District of New Jersey

NEWARK, N.J. – An Old Bridge, New Jersey, man was arrested today for allegedly using phony payments and false identity theft claims to deceive credit card companies and banks into giving him funds and credit, Acting U.S. Attorney William E. Fitzpatrick announced.

Sandy John Masselli, 55, is charged by complaint with two counts of bank fraud and two counts of wire fraud. FBI agents arrested Masselli at his residence this morning. Masselli is scheduled to appear this afternoon before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court.  

According to the complaint:

From June 2014 through July 2017, Masselli engaged in three separate but related schemes to fraudulently obtain credit and funds from various credit card companies and two brokerage firms. 

In one scheme, Masselli opened accounts with certain credit card companies, made purchases with these accounts until he had almost reached or exceeded the credit limit, and then sent payments from bank accounts that he knew did not have sufficient funds to cover the purchases. Before the fraudulent payments were rejected for insufficient funds, the credit card companies temporarily credited Masselli’s accounts based on those payments, providing him access to additional credit and allowing him to continue to make purchases. Masselli failed to pay these balances and the credit card companies sustained substantial losses.     

In another scheme, Masselli opened credit accounts with two credit card companies, made thousands of dollars in purchases, and then falsely represented to these credit card companies that the accounts had been opened fraudulently and used without his authorization, causing these companies to close the accounts and sustain losses.

As part of a third scheme, Masselli attempted to deposit more than $600,000 in checks from a closed account into a new brokerage account, which he then tried to use for various personal expenses. Those transfers were unsuccessful because the checks he deposited were ultimately returned as unpaid.     

The bank fraud counts each carry a maximum potential penalty of 30 years in prison and a $1 million fine. The wire fraud counts each carry a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gain or loss from the offense.

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 U.S. Attorney’s Office Economic Crimes Unit.

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

TRENTON, N.J. – A Guatemalan citizen today admitted transporting three kilograms of heroin that had been coated in chocolate in a failed attempt to bring the drugs undetected through Newark Liberty International Airport, Acting U.S. Attorney William E. Fitzpatrick announced.

 

Jacobo Leonel Orellana-Estrada, 21, pleaded guilty before U.S. District Judge Michael A. Shipp in Trenton federal court to an information charging him with one count of possession with intent to distribute more than one kilogram of heroin.

 

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

 

On June 11, 2017, Orellana-Estrada arrived at Newark Liberty International Airport as a passenger aboard a commercial airline flight from Guatemala City, Guatemala. U.S. Customs and Border Protection (CBP) officers stopped Orellana-Estrada at customs inspection and searched his luggage. In one of his bags, they discovered what appeared to be six small single-layer cakes that were actually packages of heroin coated in a thin layer of chocolate and wrapped in paper.

 

The count of possession with intent to distribute more than one kilogram of heroin carries a maximum potential penalty of life in prison. Sentencing is scheduled for Jan. 29, 2018.

 

Acting U.S. Attorney Fitzpatrick credited special agents of CBP, under the direction of Acting Director of Field Operations Leon Hayward, New York Field Office, and 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, with the investigation leading to today’s guilty plea.  

 

The government is represented by Assistant U.S. Attorney Sara F. Merin of the Narcotics/OCDETF unit of the U.S. Attorney’s Office in Newark.

 

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

NEWARK, N.J. – A doctor practicing in Staten Island, New York, was convicted at trial today for accepting bribes in exchange for test referrals as part of a long-running and elaborate scheme operated by Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, New Jersey, its president and numerous associates, Acting U.S. Attorney William E. Fitzpatrick announced. 

Thomas V. Savino, 58, of Staten Island, was found guilty on all 10 counts of an indictment charging him with one count of conspiring to commit violations of the Anti-Kickback Statute, the Federal Travel Act and wire fraud; three substantive violations of the Anti-Kickback Statute; three substantive violations of the Federal Travel Act; and three substantive violations of wire fraud. 

Savino was convicted following a six-day trial before U.S. District Judge Stanley R. Chesler in Newark federal court. The jury deliberated for two and a half hours before returning its verdict.
     
According to documents filed in this case and the evidence at trial:

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

The investigation has 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.

  The Anti-Kickback and Federal Travel Act counts are each punishable by a maximum potential penalty of five years in prison. The wire fraud counts are each punishable by a maximum potential penalty of 20 years in prison. Each count also carries a maximum $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is set for Feb. 14, 2018.

Acting U.S. Attorney William E. 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 and Assistant U.S. Attorney Erica Liu of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark.

The New Jersey U.S. Attorney’s Office reorganized its health care 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: Eric R. Breslin Esq., Newark and Melissa S. Geller, New York

TRENTON, N.J. – A former financial advisor entrusted with advising clients on investments was sentenced today to 37 months in prison for defrauding his client, a former factory worker, out of his retirement savings and using the funds for his own benefit, Acting U.S. Attorney William E. Fitzpatrick announced.

Jesse Holovacko, 39, of Sayreville, New Jersey, was previously convicted on all counts of an indictment charging him with six counts of wire fraud and one count of investment advisor fraud following a five-day trial before U.S. District Judge Michael A. Shipp, who imposed the sentence today in Trenton federal court.

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

Holovacko was an investment advisor at a financial institution located in New Jersey. In 2012, Holovacko went to the factory where the victim worked, met with the victim and some of his co-workers, and signed the victim on as a client, transferring the victim’s pension savings into an Individual Retirement Account (IRA).  The victim entrusted Holovacko with managing the victim’s retirement savings.

From December 2013 through August 2014, Holovacko falsely told the victim that he would use retirement account funds to purchase bonds for him and advised the victim to transfer the retirement money to the victim’s bank account and then provide cashier’s checks made out directly to the financial advisor, telling the victim it would make it easier to purchase the bonds. Based on these false representations, Holovacko obtained 18 cashier’s checks totaling approximately $255,000. 

Holovacko deposited all of the cashier’s checks into his own personal bank account and spent it for his car loan and mortgage payments, dining out, concerts and clubs, baseball game tickets, as well as taking out approximately $150,000 in cash. In order to continue deceiving the victim, Holovacko promised the victim documentation of the purported investments in bonds. 

In addition to the prison term, Judge Shipp sentenced Holovacko to three years of supervised release. Forfeiture and restitution will be determined at a hearing scheduled for Nov. 15, 2017.

Acting U.S. Attorney Fitzpatrick credited postal inspectors with the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Joseph V. Cronin in Newark, and agents with the U.S. Secret Service, under the direction of Special Agent in Charge Mark McKevitt, with the investigation leading to today’s verdict. He also thanked the Financial Industry Regulatory Authority (FINRA) and the N.J. Bureau of Securities of the New Jersey Attorney General’s Office for their assistance. 

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

Defense counsel: Paul Condon Esq., Jersey City, New Jersey

NEWARK, N.J. –A Newark man today admitted robbing a Newark jewelry store and then stealing a car at gunpoint immediately afterwards, Acting U.S. Attorney William E. Fitzpatrick announced.

Orlando Nieves-Velez, 29, pleaded guilty before U.S. District Judge Claire C. Cecchi in Newark federal court to an indictment charging him with one count of Hobbs Act robbery, one count of carjacking, and one count of using a firearm in furtherance of a crime of violence.

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

On Dec. 1, 2016, Nieves-Velez robbed a jewelry store in Newark while brandishing a firearm. During the robbery, Nieves-Velez pressed a gun to the back of an employee’s neck and threatened to shoot him if the other employees didn’t give him jewelry.

After leaving the store with more than $20,000 in jewelry, Nieves-Velez stepped in front of a 2006 Nissan Altima. Nieves-Velez pointed his gun at the driver and ordered the driver out of the car. Nieves-Velez fired his gun into the air before fleeing in the Altima.

The charge of Hobbs Act robbery carries a maximum penalty of 20 years in prison. The carjacking charge carries a maximum potential penalty of 15 years in prison. Nieves-Velez also faces a mandatory minimum prison term of 10 years in prison for discharging his weapon in connection with the carjacking, which must be served consecutively to any other sentence imposed. Each of these counts also carries a maximum fine of $250,000. 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, the U.S. Marshals Service, under the direction of U.S. Marshal Juan Mattos in Newark, and the Newark Department of Public Safety, under the direction of Director Anthony F. Ambrose, with the investigation leading to the charges.

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

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

NEWARK, N.J. – The president and secretary of a Cherry Hill, New Jersey, machine shop today admitted paying kickbacks in return for subcontract work from a Philadelphia company that manufactured military parts for the U.S. Navy, Acting U.S. Attorney William E. Fitzpatrick announced.

John Schallenhammer, 57, of Atco, New Jersey, and his sister, Theresa Schallenhammer, 53, of Cherry Hill, pleaded guilty before U.S. District Judge William J. Martini in Newark federal court to separate informations charging them with conspiracy to violate the federal anti-kickback act. They were both released on $50,000 unsecured bond.

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

Christopher Sanchirico, 55, of King of Prussia, Pennsylvania, was the assistant purchasing manager for an entity identified in the information as “Subcontractor 1,” which was located in Philadelphia and manufactured shock-hardened circuit breakers and switchgears for installation on U.S. Navy surface ships, submarines, and aircraft carriers. Subcontractor 1 performed work on multiple U.S. Navy and Defense Logistics Agency maritime contracts as a first-tier subcontractor to a prime contractor working for the United States.

In July 2013, John Schallenhammer, the president of a machine shop identified in the information as “Subcontractor 2,” made an agreement with Sanchirico. In return for Sanchirico’s assistance in securing a manufacturing contract between Subcontractor 1 and Subcontractor 2, John Schallenhammer paid Sanchirico between five and 10 percent of the gross revenue from circuit breaker and switchgear components that Subcontractor 2 provided to Subcontractor 1.  Theresa Schallenhammer, Subcontractor 2’s secretary, maintained records of the payments and sometimes made bank withdrawals for the kickbacks when John Schallenhammer was unable to do so.

From 2013 to 2016, the Schallenhammers paid Sanchirico approximately $150,000 in cash kickbacks.

John and Theresa Schallenhammer both face a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gain or loss from the offense. Sentencing for both defendants is scheduled for Feb. 6, 2018.

Sanchirico pleaded guilty to a related charge on Oct. 10, 2017 and awaits sentencing.

Acting U.S. Attorney Fitzpatrick credited agents of the Naval Criminal Investigative Service, Northeast Field Office, under the direction of Special Agent in Charge Leo S. Lamont in Newport, Rhode Island, and agents of the U.S. Department of Defense, Office of the Inspector General, Defense Criminal Investigative Service, under the direction of Special Agent in Charge Leigh-Alistair Barzey, with the investigation leading to the guilty pleas. He also thanked the U.S. Attorney’s Office for the Eastern District of Pennsylvania, under the direction of Acting U.S. Attorney Louis D. Lappen, for its assistance.

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

Defense counsel:

John Schallenhammer: Blair R. Zwillman Esq., Millburn, New Jersey

Theresa Schallenhammer: Henry E. Klingeman Esq., and Ernesto Cerimele Esq., Newark

PHILADELPHIA – Former Philadelphia District Attorney Rufus Seth Williams, who previously admitted that he accepted tens of thousands of dollars’ worth of concealed bribes in exchange for his agreement to perform official acts, defrauded a nursing home and family friends of money earmarked for a family member’s care, and used political action committee funds and official government vehicles for his personal benefit, was sentenced today to 60 months in prison, Acting New Jersey U.S. Attorney William E. Fitzpatrick announced.

Williams, 50, of Philadelphia, previously pleaded guilty before U.S. District Judge Paul S. Diamond to Count One of a superseding indictment charging him with travel and use of interstate facilities to promote and facilitate bribery contrary to Pennsylvania law. Judge Diamond imposed the sentence today in Philadelphia federal court.

“Mr. Williams swore an oath that he would act according to the highest legal and ethical standards,” Acting U.S. Attorney Fitzpatrick said. “Yet, as Philadelphia’s chief law enforcement officer, he accepted lavish gifts and other bribes in return for official favors, and even defrauded his own political action committee and his mother’s nursing home to pay for his personal expenses. Today’s sentence is a fitting punishment for an elected official who put his financial interests above his constituents and the dedicated public servants of the District Attorney’s Office.”

"With today’s sentencing, Seth Williams has officially been brought to justice. But the damage he's done to the public trust is much harder to resolve," said Michael Harpster, Special Agent in Charge of the FBI's Philadelphia Division. "Williams traded on his elected office to live larger than its six-figure salary would allow – and as a result, lost both. His corruption now claims several years of his freedom, as well."

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

From July 2010 through May 2015, Williams had an arrangement with Mohammad N. Ali (identified in the indictment as “Business Owner #1”) in which Williams, while serving as the Philadelphia District Attorney, accepted trips, money, and other things of value in exchange for performing and agreeing to perform official acts on behalf of Ali, including contacting a Philadelphia police official in order to pressure and advise the official to assist Ali with security screenings at the airport. Williams also agreed to assist with criminal charges brought by the Philadelphia District Attorney’s Office against Ali’s associate.

From March 2012 through July 2015, Williams had an arrangement with Michael Weiss (identified in the superseding indictment as “Business Owner #2”) in which Williams accepted airline tickets, money, an automobile, and other things of value in exchange for performing and agreeing to perform official acts on behalf of Weiss, including appointing him as Special Advisor to the Philadelphia District Attorney’s office in November 2012 and providing an official letter to the California Department of Alcoholic Beverage Control in order to influence a then-pending hearing to revoke or suspend Weiss’ California liquor license. In July 2015, Williams also obtained a police accident report at Weiss’ request.

In addition, from February 2012 through November 2013, Williams diverted his mother’s pension and Social Security payments to pay for his own personal expenses instead of applying them to his mother’s nursing home costs, as was his obligation under agreements with the nursing home. After accepting $10,000 from his mother’s friends intended to cover expenses for her nursing home care, Williams spent that money on his personal expenses as well.

From August 2010 through August 2016, Williams also defrauded the “The Committee to Elect Seth Williams” by using its funds for personal expenditures, including parties, birthday dinners, massages, and fitness classes. He concealed this fraud by providing false or incomplete reports to the Commonwealth of Pennsylvania and to the City of Philadelphia.

Lastly, Williams engaged in a scheme to use official vehicles – which were provided by the City of Philadelphia and a federal narcotics law enforcement program – for his personal benefit. Williams used the vehicles to transport himself, family members, friends and other non-employees on non-district attorney business, including personal trips outside of Philadelphia.

“In his position as Philadelphia’s District Attorney, Williams abused the trust placed in him by the public and today’s sentencing sends a clear message that such action will not be tolerated,” said Acting IRS-Criminal Investigation Special Agent in Charge Edward Wirth. "Today's sentencing is a direct result of the excellent partnership IRS-CI, our fellow law enforcement partners, and the U.S. Attorney’s Office have in combating violations of federal law.”

“Homeland Security Investigations is pleased to have teamed with our law enforcement partners to hold accountable public officials who betray the trust of the community they are sworn to serve by engaging in criminal behavior,” said Marlon V. Miller, Special Agent in Charge of HSI Philadelphia. “Let Mr. Williams’ sentencing serve as a proof that HSI will continue to work with our law enforcement partners to investigate and bring to justice public officials who feel they are above the law.”

In addition to the prison term, Judge Diamond sentenced Williams to three years of supervised release. Judge Diamond also ordered Williams to pay forfeiture of $33,009 and restitution of $58,422.83.

Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Michael Harpster in Philadelphia; special agents of IRS-Criminal Investigation, Philadelphia Office, under the direction of Acting Special Agent in Charge Edward Wirth, and special agents of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigation (HSI) Philadelphia, under the direction of Special Agent in Charge Marlon V. Miller, with the investigation. He also thanked the U.S. Department of Health and Human Services-Office of Inspector General, under the direction of Special Agent in Charge Nick DiGiulio, for its participation in the investigation.

The U.S. Attorney in the Eastern District of Pennsylvania recused his office from the investigation involving the Philadelphia District Attorney’s Office, and the matter was assigned to the U.S. Attorney’s Office for the District of New Jersey. Two prosecutors from the Eastern District of Pennsylvania office were assigned to the case, subject to the supervision of prosecutors in the New Jersey office.The government is represented by Deputy Chief Eric W. Moran of the U.S. Attorney’s Office Criminal Division and Chief of Appeals Robert A. Zauzmer and Assistant U.S. Attorney Vineet Gauri of the U.S. Attorney’s Office in Philadelphia.

Defense counsel: Thomas F. Burke Esq., Philadelphia.

NEWARK, N.J. – A Somerset, New Jersey, man was sentenced today to 84 months in prison for accepting cash bribes and sex in exchange for providing employment authorization documents and concealing his employment of an undocumented immigrant at a hair salon he owned, Acting U.S. Attorney William E. Fitzpatrick announced.

Arnaldo Echevarria, 40, a former deportation officer with Immigration and Customs Enforcement (ICE), was previously convicted of Counts 1-6 and Counts 8 and 9 of an indictment charging him with seven counts of accepting bribes, one count of harboring an undocumented immigrant and one count of making false statements to immigration authorities. He was acquitted on Count 7, one of the bribery counts. Echevarria was convicted following a one-week trial before U.S. District Judge Esther Salas, who imposed the sentence today in Newark federal court.

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

As a deportation officer, Echevarria enforced immigration and customs laws by identifying, locating, arresting and removing undocumented immigrants from the United States and by supervising certain undocumented immigrants who had not yet been deported.  Undocumented immigrants subject to a deportation order often were able to obtain employment authorization documents which allowed them to legally work in the United States for a one-year period and which could be renewed annually. 

Between 2012 and 2014, Echevarria agreed to obtain employment authorization documents for undocumented immigrants who were not lawfully present in the country. In return, Echevarria demanded and received approximately $75,000 in cash bribes, and demanded and received sex from one individual. In order to conceal them from immigration authorities, Echevarria falsely stated that they had been granted temporary protected status, which allows nationals from certain countries experiencing environmental disaster, ongoing armed conflict, or other extraordinary conditions to lawfully remain in the United States. None of the individuals who bribed Echevarria had actually applied for, or received, temporary protected status.

In December 2012, Echevarria received permission from his superiors at ICE to open a hair salon in West Orange, New Jersey. Echevarria certified to ICE that the hair salon would not conflict with ICE matters and would not involve undocumented workers. However, Echevarria employed his girlfriend at the time, an undocumented immigrant, to manage the salon. Echevarria’s girlfriend had entered the United States illegally, using the name and identification of an individual in Puerto Rico to obtain a Pennsylvania identification card.

Echevarria knew his girlfriend resided in the United States illegally. Prior to opening the hair salon, Echevarria queried the name and date of birth of his girlfriend’s alias in various law enforcement databases. After opening the salon, Echevarria ensured that his girlfriend’s illegal status remained a secret by signing the lease for her apartment and by placing her cable and electric bills in his name. In addition to driving his girlfriend and other employees to and from the salon each day, Echevarria also paid the employees in cash and never asked them to fill out employment eligibility paperwork. 

In addition to the prison term, Judge Salas sentenced Echevarria to three years of supervised release and ordered to pay forfeiture of $75,000.

Acting U.S. Attorney Fitzpatrick credited special agents of ICE, Office of Professional Responsibility, under the direction of Special Agent in Charge Keith Barwick, with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorneys Rahul Agarwal of the U.S. Attorney’s Office Special Prosecutions Division in Newark, and Barbara Llanes, Deputy Chief of the General Crimes Unit.

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

TRENTON, N.J. – A Monmouth County, New Jersey, woman who owned a computer training center was sentenced today to 24 months in prison for stealing $2.8 million from a program designed to help veterans find employment, Acting U.S. Attorney William E. Fitzpatrick announced.

Elizabeth Honig, 52, of Morganville, New Jersey, previously pleaded guilty before U.S. District Judge Peter Sheridan to an information charging her with one count of theft of government funds. Judge Sheridan imposed the sentence today in Trenton federal court.

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

Honig owns Computer Insight Learning Center (CILC), a computer training school based in Eatontown, New Jersey. She helped 182 veterans enroll to receive federal funding under a program – funded by the Department of Veterans Affairs (VA) and the Department of Labor – designed to help older, unemployed veterans receive training and find employment in high demand occupations. The vast majority of these veterans were either not eligible or not actually attending the training. 

Honig’s program was approved by the VA to provide education and training to military veterans, including veterans who received tuition assistance under the Veteran’s Retraining Assistance Program (VRAP), which offered up to 12 months of benefits for older, unemployed veterans between the ages of 35 and 60. This program provided training assistance to unemployed veterans for programs designed to lead to a high-demand occupation.

Honig admitted she logged on to the applications system more than 100 times and certified that she was the actual veteran who was applying for benefits. She supplied false information about employment status to qualify to attend her school and receive funding from the VA. Honig then certified to the VA that the veterans enrolled in her Business Software Applications Program – approved by the VA as a 14-week course costing approximately $4,000 – were attending for up to one year. Honig also certified that the veterans were attending full-time, in-class, knowing that 62 of those veterans lived out of the state. CILC is not eligible to be approved to provide online education.

Honig allowed veterans to attend less than the required hours, to stop attending prior to completion, or, in many cases, never attend at all. Honig failed to report the non-attendance to VA, which is required by law after 30 days of non-attendance, as long as the veterans continued to pay her a monthly fee. This caused the VA to continue payments to veterans who were not entitled to the funds. Honig’s monthly fee of approximately $750 also resulted in overpayments by veterans far in excess of the VA approved $4,000 course tuition. 

In addition to the prison term, Judge Sheridan sentenced Honig to three years of supervised release. Under terms of the plea agreement, Honig consented to a forfeiture judgment of $1,274,154 and agreed to pay restitution of $2,831,455.

Acting U.S. Attorney Fitzpatrick credited the Northeast Field Office, U.S. Department of Veterans Affairs, Office of Inspector General, under the direction of Special Agent in Charge Donna L. Neves; and the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigation, New York Region, under the direction of Special Agent in Charge Michael C. Mikulka, with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorneys Deborah J. Gannett and Jacob T. Elberg, Chief of the Healthcare and Government Fraud Unit in Newark.

Defense counsel:  Evan Nappen Esq., Eatontown, New Jersey

TRENTON, N.J. – A Yardville, New Jersey, man was sentenced today to 121 months in prison for using his e-mail account to distribute images of child sexual abuse, Acting U.S. Attorney William. E Fitzpatrick announced.

Christopher Walsh, 32, previously pleaded guilty before U.S. District Judge Mary L. Cooper to an information charging him with one count of receiving and distributing child pornography. Judge Cooper imposed the sentence today in Trenton federal court.

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

From June 15, 2014 through Jan. 10, 2016, Walsh’s email account either sent or received a total of 1,590 files that contained content constituting child pornography. Walsh, who was a school bus driver, admitted that on Aug. 2, 2015, he knowingly emailed a video depicting child sexual abuse to another individual.

In addition to the prison term, Judge Cooper sentenced Walsh to 10 years of supervised release.

Acting U.S. Attorney Fitzpatrick credited special agents of U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), New Jersey Field Office under the direction of Acting Special Agent in Charge Debra Parker, with the investigation leading to today’s sentencing.

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

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

CAMDEN, N.J. – The executive director of a nonprofit provider of mental health services to Camden’s poorest residents was sentenced today to 70 months in prison for defrauding New Jersey Medicaid by using unqualified people to treat Medicaid recipients and taking money from the nonprofit, Acting U.S. Attorney William E. Fitzpatrick announced.

Cesar Tavera, 53, of Cherry Hill, New Jersey, previously pleaded guilty before U.S. District Judge Noel L. Hillman to an information charging him with conspiracy to commit health care fraud and embezzling from a health care benefit program. Judge Hillman imposed the sentence today in Camden federal court.

 

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

 

Cesar Tavera was the Executive Director of Nueva Vida Behavioral Health Center of New Jersey, a nonprofit provider of mental health services to the Camden Hispanic community. 

Most of Nueva Vida’s patients are on Medicaid, and Tavera controlled Nueva Vida’s billings to New Jersey Medicaid. He also supervised the people at Nueva Vida who treated Medicaid patients. New Jersey Medicaid rules require that people giving mental health therapy to Medicaid recipients must either be licensed or have a master’s degree in mental health. Tavera had several unlicensed, unqualified individuals treat Medicaid recipients and then billed Medicaid as if qualified therapists had treated the patients. Tavera himself treated Medicaid patients even though he was not qualified.

Under Tavera’s direction, Nueva Vida used several other fraudulent practices to obtain money from Medicaid. Nueva Vida billed Medicaid for therapy that never happened and billed group therapy as if each participant received individual therapy. If a mother received therapy without her child, Nueva Vida would bill Medicaid for a session with the mother and a separate session with the child. Nueva Vida billed Medicaid for short sessions as if they lasted for 45 minutes. To cover up his crimes, Tavera created false records to pass Medicaid audits.

He regularly embezzled money from the Nueva Vida bank account in addition to his salary and spent the money on himself and his family. He used the Nueva Vida bank account to pay for dental care, meals, travel in the United States and abroad, and the expenses of his daughter’s music career. Tavera paid no-show employees with cash and payroll checks from Nueva Vida’s bank account. He repeatedly withdrew cash at the Sugar House Casino in Philadelphia and used the money to gamble at the casino. Tavera embezzled more than $1.5 million from Nueva Vida.

In addition to the prison term, Judge Hillman sentenced Tavera to three years of supervised release and ordered to pay $2.5 million in restitution.

 

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, and special agents from the Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert, for the investigation leading to the guilty pleas. He also thanked the Medicaid Fraud Division of the N.J. Office of the State Comptroller. 

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

The U.S. Attorney’s Office reorganized its health care practice in 2010 and created a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since that time, the office has recovered more than $1.34 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.

TRENTON, N.J. – A Los Angeles man today admitted his role in a conspiracy to traffic five kilograms of cocaine and four kilograms of heroin that were smuggled inside large pieces of hydraulic machinery, Acting U.S. Attorney William E. Fitzpatrick announced.

Eduardo Barragan Zuninga, 30, pleaded guilty before U.S. District Court Judge Peter G. Sheridan in Trenton federal court to an information charging him with one count of conspiring to distribute heroin and cocaine. 

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

From March of 2015 through March of 2016, Zuninga, Fermin Nunez, 45, also of Los Angeles, and others engaged in a conspiracy to ship cocaine and heroin, and the proceeds from narcotics transactions, across the country hidden inside large pieces of hydraulic machinery.

Nunez arranged for the drugs to be shipped from California to the east coast for distribution by Zuninga and others in the New York metropolitan area. Nunez, with Zuninga’s assistance, similarly arranged for the shipment of the distribution proceeds back to California.

Execution of two search warrants at the conclusion of an investigation conducted by the FBI, in cooperation with local law enforcement partners in Los Angeles, resulted in the seizure of approximately five kilograms of cocaine and four kilograms of heroin from a warehouse in Pennsylvania, and over $260,000 in suspected narcotics proceeds from a piece of hydraulic machinery in a California storage facility. 

The conspiracy charge to which Zuninga pleaded guilty today carries a mandatory minimum penalty of 10 years in prison, a maximum potential penalty of life in prison and a $10 million fine. Sentencing is scheduled for Jan. 29, 2018.

Nunez previously pleaded guilty to his role in the conspiracy and awaits sentencing.

Acting U.S. Attorney Fitzpatrick credited special agents with the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, and the Los Angeles Interagency Metropolitan Police Apprehension Crime Task Force (L.A. IMPACT) and the Los Angeles Police Department, under the direction of Police Chief Charlie Beck, with the investigation. 

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

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

NEWARK, N.J. – A Bayonne, New Jersey, man was convicted at trial today on charges of producing and possessing images and videos of child sexual abuse, Acting U.S. Attorney William E. Fitzpatrick announced.

Gregory John Schaffer, 38, was found guilty on all three counts of an indictment charging him with two counts of production of child pornography and one count of possession of child pornography. He was convicted following a three-day trial before U.S. District Judge Jose L. Linares in Newark federal court. The jury deliberated one and a half hours before returning its verdict.

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

In 2010, Schaffer sexually abused a 12-year-old girl in a tow-truck office in Union City, New Jersey, and video recorded the abuse without her knowledge. He later stored the video recording on a laptop computer found by law enforcement in his office in Jersey City, New Jersey. Schaffer also backed-up the video recording to another electronic storage device found in his office.

Around the same time, Schaffer also sexually abused a 14-year-old girl in a hotel room and video recorded the abuse without her knowledge. Schaffer again stored the video recording on the same laptop computer and electronic storage device that law enforcement found in his office.

Law enforcement also found additional sexually explicit videos and images of minors on Schaffer’s laptop computer and electronic storage device.

The production of child pornography charge carries a mandatory minimum penalty of 15 years in prison and a $250,000 fine. The possession of child pornography charge carries a maximum penalty of 10 years in prison and a $250,000 fine.

Acting U.S. Attorney Fitzpatrick credited special agents of the U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), New York Field Office under the direction of Special Agent in Charge Angel M. Melendez; special agents of the U.S. Secret Service, under the direction of Special Agent in Charge David E. Beach, New York Field Office; and the Hudson County Prosecutor’s Office, under the direction of Prosecutor Esther Suarez, with the investigation leading to today’s guilty verdict.

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

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

TRENTON, N.J. – A former resident of Old Tappan, New Jersey, was sentenced today to 15 months in prison for evading personal income taxes on more than $400,000 in income in 2013, Acting U.S. Attorney William E. Fitzpatrick announced.

William Dominick, 69, of Collier County, Florida, previously pleaded guilty before U.S. District Judge Anne E. Thompson to an information charging him with one count of tax evasion and one count of identity theft. Judge Thompson imposed the sentence today in Trenton federal court.

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

Dominick owned and operated Westwood Rare Coin out of his home in Old Tappan. He was required to include income earned by Westwood Rare Coin on his individual IRS 1040 form. During calendar year 2013, Dominick failed to report $400,000 in income earned by Westwood Rare Coin. He did this by using other people’s identities to open credit cards to purchase bulk quantities coins from the U.S. Mint in order to corner the market. Dominick then sold those coins through his business, retained the proceeds for his personal use, and failed to include the proceeds on the tax return that he signed and filed with the IRS.

In addition to the prison term, Judge Thompson sentenced Dominick to three years of supervised release and fined him $10,000.

Under terms of his plea agreement, Dominick will file amended returns and make full restitution for years 2010 through 2014.

Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of special agent in charge Timothy Gallagher; 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 leading to today’s sentencing.

The government is represented by Assistant U.S. Attorney Shana Chen of the Economic Crimes Unit in Newark.

NEWARK, N.J. – A corrections officer with the N.J. Department of Corrections was arrested and charged today with receiving images of child sexual abuse, Acting U.S. Attorney William E. Fitzpatrick announced.

 

Stephen Salamak, 37, of Lodi, New Jersey, was arrested at his home by special agents of U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) and charged by complaint with one count of receiving child pornography. Salamak made his initial appearance before U.S. Magistrate Judge Joseph A. Dickson. He was released on $125,000 unsecured bond, with home confinement and electronic location monitoring.

 

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

 

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

 

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

 

Acting U.S. Attorney Fitzpatrick credited special agents of ICE HSI, under the direction of Acting Special Agent in Charge Debra Parker; and the Bergen County Prosecutor’s Office, under the direction of Prosecutor Gurbir S. Grewal, with the investigation leading to today’s charge and arrest.

 

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

 

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

NEWARK, N.J. – A Sewell, New Jersey, man and the former president of a linens supply company today admitted defrauding his employer of $245,000 that he disguised as legitimate business expenses, Acting U.S. Attorney William E. Fitzpatrick announced.

Michael A. Vicchairelli, 62, pleaded guilty before U.S. District Judge Renee Marie Bumb in Camden 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:

Between January 2012 and August 2014, while he was the president of the victim company, Vicchairelli used his corporate American Express Card for personal unauthorized expenditures, including costs related to gentleman’s lounges, escorts, auto repairs and restaurants. Vicchairelli then submitted reimbursement claims to the company for these expenses. 

To conceal the fraud, Vicchairelli instructed company employees to hide these personal charges by coding them within the company’s ledger system as legitimate business expenses, such as maintenance, tolls, and delivery charges. Overall, Vicchairelli received at least $245,000 in reimbursements and other unauthorized payments from the company. 
 
The wire fraud charge carries a maximum potential penalty of 20 years in prison and a $250,000 fine. As part of his plea agreement, Vicchairelli has agreed to pay restitution to the victim company. Sentencing is scheduled for Jan. 22, 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 Sammi Malek of the U.S. Attorney’s Office Criminal Division in Newark.

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Defense counsel: Michael J. Engle Esq., Philadelphia

CAMDEN, N.J. – An Ambler, Pennsylvania, man was charged today with using phony documents to collect $252,734 in FEMA-backed disaster benefits and insurance payments that were supposed to be used to cover storm damages to his mother’s property in Ocean City, New Jersey, Acting U.S. Attorney William E. Fitzpatrick announced.

Nicholas Ochs, 54, is charged by indictment with one count of disaster benefits fraud, five counts of mail fraud and one count of theft of government funds. He appeared today before U.S. Magistrate Judge Karen M. Williams and was released on $100,000 unsecured bond.

According to the indictment:

In October 2012, the various counties of southern New Jersey, including Cape May County, suffered significant damage due to wind, rain, and flooding as a result of Hurricane Sandy. During that time, Ochs’s mother lived in a house in Ocean City. In January 2013, Ochs, on behalf of his mother, filed an application with the Federal Emergency Management Agency (FEMA) seeking federal rental assistance and assistance for personal property damage, claiming that the property was unfit for occupancy as a result of the storm.  

An inspector working on behalf of FEMA inspected the property and determined that the property was uninhabitable and that repairs were required. During the inspection, Ochs, acting as power of attorney, signed the application on behalf of his mother attesting that all the information on the application was true and correct. By signing the application, Ochs also acknowledged that any disaster relief money awarded would be returned if his mother received insurance benefits for the same loss. FEMA initially denied Ochs’s claim citing the fact that the property was covered by flood insurance.

However, Ochs submitted fraudulent documents to FEMA indicating that the insurance provider denied his mother’s claim. In addition, when applying for the federal assistance, Ochs allegedly submitted false documents claiming that, as a result of being displaced, his mother was renting another property on the same block in Ocean City. From January 2013 through December 2013, Ochs faxed fraudulent lease agreements and rental receipts and failed to disclose that the property his mother was renting was owned by his mother and that no rent was ever paid. In addition, in February 2013, Ochs contacted FEMA and made a claim for transportation assistance based on his false claim that his mother’s 1985 Mercedes Benz was damaged by Hurricane Sandy.
 
As a result of the false documents, between February 2013 and December 2013, FEMA paid Ochs’s mother $17,229 for rental assistance and $4,345 for home repairs. Ochs then used the money for his own personal expenses. The total amount of FEMA benefits for rental assistance and home repair that Ochs collected to which he was not entitled was $21,574.

In addition, after Ochs made an insurance claim for damages related to the storm, his mother’s insurance provider ultimately paid her $231,160, $169,518 of which was held in escrow by the mortgage-holder, Wells Fargo. To entice Wells Fargo to release the funds, Ochs presented fraudulent invoices and forms that over-inflated the value of the work that was actually performed. 

Based on the false invoices, Wells Fargo mailed numerous checks totaling $169,518 to the house in Ocean City, which Ochs deposited into bank accounts that he controlled and spent on personal expenses. These funds were ultimately paid for by FEMA pursuant to its National Flood Insurance Program, which backed insurance payments for disaster-related expenses. Altogether, Ochs allegedly defrauded FEMA of $252,734.

The count of disaster benefits fraud carries a potential penalty of 30 years in prison and a $250,000 fine. The mail fraud counts each carry a potential penalty of 30 years in prison and $1 million fine. The count of theft of government funds carries a potential penalty of 10 years in prison and a $250,000 fine. 

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

Acting U.S. Attorney Fitzpatrick credited special agents of the Department of Homeland Security, Office of Inspector General, under the direction of Special Agent in Charge Mark Tasky, with investigation leading to the charges.

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

Defense counsel: Thomas Young Esq., Camden
 

NEWARK, N.J. – A real estate investor, a builder, a mortgage loan officer, and a real estate settlement attorney were arrested today and charged with using “straw buyers” to fraudulently obtain mortgage loans from a bank, Acting U.S. Attorney William E. Fitzpatrick announced.

Victor Santos, a/k/a “Vitor Santos,” 57, of Wachtung, New Jersey; Arsenio Santos, a/k/a “Gaspar Santos,” 50, of Warren, New Jersey; Fausto Simoes, 64, of Millington, New Jersey; and, Raquel Casalinho, 37, of Union, New Jersey, are charged by complaint with one count each of conspiracy to commit bank fraud. They are expected to appear at 2 p.m. today before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court.

According to the complaint:

From September 2007 through November 2008, Victor Santos, a real estate investor; Arsenio Santos, a builder and Victor’s cousin; Casalinho, a junior home mortgage consultant at the victim bank and Victor’s niece; and Simoes, a real estate settlement attorney, and others allegedly conspired to fraudulently obtain mortgage loans with a total value of more than $5 million.

Victor Santos, Arsenio Santos, and their conspirators allegedly recruited straw buyers to purchase properties in Newark and obtained their identifying information, including Social Security cards and drivers’ licenses. A “straw buyer” was an individual who purchased a property for another in order to conceal the identity of the actual purchaser, usually in exchange for a fee.

In exchange for the use of the straw buyers’ identity and credit history, Victor Santos, Arsenio Santos, and others allegedly agreed to pay each of the straw buyers a fee of approximately $5,000, provide the straw buyer’s down payment and cash required for closing, secure tenants to lease the purchased property and make the mortgage payments on each of the fraudulently obtained mortgages. These secret agreements were not disclosed to the bank.

In accordance with Victor Santos’ instructions, the straw buyers’ information was provided to Casalinho and was used to prepare fraudulent mortgage loan applications that contained a variety of false statements, including the identity of the actual buyer. For the two representative schemes highlighted in the complaint, Casalinho, Victor Santos, Arsenio Santos, and their conspirators prepared and submitted mortgage applications containing false information to the bank and obtained loans totaling more than $900,000. The conspirators allegedly arranged transactions for the Newark properties whereby the straw buyers would nominally purchase the properties for far more than the sellers had agreed to sell them, and the conspirators kept the difference between the contract price and the amounts the sellers received.

Simoes was the closing attorney on approximately 10 of the fraudulent transactions and signed and certified as true the final settlement statements. These statements falsely stated that the cash required for closing for each transaction came from the straw buyer. In fact, Victor Santos and his conspirators provided those funds to Simoes and the funds were deposited into Simoes’ attorney trust account. For certain transactions, a shell company – whose bank account was controlled by Victor Santos and a conspirator and to which funds from fraudulently obtained mortgage loans were disbursed – was the source of the cashier’s checks given to Simoes to fund the buyer’s cash required at closing. For other transactions, down payments came from an account owned and controlled by Arsenio Santos and Victor Santos, the proceeds of the mortgage loan itself after funding or closing, or from the proceeds of a previously obtained fraudulent loan.

The conspiracy to commit bank fraud carries a maximum potential penalty of 30 years in prison, a fine of $1 million or twice the gross gain to the defendants or twice the gross loss to others whichever is greater.

Acting U.S. Attorney Fitzpatrick credited special agents of the Federal Housing Finance Agency, Office of Inspector General, under the direction of Special Agent in Charge Steven Perez, and special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher of the Newark office, with the investigation leading to today’s charges.

The government is represented by Special Assistant U.S. Attorneys Kevin DiGregory and Charlie Divine and Senior Litigation Counsel Andrew Leven of the U.S. Attorney’s Office’s Economic 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.

NEWARK, N.J. – Eleven men in New York, Connecticut, North Carolina and Florida were charged today for their roles in a scheme that used stolen identities to order smartphones and other electronic goods and then paid drivers with a parcel delivery company to divert those goods to members of the conspiracy, Acting U.S. Attorney William E. Fitzpatrick announced.

Eight defendants were arrested this morning. Arrantes Garrincha Green, a/k/a “Don Gucci,” a/k/a “Gucci,” 39, of Margate, Florida, and Helton Arando Mallette, 27, of Miami, Florida, will appear this afternoon before U.S. Magistrate Judge Edwin G. Torres in Miami federal court. Omar Kimani Forsythe, a/k/a “Biggs,” 26, and Elvis Anthony Prehay, 43, both of Tamarac, Florida, will appear before Judge Torres tomorrow.

Sheldon Andre Wellington, a/k/a “Shellinz,” 35, of Rockville Center, New York, and Kindley Michel, 36, of Spring Valley, New York, will appear this afternoon before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court.

Troy Linton Cooper, 35, of East Hartford, Connecticut, will appear this afternoon before U.S. Magistrate Judge Robert Richardson in Hartford federal court. Dashawn Brown, 25, of Raleigh, North Carolina, will appear this afternoon before U.S. Magistrate Judge James E. Gates in Raleigh federal court.

Andre Donovan Duffas, 27, of Plantation, Florida, Jermaine Wilson, a/k/a “Budds,” 32, of Nanuet, New York, and Oneil Gentles, a/k/a “Daffy,” 40, of Bronx, New York, remain at large.

All 11 defendants are charged by indictment with one count of wire fraud conspiracy and one count of conspiracy to transport stolen goods in interstate commerce. Green is also charged with one count of aggravated identity theft.

According to the indictment:

From June 2015 through June 2017, the defendants and others, led by Green, allegedly conspired to steal electronic equipment, including new smartphones, from a national cellular service provider.

Members of the conspiracy used stolen personal identifiers and debit and credit card information to place orders with the victim company. Many of the orders were allegedly made using two cellular phones associated with Green.

Afterwards, members of the conspiracy, including Green, Duffas, Mallette, Prehay, Wellington, and Wilson, transmitted anticipated delivery dates and locations of the fraudulently-ordered products to other conspirators who were employed as drivers with a major parcel delivery company. These drivers, including Brown, Cooper and Michel, were paid to divert the products mid-delivery to other members of the conspiracy, including Duffas, Forsythe, Gentles, Mallette, Prehay, Wellington, and Wilson.

Proceeds generated through the scheme were shared by wire transfer or depositing the funds in designated bank accounts.

The scheme compromised the identities of hundreds of residents in multiple municipalities across multiple states, including Upper Saddle River, New Jersey, and caused losses in excess of $1 million to the victim company.

The count of conspiracy to commit wire fraud carries a maximum potential penalty of 20 years in prison. The count of conspiracy to commit interstate transportation of stolen property carries a maximum potential penalty of five years in prison. Both counts carry a potential fine of $250,000, or twice the gross gain or loss from the offense. The aggravated identity theft count carries a mandatory sentence of two years in prison, which must be served in addition to any sentence imposed.

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 the charges. He also thanked the Upper Saddle River Police Department, the Bergen County Prosecutor’s Office, the NYPD, the Westchester County District Attorney’s Office, the West Hartford Police Department and the Connecticut State’s Attorney’s Office, Hartford Judicial District, for their assistance.

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

NEWARK, N.J. – Two women today admitted their roles in a conspiracy that fraudulently obtained over $24 million from the Post-9/11 GI Bill, a federal education benefits program designed to help veterans who served in the armed forces following the terrorist attacks on Sept. 11, 2001, Acting U.S. Attorney William E. Fitzpatrick announced. 
   
Lisa DiBisceglie, 56, of Lavallette, New Jersey, the former Associate Dean of the Office of External Partnerships at Caldwell University, and Helen Sechrist, 61, of Sandy Level, Virginia, a former employee of the Pennsylvania-based company Ed4Mil LLC, pleaded guilty before U.S. District Judge Katharine S. Hayden in Newark federal court to separate informations charging them each with one count of conspiracy to commit wire fraud.

“DiBisceglie and Sechrist were part of an elaborate bait-and-switch scheme that stole millions of dollars in Post-9/11 GI Bill tuition assistance,” Acting U.S. Attorney Fitzpatrick said. “Instead of receiving a quality education under the Caldwell brand, the veterans that were recruited by Ed4Mil were enrolled in unapproved online courses without their knowledge, all while members of the conspiracy profited from their hard-earned benefits. Prosecuting fraud against the government is always a top concern of our office, especially when the conduct shamelessly exploits our servicemen and women for financial gain.”

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

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

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

From 2009 through August 2013, Ed4Mil founder and president David Alvey, 50, of Harrisburg, Pennsylvania, along with DiBisceglie, Sechrist, and others, conspired to fraudulently obtain millions of dollars in tuition assistance and other education-related benefits under the Post-9/11 GI Bill.

As part of the conspiracy, DiBisceglie helped Ed4Mil get approval from Caldwell’s administration to develop and administer a series of non-credit online courses for veterans in Caldwell’s name. In order for the courses to be eligible for education benefits under the Post-9/11 GI Bill, DiBisceglie, Alvey, and others prepared and submitted an application with the Veterans Administration stating that the courses were developed, taught, and administered by Caldwell faculty and met Caldwell’s stringent educational standards. As a result, the courses were subsequently approved, and Sechrist, Alvey, and others aggressively marketed the courses to veterans who were eligible to receive the benefits. 

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

At all times during the conspiracy, DiBisceglie, Sechrist, Alvey, and others concealed the true nature of the courses from the government and the veterans who enrolled in the courses. Thousands of veterans enrolled in the online courses believing they were taking courses from Caldwell. Altogether, the scheme caused the United States to pay over $24 million in tuition benefits under the Post-9/11 GI Bill. 

“Scams like this steal money from hardworking taxpayers and legitimate students – and in this case, our veterans – and that is completely unacceptable,” said Debbi Mayer, Assistant Special Agent in Charge of the U.S. Department of Education Office of Inspector General’s Northeastern Regional Office. “I’m proud of the work of the OIG special agents and our law enforcement partners for holding Ms. DiBisceglie and Ms. Sechrist accountable for their criminal actions.”

“The guilty pleas by DiBisceglie and Sechrist send a clear and unequivocal message that the FBI and our law enforcement partners will relentlessly pursue fraud against the government. These crimes are especially egregious since they target our veterans and the educational system,” stated Timothy Gallagher, Special Agent in Charge of the Newark FBI Field Office.
   
The wire fraud conspiracy charge carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing for both defendants is scheduled for Jan. 24, 2018.

The charge and allegations against Alvey are still pending, and he is presumed innocent unless and until proven guilty.

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

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

Defense Counsel:  DiBisceglie: Gray Broughton Esq., Richmond, Virginia and John Morgenstern, Esq., Philadelphia
Sechrist: Richard Verde, Esq., North Caldwell, New Jersey

NEWARK, N.J. – A New York man was sentenced today to 43 months in prison for robbing a bank in Fort Lee, New Jersey, in January 2017, Acting U.S. Attorney William E. Fitzpatrick announced.

 

Isaac Nesbit, 30, previously pleaded guilty before U.S. District Judge Esther Salas to an information charging him with one count of bank robbery. Judge Salas imposed the sentence today in Newark federal court.

 

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

 

Nesbit admitted that on Jan. 20, 2017, he robbed a Bank of New Jersey branch in Fort Lee. Nesbit admitted that he handed a teller a hand-written note demanding cash and threatening to shoot everyone in the bank if the teller did not comply.

In addition to the prison term, Judge Salas sentenced Nesbit to three years of supervised release.

Acting U.S. Attorney Fitzpatrick credited special agents with the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; the Bergen County Prosecutor’s Office, under the direction of Prosecutor Gurbir S. Grewal; and the Fort Lee Police Department, under the direction of Chief Keith M. Bendul, with the investigation leading to today’s sentencing.

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

CAMDEN, N.J. – A Delran, New Jersey, man who worked for the U.S. Postal Service (USPS) today admitted to stealing postal service funds, Acting U.S. Attorney William E. Fitzpatrick announced.

Amar D. Patel, 36, pleaded guilty before U.S. District Noel L. Hillman  in Camden federal court to an information charging him with one count of embezzling, stealing, purloining, and knowingly converting to his own use USPS funds in excess of $1,000.

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

In July 2016, the U.S. Postal Service Office of Inspector General started investigating shortages in cash deposits reported by the Riverside, New Jersey, Delanco, New Jersey, and Delran post offices. Patel – who was a supervisor at those three offices – had access to deposit bags containing cash acquired during retail operations.

Agents installed covert surveillance cameras inside the Riverside post office.  On Jan. 14, 2017, one of the surveillance cameras captured images of Patel tearing open a sealed deposit bag, removing cash deposits, and placing the funds into his pocket. According to U.S. Postal Service financial records and bank deposit records, the Riverside office’s deposit was short $1,650 on Jan. 14, 2017. 

As part of his plea, Patel admitted stealing a total of $15,700 in U.S. Postal Service funds on 12 separate occasions from Feb. 20, 2016, through Jan. 14, 2017.

The count to which Patel pleaded guilty is punishable by a maximum of 10 years in prison and a $250,000 fine. Sentencing is scheduled for Jan. 26, 2018.

Acting U.S. Attorney Fitzpatrick credited special agents of the U.S. Postal Service Office of Inspector General, under the direction of Executive Special Agent in Charge Monica Weyler of the Eastern Area Field Office, with the investigation leading to today’s guilty plea.

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

NEWARK, N.J. – A doctor with offices in Paterson, New Jersey, Passaic, New Jersey, and Elizabeth, New Jersey, today admitted defrauding Medicare and private insurance companies out of $3 million by billing for more than 150,000 physical therapy sessions that were performed by unlicensed and unqualified personnel, Acting U.S. Attorney William Fitzpatrick announced.

Anthony J. Enrico, 60, of North Haledon, New Jersey, pleaded guilty before U.S. District Judge Kevin McNulty in Newark federal court to an information charging him with one count of health care fraud.

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

From January 2007 through May 2016, Enrico billed Medicare and other health insurance providers for physical therapy services that he supposedly provided to his patients. In order for them to be reimbursable, Medicare and private insurers required that physical therapy services be performed only by individuals like Enrico who met certain criteria based on training and certifications.

Enrico admitted that on more than 150,000 occasions, those services were performed at his direction by individuals who lacked the necessary training and certifications, resulting in him fraudulently obtaining approximately $3 million from Medicare and private insurers. 
    
Enrico faces a maximum potential penalty of 10 years in prison and a fine of up to twice the loss caused by the offense. As part of his plea agreement, Enrico must also pay restitution of $3 million. Sentencing is scheduled for Jan. 25, 2018. 

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

The government is represented by Senior Litigation Counsel Joseph N. Minish of the U.S. Attorney’s Health Care and Government Fraud Unit and Assistant U.S. Attorney Elaine Lou of the U.S. Attorney’s Office Criminal Division.

The U.S. Attorney’s Office for the District of New Jersey reorganized its health care practice in 2010 and created a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since that time, the office has recovered more than $1.36 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: Christopher D. Adams Esq., Holmdel, New Jersey

NEWARK, N.J. – Two women appeared in federal court today to face allegations that they robbed a Spencer Savings Bank in Garfield, New Jersey, at gunpoint, Acting U.S. Attorney William E. Fitzpatrick announced.

Swahilys Pedraza-Rodriguez, 19, of New Haven, Connecticut, and Melisa Aquino Arias, 23, of Passaic, New Jersey, are charged by complaint with one count of bank robbery. Both defendants made their initial appearances this afternoon before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court and were detained.

According to the complaint:

On Sept. 27, 2017, Pedraza-Rodriguez and Arias allegedly entered a Spencer Savings Bank in Garfield and asked a bank teller for information about opening a bank account. Soon after, Arias, who was wearing a blue hijab, took out a black handgun and demanded money, while Pedraza-Rodriguez stood guard by the bank manager. After a bank teller handed them some cash, the defendants left the bank, and employees immediately alerted the police. Law enforcement officers responded to the scene, but did not immediately locate the robbers.  

On Oct 15, 2017, Pedraza-Rodriguez and Arias allegedly entered an NVE Bank in Teaneck, New Jersey. Arias wore an orange hijab and Pedraza-Rodriguez wore a black head covering.  They approached a bank employee and requested information about opening a bank account. The employee recognized the women as the alleged perpetrators of the Garfield bank robbery. As the employee went to alert the police, the women left the bank. Pedraza-Rodriguez and Arias were apprehended soon after by law enforcement officers.  

The bank robbery count carries 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.

Acting U.S. Attorney Fitzpatrick credited special agents with the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; the Garfield Police Department, under the direction of Chief Raymond Kovach; the Teaneck Police Department, under the direction of Chief Glenn M. O'Reilly; and the Leonia police department, under the direction of Chief Thomas P. Rowe, with the investigation leading to the charges. 

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

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

Defense counsel:

Pedraza-Rodriguez: K. Anthony Thomas Esq., Assistant Federal Public Defender, Newark
Arias: Julian Wilsey Esq., Livingston, New Jersey
 

NEWARK, N.J. – Three doctors were each sentenced today to over two years 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.

George Roussis, 45, and Nicholas Roussis, 49, both of Staten Island, New York, were sentenced to 37 and 24 months in prison, respectively. Ricky J. Sayegh, 45, of Scarsdale, New York, was sentenced to 30 months in prison. All three defendants previously pleaded guilty before U.S. District Judge Stanley R. Chesler to separate informations charging them with accepting bribes in violation of the Federal Travel Act. Judge Chesler imposed the sentences today in Newark federal court.

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

George Roussis, a pediatrician, and his brother, Nicholas Roussis, an obstetrician-gynecologist, both with practices in Staten Island, accepted cash payments totaling approximately $175,000 from BLS employees and associates between October 2010 and April 2013. In addition, at the request of the Roussis brothers, BLS paid for strip club trips, including paying women to perform lap dances and engage in sex acts with George and Nicholas Roussis. In exchange, George and Nicholas Roussis referred their patients’ blood specimens to BLS, generating more than $1,450,000 and $250,000 of lab business for BLS, respectively.

Sayegh, an internal medicine doctor practicing in Yonkers, New York, accepted cash bribes in return for referring blood specimens to BLS. From February 2010 through April 2013, Sayegh received bribes totaling approximately $400,000 from BLS employees and associates. Sayegh’s referrals generated more than $1.4 million in lab business for BLS.

The investigation has thus far resulted in 50 convictions – 36 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 terms, Judge Chesler sentenced each defendant to a year of supervised release. He also ordered that George Roussis, Nicholas Roussis, and Sayegh pay fines of $7,500, $5,000, and $10,000, respectively.

Acting U.S. Attorney William E. 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. Attorney Danielle Alfonzo Walsman, Senior Litigation Counsel Joseph N. Minish 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 $1.34 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:

George Roussis: Peter Bennett Esq., Red Bank, New Jersey

Nicholas Roussis: Joseph R. Corozzo Esq., New York, New York

Sayegh: Michael Bachner Esq., New York

TRENTON, N.J. – A Trenton man today admitted his role in a conspiracy to distribute and possess with intent to distribute more than 1.5 kilograms of cocaine and more than 122 grams of cocaine base, Acting U.S. Attorney William E. Fitzpatrick announced.

Khalfini Richardson, 33, pleaded guilty before U.S. District Judge Michael A. Shipp in Trenton federal court to Count One of an 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 of 2013 through Jan. 13, 2016, Richardson conspired with co-defendants Bobby Williams, William Enmond and Capitol T. Wellons to distribute cocaine, and to manufacture and distribute cocaine base, primarily from two adjacent residences in Trenton.  On May 8, 2015, Richardson cooked powder cocaine into cocaine base inside one of the Trenton residences and sold approximately 40 grams of it to a confidential government source for $1,800.  Richardson admitted to conspiring to distribute and possess with intent to distribute 1.72 kilograms of cocaine and to conspiring to manufacture as well as distribute, and possess with intent to distribute, 122.6 grams of cocaine base.

The count to which Richardson pleaded guilty is punishable by a maximum penalty of 40 years in prison and a $5 million fine. Sentencing is scheduled for Jan. 17, 2018.

Enmond previously pleaded guilty before Judge Ship and was sentenced July 21, 2017, to five years in prison. The charges and allegations against Williams and Wellons are merely accusations, and they are considered innocent unless and until proven guilty.

Acting U.S. Attorney Fitzpatrick credited special agents of the Drug Enforcement Administration (DEA), under the direction of Special Agent in Charge Carl J. Kotowski in Newark, with the investigation leading to today’s guilty plea.

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

Defense counsel: Brynn Giannullo Esq., New Brunswick, New Jersey

NEWARK, N.J. – A former settlement agent from Wyckoff, New Jersey, was convicted at trial today on charges related to the refinancing of properties in Bergen and Morris Counties, New Jersey, Acting U.S. Attorney William E. Fitzpatrick announced.

Mark Andreotti, 46, was found guilty on all six counts of an indictment charging him with bank fraud, conspiracy to commit bank fraud, tax evasion, and failure to file tax returns. He was convicted following a two-week trial before U.S. District Judge Susan D. Wigenton in Newark federal court. The jury deliberated one and a half hours before returning its verdict.

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

In January 2010, Andreotti submitted a loan application to a bank requesting $625,000 to refinance the mortgage on his house in Wyckoff. Andreotti, who owned and operated Metropolitan Title and Abstract (Metropolitan), used Metropolitan as the settlement agent on the transaction. After the bank transferred the $625,000 for the refinance to Metropolitan’s escrow account, Andreotti spent the money on personal expenses instead of paying off the first mortgage on the house.

In April 2011, Andreotti conspired with another individual who worked as a real estate attorney to obtain $480,000 by claiming that the money would be used to refinance the mortgage on the attorney’s house in Montville, New Jersey. After the bank transferred the money for the refinance to Metropolitan’s escrow account, Andreotti kept $110,000 for himself before transferring the remaining funds to the other conspirator.

In 2010, the IRS initiated collection actions against Andreotti for unpaid personal income taxes. Despite numerous liens and levies and having five rental income properties in addition to his primary residence, Andreotti continued to evade his taxes. He also failed to file tax returns for the tax years 2010 and 2011.

The bank fraud counts are each punishable by a maximum potential penalty of 30 years in prison and a $1 million fine. The tax evasion count is punishable by a maximum potential penalty of five years in prison and a $100,000 fine. The counts of failure to file tax returns are each punishable by a maximum potential penalty of one year in prison and a $25,000 fine. Sentencing is scheduled for Jan. 23, 2018.

Acting U.S. Attorney William E. Fitzpatrick credited special agents of the Federal Housing Finance Agency – Office of Inspector General, under the direction of Special Agent in Charge Steven Perez in Newark; special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen in Newark; and investigators with the U.S. Attorney’s Office, with the investigation leading to today’s guilty verdicts.
                                
The government is represented by Assistant U.S. Attorney Shana Chen in Newark and Special Assistant U.S. Attorney Charlie Divine of the Federal Housing and Finance Agency – Office of Inspector General.

Defense counsel: John P. McGovern Esq. and Christopher Dunn Esq., of Newark.
 

CAMDEN, N.J. – An Atlantic City, New Jersey, man was sentenced today to 120 months in prison for his role in a cocaine distribution conspiracy operating in the Atlantic County, Acting U.S. Attorney William E. Fitzpatrick announced.

Kabaka Atiba, a/k/a “Clarence Nixon,” 47, previously pleaded guilty before U.S. District Judge Jerome B. Simandle to Count 2 of a second superseding indictment charging him with distribution and possession with intent to distribute cocaine. Judge Simandle imposed the sentence today in Camden federal court.

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

The conspiracy that Atiba participated in involved the trafficking of more than 100 kilograms of cocaine. Atiba and other members of the conspiracy used residences in Pleasantville, New Jersey, and Absecon, New Jersey, to store and package cocaine and crack cocaine.

Atiba was supplied with cocaine by his half-brother, Tozine Tiller, 43, of Absecon, and others, and was personally responsible for distributing in excess of 840 grams of crack cocaine from February 2010 through Dec. 10, 2014. 

In addition to the prison time, Judge Simandle sentenced Atiba to three years of supervised release.

To date, 12 individuals have been charged for their roles in the drug trafficking conspiracy. All of those charged, with the exception of one defendant who remains a fugitive, have been convicted. Five defendants have been sentenced, including Talib Tiller, 45, of Pleasantville, New Jersey, and Tejohn Cooper, 44, of Galloway Township, New Jersey, who were recently sentenced in September 2017 to 57 and 96 months in prison, respectively. 

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

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

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

Defense counsel: David Rudenstein Esq., Philadelphia
 

NEWARK, N.J. – Two people were charged in connection with a drug distribution conspiracy after U. S. Customs and Border Protection (CBP) officers found more than six kilograms of cocaine in neck pillows following their arrival at Newark Liberty International Airport, Acting U.S. Attorney William E. Fitzpatrick announced.

Rafael Francisco Bautista Perdomo, 20, and Brenda Alyssa Mancebo, 20, are each charged by complaint with one count of conspiracy to distribute and possess with intent to distribute five kilograms or more of cocaine. Both appeared today before U.S. Magistrate Judge Mark Falk in Newark federal court and were detained without bail.

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

On Oct. 11, 2017, Perdomo and Mancebo arrived at Newark Liberty on an inbound flight from Las Americas International Airport in Santo Domingo, Dominican Republic. Each brought a neck pillow with them onto the flight as carry-on items.

During a routine baggage screening, CBP officers discovered approximately three kilograms of cocaine sewn inside each of the neck pillows that the defendants were carrying.

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

Acting U.S. Attorney Fitzpatrick credited officers of CBP, under the direction of Leon Hayward, Acting Director, New York Field Operations, and special agents U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), New Jersey Field Office, under the direction of Acting Special Agent in Charge Debra Parker, 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.

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

CAMDEN, N.J. – A Camden man was sentenced today to 41 months in prison for his role in a crack cocaine distribution conspiracy operating in Camden, Acting U.S. Attorney William E. Fitzpatrick announced.

Julian Dickerson, a/k/a “Juelz,” 30, previously pleaded guilty before U.S. District Judge Jerome B. Simandle to an information charging him with one count of conspiracy to distribute and to possess with intent to distribute cocaine base. Judge Simandle imposed the sentence today in Camden federal court.

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

Dickerson admitted that he was a member of an organization that controlled the distribution of drugs, including crack cocaine, in and around the 1100 block of Lansdowne Avenue in Camden. Dickerson admitted that he was supplied crack cocaine by other members of the conspiracy, which he sold to customers in the area and to an undercover officer on several occasions.

In addition to the prison term, Judge Simandle sentenced Dickerson to three years of supervised release.

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

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

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

Defense counsel: Michael E. Riley Esq., Mount Holly, New Jersey

TRENTON, N.J. – A former salesman at Bayway Lumber, a Linden, New Jersey, company that sold commercial and industrial products to numerous public and private entities, was sentenced today to 12 months in prison for conspiring to defraud customers and lying to a federal grand jury, Acting U.S. Attorney William E. Fitzpatrick announced.

Adam Martignetti, 44, of South River, New Jersey, previously pleaded guilty before U.S. District Judge Peter G. Sheridan to Counts 1 and 6 of an indictment charging him with conspiracy to commit wire fraud and making false declarations before a grand jury. Judge Sheridan imposed the sentence today in Trenton federal court.  

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

Martignetti admitted that from 2011 through 2013, he conspired with others to defraud certain Bayway Lumber customers by providing free items to the customers’ employees and then recouping the cost of the items – plus additional revenue for Bayway Lumber – by overbilling the customers. Martignetti also admitted supplying lower-quality, less expensive plywood to a customer while still charging it for the more expensive, higher-quality plywood that it had ordered.   

Martignetti gave a variety of personal items to employees of Bayway Lumber’s customers, including Amtrak, the City of Elizabeth, and the Plainfield Board of Education.  These items included a laptop, several iPads, a camera and sound system, patio furniture, and other merchandise. Under the supervision of Robert Dattilo, president and partial owner of Bayway Lumber, Martignetti then overbilled those customers. Dattilo kept a running tally of how much Martignetti and others fraudulently billed customers, which many at Bayway Lumber referred to as the “Bank,” to ensure that Bayway Lumber recovered the full cost of the free items.

Martignetti also conspired to provide one Bayway Lumber customer, Consolidated Edison Co. of New York Inc. (Con Edison), with lower-quality wood than it ordered and paid for. When Con Edison ordered plywood that had been graded to meet a certain set of specifications, Martignetti, at Dattilo’s instruction, routinely sent plywood that was of a lower grade or not graded at all, including “reject” plywood, all while still charging Con Edison for the higher-quality plywood. 

Martignetti also admitted giving false testimony before a federal grand jury while appearing as a witness under oath in March 2013, including stating that he had never given Bayway Lumber items to City of Elizabeth employees for free, and that Elizabeth was never charged for items that were for Elizabeth employees’ personal use.   

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

Dattilo previously pleaded guilty to conspiracy to commit mail and wire fraud and was sentenced in July 2016 to 48 months in prison and ordered to pay $708,386 in restitution.

Acting U.S. Attorney Fitzpatrick credited special agents with the Office of Inspector General, U.S. Department of Housing and Urban Development, under the direction of Special Agent in Charge Christina Scaringi; the Office of Inspector General, Amtrak, under the direction of Special Agent in Charge Michael Waters; and the FBI, under the direction of Special Agent in Charge Timothy Gallagher, with the investigation.   

The government is represented by Assistant U.S. Attorney Cari Fais of the U.S. Attorney’s Office Special Prosecutions Division, and Assistant U.S. Attorney Barbara R. Llanes, Chief of the General Crimes Unit in Newark. 

Defense Counsel: Michael Armstrong Esq., Willingboro, New Jersey

Plea Calls for Prison Sentence of 39 to 45 Years

NEWARK, N.J. – The second-in-command of the New Jersey set of the Grape Street Crips street gang today admitted his role in committing a murder, participating in numerous attempted murders, plots to kill a state witness and to kidnap a heroin trafficker, and conspiring to distribute heroin, all as part of a racketeering conspiracy, Acting U.S. Attorney William E. Fitzpatrick announced.

Kwasi Mack, a/k/a “Welches,” 28, pleaded guilty before U.S. District Judge Madeline Cox Arleo in Newark federal court to eight counts of the sixth superseding indictment, which charged him with murder and attempted murders as part of a RICO conspiracy, assaults with a dangerous weapon in aid of racketeering, conspiracy to assault with a dangerous weapon, and conspiracy to distribute one kilogram or more of heroin.

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

Mack admitted that as the second-in-command of the NJ Grape Street Crips he committed the following violent acts in furtherance of the RICO conspiracy: 

• In August 2006, Mack used two firearms simultaneously to kill a rival gang-member and, in the process, severely injured an individual who was with the rival.
   
• On Oct. 10, 2011, during an outdoor cookout, Mack used an assault rifle to attempt to kill a gang-member who had previously cooperated in a murder investigation and whose loyalty to the gang was in question. Mack shot eight individuals, at least two of whom suffered permanent or life-threatening injuries.
   
• After being charged by the Essex County Prosecutor’s Office with the Oct. 10, 2011, attempted murder, Mack was provided during the discovery process with the identity of the only witness against him. Mack ordered fellow gang-members to kill that witness. Gang-members took substantial steps to carry out Mack’s orders, but the murder never took place.
   
• In 2013, Mack and others planned to kidnap a major heroin-trafficker in order to rob him.
   
• On Oct. 5, 2013, Mack ordered the murder of a person identified in the indictment as “Victim-1.” On Oct. 27, 2013, following Mack’s orders, several gang-members repeatedly shot Victim-1 and Victim-4.
   
• On Oct. 7, 2013, Mack and others participated in the attempted murder of rival gang-members in retaliation for the murder of a fellow gang-member.

Mack also admitted to participating in a conspiracy to distribute one kilogram or more of heroin, possessing firearms in furtherance of the RICO and narcotics conspiracies, using minors to commit these offenses, and engaging in these offenses as a pattern of criminal conduct engaged in as a livelihood.

Under the terms of the plea agreement, Mack will be sentenced to 39 to 45 years in prison five years of supervised release. Sentencing is scheduled for March 20, 2018.

Acting U.S. Attorney Fitzpatrick credited special agents of the Drug Enforcement Administration, under the direction of Special Agent in Charge Carl Kotowski, and special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher, for the investigation leading to today’s guilty plea. He also thanked prosecutors and detectives of the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Robert D. Laurino, police officers and detectives of the Newark Police Department, under the direction of Public Safety Director Anthony F. Ambrose, and the Essex County Sheriff’s Office, under the direction of Armando B. Fontoura, for their work on the investigation.

The government is represented by Assistant U.S. Attorneys Osmar J. Benvenuto and Barry Kamar of the Criminal Division, and Richard J. Ramsay of the Office’s Appeals Division in Newark.

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

Defense counsel: Robert J. Fettweis, Esq., Moonachie, New Jersey

TRENTON, N.J. – A Camden, New Jersey, woman was sentenced today to 72 months in prison for sex trafficking of a minor, Acting U.S. Attorney William E. Fitzpatrick announced.

 

Aja M. Easley, 24, previously pleaded guilty before U.S. District Judge Peter G. Sheridan to an information charging her with one count of sex trafficking of a minor. Judge Sheridan imposed the sentence today in Trenton federal court.

 

Easley, Aaron J. Gray, 30, of Camden, and Kenneth A. Mertz, 36, of Collingswood, were previously charged in a criminal complaint with sex trafficking of a minor and conspiracy to engage in sex trafficking of a minor. Gray was also charged in the complaint with being a felon in possession of a firearm.

 

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

 

Easley admitted that on March 2, 2015, she communicated with the victim, a minor, using a popular social media website. Easley told the victim she was “worried about” the victim because of a previous assault by the victim’s ex-boyfriend. She offered the victim money, food, clothing, and shelter, and met the victim at the Camden Transportation Center. There, Easley told the victim about a “dating website,” and said that the victim could make money through the website by going on “dates.” Easley and the victim later met Gray and Mertz at a residence in Camden. Easley, Mertz, and Gray agreed to advertise the minor online for commercial sex acts and drove the minor to a motel in Cherry Hill for that purpose.

 

At the motel, Gray and Easley convinced the victim to engage in commercial sex acts. Using her cellular telephone, Easley took provocative photos of the victim, and uploaded them to an online advertisement that she had created advertising the victim for commercial sex acts. After the advertisement was online, Easley used her cellular telephone to communicate with multiple individuals who responded to the advertisement. Gray gave the victim instructions on what to do when the respondents arrived. Easley instructed the victim to tell the individuals, regardless of her real age, that she was 21 years old. Easley also instructed the victim how much time each individual could spend with the victim at the motel and how much each individual owed the victim. Easley also told the victim that if any trouble arose, Gray was outside the motel with a firearm. While at the motel in Cherry Hill, the victim engaged in sex acts in exchange for money with multiple individuals, which the defendants split between themselves and the victim.

 

The next day, at a motel in Mount Laurel, New Jersey, at the defendants’ direction, the victim again engaged in sex acts in exchange for money with multiple individuals who responded to the advertisement. Later that evening, the defendants told the victim that they were taking the victim to Atlantic City, New Jersey, to meet another person who had responded to the advertisement and was willing to pay $1,200 for an entire evening with the victim.

 

On the way to Atlantic City, the defendants agreed to let the victim stop at a residence in Gloucester City, New Jersey. The victim went inside and contacted the police, leading to the defendants’ arrest.

 

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

 

Gray previously pleaded guilty to an information charging him with one count of sex trafficking of a minor and was sentenced March 16, 2017, to 151 months in prison. Mertz previously pleaded guilty to an information charging him with one count of violation of the Travel Act. He is scheduled to be sentenced Nov. 28, 2017.

 

Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher, and members of the Mount Laurel Police Department, under the direction of Police Chief Dennis Cribben, and the Gloucester City Police Department, under the direction of Acting Police Chief Michael Morell, with the investigation leading to the charges.

 

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

 

Defense counsel: Joshua Markowitz Esq., Lawrenceville, New Jersey

 

NEWARK, N.J. – The assistant purchasing manager for a company that manufactured military parts for the U.S. Navy today admitted soliciting and receiving kickbacks in return for providing subcontract work to a Cherry Hill, New Jersey, company, Acting U.S. Attorney William E. Fitzpatrick announced.

Christopher Sanchirico, 55, of King of Prussia, Pennsylvania, pleaded guilty before U.S. District Judge William J. Martini in Newark federal court to an information charging him with conspiracy to violate the federal anti-kickback act. He was released on $100,000 unsecured bond.

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

Sanchirico was the assistant purchasing manager for an entity identified in the information as “Subcontractor 1,” which was located in Philadelphia and manufactured shock-hardened circuit breakers and switchgears for installation on U.S. Navy surface ships, submarines, and aircraft carriers. Subcontractor 1 performed work on multiple U.S. Navy and Defense Logistics Agency maritime contracts as a first-tier subcontractor to a prime contractor working for the United States. 

In July 2013, Sanchirico made an agreement with an entity identified in the information as “Subcontractor 2,” a machine shop in Cherry Hill, through Subcontractor 2’s president, identified in the information as “Individual 1.” In return for his assistance in securing a manufacturing contract between Subcontractor 1 and Subcontractor 2, Sanchirico received between five and 10 percent of the gross revenue from circuit breaker and switchgear components that Subcontractor 2 provided to Subcontractor 1. Subcontractor 2’s secretary, identified in the information as “Individual 2,” maintained records of the payments and sometimes made bank withdrawals for the kickbacks when Individual 1 was unable to do so. 

From 2013 to 2016, Sanchirico received approximately $150,000 in cash kickbacks from Subcontractor 2.

Sanchirico faces a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gain or loss from the offense. Sentencing is scheduled for Jan. 23, 2018.

Acting U.S. Attorney Fitzpatrick credited agents of the Naval Criminal Investigative Service, Northeast Field Office, under the direction of Special Agent in Charge Leo S. Lamont in Newport, Rhode Island, and agents of the U.S. Department of Defense, Office of the Inspector General, Defense Criminal Investigative Service, under the direction of Special Agent in Charge Leigh-Alistair Barzey, with the investigation leading to the guilty plea. He also thanked the U.S. Attorney’s Office for the Eastern District of Pennsylvania, under the direction of Acting U.S. Attorney Louis D. Lappen, for its assistance.

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

Defense counsel: Michael Drossner Esq., Philadelphia

CAMDEN, N.J. – A Camden man was sentenced today to 96 months in prison for selling crack cocaine, Acting U.S. Attorney William E. Fitzpatrick announced.

Nafeez Griffin, a/k/a “Feez,” 31, previously pleaded guilty before U.S. District Judge Jerome B. Simandle to an information charging him with one count of distribution and possession with intent to distribute cocaine base. Judge Simandle imposed the sentence today in Camden federal court.

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

Griffin admitted that on Nov. 30, 2015, he sold crack cocaine to an undercover officer on the 1100 block of Lansdowne Avenue, which was then under the control of a drug distribution organization of which he was a member. Griffin also admitted that other members of the organization supplied drugs to him, and that he made sales of crack cocaine on other occasions. Griffin and others were originally charged by complaint on Sept. 9, 2016, following a long-term investigation by the FBI’s South Jersey Violent Offender and Gang Task Force. Law enforcement officers seized drugs and recovered two handguns that were kept by members of the conspiracy in connection with the organization’s drug trafficking activities.  Investigators also intercepted communications pursuant to court-authorized wiretaps on cellular telephones used by several members of the conspiracy.

In addition to the prison term, Judge Simandle sentenced Griffin to three years of supervised release.

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

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

 

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

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

Michael Neopolitan, 49, of Willow Grove, Pennsylvania, 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, Neopolitan recruited individuals in New Jersey to obtain very expensive and medically unnecessary compounded medications from an out-of-state pharmacy, identified in the informations as the “Compounding Pharmacy.” 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 informations 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.

Neopolitan and conspirators working under him recruited public employees and other individuals covered by the Pharmacy Benefits Administrator to fraudulently obtain compounded medications from the Compounding Pharmacy without any evaluation by a medical professional that they were medically necessary. In return, the pharmacy paid one of Neopolitan’s conspirators a percentage of each prescription filled and paid by the Pharmacy Benefits Administrator, which was then distributed to Neopolitan and other members of the conspiracy.

Once he had recruited an employee covered by the Pharmacy Benefits Administrator, Neopolitan would obtain the employee’s insurance information and fill out a Compounding Pharmacy prescription form.  He would select the compounded medications that paid the most without regard to their medical necessity.

Neopolitan would then get the prescriptions signed by doctors who never evaluated whether the patients had a medical necessity for the compounded medication. The prescriptions were then faxed to Compounding Pharmacy, which filled the prescriptions and billed the Pharmacy Benefits Administrator.

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, Neopolitan must forfeit $198,617.14 in criminal proceeds he received for his role in the scheme and pay restitution of at least $762,519.74. 

Neopolitan 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 Jan. 12, 2018.

Nine other conspirators – Matthew Tedesco, Robert Bessey, Michael Pepper, Thomas Hodnett, Steven Urbanski, John Gaffney, Judd Holt, George Gavras, and Richard Zappala – 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:  Robert A. Weir Esq., Philadelphia, Pennsylvania

NEWARK, N.J. – A high-ranking member of the New Jersey set of the Grape Street Crips today admitted his role in orchestrating a murder, participating in a separate attempted murder, and conspiring to distribute crack-cocaine, Acting U.S. Attorney William E. Fitzpatrick announced.

Rashan Washington a/k/a “Shoota,” 30, pleaded guilty before U.S. District Judge Madeline Cox Arleo in Newark federal court to five counts of a sixth superseding indictment charging him with murder and attempted murder as part of a racketeering conspiracy, conspiracy to commit aggravated assault in aid of racketeering, conspiracy to possess a firearm, conspiracy to distribute 280 grams or more of crack-cocaine, and participating in a continuing criminal enterprise.

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

Washington admitted that he orchestrated the murder of person identified as “Victim-5” in the indictment. On Nov. 12, 2013, Washington purposely left Victim-5 alone inside of a blue Jeep Cherokee knowing that another gang member intended to shoot and kill Victim-5. Washington admitted that, after he set up Victim-5 in the Jeep Cherokee, another gang member shot Victim-5 once in the head, killing him. Afterwards, Washington was promoted to the rank of “G,” of “Gangster,” within the N.J. Grape Street Crips.

As charged in the pending sixth superseding indictment, the gang’s leader, Corey Hamlet, a/k/a “C-Blaze,” 41, of Newark, ordered Victim-5’s murder. Hamlet and other gang members believed that Victim-5 had been disloyal by setting up a meeting at the Mall at Short Hills in Millburn, New Jersey, in an attempt to end a long-running feud between Hamlet and a person identified in the indictment as “Victim-1,” a rival.

After the Short Hills meeting, Hamlet used a social media account to post a report from the Essex County Prosecutor’s Office purportedly indicating that Victim-1 had provided a statement to law enforcement. Just three days after Hamlet’s social media post, gang members – acting on Hamlet’s orders – repeatedly shot and nearly killed Victim-1 and another individual identified in the indictment as “Victim-4,” a bystander who was inside Victim-1’s car. Following the attempted murder of Victim-1, Hamlet ordered Washington and another gang member to murder Victim-5.

Washington also admitted that on Oct. 7, 2013, he and other gang members sought to avenge the murder of a fellow gang member by individuals from a rival gang. Washington and others travelled to the area of Avon Avenue in Newark where one of Washington’s fellow gang members discharged 14 rounds in an attempt to shoot members of the rival gang. After returning to their staging area after the shooting, Washington fled law enforcement who attempted to arrest him and his fellow gang members.

Under the terms of the plea agreement, which has been accepted by the Court, Washington will be sentenced to 30 years in prison and 10 years of supervised release. Sentencing is scheduled for Feb. 2, 2018.

Acting U.S. Attorney Fitzpatrick credited special agents of the Drug Enforcement Administration (DEA), under the direction of Special Agent in Charge Carl J. Kotowski, and special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher, with the investigation. Acting U.S. Attorney Fitzpatrick also thanked prosecutors and detectives of the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Robert D. Laurino, police officers and detectives of the Newark Department of Public Safety, under the direction of Director Anthony F. Ambrose, and the Essex County Sheriff’s Office, under the direction of Armando B. Fontoura, for their work on the investigation.
The government is represented by Assistant U.S. Attorneys Osmar J. Benvenuto and Barry Kamar of the District of New Jersey’s Criminal Division, as well as Richard J. Ramsay of the Office’s Appeals Division in Newark.

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

Defense Counsel: Pasquale F. Giannetta, Esq., Newark, New Jersey
 

NEWARK, N.J. – A North Brunswick, New Jersey, man who transmitted an image of child sexual abuse to an undercover agent was arrested today and charged with distributing child pornography, Acting U.S. Attorney William E. Fitzpatrick announced.

Richard Scalea, 59, was arrested by agents of the FBI Child Exploitation Task Force and charged by criminal complaint with one count of distributing child pornography. He made his initial appearance this afternoon before U.S. Magistrate Judge Steven C. Mannion in Newark federal court and was detained.

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

On Aug. 31, 2017, Scalea communicated with an undercover law enforcement officer via an online incest chat room. In that chat, Scalea claimed to have sexually abused a minor child who was known to him. Scalea then distributed an image of child pornography to the undercover law enforcement officer. Today, law enforcement officers executed a search warrant at Scalea’s residence and seized computer devices containing multiple images of child sexual abuse.

Anyone with information regarding possible victims of this activity is urged to contact the FBI in Newark at 973-792-3000.

The charge of distributing child pornography carries a mandatory minimum sentence of five years in prison, a maximum potential penalty of 20 years in prison, and a $250,000 fine. The charge and allegations contained in the complaint are merely accusations, and the defendant is presumed 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, with the investigation.

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

Defense counsel: David Holman Esq., Assistant Federal Public Defenders, Newark
 

NEWARK, N.J. – A former accounting specialist in the Ridgefield Park, New Jersey, office of an insurance broker was arrested today and charged with allegedly defrauding her employer of approximately $900,000, Acting U.S. Attorney William E. Fitzpatrick announced.

Violeta McGough, 55, of Bergenfield, New Jersey, is charged by complaint with one count of wire fraud. U.S. Postal Inspectors and criminal investigators with the U.S. Attorney’s Office arrested McGough at her home this morning. She is scheduled to appear this afternoon before U.S. Magistrate Judge Steven C. Mannion in Newark federal court.

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

From 2008 through October 2015, McGough allegedly made numerous fraudulent accounting entries to steal funds that her employer – identified as “Victim-Company 1” in the complaint – collected as insurance premiums. The premiums were for policies underwritten and issued by Victim-Company 1 on behalf of a United Kingdom-based insurance syndicate that actually held the risk. As part of her employment duties, McGough tracked premiums collected by Victim-Company 1 and its monthly payments to the syndicate.

McGough repeatedly used her access to Victim-Company 1’s books to divert a portion of those payments to her personal use. McGough disguised the stolen funds as reimbursed premiums for cancelled policies. She caused Victim-Company 1 to generate checks payable to a person identified in the complaint as “Individual 1,” who suppossedly worked for a premium financing company, but did not actually work there. McGough personally deposited the checks into Individual 1’s bank account and the bulk of the funds were transmitted back to McGough’s bank account.

The single wire fraud count is punishable by a maximum potential penalty of 20 years in prison and a fine of $250,000.

Acting U.S. Attorney Fitzpatrick credited postal inspectors with the U.S. Postal Inspection Service, under the direction of Inspector in Charge James V. Buthorn, and criminal investigators from the U.S. Attorney’s Office, with the investigation leading to today’s arrest.

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

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

 

CAMDEN, N.J. – A Canadian man was sentenced today to 168 months in prison for his role in a conspiracy to traffic 100 kilograms of cocaine from Chicago to New Jersey and then on to Canada, Acting U.S. Attorney William E. Fitzpatrick announced.

Sezayir Bulaman, 49, of Hemmingford, Canada, previously pleaded guilty before U.S. District Court Judge Robert Kugler to an indictment charging him with one count of conspiring to distribute more than five kilograms or more of cocaine. Judge Kugler imposed the sentence today in Camden federal court.

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

Between October 2012 and Nov. 29, 2012, Bulaman conspired with others to pick up 100 kilograms of cocaine in Chicago, Illinois, transport it to a warehouse in New Jersey and then transport it to Canada. He was indicted in 2012, but fought extradition to the United States. The FBI seized the cocaine as part of the operation.

In addition to the prison term, Judge Kugler sentenced Bulaman to five years of supervised release.

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 today’s sentencing.

The government is represented by Assistant U.S. Attorneys Sara F. Merin of the OCDETF/Narcotics Unit and Andrew J. Bruck of the Economic Crimes Unit of the U.S. Attorney’s Office in Newark.                                             

Defense counsel: Richard Sparaco Esq., Cherry Hill, New Jersey 

NEWARK, N.J. – A Wallington, New Jersey, man today admitted purchasing live child sex shows from individuals overseas, Acting U.S. Attorney William E. Fitzpatrick announced.

Stephen Hallett, 66, made his initial appearance and pleaded guilty before U.S. District Judge Kevin McNulty in Newark federal court to an information charging him with receipt of child pornography. Hallett was released on $125,000 unsecured bond.

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

Hallett purchased live child sex shows from individuals located in the Philippines. He admitted that on Feb. 4, 2015, he received a webcam transmission of a minor engaging in sexually explicit conduct. Hallett also admitted purchasing live webcam shows of children engaging in sexually explicit conduct on dozens of occasions between 2013 and 2015.   

The receipt of child pornography charge to which Hallett pleaded guilty carries a maximum potential penalty of 20 years in prison and a $250,000 fine. Hallett will be required to register as a sex offender. Sentencing is scheduled for Jan. 11, 2018.

Acting U.S. Attorney Fitzpatrick credited special agents of U.S. Immigration and Customs Enforcement’s (ICE), Homeland Security Investigations (HSI), under the direction of Acting Special Agent in Charge Debra Parker in Newark, with the investigation.

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

Defense counsel: Michael A. Robbins Esq., West Orange, New Jersey

NEWARK, N.J. – A Media, Pennsylvania, man today admitted defrauding TRICARE – a health insurance program for members of the military and their families – by submitting fraudulent claims for medically unnecessary prescriptions, Acting U.S. Attorney William E. Fitzpatrick announced.

Jason Cerge, 41, a pharmaceutical sales representative, pleaded guilty before U.S. District Judge John Michael Vazquez in Newark 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:

Cerge admitted that from September 2014 through May 2015, he participated in a scheme to defraud TRICARE by knowingly submitting fraudulent claims for medically unnecessary prescription compounded medications – including scar creams, pain creams, and metabolic supplements – that were marketed by an entity referred to in the information as “Company A.” The conspirators knew that TRICARE reimbursed pharmacies between $2,500 and $18,800 for each of these compounded medications. The conspirators entered into agreements with certain compounding pharmacies nationwide to receive a percentage of the amount reimbursed for each prescription diverted to that pharmacy.

Cerge was recruited into the scheme by Peter Pappas, 45, of Drexel Hill, Pennsylvania. Cerge then recruited a former member of the U.S. military, a conspirator identified in the information as “CC-2,” to approach other members of the military and their families. CC-2 paid cash bribes to TRICARE beneficiaries in exchange for their TRICARE information and agreement to receive medically unnecessary prescription compounded medications. 

Cerge placed these TRICARE beneficiaries’ information onto preprinted prescription forms and presented them to a New Jersey physician for a signature. Cerge knew that the physician would immediately sign the prescriptions without examining or speaking with the patients.

Afterwards, the prescriptions were faxed to certain compounding pharmacies associated with Company A who would bill TRICARE for the medication. These compounding pharmacies then paid Company A a percentage of each prescription paid by TRICARE, which was then distributed to Cerge and other members of the conspiracy.  

As part of his plea agreement, Cerge must forfeit $12,816.24 in criminal proceeds he received for his role in the scheme and pay restitution of at least $204,198.11.

Cerge faces a statutory maximum term of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for Jan. 30, 2018.

Three other defendants – Peter Pappas, Stephanie Naar, and Julie Andresen – have pleaded guilty to their roles 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; and the U.S. Department of Defense, Office of the Inspector General, Defense Criminal Investigative Service, under the direction of Special Agent in Charge Leigh-Alistair Barzey, with the ongoing investigation leading to the guilty plea.

The government is represented by Assistant U.S. Attorney Erica Liu of the United States Attorney’s Office Health Care and Government Fraud Unit in Newark.

The New Jersey U.S. Attorney’s Office reorganized its health care practice in 2010 and created a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since that time, the office has recovered more than $1.36 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: Scott Godshall Esq., Media, Pennsylvania

NEWARK, N.J. – Two Jersey City police officers today admitted fraudulently collecting income for off-duty work they never performed, Acting U.S. Attorney William E. Fitzpatrick announced. 

Ehab Abdelaziz, 38, of Clifton, New Jersey, pleaded guilty before U.S. District Judge John Michael Vazquez in Newark federal court to an information charging him with one count of conspiracy to commit bribery. Andrea Fahrenholz, 38, of Clifton, pleaded guilty before Judge Vazquez to a separate information charging her with one count of conspiracy to commit fraud.

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

Private contractors and utility companies sometimes needed the services of off-duty Jersey City police officers for certain projects, including work in Jersey City that could obstruct the flow of traffic. Abdelaziz and Fahrenholz were Jersey City police officers who were eligible to perform off-duty work.

From December 2015 through June 2016, Abdelaziz engaged in a conspiracy in which he made a total of $11,825 in bribe payments to another Jersey City officer who was authorized to assign off-duty work, in exchange for that officer’s official assistance in submitting phony vouchers to Jersey City indicating that Abdelaziz had completed certain off-duty assignments. As a result, Abdelaziz was compensated for work he never performed.

From March 2014 through May 2016, Fahrenholz conspired with a Jersey City officer who was authorized to assign off-duty work. The officer – with Fahrenholz’s knowledge and consent – submitted phony vouchers to Jersey City indicating that Fahrenholz had completed certain off-duty assignments. As a result, Fahrenholz was compensated for work she never performed.

Both officers face a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offenses. Pursuant to their plea agreements, Abdelaziz and Fahrenholz must forfeit $22,449 and $116,346, respectively.

Sentencing for Abdelaziz and Fahrenholz is set for Jan. 3, 2018 and Jan. 25, 2018, respectively.

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 Jersey City Police Department is cooperating 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:

Abdelaziz: Anthony J. Iacullo Esq., Nutley, New Jersey

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

NEWARK, N.J. – An East Orange, New Jersey, man was sentenced today to 150 months in prison his role in the September 2015 armed robbery of a club in Passaic, New Jersey, Acting U.S. Attorney William E. Fitzpatrick announced.

Shaheed Blamahsah, a/k/a “Aboo,” 30, pleaded guilty before U.S. District Judge Madeline Cox Arleo in Newark federal court to an information charging him with one count of conspiracy to commit Hobbs Act robbery and one count of brandishing a firearm during a crime of violence.

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

On Sept. 6, 2015, Blamahsah and at least two other conspirators agreed to rob a club in Passaic at gunpoint. During his plea hearing, Blamahsah admitted that he knowingly and willfully participated in the robbery and that he and another conspirator brandished a firearm and threatened to use violence against a club employee. He also admitted that he and the other conspirator took $26,084 in cash from the club before fleeing in a getaway car.

In addition to the prison term, Judge Arleo sentenced Blamahsah to five years of supervised release.

Blamahsah was originally charged in November 2016 with Jimmy Cooper, a/k/a “Flip,” 32, of Irvington, New Jersey, and Keontrae Lawrence, a/k/a “Taz,” 29, of South Orange, New Jersey. Lawrence pleaded guilty on Sept. 7, 2017 and awaits sentencing. The charges against Cooper are merely allegations, and he is presumed 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, and members of the Passaic County Prosecutor’s Office, under the direction of Prosecutor Camelia M. Valdes, with the investigation. He also thanked the Passaic County Sheriff’s Office, the Passaic Police Department, and the Newark Division of Public Safety for their assistance.

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

Defense counsel: Kevin Buchan Esq., Holmdel

NEWARK, N.J. – The owner of a consulting services company today admitted evading taxes while operating his business in 2009, Acting U.S. Attorney William E. Fitzpatrick announced. 

Oscar N. James Sr., 60, of West Orange, New Jersey, pleaded guilty before U.S. District Judge Kevin McNulty in Newark federal court to Count Two of an information charging him with tax evasion.

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

As the owner of The James Group, James intentionally under-reported the income that he received for tax years 2008 and 2009 by filing false federal personal income tax returns. James admitted that he was responsible for underreporting $173,796 in income for the 2009 tax year, resulting in a tax loss of $61,046. 

The tax evasion charge carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is currently scheduled for Jan. 11, 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: the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; and U.S. Department of Housing and Urban Development, Office of Inspector General, under the direction of Special Agent in Charge Christina Scaringi, for 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: Adalgiza Núñez Esq., Newark

CAMDEN, N.J. – A Millville, New Jersey, man was charged today with threatening to assault and murder a congressman and the congressman’s staff, Acting U.S. Attorney William E. Fitzpatrick announced.

Joseph Brodie, 38, is charged by federal criminal complaint with one count of threatening to assault a U.S. official. Brodie has been in state custody since he was arrested on Sept. 20, 2017 and will appear before U.S. Magistrate Judge Joel Schneider in Camden federal court at a later date.

According to documents filed in this case:

On Sept. 15, 2017 and Sept. 19, 2017, Brodie allegedly made various threats via telephone and email to murder and assault a New Jersey member of Congress and the congressman’s staff. Brodie was initially arrested by the N.J. State Police and charged by the Cumberland County Prosecutor’s Office with weapons charges.

Acting U.S. Attorney Fitzpatrick credited special agents of the FBI’s Atlantic City Resident Agency, under the direction of Special Agent in Charge Timothy Gallagher in Newark; special agents of the U.S. Capitol Police, under the direction of Chief Matthew R. Verderosa;  officers from the N.J. State Police, under the direction of Colonel Joseph R. Fuentes; and the Cumberland County Prosecutor’s Office, under the direction of Prosecutor Jennifer Webb-McRae, with the investigation leading to today’s charges.

The count to which Brodie has been charged is punishable by a maximum potential penalty of six years in prison and a $250,000 fine.

The charge and allegations in the complaint are merely accusations, and Brodie is considered innocent unless and until proven guilty. 
 
The government is represented by Assistant United States Attorney Sara A. Aliabadi of the U.S. Attorney’s Office Criminal Division in Camden.
 

CAMDEN, N.J. -- A Burlington County, New Jersey, man was sentenced today to 12 months in prison for buying counterfeit computer components from a factory in China for sale in the United States, Acting U.S. Attorney William E. Fitzpatrick announced.

Ronald Graban, 58, of Columbus, N.J., previously pleaded guilty before U.S. District Judge Noel L. Hillman to an information charging him with mail fraud and money laundering. Judge Hillman imposed the sentence today in Camden federal court.

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

Beginning in 2000, Graban was in the business of buying and reselling computer parts.  He operated his business using various entities that he had set up, including, RPR International LLC, Graham Enterprises International, Innovative Technology Group, MT Loveland Corp., Golden Eagle Property Management, Andy Lee Inc., and Andy Lee Electronics. From early 2006 to mid-2007, Graban purchased counterfeit Cisco and Nortel components from a factory in China and then resold them to an Internet retailer, who sold them to the public.

In December 2004, he began buying computer parts from a company in China named GigaLight Electronic (HK) Co. Ltd., a/k/a Eflow (GigaLight/Eflow). These parts were mostly network connecting parts, and appeared identical to parts manufactured by Cisco Systems Inc. and Nortel Networks, two large computer parts and services companies. ­Graban represented to certain persons at the Intern­et retailer that the parts were genuine Cisco and Nortel parts.

In early 2006, Graban became aware that GigaLight/Efl­ow was selling counterfeit computer parts to his companies after U.S. Customs and Border Protection (CBP) seized several shipments of computer parts from GigaLight/Eflow and notified the companies of the seizures and of the fact that the parts seized were counterfeit. Despite being on notice th­at the computer parts he had been buying were counterfeit, Graban continued to buy those parts and resell them to the Internet retailer.

In February 2006, Graban caused the Internet retailer to mail him a check, payable to one of Graban=s companies, for $163,000 in payment for counterfeit parts he sold to the retailer. He deposited that check into the bank account of another one of his companies. In August 2007, approximately $890,000 was seized from various bank accounts that Graban maintained in the name of his companies. Two properties in Florida were seized, but later went into foreclosure.  Graban agreed to forfeit the funds seized and the proceeds from the two foreclosure sales, approximately $40,000.

In addition to the prison term, Judge Hillman sentenced Graban to one years of supervised release, fined him $60,000 and ordered him to pay restitution of $927,193.

Acting U.S. Attorney Fitzpatrick credited special agents of Immigration and Customs Enforcement - Homeland Security Investigations, under the direction of Acting Special Agent in Charge Debra Parker; IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; the U.S. Postal Inspection Service, under the direction of Inspector In Charge Daniel B. Brubaker, Philadelphia Division; and CBP, under the direction of Acting Director of Field Operations Leon Hayward, New York Field Office, with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorney Howard Wiener of the U.S. Attorney's Office Criminal Division in Camden.

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

Richard Zappala, 45, 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, Zappala recruited individuals in New Jersey to obtain very expensive and medically unnecessary compounded medications from an out-of-state pharmacy, identified in the informations as the “Compounding Pharmacy.” 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 informations 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. 

Zappala and conspirators working under him recruited public employees and other individuals covered by the Pharmacy Benefits Administrator to fraudulently obtain compounded medications from the Compounding Pharmacy without any evaluation by a medical professional that they were medically necessary. In return, the pharmacy paid one of Zappala’s conspirators a percentage of each prescription filled and paid by the Pharmacy Benefits Administrator, which was then distributed to Zappala and other members of the conspiracy.

Once he had recruited an employee covered by the Pharmacy Benefits Administrator, Zappala would obtain the employee’s insurance information and fill out a Compounding Pharmacy prescription form.  He would select the compounded medications that paid the most without regard to their medical necessity. 

Zappala would then get the prescriptions signed by doctors who never evaluated whether the patients had a medical necessity for the compounded medication. The prescriptions were then faxed to Compounding Pharmacy, which filled the prescriptions and billed the Pharmacy Benefits Administrator.

Zappala paid money and other benefits to doctors to reward them for signing prescriptions.  He also paid recruiters under him and paid individuals with insurance coverage to reward them for agreeing to obtain 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, Zappala must forfeit $1,492,918.19 in criminal proceeds he received for his role in the scheme and pay restitution of at least $4,310,232.76.  

Zappala 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 Jan. 5, 2018. 

Eight other conspirators – Matthew Tedesco, Robert Bessey, Michael Pepper, Thomas Hodnett, Steven Urbanski, John Gaffney, Judd Holt, and George Gavras – 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.

Defense counsel:  Kevin E. Raphael Esq., Philadelphia, Pennsylvania
 

TRENTON, N.J. – A Middlesex County, New Jersey, man was arrested today for alleged computer hacking and wiretapping of his former company’s email server, Acting U.S. Attorney William E. Fitzpatrick announced.

Jian Yang Zhang, a/k/a “Kevin Zhang,” 37, of Edison, New Jersey, is charged complaint with one count of unauthorized access of a protected computer and one count of interception of electronic communications. He is scheduled to appear later today before U.S. Magistrate Judge Tonianne J. Bongiovanni in Trenton federal court.

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

Zhang and his family were part owners of a New Jersey-based company (Company 1) that imported and supplied products to dollar stores, discount stores, and wholesalers across the United States. After a dispute among the owners in 2015 Zhang and his family agreed to sell their interest in Company 1 to the other owners. While negotiating the buyout, Zhang, who served as the email administrator for the company, created a hidden sub-user account within the Company 1 email server account. When Zhang left Company 1 in February 2015, he provided the login credentials for the email server to the remaining owners, who then changed the password. However, Zhang did not disclose that he had created the hidden sub-user account.  On numerous occasions over the next 14 months, Zhang accessed the Company 1 email server without authorization and set various employee email accounts to forward to outside email accounts that he controlled.

Both charges carry a maximum potential penalty of five years in prison and a fine of $250,000 or twice the gross gain or loss from the offense.

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

 

The government is represented by Assistant U.S. Attorney Sarah M. Wolfe of the U.S. Attorney’s Office Criminal Division in Trenton.

 

NEWARK, N.J. – Edison Adult Medical Daycare (Edison), its former owner, Dinesh Patel, and current owners, Daxa Patel and Satish Mehtani, have agreed to pay the United States and the State of New Jersey $2.72 million to resolve allegations that Edison improperly billed and received payments from Medicaid despite Dinesh Patel having been excluded from participating in Medicaid following his 2012 conviction for accepting kickbacks, Acting U.S. Attorney William E. Fitzpatrick announced today.

On Sept. 19, 2012, Dinesh Patel pleaded guilty to accepting cash kickback payments from Orange Community MRI LLC in exchange for patient referrals. He was later sentenced to three months in jail and two years of supervised release.

On March 17, 2012, Dinesh Patel was excluded by the State of New Jersey from participating in any capacity in the Medicaid program. Later, on Feb. 20, 2014, Dinesh Patel was excluded by the U.S. Department of Health and Human Services from participating in Medicare, Medicaid, and all federal health care programs for a period of five years. Five days after Dinesh Patel’s Medicaid exclusion in 2012, he transferred his 50 percent ownership interest in Edison to his wife, Daxa Patel.

Today’s settlement resolves federal and state government allegations that from March 17, 2012, through Aug. 4, 2015, Dinesh Patel violated his exclusion by not ceasing his involvement in the adult daycare facility, and that Edison violated the False Claims Act by submitting claims to and receiving payments from Medicaid while Dinesh Patel directed, managed and supervised activities at Edison. The settlement also resolves allegations that owners Daxa Patel and Satish Mehtani had full knowledge that Dinesh Patel was managing Edison while he was an excluded Medicaid provider.

Dinesh Patel, Daxa Patel, Satish Mehtani, and Edison have agreed to pay $2.72 million plus interest to be split equally between United States and State of New Jersey. Dinesh Patel has also agreed to another five-year exclusion precluding him from participating in all federal health care programs, including Medicaid and Medicare, until 2022.

Acting U.S. Attorney Fitzpatrick credited special agents of the U.S. Department of Health and Human Services - Office of the Inspector General (HHS-OIG), under the direction of Special Agent in Charge Scott J. Lampert, New York Region, and the N.J. Office of the State Comptroller, Medicaid Fraud Division, under the direction of State Comptroller Philip James Degnan, with the investigation leading to the settlement.

The government is represented by Assistant U.S. Attorney Nicole F. Mastropieri of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark. David Fuchs of the HHS-OIG negotiated the additional period of exclusion.

The New Jersey U.S. Attorney’s Office reorganized its health care practice in 2010 and created a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since that time, the office has recovered more than $1.37 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; there have been no admissions of liability.              

Defense counsel:

Edison Adult Medical Daycare: Robert Fogg Esq., Princeton

Dinesh Patel: Steven D. Feldman Esq., New York, and Melissa L. Jampol Esq., New York

Daxa Patel: Nicholas C. Harbist Esq., Princeton

Satish Mehtani: Denis F. Driscoll Esq., Parsippany