submitted false timesheets each day on his behalf and even credited him for up to 16 hours of overtime a day. The 13 substantive wire fraud counts consist of one-week increments in which Moe – having either failed to appear at the job site or while being out of state or out of the country – was paid as if he had been on the job for a minimum of 40 hours a week.  
  
Each count is punishable by up to twenty years in prison and a $250,000 fine. Sentencing will be scheduled at a later date.

Acting U.S. Attorney Fitzpatrick credited special agents and investigators with the Waterfront Commission of New York Harbor, under the direction of Executive Director Walter M. Arsenault; the U.S. Department of Labor, Office of Inspector General, under the direction of Special Agent in Charge Michael C. Mikulka in New York; the Office of Employee Benefits Security Administration (EBSA), under the direction of Regional Director Jonathan Kay; and the Office of Labor Management Standards, under the supervision of District Director Andriana Vamvakas, with the investigation.

The government was represented by Senior Litigation Counsel V. Grady O’Malley, Assistant U.S. Attorney Anthony Moscato, Chief of the National Security Unit, and Special Assistant U.S. Attorney Tracey Agnew.

Defense counsel: Gerald McMahon Esq., New York
 

NEWARK, N.J. – A Dominican national was extradited to the United States over the weekend for his alleged role in a drug trafficking organization responsible for over 16 kilograms of heroin that were seized in New Jersey and New York, Acting U.S. Attorney William E. Fitzpatrick announced.

Wellington Luna De La Cruz, a/k/a “Orlando Luna Cruz,” a/k/a “Luis Echevarria,” a/k/a “El Mofle,” 40, is charged by indictment with one count of conspiracy to distribute more than one kilogram of heroin and one count of distribution and possession with intent to distribute more than one kilogram of heroin. De La Cruz appeared this afternoon before U.S. Magistrate Judge Michael A. Hammer in Newark federal court and was detained.

According to documents filed in this and related cases:

Since January 2015, the Drug Enforcement Administration (DEA) has been investigating a drug trafficking organization (DTO) operating in New Jersey, the Dominican Republic, Mexico, and elsewhere. The investigation revealed that De La Cruz is an alleged narcotics trafficker and high-ranking member of the DTO.

The narcotics were generally imported from Mexico and transported via truck to the New Jersey and New York areas. De La Cruz allegedly instructed certain DTO members to receive the shipments, deliver payment to the truck drivers or other suppliers, and then distribute specified amounts of narcotics to other members of the DTO. 

The DTO has been linked to several multiple-kilogram seizures of heroin, including two kilograms of heroin seized in New York in March 2015; four kilograms of heroin seized on Route 80 near Saddle Brook, New Jersey, in November 2015; and 10 kilograms of heroin seized in Elizabeth, New Jersey, in January 2017.

If convicted, De La Cruz faces a mandatory minimum sentence of 10 years imprisonment, a maximum sentence of life imprisonment, and a fine of $10 million per count.

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

Acting U.S. Attorney Fitzpatrick credited special agents with the DEA, under the direction of Special Agent in Charge Valerie A. Nickerson, and officers with the N.J. State Police, Trafficking North Unit, under the direction of Col. Rick Fuentes, with the investigation leading to the charges.

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

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

TRENTON, N.J. – Two men today admitted their respective roles in an international drug trafficking organization, Acting U.S. Attorney William E. Fitzpatrick announced.

 

Wilson Madrid, 31, of Norcross, Georgia, pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton federal court to an information charging him with conspiracy to launder money. Dany Francisco-Valerio, 44, of Bronx, New York, pleaded guilty before Judge Sheridan to an information charging him with conspiracy to distribute heroin.

 

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

 

From June 2014 through November 2014, Madrid conspired with other members of an international drug trafficking organization, with cells operating in New Jersey, to launder more than $150,000 related to the distribution of heroin. In December 2014, Francisco-Valerio conspired with members of the drug trafficking organization to transport and distribute kilogram quantities of heroin. On Dec. 24, 2014, he was arrested while transporting 15 kilograms of heroin contained in a hidden compartment in his vehicle.

 

One of their conspirators, Henry Zamora, pleaded guilty before Judge Sheridan on Aug. 31, 2017, to conspiring to distribute four kilograms of heroin that were recovered from a hidden compartment in Zamora’s vehicle. Another conspirator, Harry Madrid, pleaded guilty before Judge Sheridan on Sept. 7, 2017, to conspiring to launder more than $150,000 on behalf of the drug trafficking organization.

 

The money laundering charge to which Madrid pleaded guilty carries a maximum penalty of 20 years in prison and a $500,000 fine. Sentencing is scheduled for Jan. 30, 2018.

 

The narcotics charge to which Francisco-Valerio pleaded guilty carries a maximum penalty of life in prison and a $10 million fine. Sentencing is scheduled for Jan. 31, 2018.

           

Acting U.S. Attorney Fitzpatrick credited the Drug Enforcement Administration’s (DEA) New Jersey Division, under the direction of Special Agent in Charge Carl J. Kotowski, officers of the N.J. State Police, under the direction of Superintendent Col. Joseph R. Fuentes, and officers from the DeKalb (Illinois) Police Department, under the direction of Chief Gene Lowrey, with the investigation leading to today’s guilty pleas. 

 

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

 

Defense counsel:

Madrid: Mark Davis Esq., Hamilton, New Jersey

Francisco-Valerio John D. Lynch Esq., Jersey City, New Jersey