District of New Jersey

NEWARK, N.J. – A Staten Island, New York, man today admitted his plan to distribute more than $2.5 million of counterfeit UGG-brand boots that were shipped into the Port of Newark, Acting U.S. Attorney William E. Fitzpatrick announced.

Shi Wei Zheng, 42, pleaded guilty before U.S. District Judge John Michael Vazquez in Newark federal court to an information charging him with one count of trafficking in counterfeit goods. Zheng was originally arrested and charged by complaint on March 7, 2017.

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

From September 2016 through February 2017, Zheng received certain shipping container numbers from an individual overseas that identified at least three containers containing counterfeit UGG boots. Cheng asked individuals working at the Port of Newark to remove the containers from the port before they could be examined by U.S. Customs and Border Protection. Once the containers were removed, Zheng directed that they be delivered to other individuals working for him, who would then distribute the boots in New Jersey and elsewhere.

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

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

The trafficking in counterfeit goods charge carries a maximum potential penalty of 10 years in prison and a $2 million fine. Zheng will be sentenced on Jan. 23, 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 leading to Zheng’s guilty plea.

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

Defense counsel: Scott B Tulman Esq., New York

NEWARK, N.J. – A Passaic County man was arraigned today on charges that he conspired to distribute more than 16 kilograms of heroin, Acting U.S. Attorney William E. Fitzpatrick announced.

Yasmil Minaya, a/k/a “Animal, 31, is charged in an indictment with one count of conspiracy to distribute more than one kilogram of heroin, and one count of distribution and possession with intent to distribute more than one kilogram of heroin. The defendant was arraigned before U.S. District Judge Claire C. Cecchi in Newark federal court and remains detained without bail.

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

Law enforcement learned that Minaya and his co-defendants were serving as New Jersey and New York area distributors for a drug trafficking organization operating in the Dominican Republic, Mexico and elsewhere. The organization’s narcotics were usually transported to this area via truck and were paid for by the defendants before they being sold on the street. The drug organization has been linked to several multiple-kilogram seizures of heroin, including a seizure of approximately two kilograms of heroin in March 2015, four kilograms in November 2015, and 10 kilograms in January 2017.

The counts with which Minaya is charged carry a mandatory minimum sentence of 10 years imprisonment, a maximum sentence of life imprisonment, and a maximum fine of $10 million per count.

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

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

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

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

NEWARK, N.J. – Three New Jersey-based opioid abuse programs are receiving a total of $1.1 million in federal grants, part of the $58.9 million the U.S. Department of Justice is awarding to address the nationwide epidemic, Acting U.S. Attorney William E. Fitzpatrick announced today.

In 2016, nearly 60,000 Americans lost their lives to drug overdoses, an increase from the 52,000 overdose deaths the year before. Opioids, including illicit fentanyl and its analogues, are responsible for most of these deaths.

“The epidemic of opioid abuse is a true national emergency, impacting families and communities throughout New Jersey,” Acting U.S. Attorney Fitzpatrick said. “The funding provided by the Department of Justice will be used to help prevent addiction while at the same time providing much needed resources for treatment and recovery.”

The New Jersey grants are as follows:

• $600,000, N.J. Department of Law and Public Safety. The department will collaborate with state agencies to develop a computerized, data-sharing Integrated Drug Awareness Dashboard (IDAD).
• $400,000, County of Camden. The county will implement the Camden County Opioid Abuse Diversion Program (CCOAD) to improve treatment and support services for individuals with a history of opioid misuse.
• $100,000, N.J. Department of Law and Public Safety. The department will use grant funds to create a coordinated plan, formulated with pertinent stakeholders, to assess how best to leverage various resources and funding streams to expand programs through the through the establishment of Opioid Response Teams to add another point of entry to treatment for opioid-addicted individuals.

Descriptions of the grants are attached.

TRENTON, N.J. – A Trenton man was sentenced today to 72 months in prison for possessing a firearm as a previously convicted felon and participating in a drug trafficking organization that allegedly distributed hundreds of grams of heroin in the Trenton area, Acting U.S. Attorney William E. Fitzpatrick announced today.

Christopher Proctor, a/k/a “Bris,” a/k/a “Bris Broctor,” 22, previously pleaded guilty before U.S. District Judge Freda L. Wolfson to an information charging him with conspiracy to distribute and possess with intent to distribute 100 grams or more of heroin and unlawful possession of a firearm by a convicted felon. Judge Wolfson imposed the sentence today in Trenton federal court.

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

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

From January 2016 through December 2016 Proctor participated in a drug trafficking organization that operated in the area of Spring and Passaic Streets in Trenton.

Through the authorized interception of telephone calls and text messages, controlled purchases of heroin, the use of confidential sources of information, and other investigative means, law enforcement learned that Ishmael Abdullah was a leader of the Abdullah DTO, and was responsible for obtaining significant quantities of heroin from multiple suppliers, including Jose Joaquin Torres-Mezquita and Ileana Sanchez. Ishmael Abdullah and Keith Hunter coordinated the organization’s distribution of heroin through themselves and other conspirators, including Elijah Abdullah.

Members of the Abdullah DTO used temporary prepaid phones, stash houses and cars, and spoke in code to avoid detection by law enforcement. In connection with the narcotics conspiracy, Elijah Abdullah and other members of the Abdullah DTO maintained joint access to multiple firearms.

In addition to receiving, possessing, and selling heroin as part of the conspiracy, Proctor – a previously convicted felon – was arrested on Aug. 23, 2016, by Trenton police officers in possession of a loaded Glock 27 semiautomatic handgun and multiple rounds of ammunition.

In addition to the prison term, Judge Wolfson sentenced Proctor to five years of supervised release.

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

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

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

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

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

Two companies in New Jersey and two individuals have been enjoined from distributing their unapproved injectable skin whitening drugs and other drugs in violation of federal law, the Department of Justice announced today.

The U.S. District Court for the District of New Jersey entered a consent decree of permanent injunction against Flawless Beauty LLC of Ocean Township and Asbury Park, New Jersey; RDG Imports LLC of Asbury Park, New Jersey; and Jack H. Gindi and Susana B. Boleche.  The injunction permanently enjoins the defendants from distributing unapproved and misbranded drugs in violation of the federal Food, Drug, and Cosmetic Act (FDCA).  In addition, the injunction requires the defendants to recall and destroy all of their unapproved injectable skin whitening drugs.

The Department filed a complaint in the District of New Jersey on Sept. 14, at the request of the U.S. Food and Drug Administration (FDA).  As detailed in the complaint, the defendants import, process, pack, label, hold, and/or distribute a variety of unapproved drugs, including unapproved prescription drugs, in violation of the FDCA.  Specifically, the complaint alleged that the defendants sold a number of skin whitening drugs, including injectable drugs, despite the absence of FDA approval or a sufficient showing that these products were safe and effective. 

“The Department of Justice is committed to enforcing federal consumer protection laws,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division.  “We will continue to work diligently with the FDA to ensure that companies and individuals follow the laws designed to protect American consumers.”

As noted in the complaint, the vast majority of the defendants’ products are marketed with skin whitening claims.  According to the complaint, some of defendants’ products contain unsubstantiated therapeutic claims.  For example, some of the products were promoted with claims such as “contribute to good liver function” and “clinically treat degenerative brain & liver diseases including Parkinsons.”   The complaint alleged that the defendants introduce new drugs, or cause them to be introduced, into interstate commerce in violation of the law. 

The complaint alleged that defendants’ unapproved new and misbranded drugs present serious public health risks, especially defendants’ purportedly sterile injectable skin whitening drugs.  Intravenous and intramuscular administration of drugs creates many risks, including nerve or blood vessel damage, blood-borne infection, superficial skin infection, cellulitis, abscess formation and toxic systemic reactions.

The complaint alleged that in addition to distributing unapproved drugs, some of the defendants’ drugs were misbranded because they contained labeling that is false or misleading.  In particular, the complaint alleged that the labeling suggests or implies FDA approval or endorsement, when no such FDA approval for any of these products existed.  The complaint further alleged that some of defendants’ unapproved drugs are misbranded because they bear inadequate directions for use, are unsafe prescription drugs, and are prescription drugs that fail to bear ‘Rx’ on their labels.

Products referenced in the complaint include Relumins Advanced Glutathione and New Relumins Advanced Glutathione 3500 mg; Tatiomax Glutathione Collagen Whitening; and Laennec Human Placenta Whitening; Relumins Advanced Oral Whitening & Antiaging Stack; Authentic Relumins Advanced White Stem Cell Therapy All In One Day Lotion; Authentic Relumins Advance Whitening Facial Cream With TA Stem Cell & Placenta; Relumins Medicated Professional Acne & Dark Spot Fighting Set; Natural Pearl Whitening Lotion; Authentic Kustie Beauty Slimming Activated Hot Cream; Authentic Mosbeau Placenta White Clarifying Toner; Gluta PowerPeel Soap; Relumins Advance White-Whitening Deodorant Roll-On and Sante Barley Fusion. 

In conjunction with the filing of the complaint, the defendants agreed to settle the case and to be bound by a permanent injunction.  The injunction requires defendants to stop importing, receiving, manufacturing, preparing, processing, packing, labeling, holding, and/or distributing any unapproved drugs, including their injectable skin whitening drugs, unless and until defendants comply with specific remedial measures set forth in the permanent injunction.

In addition, within 20 days after the district court’s order, the defendants are required to recall and destroy, under FDA supervision and to FDA’s satisfaction, all unapproved injectable skin whitening drugs.

“Distributing unapproved drugs and mislabeling them to give the impression that they have been approved by the FDA is a practice that cannot be tolerated,” said Acting U.S. Attorney William E. Fitzpatrick, District of New Jersey. “This decree ensures that these products will be removed from the marketplace and that the defendants will not be allowed to distribute them until they bring the products into compliance with the law.”

The government is represented by Trial Attorney Mary M. Englehart of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Anthony Labruna of the U.S. Attorney’s Office for the District of New Jersey, with the assistance of Associate Chief Counsel for Enforcement Sonia Nath of the Department of Health and Human Services’ Office of General Counsel’s Food and Drug Division.

Additional information about the Consumer Protection Branch and its enforcement efforts may be found at http://www.justice.gov/civil/consumer-protection-branch.  For more information about the U.S. Attorney’s Office for the District of New Jersey, visit its website at https://www.justice.gov/usao-nj.

CAMDEN, N.J. – A Bridgeport, Connecticut, man was arrested this morning on charges that he and others defrauded the Overseas Private Investment Corporation (OPIC) of over $1 million and laundered most of the funds through various bank accounts in Liberia and the United States, Acting U.S. Attorney William E. Fitzpatrick announced.

William Garrison Jackson, 55, is charged by criminal complaint with one count of conspiracy to commit mail and wire fraud and one count of conspiracy to commit money laundering. Jackson appeared this morning before U.S. Magistrate Judge William I. Garfinkel in Bridgeport federal court and was released on $100,000 secured bond. He will make his initial appearance in New Jersey federal court on Oct. 4, 2017.

According to the complaint:

OPIC is a U.S. government agency that provides loans to U.S.-based companies in order to encourage investment in overseas business projects. To qualify for a loan, the U.S. business, also called the “U.S. Sponsor,” has to own at least 25 percent of the overseas project.

In 2010, Jackson, along with two other people identified in the complaint as “Individual 1” and “Individual 2,” formed a limited liability company in New Jersey called NuStrata Logistics LLC (NSL-US). NSL-US was the “parent company” of NuStrata Logistics Liberia Inc. (NSL-L), a licensed and registered Liberian company. For the purposes of the OPIC loan, NSL-US was the U.S. sponsor of NSL-L.

NSL-US and NSL-L were created to operate an urban public transportation bus service in Liberia, branded “The Lizard Bus.” In 2010, Jackson, Individual 1, and Individual 2 established a pilot program in order to measure The Lizard Bus’s potential in the Monrovia, Liberia, market.

To obtain a loan from OPIC, Jackson and Individual 1 submitted documents to OPIC with materially fraudulent representations, including false financial documents that over-inflated their assets and claimed that NSL-US’s investors, along with the principals, had a combined liquid net worth of over $2 million, and a fraudulent disbursement request advising OPIC that NSL-L would use $560,000 to pay for the purchase of buses and transshipping costs.

On Sept. 4, 2013, based on the false representations by Jackson and his conspirators, OPIC made a loan disbursement of $1,059,266 by international wire transfer to NSL-L’s Ecobank bank account in Liberia. However, on Sept. 6, 2013, Jackson and Individual 1 had $700,000 wired from NSL-L’s account to NSL-US’s Bank of America account in the United States. That money was then transferred to another bank account and ultimately dispersed to Jackson, Individual 1 and their families in violation of the OPIC loan agreement.

Meanwhile, NSL-L made one interest payment to OPIC in January 2014 and subsequently defaulted on the loan. The Lizard Bus ceased operations in April 2014 due, in part, to lack of funds.

The conspiracy to commit mail and wire fraud charge carries a maximum potential penalty of 20 years in prison and $250,000 fine. The money laundering conspiracy charge carries a maximum potential penalty of 20 years in prison and $500,000 fine.

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

Acting U.S. Attorney Fitzpatrick credited special agents of the U.S. Agency for International Development (USAID), Office of Inspector General, under the direction of Special Agent in Charge Jonathan Schofield, 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, IRS- Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, and the Federal Deposit Insurance Corporation (FDIC), Office of Inspector General, under the direction of Special Agent in Charge Patricia Tarasca with the investigation leading to the charges.

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

CAMDEN, N.J. – Two Burlington County, New Jersey, men today admitted defrauding New Jersey state health benefits programs and other insurers by submitting fraudulent claims for medically unnecessary prescriptions, Acting U.S. Attorney William E. Fitzpatrick and New Jersey Attorney General Christopher S. Porrino announced.

Judd Holt, 42, a pharmaceutical sales representative from Marlton, New Jersey, and George Gavras, 36, a pharmaceutical sales representative from Moorestown, New Jersey, pleaded guilty before U.S. District Judge Robert B. Kugler in Camden federal court to separate informations charging them with conspiracy to commit health care fraud.

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

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

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

The conspirators also learned that some New Jersey state and local government and education employees, including teachers, firefighters, municipal police officers, and state troopers, had insurance coverage for these particular compound medications. An entity referred to in the 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.

The conspirators 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 Holt and Gavras’ conspirators a percentage of each prescription filled and paid by the Pharmacy Benefits Administrator, which was then distributed to other members of the conspiracy.

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

Holt and Gavras would then get the prescriptions signed by doctors and other qualified health professionals who never saw the patients or 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 informations, the Pharmacy Benefits Administrator paid Compounding Pharmacy over $50 million for compounded medications mailed to individuals in New Jersey.

As part of the plea agreements, Holt must forfeit $95,574.49 in criminal proceeds he received for his role in the scheme and pay restitution of at least $769,762.53. Gavras agreed to forfeit $204,002.02 and pay restitution of at least $679,368.53.

Each defendant faces a maximum penalty of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing for both defendants is scheduled for Jan. 5, 2018.

Six other conspirators – Matthew Tedesco, Robert Bessey, Michael Pepper, Thomas Hodnett, Steven Urbanski, and John Gaffney – pleaded guilty in August and September 2017 and await sentencing.

Acting U.S. Attorney Fitzpatrick credited agents of the FBI’s Atlantic City Resident Agency, under the direction of Special Agent in Charge Timothy Gallagher in Newark, IRS – Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen in Newark, and the 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 pleas. 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:

Holt: Rocco C. Cipparone Jr. Esq., Haddon Heights, New Jersey
Gavras: Robert N. Agre Esq., Haddonfield, New Jersey

NEWARK, N.J. – A soldier of the Sex Money Murder set of the Bloods street gang was sentenced today to 264 months in prison for his role in a racketeering conspiracy that involved attempted murder and conspiracy to distribute heroin, Acting U.S. Attorney William E. Fitzpatrick announced.

Laquan Reed, 28, a/k/a “Drama,” of Montclair, New Jersey, previously pleaded guilty before U.S. District Judge Susan D. Wigenton to Count Two of a 14-count superseding indictment charging him with racketeering conspiracy. Judge Wigenton imposed the sentence today in Newark federal court.

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

The Bloods street gang is organized into subgroups, called “sets,” that operate in specific geographic locations. Sex Money Murder is the set that operates primarily in Essex County, New Jersey. Reed, a ranking member in Sex Money Murder, admitted that from 2007 to 2011 he committed a series of violent crimes to advance the gang’s objectives. He admitted that he conspired with set members to murder a rival gang member on Aug. 3, 2011, identified in the indictment as “Victim 6.” Reed admitted he and others engaged in a shootout in an effort to kill the rival gang member in and around Newark. Reed also admitted conspiring to distribute more than one kilogram of heroin in and around Newark.

In addition to the prison term, Judge Wigenton sentenced Reed to five years of supervised release.

Acting U.S. Attorney Fitzpatrick credited special agents of the FBI and the FBI’s Safe Streets Task Force, under the direction of Special Agent in Charge Timothy Gallagher in Newark; the Essex County Prosecutor’s Office, under the direction of Acting Essex County Prosecutor Robert D. Laurino; the Essex County Sheriff’s Office, under the direction of Sheriff Armando V. Fontoura; and the Newark Department of Public Safety, under the direction of Anthony F. Ambrose, with the investigation leading to today’s sentencing. He also thanked special agents of the Drug Enforcement Administration (DEA), under the direction of Special Agent in Charge Carl J. Kotowski; and special agents of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), under the direction of Special Agent in Charge John B. Devito, for their roles in the investigation.

The government is represented by Assistant U.S. Attorneys Mary Toscano, Chief, Organized Crime and Gangs Unit of the U.S. Attorney’s Office’s Criminal Division, and Dara Govan of the Criminal Division in Newark.

Defense counsel: James Patton Esq., Livingston, New Jersey

CAMDEN, N.J. – A doctor with a medical practice in Margate, New Jersey, today admitted defrauding New Jersey state health benefits programs and other insurers by signing prescriptions for patients he never saw, Acting U.S. Attorney William E. Fitzpatrick and New Jersey Attorney General Christopher S. Porrino announced.

John Gaffney, 55, of Linwood, New Jersey, pleaded guilty before U.S. District Judge Robert B. Kugler in Camden federal court to an information charging him with conspiracy to commit health care fraud. 

“Dr. Gaffney sold phony prescriptions for unnecessary medications to patients he never examined as part of a sophisticated scheme to defraud a prescription benefits program available to New Jersey state and municipal employees,” Acting U.S. Attorney Fitzpatrick said. “In an era when many Americans work hard to maintain affordable health insurance for their families, Dr. Gaffney and his conspirators criminally exploited the health care system and left New Jersey tax payers on the hook for approximately $25 million in losses.”

“New Jersey’s families are the ones who pay the cost for healthcare fraud,” said Attorney General Porrino. “In New Jersey, law enforcement partners are working together to fight back against those who use their positions to steal millions of dollars from our healthcare system for personal gain. I want to thank the United States Attorney's Office for the District of New Jersey, Acting U.S. Attorney Fitzpatrick and all of our federal partners for aggressively attacking incidents of insurance fraud and for successfully prosecuting these often complicated schemes.”

“This is another demonstration of the FBI’s commitment to aggressively pursue healthcare fraud, along with our federal, state, and local law enforcement partners and the U.S. Attorney’s Office,” stated Special Agent in Charge Timothy Gallagher of the Newark FBI Field Office. “We will not tolerate unscrupulous healthcare professionals who are entrusted with providing honest services to the citizens of New Jersey.”

“Doctors play a trusted and vital role in the American healthcare system. John Gaffney broke this trust when he wrote and accepted payment for prescriptions that were medically unnecessary. This fraudulent conduct creates risks for patients and undermines the system. The U.S. Department of Labor Office of Inspector General remains committed to combating illegal prescription drug schemes, like compounded medication fraud, particularly when they victimize programs administered by the Department of Labor. We will continue to work with our law enforcement partners to aggressively investigate allegations of this nature,” said Michael C. Mikulka, Special Agent-in-Charge, New York Region, U.S. Department of Labor, Office of Inspector General. 

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

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

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

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

Once they had recruited an employee covered by the Pharmacy Benefits Administrator, Gaffney’s conspirators would obtain the employee’s insurance information and fill out a Compounding Pharmacy prescription form. They then had Gaffney sign prescriptions for compounded medications for numerous individuals, even though Gaffney never saw the individuals or evaluated whether they had a medical necessity for the compounded medication.  Gaffney also signed a blank prescription form, which other conspirators copied and used to submit additional fraudulent prescriptions to the Compounding Pharmacy.

Other conspirators submitted fraudulent prescriptions bearing Gaffney’s signature for over 200 individuals, and the Pharmacy Benefits Administrator paid just under $25 million for those prescriptions. Gaffney received payments of thousands of dollars in cash and other benefits to reward him for his role in the scheme.

As part of his plea agreement, Gaffney must forfeit $25,000 in criminal proceeds and pay restitution of at least $24,956,435.08. He faces a maximum penalty of 10 years in prison and a $250,000 fine, or twice the gain or loss caused by the offense. Sentencing is scheduled for Jan. 5, 2018.

Five other conspirators – Matthew Tedesco, Robert Bessey, Michael Pepper, Thomas Hodnett, and Steven Urbanski – pleaded guilty in August 2017 and await sentencing.

Acting U.S. Attorney Fitzpatrick credited agents of the FBI’s Atlantic City Resident Agency, under the direction of Special Agent in Charge Gallagher in Newark, agents of the IRS – Criminal Investigation, under the direction of Jonathan D. Larsen in Newark, and agents of the Department of Labor, Office of Inspector General, under the direction of Special Agent in Charge Mikulka in New York, for their roles in 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:  Michael Engle Esq., Philadelphia

NEWARK, N.J. – The former executive director of the Newark Watershed Conservation and Development Corp. (NWCDC) was sentenced today to 102 months in prison for accepting nearly $1 million in kickback payments in exchange for her assistance in awarding work to various vendors and contractors of the agency, Acting U.S. Attorney William E. Fitzpatrick announced.

Linda Watkins Brashear, 57, of West Orange, New Jersey, previously pleaded guilty before U.S. District Judge José Linares to Counts 1 and 5 of a five-count information charging her with a wire fraud scheme to defraud the NWCDC by accepting bribes and kickback payments from contractors and an employee of the corporation, which were funded by payments from the NWCDC based on fraudulently inflated invoices or issued for work that was not performed by the contractors (Count 1), and subscribing a false tax return for the year 2012 (Count 5). Judge Linares imposed the sentence today in Newark federal court.

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

Brashear served as the executive director for the NWCDC from 2007 to March 2013. During this time, she and others devised a scheme to defraud the NWCDC of her honest services in the affairs of the NWCDC and of the NWCDC’s money and property. The object of the scheme was for Brashear and others to accept a substantial stream of concealed and undisclosed kickbacks from NWCDC contractors and an employee of the NWCDC for her direct and indirect benefit in exchange for action and assistance in the affairs of the NWCDC, and for her violating her official duties and responsibilities.

Between 2008 and March 2013, Brashear accepted approximately $999,000, in kickbacks financed through the receipt of payments by contractors and an employee of the NWCDC that were fraudulently obtained from the NWCDC with Brashear’s assistance, through materially false pretenses, representations and promises. In particular, Brashear accepted kickbacks as summarized below:

Time Period

Approximate Amount of Kickbacks

Paid By

September 2012 - March 2013

$39,000

NWCDC “Employee 1”

January 2009 – December 2012

$260,000

James Porter (identified in Count 1 as “partner of the special projects manager”)

January 2008 – June 2012

$70,000

Printing contractor

January 2011 – January 2013

$33,000

Marketing contractor

September 2012 – April 2013

$90,000

Cleaning contractor

April 2009 – February 2013

$118,000

Homeland Security contractor

January 2009 – May 2012

$40,000

Interior designer

January 2008 – March 2013

$177,000

Internet research consultant

October 2011 – March 2013

$29,000

Political consultant

April 2011 – September 2012

$32,000

Media consultant

January 2008 – March 2013

$27,000

Giacomo “Jack” DeRosa

May 2011 – March 2013

$84,000

Security consultant

Brashear routinely accepted payments from some of these contractors through Donald Bernard Sr.  Brashear and Bernard also used their email accounts to facilitate this kickback and fraud scheme. Bernard was previously charged in December 2014 in a 20-count indictment with various federal offenses involving a scheme to defraud the NWCDC of his honest services and the NWCDC’s money and property by accepting and agreeing to accept bribes and kickbacks from certain NWCDC contractors, which were financed at least in part through the contractors’ fraudulent padding of invoices to the NWCDC. 

Brashear admitted taking payments from James Porter, a contractor who pleaded guilty in January 2015 to conspiracy to defraud the NWCDC of honest services, money and property through the use of interstate wire transmissions, as well as tax evasion for his role in the kickback scheme. The roofing contractor referred to in Count 1 of the information, Giacomo “Jack” DeRosa, was charged in a six-count fraud and money laundering indictment in December 2014 for his role in passing kickbacks to Bernard, which were shared, in part, with Brashear.

Brashear also admitted making and subscribing a U.S. Individual Income Tax Return, Form 1040, for tax year 2012, signed and filed with the IRS under penalty of perjury, which she did not believe to be true and correct, including approximately $316,000 in unreported income that she received through the kickback payments.

In addition to the prison term, Judge Linares sentenced Brashear to three years of supervised release and ordered her to pay $1.3 million in restitution.

On July 13, 2017, Judge Linares sentenced Bernard to eight years in prison for his role in the kickback scheme and for filing false tax returns. DeRosa was sentenced on Oct. 25, 2016, to six months in prison. On July 20, 2017, Porter was sentenced to two years in prison for his role in the scheme.

Acting U.S. Attorney Fitzpatrick credited special agents of the FBI’s Newark Field Office, under the direction of Special Agent in Charge Timothy Gallagher; IRS – Criminal Investigation, Newark Field Office, under the direction of Special Agent in Charge Jonathan D. Larsen; and the U.S. Department of Housing and Urban Development, Office of Inspector General, Newark office, under the direction of Special Agent in Charge Christina Scaringi, as well as criminal investigators of the U.S. Attorney’s Office, for the investigation leading to today’s sentencing. Acting U.S. Attorney Fitzpatrick also thanked the N.J. Office of the State Comptroller, under the direction of State Comptroller Philip James Degnan, for its assistance in the investigation.

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

Defense counsel: Michael Baldassare Esq., Newark

NEWARK, N.J. – A Jersey City, New Jersey, police officer today admitted defrauding Jersey City by obtaining compensation for off-duty work that he did not perform, Acting U.S. Attorney William E. Fitzpatrick announced. 

David Ortmann, 53, of Carlstadt, 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 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. Ortmann was an officer who was eligible to perform off-duty work.

From July 2015 through May 2016, Ortmann conspired with a Jersey City officer who was authorized to assign off-duty work. The officer – with Ortmann’s knowledge and consent – submitted phony vouchers to Jersey City indicating that Ortmann had completed certain off-duty assignments. As a result, Ortmann was compensated for work he never performed.

Ortmann faces a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Pursuant to the plea agreement, Ortmann must forfeit the $12,617 he made as part of the conspiracy. Sentencing is set for Jan. 3, 2018.

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

The 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: Michael P. Koribanics Esq., Clifton, New Jersey

NEWARK, N.J. – A Jersey City, New Jersey, police officer today admitted paying bribes in order to obtain compensation for off-duty work he did not perform, Acting U.S. Attorney William E. Fitzpatrick announced. 

Michael O’Leary, 35, of Jersey City, 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.

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. O’Leary was an officer who was eligible to perform off-duty work.

From November 2013 through April 2016, O’Leary engaged in a conspiracy in which he made 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 O’Leary had completed certain off-duty assignments. As a result, O’Leary was compensated for work he never performed.

O’Leary faces a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Pursuant to the plea agreement, he must also forfeit $39,587 he made as part of the conspiracy. Sentencing is set for Jan. 3, 2018.

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

The 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: John Lynch Esq., Union City, New Jersey

NEWARK, N.J. – A Clifton, New Jersey, woman today admitted her role in a scheme to defraud a New Jersey-based trucking company of over $900,000, Acting U.S. Attorney William E. Fitzpatrick announced.   

Lisa Popewiny, 55, pleaded guilty before U.S. District Judge Madeline Cox Arleo in Newark federal court to Count One of an indictment charging her with wire fraud. Brothers Miguel Vidal, Angel D. Vidal, and Angel Gabriel Vidal previously pleaded guilty to wire fraud charges for their roles in the scheme.

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

Popewiny was the payroll clerk at Clifford B. Finkle Jr. Inc., a Clifton company that provided transportation and freight services to various public and private entities located in New Jersey, New York, and elsewhere.  From June 2012 to April 2015, Popewiny, and the Vidals, including Miguel Vidal – a former truck driver for the Company – engaged in a scheme to defraud the company of $920,380. 

Popewiny falsified payroll records in order to generate fraudulent paychecks payable to non-existent employees, including the Vidal brothers. All of the Vidal brothers have admitted to allowing the use of their personal identifying information to generate the fraudulent paychecks.  The three men then converted the fraudulent paychecks, many of which were deposited into their bank accounts and then funneled out of the accounts in cash. Miguel Vidal admitted to recruiting other individuals to provide their personal information so that Popewiny could falsely add them to the payroll. Popewiny input false hours for at least 12 different individuals. The scheme came to light when owners of the company, in an effort to investigate suspected fraud, distributed the payroll checks to employees – a task normally completed by Popewiny. After all of the payroll checks had been distributed, several paychecks remained unclaimed that turned out to be fraudulently issued. 

The charge to which Popewiny pleaded guilty carries a maximum potential penalty of 20 years in prison and a fine of $250,000 or twice the gross gain or loss from the offense. Sentencing is scheduled for Jan. 12, 2018.

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

The government is represented by Assistant U.S. Attorney Cari Fais, of the Special Prosecution Division, and Lee M. Cortes Jr., Deputy Chief of the Special Prosecutions Division.

Defense counsel: Christopher D. Adams Esq., Holmdel, New Jersey

NEWARK, N.J. – A Pennsylvania company doing business in New Jersey will pay $3.5 million to resolve allegations that it caused a fire at the Federal Aviation Administration’s William J. Hughes Technical Center in Atlantic City, New Jersey, Acting U.S. Attorney William E. Fitzpatrick announced.

EDA Contractors Inc. (EDA), a corporation headquartered in Bensalem, Pennsylvania, received a government contract in March 2012 to perform roofing work at the FAA Technical Center and began work in May 2012. Part of the contract involved the replacement of a roof at Building 300 of the FAA Technical Center. On June 22, 2012, approximately half an hour after EDA’s workers finished work for the day, a fire engulfed the rooftop of Building 300, causing extensive damage.

The consent judgment agreed to by the United States and EDA and entered by the court resolves allegations that the negligence of EDA’s employees was the proximate cause of the fire.

Acting U.S. Attorney Fitzpatrick credited the Legal Office of the FAA Technical Center, under the direction of Diane Cherinchak Loughrin, and Senior Attorney William Sheehan and Program Analyst Brenda Martello, for their support in gathering information and providing substantial assistance during the litigation and settlement negotiations.

The government is represented by Assistant U.S. Attorney Mark C. Orlowski of the U.S. Attorney’s Civil Division in Newark.

Defense counsel: Floyd Cottrell Esq., Newark

NEWARK, N.J. – A New York man was sentenced today to 24 months in prison for his role in one of the largest credit card fraud schemes ever charged by the Justice Department, Acting U.S. Attorney William E. Fitzpatrick announced.

Raghbir Singh, 61, of Hicksville, New York, previously pleaded guilty before U.S. Magistrate Judge Madeline Cox Arleo to an information charging him with one count of conspiracy to commit bank fraud. Judge Arleo imposed the sentence today in Newark federal court.

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

Singh was originally charged in February 2013 as part of a conspiracy to fabricate more than 7,000 false identities to obtain tens of thousands of credit cards. Members of the conspiracy doctored credit reports to pump up the spending and borrowing power associated with the cards. They then borrowed or spent as much as they could, based on the phony credit history, but did not repay the debts – causing more than $200 million in confirmed losses to businesses and financial institutions.

The scheme involved a three-step process in which the defendants would make up a false identity by creating fraudulent identification documents and a fraudulent credit profile with the major credit bureaus; pump up the credit of the false identity by providing false information about that identity’s creditworthiness to those credit bureaus; finally, run up large loans.

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

Singh admitted he helped obtain credit cards in the name of third parties – many of which were fictional – then directed the credit cards to be mailed to addresses controlled by members of the conspiracy. He also admitted he knew the cards would be used fraudulently at businesses.

In addition to the prison terms, Judge Arleo sentenced Singh to three years of supervised release and fined him $1,000.

Acting U.S. Attorney Fitzpatrick credited special agents of the FBI’s Cyber Division, under the direction of Special Agent in Charge Timothy Gallagher, with the investigation leading to today’s sentencings. He also thanked postal inspectors, under the direction of Postal Inspector in Charge James V. Buthorn, and special agents of the U.S. Secret Service, under the direction of Special Agent in Charge Mark McKevitt. He also thanked the U.S. Social Security Administration for its role in the investigation.

The government is represented by Assistant U.S. Attorneys Daniel V. Shapiro and Zach Intrater of the U.S. Attorney’s Office Economic Crimes Unit and Barbara Ward of the office’s Asset Forfeiture and Money Laundering Unit in Newark.

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

Defense counsel: David E. Levine Esq., Brooklyn, New York

TRENTON, N.J. – A former employee of a New York company that invests in, imports and distributes “As Seen On TV” products today admitted trying to sell trade secrets to one of the company’s competitors, Acting U.S. Attorney William E. Fitzpatrick announced.

Ralph Mandil, 38, of West Long Branch, New Jersey, pleaded guilty before U.S. District Judge Brian R. Martinotti in Trenton federal court to an information charging him with one count of wire fraud.

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

The products sold by Mandil’s employer, identified in the information as “Victim Company 1,” included electrical and non-electrical appliances, beauty and personal care, pet care, fitness, auto and outdoor products that are frequently marketed via television ads and are commonly sold at large retailers such as Walmart.

From August 2016 through October 2016, Mandil communicated and met with people he believed were representatives of a New Jersey-based competitor of Victim Company 1. These individuals were actually government agents outfitted with audio and video recording devices.

Mandil offered to provide the agents with information belonging to Victim Company 1, in addition to providing them with access to Victim Company 1’s “drop box,” or cloud storage account, in exchange for money. Mandil also provided the government agents with samples of the merchandise he could steal from Victim Company 1.

The wire fraud count to which Mandil pleaded guilty carries a maximum potential penalty of 20 years in prison. 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 Zach Intrater, Deputy Chief of the U.S. Attorney’s Office Economic Crimes Unit in Newark.

Defense counsel: Justin Walder Esq. and Aidan O’Connor Esq., Hackensack, New Jersey.

NEWARK, N.J. – A music teacher and singer/songwriter who performs for children at synagogues, Jewish community centers, camps and conventions nationwide was arrested and charged today with receiving and distributing images of child sexual abuse, Acting U.S. Attorney William E. Fitzpatrick announced.

Eric S. Komar, 46, of Hillsborough, New Jersey, was arrested by special agents of the FBI Child Exploitation Task Force. He is charged by complaint with one count of receiving and distributing child pornography. Komar made his initial appearance today before U.S. Magistrate Court Judge James B. Clark III in Newark federal court and was remanded without bail.

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

Komar used a peer-to-peer file-sharing program to obtain and distribute images and videos that including images of prepubescent children being sexually abused.

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

The count with which Komar is charged 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 the FBI, under the direction of Special Agent in Charge Timothy Gallagher; members of the Somerset County Prosecutor’s Office, under the direction of Somerset County Prosecutor Michael H. Robertson and County Chief of Detectives John W. Fodor; the Hillsborough Township Police Department, under the direction of Chief Darren Powell, and the N.J. Regional Computer Forensics Laboratory, with the investigation leading to the charges.

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

TRENTON, N.J. – A Union County, New Jersey, man today admitted he used his home computer to distribute sexually explicit videos and images of children, Acting U.S. Attorney William E. Fitzpatrick announced.

Thomas J. Leonard, 35, of Elizabeth, New Jersey, pleaded guilty before U.S. District Judge Brian R. Martinotti in Trenton federal court to an information charging him with one count of distributing child pornography.

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

Leonard used a file-sharing program to obtain and distribute over the Internet images and videos of children engaged in sexual acts.

The count to which Leonard pleaded guilty carries a statutory mandatory minimum term of five years in prison, a maximum of 20 years in prison, and a fine of up to $250,000. Sentencing is scheduled for Jan. 29, 2018.

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 guilty plea. He also thanked the Union County Prosecutor’s Office, the N.J. State Police, and the N.J. Regional Computer Forensics Laboratory, for their assistance.

The government is represented by Assistant U.S. Attorney Veronica Allende of the U.S. Attorney’s Office in Trenton.

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

Defense counsel: Rubin M. Sinins Esq., Springfield, New Jersey

NEWARK, N.J. – A resident of Nigeria was indicted today for participating in a sophisticated business email scheme that sought millions of dollars from the U.S. Treasury and a separate conspiracy to possess counterfeit and unauthorized credit cards, Acting U.S. Attorney William E. Fitzpatrick announced.

Alade Qudus Badmus, 29, of Lagos, Nigeria, is charged with one count of wire fraud conspiracy, three counts of wire fraud, five counts of aggravated identity theft, and one count of conspiracy to commit access device fraud. He is currently at large.

According to documents filed in this case:

Badmus and his conspirators engaged in a business email compromise scheme in which they “spoofed,” or altered, the email header information of high-ranking corporate officers of numerous victim corporations, including Fortune 500, multinational, and publicly traded companies. Badmus and others then sent phishing emails with the spoofed headers to employees of the victim companies requesting W-2 forms containing the names, addresses, social security numbers, and other personally-identifying information (PII) of thousands of employees.

Tricked into thinking that the emails were legitimate, the victim company employees responded to the emails and sent the W-2 forms to Badmus and other conspirators. In total, Badmus and others obtained the PII of more than 10,000 employees.

Badmus and others used stolen PII to file thousands of fraudulent tax returns. To further facilitate the conspiracy, Badmus and others accessed the IRS’s “Get Transcript” system to obtain additional information on certain individuals. In total, Badmus and others sought more than $10.2 million in fraudulent tax refunds.

In addition, Badus also engaged in a separate conspiracy to possess with intent to defraud dozens of fraudulently-obtained credit cards, along with the PII for dozens of other individual victims.

Badmus faces a maximum potential penalty of 20 years in prison for the wire fraud conspiracy and wire fraud charges, 10 years in prison for the conspiracy to commit access device fraud charge, and 24-month consecutive sentences on each of the aggravated identity theft counts.

Acting U.S. Attorney Fitzpatrick credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen in Newark, and 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 Osmar Benvenuto of the U.S. Attorney’s Office Economic Crimes Unit in Newark.

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

CAMDEN, N.J. – A Camden man today admitted to conspiring with others to sell crack cocaine and possess a firearm in furtherance of a drug conspiracy in Camden, Acting U.S. Attorney William E. Fitzpatrick announced.

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

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

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

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

Six other co-defendants have also pleaded guilty to drug and firearm offenses, and three have been sentenced.

Tony Wilson, a/k/a “Tony Langston,” a/k/a “Tone,” and a/k/a “H,” 25, previously pleaded guilty before Judge Simandle to an information charging him with one count of conspiracy to distribute and to possess with intent to distribute cocaine base and one count of possession of a firearm in furtherance of a drug trafficking crime. He was sentenced on June 16, 2017, to 96 months in prison followed by five years of supervised release.

On June 14, 2017, Jason Boyd, a/k/a “Teddy,” a/k/a “Teddy Reek,” and a/k/a “Fatboy,” 37, was sentenced to 96 months in prison followed by five years of supervised release. Boyd had previously pleaded guilty to an information charging him with one count of conspiracy to distribute and to possess with intent to distribute cocaine base and one count of possession of a firearm in furtherance of a drug trafficking crime.

On June 13, 2017, Derek Stallworth, a/k/a “AK” and a/k/a “A,” 21, of Camden, was sentenced to 96 months in prison followed by five years of supervised release. Stallworth had previously pleaded guilty to the same charges for his role in the conspiracy.

On April 3, 2017, Joseph Boyd, a/k/a “Breet,” 32, pleaded guilty to an information charging him with conspiracy to distribute and to possess with intent to distribute cocaine base and was sentenced Sept. 6, 2017, to 70 months in prison.

On June 7, 2017, Julian Dickerson, a/k/a “Juelz,” 30, pleaded guilty to an information also charging him with conspiracy to distribute and to possess with intent to distribute cocaine base. Dickerson’s sentencing is scheduled for Sept. 29, 2017.

On June 28, 2017, Nafeez Griffin, a/k/a “Feez,” 31, pleaded guilty to an information charging him with one count of distribution and possession with intent to distribute cocaine base. Griffin’s sentencing is scheduled for Oct. 6, 2017.

On February 8, 2017, a federal grand jury also charged Jeffrey Whitaker, 33, a/k/a “Jay,” a/k/a “Jay Black,” and a/k/a “Black,” of Collingswood, in a superseding indictment with one count of conspiracy to distribute and to possess with intent to distribute cocaine base. The charges against Whitaker are still pending.

The drug distribution conspiracy charge to which Thomas pleaded guilty carries a statutory minimum penalty of five years in prison and maximum potential penalty of 40 years in prison and a $5 million fine. The firearm conspiracy charge carries a maximum potential penalty of 20 years in prison and a $250,000 fine. Sentencing is scheduled for Jan. 5, 2018.

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 guilty plea.

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

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

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

NEWARK, N.J. – Three Customs and Border Protection (CBP) officers were arrested this morning and charged with assaulting two fellow officers at Newark Liberty International Airport, Acting U.S. Attorney William E. Fitzpatrick announced.

Tito Catota, 38, of Lyndhurst, New Jersey, Parmenio I. Perez, 40, of Hawthorne, New Jersey, and Michael A. Papagni, 32, of Staten Island, New York, are charged by complaint with forcibly assaulting, impeding, intimidating, and interfering with two men identified in the complaint as “Victim One” and “Victim Two” while the victims were engaged in their duties as CBP officers. The three defendants are scheduled to appear this afternoon before U.S. Magistrate Judge Michael A. Hammer in Newark federal court.

 “The defendants, who were members of a unit responsible for identifying dangerous contraband and threats to national security, allegedly subjected their own colleagues to senseless physical abuse, all while on duty at Newark Liberty International Airport,” Acting U.S. Attorney Fitzpatrick said. “This behavior would be abhorrent in any environment, especially one serving a critical law enforcement function. The hard working men and women who protect our borders deserve better.”

“DHS employees pledge to maintain the highest standards of conduct and the OIG ensures those employees are held accountable when they violate that obligation,” Special Agent in Charge Mark Tasky of the U.S. Department of Homeland Security, Office of Inspector General, New York Resident Office, said. “DHS OIG takes very seriously allegations such as those in today’s complaint and works tirelessly to conduct a thorough and impartial investigation.”

According to the complaint:

Catota, Perez, and Papagni were employed as CBP officers at Newark Liberty International Airport and were assigned to the Passenger Enforcement Rover Team (PERT). PERT was a CBP specialized unit that was involved in the identification and interception of passengers attempting to bring contraband into the United States or who might be associated with terrorist activities. PERT maintained an office on the second floor of Terminal C at Newark Liberty International Airport.

Victim One was assigned to PERT in October 2016. Within the first two weeks that Victim One worked in PERT, Papagni allegedly advised Victim One that the PERT office table was known as the “rape table” and threatened the victim that he would get him on it.

On Jan. 10, 2017, Victim One was asked to retrieve and forward a document related to a prior drug seizure. While Victim One and an individual identified in the complaint as “CBPO 1” were trying to scan the document, Papagni allegedly warned Victim One that he had five minutes to get out of the office or Papagni would teach him “what this team is about.”

Moments later, an individual identified in the complaint as “CBPO 2” shut off the lights in the PERT office. Papagni, Catota, and another officer identified in the complaint as “CBPO 3” then allegedly grabbed Victim One’s arms and legs and threw him on top of the PERT office table. While Papagni, Catota, and CBPO 3 held him down, Perez got on top of Victim One’s mid-section and grinded his body up and down against Victim One’s genitals through the victim’s clothing in a motion simulating a sex act. Victim One unsuccessfully attempted to push Perez off his body. When Perez eventually got off of Victim One, Papagni, Catota, and CBPO 3 released him.         

On Nov. 30, 2016, Victim Two, who was assigned to the Port Director staff, went to the PERT office to speak to CBPO 1. A few minutes later, Victim Two saw an officer identified as “CBPO 4” lock one of the doors to the office. Victim Two started to walk towards the other door to the PERT office but it was closed. Catota, Papagni, and Perez then grabbed Victim Two and threw him on his side on the PERT office table. While two of the defendants held Victim Two down on top of the table, the other defendant got on top of Victim Two and moved his genitals up and down on Victim Two’s leg in simulation of a sex act. Victim Two struggled to get free until Catota, Papagni, and Perez eventually released him. 
     
Both counts in the complaint carry a maximum potential penalty of eight years in prison and a $250,000 fine.

Acting U.S. Attorney Fitzpatrick credited special agents with the U.S. Department of Homeland Security, Office of Inspector General, New York Resident Office, under the direction of Special Agent in Charge Mark Tasky and U.S. Customs and Border Protection, Office of Professional Responsibility, New York Resident Office, under the direction of Special Agent in Charge Vance Kuhner, with the investigation leading to today’s arrests.

The government is represented by Senior Litigation Counsel Leslie Faye Schwartz of the U.S. Attorney’s Office’s Special Prosecutions Division in Newark.

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

Defense counsel:

Catota: Alan Zegas Esq., Chatham, New Jersey
Papagni: Chad Seigel Esq., New York
Perez: Lorraine Gauli-Rufo, Verona, New Jersey

NEWARK, N.J. – A Milford, Ohio, man was sentenced today to 33 months in prison for using an Essex County, New Jersey, medical company’s credit card without the company’s permission to fraudulently obtain more than $950,000, Acting U.S. Attorney William E. Fitzpatrick announced.

John Tekulve, 44, previously pleaded guilty before U.S. District Judge Katharine S. Hayden to an information charging him with wire fraud. Judge Hayden imposed the sentence today in Newark federal court.

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

From January 2011 through October 2012, Tekulve owned a medical supply company that sold products to an Essex County medical company. He obtained the company’s credit card information, which he used to fraudulently bill the company nearly $1 million for products and services that neither Tekulve nor his medical supply company provided. Tekulve then used the proceeds of the scheme for his own purposes, including the purchase of high-end automobiles and jewelry.

In addition to the prison term, Judge Hayden sentenced Tekulve to three years of supervised release and ordered him to pay restitution of $977,418.75.

Acting U.S. Attorney Fitzpatrick credited special agents with the U.S. Secret Service, under the direction of Special Agent in Charge Mark McKevitt in Newark, with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorney Veronica Allende of the U.S. Attorney’s Office in Trenton.

Defense counsel: Peter Carter Esq., Newark

NEWARK, N.J. – A Hudson County, New Jersey, woman and an Essex County, New Jersey, man have admitted their respective roles in a conspiracy to illegally obtain and distribute oxycodone, Acting U.S. Attorney William E. Fitzpatrick announced.

Rhonda Musallam, 41, of Fairview, New Jersey, pleaded guilty today before U.S. District Judge Esther Salas in Newark federal court to a superseding information charging her with one count of conspiracy to distribute oxycodone. On Aug. 15, 2017, Robert O’Brien, 60, of Bloomfield, New Jersey, pleaded guilty before Judge Salas to an indictment charging him with one count of conspiracy to distribute oxycodone.

Of the 16 people that were charged in this conspiracy, 15 have been convicted, including the leader, Victoria Horvath, who was sentenced Oct. 20, 2016, to 92 months in prison. Charges against the 16th defendant were dismissed after his death in April 2015.

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

Using confidential sources, surveillance, and recorded text messages and telephone calls, investigators with the Drug Enforcement Administration (DEA) discovered that members and suppliers of a drug-trafficking organization secured prescriptions for oxycodone and other controlled substances from various doctors in New Jersey, filled them at pharmacies in Belleville and elsewhere, and sold the drugs for a profit. The investigation identified O’Brien and Musallam as members of the drug trafficking organization.

Musallam admitted that from June 10, 2014, to July 18, 2014, she supplied members of the conspiracy and others with oxycodone pills. She said that on a day in June 2014 she sold 70 oxycodone-containing pills conspirators in exchange for $1,000.

O’Brien admitted that from Feb. 5, 2014, to Aug. 13, 2014, he obtained and paid for filled prescriptions of oxycodone-containing pills on behalf of members of the conspiracy. He said that on a day in May 2014 he purchased a filled prescription for oxycodone-containing pills from a New Jersey pharmacy on behalf of a conspirator in exchange for 45 oxycodone-containing pills from another conspirator.

Oxycodone is a Schedule II controlled substance – meaning that it has a high potential for

abuse, it is currently accepted medical use with severe restrictions, and abuse of the drug may lead to severe psychological or physical dependence.

The charges to which Musallam and O’Brien pleaded guilty carry a maximum potential penalty of 20 years in prison and a $1 million fine. Sentencing for Musallam is scheduled for Dec. 19, 2018, and for O’Brien is scheduled for Nov. 27, 2018.

Acting U.S. Attorney Fitzpatrick credited the DEA’s New Jersey Division, under the direction of Special Agent in Charge Carl J. Kotowski, with the investigation leading to the guilty pleas.

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

The principal mission of the OCDETF program, under which this investigation was conducted, 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.

School Officials Failed to Evacuate Students with Disabilities During School-Wide Evacuation

NEWARK, N.J. – The Watchung Hills Regional High School District Board of Education has agreed to settle allegations that it violated the Americans with Disabilities Act (ADA) when it failed to evacuate at least one student with a mobility disability during a school-wide evacuation and failed to have any policies addressing emergency evacuations of students with disabilities, Acting U.S. Attorney William E. Fitzpatrick announced today.

According to the agreement, on Oct. 7, 2014, the district failed to evacuate at least one student with a mobility disability during an unplanned emergency evacuation. Instead, the student was left on the second floor while students without disabilities were evacuated. The district also did not have a policy or practice that allowed students with mobility impairments to participate fully and equally during emergency evacuation drills.

The ADA prohibits a public entity from, among other things, excluding or denying individuals with disabilities from benefits the public services, programs, or activities. To comply with the ADA, the district must ensure that students with disabilities are afforded “meaningful access” to its services, benefits and activities, including emergency preparedness and emergency evacuations.

“Schools should provide a safe and inclusive environment for all students,” Acting U.S. Attorney Fitzpatrick said. “The ADA mandate is especially pronounced when it comes to programs involving student safety. Through this agreement, the district must enforce an emergency evacuation policy that ensures equal participation and the safety of students with mobility disabilities.”

The district has agreed to ensure that students with disabilities are able to participate meaningfully in emergency evacuations and evacuations drills. It has also agreed to provide ADA training to all of its employees who interact with students with disabilities. The district has adopted policies to ensure that students with disabilities will not be excluded from participation in or be denied the benefits of the district’s safety protocols and practices, including emergency evacuations and drills. The district has agreed to adopt and implement evacuation plans for students with disabilities who have mobility impairments so that all students have the opportunity to participate in evacuations – whether actual evacuations or drills.

The government is represented by Assistant U.S. Attorney Michael E. Campion, Chief of the Civil Rights Unit, of the U.S. Attorney’s Office Civil Division in Newark.

Individuals who believe they may have been victims of discrimination may file a complaint with the U.S Attorney’s Office at http://www.justice.gov/usao-nj/civil-rights-enforcement/complaint or call the U.S. Attorney’s Office’s Civil Rights Complaint Hotline at (855) 281-3339. Additional information about the ADA can be found at www.ada.gov, or by calling the Department of Justice’s toll-free information line at (800) 514-0301 and (800) 514-0383 (TDD).

NEWARK, N.J. – A Newark, New Jersey, man was sentenced today to 173 months in prison for robbing four banks in August and September 2016 and for violating his supervised release from a previous offense, Acting U.S. Attorney William E. Fitzpatrick announced.

James Lockwood, 39, previously pleaded guilty before U.S. District Judge Esther Salas to an information charging him with four counts of bank robbery. He was sentenced to 125 months in prison on the bank robbery counts, as well as an additional 48 months for violating supervised release. He was originally arrested by state authorities on Sept. 23, 2016, and has been in custody since that time. Judge Salas imposed the sentence today in Newark federal court.

According to documents filed in this case and statements made in court, Lockwood robbed the following banks:

Bank

Location

Date

M & T Bank

Lyndhurst, New Jersey

Aug. 16, 2016

Schuyler Bank

Kearney, New Jersey

Aug. 25, 2016

Schuyler Bank

Kearney, New Jersey

Sept. 8, 2016

Capital One Bank

Clifton, New Jersey

Sept. 16, 2016

Lockwood admitted that during each of the above robberies, he threatened to use force while demanding money from the bank employees. He also robbed the same Schuyler Bank on Aug. 25, 2016, and Sept. 8, 2016.

In addition to the prison term, Judge Salas sentenced Lockwood to three 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 in Newark, with the investigation leading to today’s sentencing. He also thanked the Hudson County Prosecutor’s Office, the Passaic County Prosecutor’s Office, and the Kearny and Clifton Police Departments for their assistance.

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

Defense counsel: Keith Hirschorn Esq., Hoboken, New Jersey

TRENTON, N.J. – Two individuals from Trenton, New Jersey, who were arrested in connection with a Trenton-area drug trafficking organization today pleaded guilty to separate charges of unlawful firearms possession and conspiracy to distribute heroin, Acting U.S. Attorney William E. Fitzpatrick announced.

Prince Sarnoe, 30, pleaded guilty before U.S. District Judge Freda L. Wolfson in Trenton federal court to an information charging him with unlawful possession of a firearm by a convicted felon. India Daniels, 24, pleaded guilty before Judge Wolfson to a separate information charging her with conspiracy to distribute and possess with intent to distribute heroin.

In December 2016, Sarnoe, Daniels, and eight other members of a drug trafficking organization operating in Trenton were charged by criminal complaint with conspiracy to distribute heroin. The complaint referred to the drug trafficking organization as the “Abdullah DTO,” after its leader, Ishmael Abdullah. Since then, eight of the 10 defendants, including Abdullah, Sarnoe and Daniels, have pleaded guilty.

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

From May 2015 through December 2016, Abdullah and others participated in a drug trafficking organization that operated in the area of Spring and Passaic Streets in the City of Trenton. Abdullah was responsible for obtaining significant quantities of heroin from multiple suppliers, including Jose Joaquin Torres-Mezquita and Ileana Sanchez. Ishmael Abdullah and Keith Hunter coordinated the organization’s distribution of heroin through themselves and others.

Members of the Abdullah DTO used temporary prepaid phones, stash houses and cars, and spoke in code to avoid detection by law enforcement. Additionally, multiple members of the organization, including Sarnoe – a previously convicted felon – possessed and maintained access to firearms.

While Abdullah was detained at the Mercer County Correction Center on outstanding warrants, Daniels coordinated and obtained, on Abdullah’s behalf, additional supplies of heroin from Torres-Mezquita. In furtherance of the conspiracy, Daniels then provided that heroin to Hunter for distribution to other members of the conspiracy and their customers.

The firearms charge to which Sarnoe pleaded guilty carries a maximum potential sentence of 10 years in prison and a $250,000 fine. The conspiracy charge to which Daniels pleaded guilty carries a maximum potential sentence of 20 years in prison and a $1 million fine. Sentencing for both defendants is set for Jan. 5, 2018.

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

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

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

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

Defense counsel:

Sarnoe: John S. Furlong Esq., Trenton

Daniels: Robert Rambadadt Esq., New York

NEWARK, N.J. – A Ringwood, New Jersey, man appeared in federal court today to face cocaine distribution, money laundering, and other conspiracy charges associated with his role in a scheme to import large quantities of cocaine from Guyana to New Jersey and New York, Acting U.S. Attorney William E. Fitzpatrick announced.

Khamraj Lall, 50, is charged by indictment with one count each of conspiracy to launder money, conspiracy to structure funds, conspiracy to import cocaine, and conspiracy to distribute cocaine. He was arraigned today before U.S. District Judge Michael A. Shipp in Trenton federal court and was detained. Lall was arrested July 22, 2015 and has been in custody since that time.

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

From April 2011 through November 2014, Lall, a private pilot, allegedly imported large quantities of cocaine from Guyana to New Jersey and elsewhere on his privately-owned jet aircraft and then laundered the proceeds into banks in New Jersey and New York. Afterwards, he allegedly smuggled hundreds of thousands of dollars in cash back to Guyana.

Lall performed, or had others perform, over 1,287 cash deposits totaling approximately $7,549,775 into more than 20 different bank accounts. All deposits were for amounts less than $10,000 in order to circumvent certain banking reporting laws.

The indictment seeks forfeiture of multiple properties as well as two private jets that Lall purchased with structured funds or were otherwise involved in the criminal conspiracies.

The conspiracy to import and distribute cocaine charges carry a minimum penalty of 10 years in prison, a maximum of life in prison, and a $10 million fine. The conspiracy to launder money charge carries a potential penalty of 20 years in prison and a $500,000 fine. The conspiracy to structure funds charge carries a potential penalty of five years in prison and a $500,000 fine.

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

Acting U.S. Attorney Fitzpatrick credited special agents and task force officers of the Drug Enforcement Administration, New York Division, under the direction of Special Agent in Charge James. J. Hunt, IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, and the Morristown, New Jersey, police department, under the direction of Chief Peter Demnitz, with the investigation leading to the charges.

The government is represented by Assistant U.S. Attorneys Jonathan M. Peck, Barry A. Kamar, and Melissa M. Wangenheim of the U.S. Attorney’s Office Organized Crime/Drug Enforcement Task Force Unit, Assistant U.S. Attorneys Peter Gaeta and Sarah Devlin of the Asset Forfeiture-Money Laundering Unit, and Assistant U.S. Attorney Robert A. Marangola of the U.S. Attorney’s Office, Western District of New York.

Defense Counsel: Michael D’Alessio Jr. Esq.

NEWARK, N.J. – A Hudson County, New Jersey, man was sentenced today to 480 months in prison for coercing a minor to engage in sexually explicit conduct while he photographed the abuse, Acting U.S. Attorney William E. Fitzpatrick announced.

Felix Restitullo, 42, of Jersey City, New Jersey, was convicted in May 2017 of one count of production of child pornography and one count of possession of child pornography following a two-week trial before U.S. District Judge William H. Walls. The jury deliberated less than three hours before returning the guilty verdicts. Judge Walls imposed the sentence today in Newark federal court.

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

Restitullo resided with his mother, who acted as caregiver to children, including the victim, an underage girl. On March 13, 2014, as a result of an ongoing investigation into the sexual abuse of minor children, law enforcement officers interviewed the victim, who told the officers that Restitullo had sexually abused her and photographed it.

Restitullo was arrested and charged by the Hudson County Prosecutor’s Office with aggravated sexual assault and endangering the welfare of the girl. In connection with his arrest, officers searched Restitullo’s bedroom and recovered a camera and multiple electronic media devices belonging to Restitullo.

A forensic examination of the devices was performed, and law enforcement agents identified photographs that depicted the victim’s sexual abuse saved on a thumb drive found in Restitullo’s closet. Agents identified more than 3,000 images and more than 350 videos of child sexual abuse.

In addition to the prison term, Judge Walls sentenced Restitullo to lifetime supervised release.

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, Newark field office, and the Hudson County Prosecutor’s Office, under the direction of Prosecutor Esther Suarez, with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorneys Melissa M. Wangenheim and Justin Herring of the Criminal Division in Newark.

Defense counsel: Mario Blanch Esq., West New York, New Jersey

CAMDEN, N.J. – A Deptford, New Jersey, man was sentenced today to 78 months in prison for using a fake Facebook profile to entice children to produce sexually explicit images, Acting U.S. Attorney William E. Fitzpatrick announced.

Michael J. Mostovlyan, 33, previously pleaded guilty before U.S. District Judge Renée Marie Bumb to an information charging him with one count of online enticement of a minor to engage in criminal sexual conduct. Judge Bumb imposed the sentence today in Camden federal court.

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

Mostovlyan admitted that between Jan. 1, 2016 and June 2, 2016, he communicated with children online in order to obtain sexually explicit images of those children. Using a fake female persona on Facebook in the name of “Amber Zee,” which he created using actual images of a girl, Mostovlyan was able to persuade the victims to send him sexually explicit photographs or videos.

In addition to the prison term, Judge Bumb sentenced Mostovlyan to 15 years of supervised release.

U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction Special Agent in Charge Michael Harpster in Philadelphia; the Monroe Township Police Department under the direction of Chief John McKeown; the Gloucester County Prosecutor’s Office, under the direction of Prosecutor Sean F. Dalton; and the Deptford Township Police Department, under the direction of Chief William Hanstein, with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorney Justin C. Danilewitz of the U.S. Attorney’s Office in Camden.

Galena Biopharma Inc. (Galena) will pay more than $7.55 million to resolve allegations under the civil False Claims Act that it paid kickbacks to doctors to induce them to prescribe its fentanyl-based drug Abstral, the Department of Justice announced today.

“Given the dangers associated with opioids such as Abstral, it is imperative that prescriptions be based on a patient’s medical need rather than a doctor’s financial interests,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “The Department of Justice intends to vigorously pursue those who offer and receive illegal inducements that undermine the integrity of government health care programs.”

“The conduct alleged by the government and resolved by today’s settlement was egregious because it incentivized doctors to over-prescribe highly addictive opioids,” said Acting U.S. Attorney William E. Fitzpatrick for the District of New Jersey. “This settlement constitutes another example of the Department of Justice’s ongoing efforts to battle the opioid epidemic on every front.”

The United States contends that Galena paid multiple types of kickbacks to induce doctors to prescribe Abstral, including providing more than 85 free meals to doctors and staff from a single, high-prescribing practice; paying doctors $5,000, and speakers $6,000, plus expenses, to attend an “advisory board” that was partly planned, and attended, by Galena sales team members and paying approximately $92,000 to a physician-owned pharmacy under a performance-based rebate agreement to induce the owners to prescribe Abstral. The United States also contends that Galena paid doctors to refer patients to the company’s RELIEF patient registry study, which was nominally designed to collect data on patient experiences with Abstral, but acted as a means to induce the doctors to prescribe Abstral. Galena has not marketed any pharmaceutical drug since the end of 2015.

Two of the doctors who received remuneration from Galena were tried, convicted and later sentenced to prison in the U.S. District Court for the Southern District of Alabama following a jury trial of, among other counts, offenses relating to their prescriptions of Abstral. Galena cooperated in that prosecution.

The settlement resolves a lawsuit filed by relator Lynne Dougherty under the whistleblower provisions of the False Claims Act, which permit private parties to file suit on behalf of the United States and obtain a portion of the government’s recovery. As part of today’s resolution, Ms. Dougherty will receive more than $1.2 million. The matter remains under seal as to allegations against entities other than Galena.

The settlement is the result of a coordinated effort by the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the District of New Jersey, with assistance from the Department of Health and Human Services Office of Counsel to the Inspector General, and the Food and Drug Administration Office of Criminal Investigations’ Metro Washington Field Office.

The claims settled by this agreement are allegations only; there have been no admissions of liability by Galena.

NEWARK, N.J. – Galena Biopharma Inc. will pay more than $7.55 million to resolve allegations that it paid kickbacks to doctors to induce them to prescribe its fentanyl-based drug Abstral, Acting U.S. Attorney William E. Fitzpatrick and Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division announced today. The allegations arose from a whistleblower suit filed under the False Claims Act.

“The conduct alleged by the government and resolved by today’s settlement was egregious because it incentivized doctors to over-prescribe highly addictive opioids,” Acting U.S. Attorney Fitzpatrick said. “This settlement constitutes another example of the Department of Justice’s ongoing efforts to battle the opioid epidemic on every front.”

“Given the dangers associated with opioids such as Abstral, it is imperative that prescriptions be based on a patient’s medical need rather than a doctor’s financial interests,” Acting Assistant Attorney General Readler said. “The Department of Justice intends to vigorously pursue those who offer and receive illegal inducements that undermine the integrity of government health care programs.”

The settlement follows an investigation by the U.S. Attorney’s Office for the District of New Jersey and the Commercial Litigation Branch of the Justice Department’s Civil Division.

The United States contends that Galena Biopharma paid multiple types of kickbacks to induce doctors to prescribe Abstral, including providing more than 85 free meals to doctors and staff from a single, high-prescribing practice; paying doctors $5,000 honoraria, and speakers $6,000, plus expenses, to attend an “advisory board” that was partly planned, and was attended by, Galena sales team members; and paying approximately $92,000 to a physician-owned pharmacy under a performance-based rebate agreement to induce the owners to prescribe Abstral. The United States also contends that Galena paid doctors to refer patients to the company’s RELIEF patient registry study, which was nominally designed to collect data on patient experiences with Abstral, but acted as a means to induce the doctors to prescribe Abstral.

Galena Biopharma sold Abstral in November 2015 after booking net losses on Abstral in each year that it owned the drug, beginning in June 2013. During that period, Medicare, TRICARE, and the Federal Employees Health Benefits program paid $13.6 million for Abstral prescriptions; the settlement resolves Galena’s civil liability for causing false claims to be submitted to these programs. Galena Biopharma has not marketed any pharmaceutical drug since the end of 2015. It currently has a market capitalization of roughly $21 million. The company cooperated with the government’s investigation of certain individuals in connection with the conduct that is the subject of today’s settlement agreement; it also cooperated with the U.S. Attorney’s Office for the Southern District of Alabama’s investigation that led to the February 2017 conviction of two doctors, in the U.S. District Court for the Southern District of Alabama following a jury trial, of, among other counts, offenses relating to their prescriptions of Abstral.

The settlement resolves a lawsuit filed by relator Lynne Dougherty under the whistleblower provisions of the False Claims Act, which permit private parties to file suit on behalf of the United States and obtain a portion of the government’s recovery. As part of today’s resolution, Ms. Dougherty will receive more than $1.2 million. The matter remains under seal as to allegations against entities other than Galena.

Acting U.S. Attorney Fitzpatrick credited special agents from FDA-OIG, under the direction of Special Agent in Charge Jeffrey J. Ebersole, FDA Office of Criminal Investigations’ New York Field Office, as well as investigators from the U.S. Attorney’s Office for the District of New Jersey, for the investigation leading to the settlement.

The government is represented by Assistant U.S. Attorneys Charles Graybow and Brian Urbano of the Health Care and Government Fraud Unit, and David Dauenheimer, Deputy Chief, Civil Division, of the U.S. Attorney’s Office for the District of New Jersey, and by Trial Attorney Natalie Priddy of the Department of Justice’s Civil Division.

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 $1.36 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.

The claims settled by this agreement are allegations only; there have been no admissions of liability.

TRENTON, N.J. – A South Gate, California, man who was arrested with 29 kilograms of methamphetamine hidden in a tractor trailer was sentenced today to 63 months in prison, Acting U.S. Attorney William E. Fitzpatrick announced.

Tomas Lopez Beltran, 46, previously pleaded guilty before U.S. District Judge Brian R. Martinotti to an information charging him with one count of possession with intent to distribute more than 500 grams or more of methamphetamine. Judge Martinotti imposed the sentence today in Trenton federal court.

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

On Oct. 28, 2016, law enforcement lawfully searched a tractor trailer driven by Beltran and recovered approximately 29 kilograms of methamphetamine and $73,500 in cash from a concealed compartment located inside the cab of the trailer. Beltran admitted that he intended to distribute the methamphetamine and cash to an individual in Georgia.

In addition to the prison term, Judge Martinotti sentenced Beltran to three years of supervised release

Acting U.S. Attorney Fitzpatrick credited special agents of the Drug Enforcement Administration, under the direction of Special Agent in Charge Carl J. Kotowski in Newark, with the investigation.

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

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

TRENTON, N.J. – A Monmouth County, New Jersey, man was sentenced today to 97 months in prison for using his e-mail and instant messaging accounts to receive images of child sexual abuse, Acting U.S. Attorney William E. Fitzpatrick announced.

Matthew Kaminsky, 51, of Matawan, New Jersey, previously pleaded guilty before U.S. District Judge Mary L. Cooper to an information charging him with one count of receiving child pornography. Judge Cooper imposed the sentence today in Trenton federal court.

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

Kaminsky allegedly met various underage girls through online chat applications and sent them naked pictures of himself. In late January of 2015, over the course of several days, he began corresponding with a 13-year-old girl over an online chat application and induced her to take nude pictures of herself and to send them to him. In March 2015 law enforcement officers recovered computer equipment belonging to Kaminsky containing images and videos appearing to be of child sexual abuse. Law enforcement officers located and interviewed the 13-year-old girl Kaminsky had chatted with online in January of 2015, and she confirmed that she had chatted online with Kaminsky and had sent him nude pictures of herself at his request.

In addition to the prison term, Judge Cooper sentenced Kaminsky to five years of supervised release.

Acting U.S. Attorney Fitzpatrick credited special agents of U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), under the direction of Acting Special Agent in Charge Debra Parker, Newark, and inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge John Walker, Philadelphia Division, 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: Brian Reilly Esq., Assistant Federal Public Defender, Trenton

CAMDEN, N.J. – The former executive director of the Ocean City, New Jersey, Housing Authority (OCHA) was sentenced today to three years of probation for embezzling federal funds received by authority from the U.S. Department of Housing and Urban Development (HUD), Acting U.S. Attorney William E. Fitzpatrick announced.

Alesia Watson, 54, of Galloway Township, New Jersey, previously pleaded guilty before U.S. Magistrate Judge Karen M. Williams to an information charging her with one count of embezzling federal funds received from HUD and administered by OCHA to which she was not entitled. Judge Williams imposed the sentence today in Camden federal court.

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

As executive director, Watson had access to two credit cards maintained by OCHA. From December 2013 through March 2015, Watson purchased 69 MasterCard gift cards using these two OCHA credit cards. She used the gift cards for personal expenses not associated with OCHA or provided them to friends and family members. Watson then used federal funds received from HUD and administered by OCHA to pay the credit card bills associated with the purchase of the gift cards. According to the plea agreement, the loss associated with the embezzlement was more than $6,500 but less than $15,000.

Watson was also ordered to pay restitution of $8,050.

Acting U.S. Attorney Fitzpatrick credited special agents of the U.S. Department of Housing and Urban Development, Office of the Inspector General, under the direction of Special Agent in Charge Christina Scaringi, and special agents of the U.S. Secret Service, Newark Field Office, under the direction of Special Agent in Charge Mark McKevitt, with the investigation.

The government is represented by Deputy Attorney-in-Charge Matthew J. Skahill of the U.S. Attorney’s Office in Camden.

Defense counsel: John J. Zarych Esq., Northfield, New Jersey

NEWARK, N.J. – A South Orange, New Jersey, man today admitted his participation in the September 2015 armed robbery of a club in Passaic, New Jersey, Acting U.S. Attorney William E. Fitzpatrick announced.

Keontrae Lawrence, a/k/a “Taz,” 29, pleaded guilty before U.S. District Judge Madeline Cox Arleo in Newark federal court to an indictment 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 indictment and other documents filed in this case:

On Sept. 6, 2015, Lawrence and others agreed to rob a club in Passaic at gunpoint. During his plea hearing, Lawrence 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.

The Hobbs Act conspiracy charge carries a statutory maximum of 20 years in prison and a $250,000 fine, or twice the gain or loss from the offense. The count of brandishing a firearm during a crime of violence carries a mandatory minimum sentence of seven years in prison and that sentence must be consecutive to any other sentence imposed. Lawrence’s sentencing is set for Jan. 5, 2018.

Lawrence was originally charged with Jimmy Cooper, a/k/a “Flip,” 32, of Irvington, New Jersey, and Shaheed Blamahsah, a/k/a “Aboo,” 30, of East Orange, New Jersey, in November 2016. Cooper and Lawrence were later indicted by a federal grand jury on March 24, 2017, for their roles in the robbery.

Blamahsah pleaded guilty to his role in the robbery and awaits sentencing. The charges against Cooper are still pending, 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 leading to today’s guilty plea. He also thanked the Passaic County Sheriff’s Office, the Passaic Police Department, and the Newark Police Division 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: John A. Azzarello Esq., Morristown, New Jersey

NEWARK, N.J. – A California man who swallowed plastic bags containing approximately 600 grams of heroin admitted today that he possessed the drug with intent to distribute it, Acting U.S. Attorney William E. Fitzpatrick announced.

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

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

On Sept. 15, 2016, Vazques landed at Newark Liberty International Airport on a commercial flight after having swallowed approximately 81 “pellets” of heroin wrapped in plastic baggies. Vazques intended to distribute the heroin after his arrival but was apprehended by law enforcement authorities, who escorted Vazques to a hospital. Vazques underwent emergency surgery after hospital staff discovered that one of the baggies had ruptured. A co-defendant, Arturo Gonzales, who arrived on the same flight and had also swallowed heroin with the intent to distribute it, pleaded guilty before Judge Vazquez on June 26, 2017.

The drug distribution charge to which Vazques pleaded guilty carries a maximum prison sentence of 20 years and a maximum fine of $1 million. Sentencing is scheduled for Dec. 11, 2017.

U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher, and the Drug Enforcement Administration, under the direction of Special Agent in Charge Carl J. Kotowski, in Newark for the investigation that led to today’s guilty plea.

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

TRENTON, N.J. – An Anaheim, California, man today admitted laundering money on behalf of an international drug trafficking organization, Acting U.S. Attorney William E. Fitzpatrick announced.

Harry Madrid, 26, pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton federal court to Count Two of an indictment charging him with conspiracy to launder money. Madrid was previously arrested in November 2014 in Illinois.

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

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

One of Madrid’s co-defendants, Henry Zamora, pleaded guilty before Judge Sheridan on Aug. 31, 2017 to conspiring to distribute four kilograms of heroin that were recovered from a hidden compartment in his vehicle.

The money laundering charge to which Madrid pleaded guilty carries a maximum potential penalty of 20 years in prison and a $500,000 fine. Sentencing is set for Dec. 14, 2017.

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

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

CAMDEN, N.J. - A Camden man was sentenced today to 70 months in prison for his role in a crack cocaine distribution conspiracy operating in Camden, Acting U.S. Attorney William E. Fitzpatrick announced.

Joseph Boyd, a/k/a “Breet,” 32, 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:

Joseph Boyd admitted that he sold crack cocaine in and around the 1100 block of Lansdowne Avenue in Camden and supplied crack cocaine to other members of the conspiracy to sell in the area.

Joseph Boyd – along with Jason Boyd, Tony Wilson, Preston Thomas, Derek Stallworth, Jeffrey Whitaker, Nafeez Griffin, and Julian Dickerson – were originally charged by complaint on Sept. 9, 2016, following an 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.

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

Jason Boyd, Stallworth, and Wilson, who each previously pleaded guilty to drug distribution conspiracy and firearms possession, were all sentenced to 96 months in prison. Dickerson and Griffin both pleaded guilty to their roles in the scheme and await sentencing.

Thomas and Whitaker remain charged by superseding indictment with one count of conspiracy to distribute and to possess with intent to distribute cocaine base. Thomas is also charged with one count of possession of a firearm in furtherance of a drug trafficking crime. The charges and allegations against them are merely accusations, and they are presumed innocent unless and until proven guilty.

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: David Rudenstein Esq.

CAMDEN, N.J. – A Monmouth County, New Jersey, man was sentenced today to 36 months in prison for conspiring to defraud 76 victims of more than $4 million and evaded paying more than $273,000 in taxes, Acting U.S. Attorney William E. Fitzpatrick announced.

Peter Zuck, 67, of Middletown, New Jersey, previously pleaded guilty before U.S. District Judge Joseph H. Rodriguez to an information charging him with one count of conspiracy to commit wire fraud and four counts of tax evasion. Judge Rodriguez imposed the sentence today in Camden federal court.

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

Zuck was a co-founder of Osiris Partners LLC and Osiris Partners Fund Limited. Starting in 2009, Zuck was employed in a management role with Osiris Partners LLC and Osiris Partners Fund Limited, including as a managing member and portfolio manager of the fund. Between June 2009 and November 2011, Osiris Fund Limited Partnership solicited 76 investors to invest $12 million in the Fund. Zuck, Michael Spak, who previously pleaded guilty to one count of conspiracy to commit wire fraud for his role in the scheme, and other conspirators defrauded investors by concealing investments losses in the fund, misappropriating assets from the fund for their own personal use, and obtaining management fees based on a fraudulently inflated net asset value.

Zuck admitted that members of the Osiris Fund Limited Partnership diverted $4 million in investors’ funds from the fund and fraudulently drew $3.9 million in management fees to which they were not entitled.

Zuck also admitted that he was issued $1.3 million in checks in connection with his employment at Osiris Partners LLC and Osiris Fund Limited Partnership, which he used to pay for personal expenditures but which he did not report as income to the IRS. Instead, Zuck concealed his income by causing the checks to be deposited in an account that he controlled but that was in his son’s name and falsely assigning the income to his son on IRS forms. He admitted that he attempted to evade $273,417 in income tax.

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

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

The government is represented by Assistant U.S. Attorneys Elaine K. Lou, David M. Eskew, and Shirley Emehelu of the U.S. Attorney’s Office Criminal Division in Newark.

Defense counsel: Tim Anderson Esq., Red Bank

TRENTON, N.J. – A Farmingdale, New Jersey, man was arrested and charged today with defrauding investment clients out of more than $1.8 million, Acting U.S. Attorney William E. Fitzpatrick announced.

Scott Newsholme, 42, is charged by criminal complaint with one count each of mail fraud, wire fraud, and securities fraud. He was arrested by FBI and IRS special agents this morning and will appear later this afternoon before U.S. Magistrate Judge Tonianne J. Bongiovanni in Trenton federal court.

According to the complaint:

Since 2002, Newsholme owned and operated at least three different financial advisory and tax return preparation businesses. Between 2007 and 2016, Newsholme recommended to multiple clients that they invest their money with him, which he would use on their behalf to purchase various securities, including bond instruments issued by a private New Jersey country club, a bond investment in a video-game production company, and investments in the production of a movie. Newsholme also represented to clients that he would invest their money in more traditional securities, including mutual funds, annuities, life insurance policies, college education accounts, and money market funds.

Newsholme directed his investment clients to write checks to him or one of his companies so that he could execute the investments on their behalf.

However, rather than invest them as promised, Newsome used the funds for personal expenses, including multiple vehicles, bedroom furniture, debits at casinos, bank transfers to Newsholme’s personal bank accounts, and ATM withdrawals. In many cases, the investments that Newsholme recommended did not even exist.

In addition, Newsholme concealed his scheme by diverting incoming investment funds to pay other clients who had requested to withdraw funds from their investment portfolios. Newsholme also provided his clients phony account statements, security instruments, and other documentation showing the purported investments made on his clients’ behalf. Overall, Newsholme’s alleged scheme caused investment losses of over $1.8 million.

The mail and wire fraud counts each carry a maximum potential penalty of 30 years in prison and a $1 million fine. The securities fraud count carries a maximum potential penalty of 20 years in prison and $5 million fine.

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

Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, Newark Division, Red Bank Resident Agency, under the direction of Special Agent in Charge Timothy Gallagher, and special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation. He also thanked the SEC’s New York Regional Office, under the direction of Andrew Calamari, and the N.J. Bureau of Securities, under the direction of Bureau Chief Christopher Gerold, for their assistance.

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

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

If you believe you are a victim of or otherwise have information concerning this alleged scheme, you are encouraged to contact the FBI at 973-792-3000.

Defense Counsel: Gregory E. Tomczak Esq., Scottsdale, Arizona

NEWARK, N.J. – A Little Falls, New Jersey, man was sentenced today to 54 months in prison for robbing a TD Bank in Hawthorne, New Jersey, in February 2016, Acting U.S. Attorney William E. Fitzpatrick announced.

Robert Somers, 45, previously pleaded guilty before U.S. District Judge Susan D. Wigenton to an information charging him with one count of bank robbery. Judge Wigenton imposed the sentence today in Newark federal court.

According to documents filed in this case and statements made in court: On Feb.17, 2016, Somers robbed the TD Bank in Hawthorne by handing a teller a note that read: “this is a hold up,” and demanding cash. The teller handed Somers cash. Somers demanded more money, and a second teller handed him additional cash. Somers then fled the bank in a car driven by another individual.

In addition to the prison term, Judge Wigenton sentenced Somers to three 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 in Newark; the Hawthorne Police Department, under the direction of Chief Richard McAuliffe; the Pennsylvania State Police, under the direction of Col. Tyree C. Blocker; and the Passaic County Prosecutor’s Office, under the direction of Prosecutor Camelia M. Valdes, with the investigation.

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

NEWARK, N.J. - One man was arrested and three others pleaded guilty today for their roles in an insider trading scheme that profited from yet-to-be public information concerning a pharmaceutical company that developed a drug to treat cancer, Acting U.S. Attorney William E. Fitzpatrick announced.

Daniel Perez, 28, of Yardley, Pennsylvania, was arrested this morning and charged by complaint with one count of conspiracy to commit securities fraud. He is scheduled to appear this afternoon before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court.

Evan Kita, 27, of Yardley, pleaded guilty today before U.S. District Judge Michael A. Shipp to an information charging him with one count of conspiracy to commit securities fraud and one count of securities fraud. Richard Yu, 27, and his father, Chiang Yu, 55, both of Pennington, New Jersey, also pleaded guilty today before Judge Shipp to separate informations charging them each with one count of securities fraud. All three were released on $150,000 unsecured bond.

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

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

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

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

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

Kita admitted that the gain resulting from his insider trading scheme was more than $250,000, but not more than $550,000. Chiang Yu admitted that the gains associated with his offense were more than $95,000, but not more than $150,000. Richard Yu admitted that the gains associated with his offense were $200,070.29.

The conspiracy to commit securities fraud counts carry a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. The securities fraud counts carry a potential penalty of 20 years in prison and a $5 million fine. Sentencing for Kita, Richard Yu, and Chiang Yu is set for Dec. 5, 2017.

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

The U.S. Securities and Exchange Commission (SEC) filed a civil complaint against all four defendants today.

Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, with the investigation. He also thanked the SEC for the assistance provided by its Market Abuse Unit, under the direction of Joseph Sansone and Robert Cohen, and its Philadelphia Regional Office, under the direction of G. Jeffrey Boujoukos.

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

This case is part of efforts underway by the Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.

Defense counsel:

Perez: Louis R. Busico Esq., Newton, Pennsylvania

Kita: Robert Heim Esq., New York

Richard Yu: Rubin Sinins Esq., Springfield, New Jersey

Chiang Yu: Kristen Santillo Esq., Newark, New Jersey

TRENTON, N.J. – A DeKalb, Illinois, man who was arrested transporting four kilograms of heroin to Indiana pleaded guilty today in Trenton federal court, Acting U.S. Attorney William E. Fitzpatrick announced.

Henry Zamora, 38, pleaded guilty before U.S. District Judge Peter G. Sheridan to Count One of an indictment charging him with conspiracy to distribute heroin.  

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

From June 2014 through November 2014, Zamora conspired with other members of a cross-country drug trafficking organization, which included cells operating in New Jersey, to transport and distribute bulk quantities of heroin. On Nov. 21, 2014, Zamora was arrested while transporting four kilograms of heroin contained in a hidden compartment in his vehicle. Following the arrest, officers recovered an additional two kilograms of heroin from his residence in DeKalb. 

The charge to which Zamora pleaded guilty carries a maximum penalty of life in prison and a $10 million fine. Sentencing is scheduled for Dec. 13, 2017. 
 
Acting U.S. Attorney Fitzpatrick credited the Drug Enforcement Administration (DEA)’s New Jersey Division, under the direction of Special Agent in Charge Carl J. Kotowski, officers of the N.J. State Police, under the direction of Superintendent Col. Joseph R. Fuentes, and officers from the DeKalb Police Department with the investigation leading to today’s guilty plea. 

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

Defense counsel: Andrea Bergman Esq., Trenton, New Jersey

NEWARK, N.J. – A man from New York and a woman from New Jersey were arrested this morning for their roles in a conspiracy to distribute dangerous designer drugs, including a synthetic opioid that is several times more potent than morphine, Acting U.S. Attorney William E. Fitzpatrick announced.

Brian Parker, 34, of Long Island City, New York, and Victoria Koleski, 29, of Farmingdale, New Jersey, are charged by criminal complaint with conspiring to distribute controlled substance analogues, and distributing and possessing with intent to distribute the controlled substance analogues U-47700, A-PHP, and 3-MEO-PCP. The defendants are scheduled to appear this afternoon before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court.

According to the complaint:

Controlled substance analogues are designer drugs that have chemical structures and hallucinogenic effects similar to Schedule I controlled substances. Parker, who has two prior convictions for federal narcotics-related crimes, allegedly manufactured and distributed controlled substance analogues and other illegal chemicals through two internet-based companies he controlled. The substances sold by Parker were linked to an overdose death which occurred in May 2016.

On May 22, 2016, law enforcement officers were dispatched to a residence in Madison, Wisconsin, in response to a report of a 37-year-old man who had stopped breathing. The victim was dead by the time officers arrived at his residence. An autopsy later confirmed that the victim’s death was caused by acute intoxication due to the combined effects of a substance called U-47700 and Benzodiazepine Analogue (Etizolam).

U-47700 is a synthetic opioid that is several times more potent than morphine. Law enforcement officers recovered several mail parcels that were addressed to the victim, one or more of which contained full glass vials labeled “U-47700,” as well as multiple invoices indicating the victim had been ordering U-47700 and other substances from a website run by Parker.

After learning of the victim's overdose, law enforcement agents began investigating one of Parker’s websites. The investigation revealed that Parker used other conspirators, including Koleski, to send and receive packages for his narcotics distribution business. Those conspirators received raw materials from China or elsewhere through the mail, repackaged and sent them to Parker, who then manufactured those materials into the chemicals that he sold online. Afterwards, Parker transported the finished products back to his conspirators, who then shipped them to Parker's customers.

For example, from June 30, 2017 through July 5, 2017, Koleski shipped approximately 218 parcels from a post office located in Farmingdale, many of which contained controlled substance analogues that Parker sold online. A court-authorized search and seizure of approximately 75 of those packages revealed that Parker and Koleski were also distributing the controlled substance analogues A-PHP and 3-MEO-PCP, which have chemical structures and hallucinogenic properties similar to the Schedule I controlled substances A-PVP and PCP, respectively.

Each charge in the complaint carries a maximum potential penalty of 20 years in prison and a $1 million fine.

Acting U.S. Attorney Fitzpatrick credited special agents with the Drug Enforcement Administration (DEA)’s New Jersey Division, under the direction of Special Agent in Charge Carl J. Kotowski, and postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge James V. Buthorn, with the investigation leading to today’s arrests.

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

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

TRENTON, N.J. – A Farmingdale, New Jersey, man appeared in federal court today to face charges that he recently robbed TD Banks in Tinton Falls, New Jersey, and Wall, New Jersey, Acting U.S. Attorney William E. Fitzpatrick announced.

Michael R. Volek, 53, was arrested yesterday and charged by complaint with one count of bank robbery. He appeared this afternoon before U.S. Magistrate Judge Douglas Arpert in Trenton federal court and was detained.

According to the complaint:

On Aug 25, 2017, Volek allegedly entered a TD Bank in Tinton Falls and handed a teller a note that read “put the money in bag now and nobody get hurt.” Volek then told the bank teller “put the money in the bag. Come on, I’m desperate.” The teller handed Volek some cash and he left the bank.

On Aug. 28, 2017, Volek allegedly entered another TD Bank in Wall and handed a teller a note that read “Put the money in bag now. This is no joke. I will shoot you. $100. $50.” Volek then told the teller “Give me money. If you don’t, I’m going to cut you.” The teller handed Volek some cash and he left the bank. Volek was arrested later that day at a motel in Neptune, New Jersey.

The charge in the complaint 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.

Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, Newark Division, Red Bank Resident Agency, Jersey Shore Gang and Criminal Enterprise Task Force (to include representatives from Bradley Beach Police Department, Brick Police Department, Marlboro Police Department, Monmouth County Sheriff’s Office, and Toms River Police Department), under the direction of Special Agent in Charge Timothy Gallagher; the Monmouth County Prosecutor’s Office, under the direction of Monmouth County Prosecutor Christopher J. Gramiccioni; the Tinton Falls Police Department, under the direction of Chief John A. Scrivanic; the Wall Township Police Department, under the direction of Chief Ken Brown; and the Neptune Township Police Department, under the direction of Chief James M. Hunt Jr., with the investigation leading to Volek’s arrest.

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

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

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

TRENTON, N.J. – A Sea Isle City, New Jersey, man was sentenced today to 66 months in prison for operating a multimillion-dollar fraud scheme through his former payroll company, Innovative Payroll Services LLC (IPS), Acting U.S. Attorney William E. Fitzpatrick announced.

John Scholtz, 68, previously pleaded guilty before U.S. District Judge Freda L. Wolfson to an information charging him with one count of wire fraud and one count of transacting in criminal proceeds. Judge Wolfson imposed the sentence today in Trenton federal court.

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

Scholtz owned and operated IPS, a company that provided payroll services to clients – including municipalities, educational institutions, and various small to medium-sized privately held companies – in New Jersey and elsewhere. Each payroll period, IPS provided its clients with a summary setting forth the payroll taxes owed for that period. IPS clients then deposited the specified payroll taxes into an IPS bank account, where IPS held the funds until they were remitted to the taxing authorities.

Scholtz admitted that from February 2012 to January 2016, he withdrew or directed others at IPS to withdraw client tax funds from IPS’ Tax Impound Accounts, knowing that these funds constituted client tax funds, and used these funds instead for IPS operating expenses and his own personal expenses, including payments for homes, cars, boats, airplanes and credit cards.

This ongoing misappropriation of funds caused many IPS clients to be in delinquent status with the IRS and state and local taxing authorities. As clients’ tax deposit funds came in, IPS used such funds to pay other clients’ taxes owed for prior pay periods, as well as penalties and interest. As a result, at least 103 IPS clients lost more than $8.4 million worth of federal, state and local tax deposits that IPS failed to make, as well as more than $578,000 in associated penalties and interest. The City of Trenton was an IPS client from July 2009 to January 2016, and is one of is the IPS clients whose tax deposit funds were misappropriated by Scholtz.

In addition to the prison term, Judge Wolfson sentenced Scholtz to two years of supervised release and ordered him to pay restitution of $9,566,460.79.

Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher, Newark Division; special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, Newark Division; and the Mercer County Prosecutor’s Office, under the direction of Prosecutor Angelo J. Onofri, with the investigation.

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

Defense counsel: Brian Reilly Esq., Assistant Federal Public Defender, Trenton

NEWARK, N.J. – Two California men who were arrested in Essex County, New Jersey, with over 140 kilograms of narcotics in their possession made their initial appearances today in Newark federal court, Acting U.S. Attorney William E. Fitzpatrick announced.

Abraham Castro, 33, of San Diego, California, and Hector Leonel Lucas-Ramos, 42, of National City, California, are charged by complaint with one count of conspiracy to possess with intent to distribute approximately 141 kilograms of suspected cocaine and heroin. They appeared this afternoon before U.S. Magistrate Judge Joseph A. Dickson and were detained.

According to the complaint:

On Aug. 27, 2017, Castro and Lucas-Ramos were arrested in Essex County while they were driving a tractor trailer. After the tractor trailer was seen committing several traffic violations, law enforcement conducted a motor vehicle stop. As law enforcement approached the driver, Castro, they observed Lucas-Ramos run to the cabin-area of the tractor trailer, where he was allegedly trying to close a large bag containing packages of a white powdery substance.

During a subsequent search of the tractor trailer, law enforcement recovered approximately five large duffle bags containing a total of 141 packages. Lab testing later confirmed the presence of heroin and cocaine in the packages.

Each defendant faces a mandatory minimum penalty of 10 years in prison, a maximum potential penalty of life in prison, and a $10 million fine.

Acting U.S. Attorney Fitzpatrick credited the Drug Enforcement Administration (DEA)’s New Jersey Division, under the direction of Special Agent in Charge Carl J. Kotowski, with the investigation.

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

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

Defense counsel:

Castro: John Yauch Esq., Assistant Federal Public Defender, Newark

Lucas-Ramos: Alyssa Cimino Esq., Fairfield, New Jersey

TRENTON, N.J. – A Trenton man was sentenced today to 84 months in prison for his role in a drug trafficking organization that allegedly distributed hundreds of grams of heroin in Trenton and the surrounding areas, Acting U.S. Attorney William E. Fitzpatrick announced.

Thomas Rogers, a/k/a “Herb,” a/k/a “T-Rod,” 23, previously pleaded guilty before U.S. District Judge Freda L. Wolfson to an information charging him with conspiracy to distribute and possess with intent to distribute 100 grams or more of heroin. As part of his guilty plea, Rogers admitted possessing at least one firearm during the conspiracy. Judge Wolfson imposed the sentence today in Trenton federal court.

In December 2016, Rogers and nine other members of a drug trafficking organization operating in Trenton were charged by criminal complaint with conspiracy to distribute heroin. The complaint referred to the drug trafficking organization as the “Abdullah DTO,” after its leader, Ishmael Abdullah. Since then, six of the 10 defendants, including Abdullah, have pleaded guilty.

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

From June 2015 through December 2016, Rogers and others engaged in a drug trafficking organization that operated in the area of Spring and Passaic Streets in Trenton. Through the authorized interception of telephone calls and text messages, controlled purchases of heroin, the use of confidential sources of information, and other investigative means, law enforcement learned that defendant Ishmael Abdullah was a leader of the Abdullah DTO and was responsible for obtaining significant quantities of heroin from multiple suppliers, including from defendants Jose Joaquin Torres-Mezquita and Ileana Sanchez. Abdullah and Keith Hunter coordinated the organization’s distribution of heroin through themselves and other conspirators, including Rogers.

Members of the Abdullah DTO used temporary prepaid phones, stash houses and cars, and spoke in code to avoid detection by law enforcement. In connection with their narcotics conspiracy, Rogers and other members of the Abdullah DTO maintained joint access to multiple firearms.

In addition to the prison term, Judge Wolfson sentenced Rogers to five years of supervised release.

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

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

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

The charges and allegations against the remaining defendants are merely accusations and those defendants are presumed innocent unless and until proven guilty.

Defense counsel: David R. Oakley Esq., Princeton

NEWARK, N.J. – A New York man was sentenced today to 39 months in prison for his role in the robbery of a North Jersey bar, Acting U.S. Attorney William E. Fitzpatrick announced.

Balmore Carrillo-Iraheta, 20, of Suffern, New York, previously pleaded guilty before Judge Linares for his role in the Hobbs Act Robbery of a Hawthorne, New Jersey, bar. Judge Linares imposed the sentence today in Newark federal court.

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

Balmore Carrillo-Iraheta admitted that on Dec. 25, 2016, he and others forcibly robbed the bar and fled with approximately $200 in cash.

In addition to the prison term, Judge Linares sentenced Carrillo-Iraheta to three 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 in Newark, the Bergen County Prosecutor’s Office, under the direction of Prosecutor Gurbir S. Grewal, and the Ridgewood and Hawthorne Police Departments, with the investigation leading to today’s sentencing.

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

Defense counsel: Ruth M. Liebesman Esq., Paramus, New Jersey

TRENTON, N.J. – A Monmouth County, New Jersey, man appeared in federal court today to face charges that he operated a $530,000 check-kiting scheme using stolen Social Security numbers, Acting U.S. Attorney William E. Fitzpatrick announced.

Daniel White, 51, of Manalapan, New Jersey, was charged by complaint with one count of bank fraud and one count of aggravated identity theft. He made his initial appearance before U.S. Magistrate Judge Douglas E. Arpert in Trenton federal court.

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

From February 2015 to June 2016, White opened or directed others to open 413 accounts at TD Bank, using 133 different Social Security numbers, 84 of which belonged to other individuals. White then wrote or caused others to write 472 checks totaling more than $530,000 addressed to himself or the owners of the newly opened accounts, knowing that the accounts against which the checks were written did not contain sufficient funds. White and others deposited those checks into the newly opened accounts and withdrew money before the checks bounced.

The count of bank fraud with which White is charged carries a maximum potential penalty of 30 years in prison and a $1 million fine. The count of aggravated identity theft carries a mandatory minimum of two years in prison, consecutive to any other sentence imposed.

Acting U.S. Attorney Fitzpatrick credited the U.S. Secret Service, under the direction of Special Agent in Charge Mark McKevitt; the Ocean County Prosecutor’s Office, under the direction of Prosecutor Joseph D. Coronato; and the Manchester Police Department, under the direction of Chief Lisa D. Parker, 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.

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