District of New Jersey

NEWARK, N.J. – Five doctors today admitted taking bribes in connection with a long-running and elaborate test referral scheme operated by Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, New Jersey, its president and numerous associates, Acting U.S. Attorney William E. Fitzpatrick announced.

George Roussis, 44, of Staten Island, New York; Nicholas Roussis, 48, of Staten Island; Jorge J. Figueroa, 58, of Wayne, New Jersey; and Basel Batarseh, 57, of Franklin Lakes, New Jersey, each pleaded guilty before U.S. District Judge Stanley R. Chesler in Newark federal court to separate informations charging them each with one count of accepting bribes in violation of the Federal Travel Act.

Yousef Zibdie, 53, of Wayne, New Jersey, who was indicted on June 6, 2017 with Aiman Hamdan and Kristina Hamdan, pleaded guilty before Judge Chesler to all 11 counts against him in the indictment, including participating in the bribery conspiracy, violating the Federal Anti-Kickback statute, violating the Federal Travel Act, honest services wire fraud and conspiracy to commit money laundering.

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

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

Figueroa, an internal medicine doctor with a practice in Fair Lawn, New Jersey, accepted checks, cash and other bribe payments totaling approximately $200,000 from BLS employees and associates between May 2007 and April 2013. In exchange, Figueroa generated more than $1,400,000 in lab business for BLS.

Batarseh, an internal medicine doctor with a practice in West New York, New Jersey, accepted monthly bribe checks of $3,200 totaling more than $104,000 from BLS employees and associates between November 2007 and August 2010. In exchange, Batarseh generated more than $1,300,000 in lab business for BLS.

Zibdie, an internal medicine doctor with a practice in Woodland Park, New Jersey, accepted monthly bribe checks totaling approximately $80,000 from BLS employees and associates, including co-defendant Kristina Hamdan. In exchange, Zibdie generated more than $930,000 in lab business for BLS.

The investigation has thus far resulted in 50 convictions – 36 of them doctors – in connection with the bribery scheme, which its organizers have admitted involved millions of dollars in bribes and resulted in more than $100 million in payments to BLS from Medicare and various private insurance companies. It is believed to be the largest number of medical professionals ever prosecuted in a bribery case.

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

The Travel Act charges to which each of the five doctors pleaded guilty is punishable by a maximum potential penalty of five years in prison. It also carries a maximum $250,000 fine, or twice the gross gain or loss from the offense.

The conspiracy to engage in bribery charge and Federal Anti-Kickback Statute violations to which Zibdie pleaded guilty are punishable by a maximum potential penalty of five years in prison. The honest services wire fraud charges and conspiracy to commit money laundering charges to which Zibdie pleaded guilty are punishable by a maximum potential penalty of twenty years in prison. Each count also carries a maximum $250,000 fine, or twice the gross gain or loss from the offense.

The sentencings for all five defendants have been scheduled for Dec. 6, 2017.

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

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

The New Jersey U.S. Attorney’s Office reorganized its health care fraud practice in 2010 and created a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since that time, the office has recovered more than $1.34 billion in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.

Defense counsel:

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

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

Jorge J. Figueroa: Gerald Krovatin Esq., Newark, New Jersey

Basel Batarseh: Curtis LaForge Esq., Saddle Brook, New Jersey

Yousef Zibdie: Eric Kanefsky Esq., Newark, New Jersey

NEWARK, N.J. – Five men who were arrested in California with 15 kilograms of cocaine bound for New Jersey were arraigned today in Newark federal court, Acting U.S. Attorney William E. Fitzpatrick announced.

Froylan Gil Palomares, a/k/a “Froilan Gill,” 39, a Mexican national; Efrain Cardenas Alcaras, a/k/a “Ifrain Alcaras Cardenas,” 39, of Sunnyside, Washington; Sergio Kevin Calvio Ayala, a/k/a “Kevin Calveo” 28, of Fontana, California; Luis Tomas Alba Urena, 53, of Prospect Park, New Jersey; and Javier Armando Cortes Quintal, 48, a Mexican national, are charged by indictment with conspiracy to distribute and possess with intent to distribute more than five kilograms of cocaine. The defendants were arraigned in Newark federal court before U.S. District Judge William H. Walls and were detained.

According to documents filed in this case:

From Aug. 31, 2016, through Feb. 8, 2017, law enforcement officers monitored communications between Alba and others. Those communications led to the seizure of approximately one kilogram of cocaine that Alba and Quintal allegedly sold to another individual in California on Sept. 26, 2016. Alba, Quintal, and the individual later negotiated the sale of kilograms of cocaine that the individual would transport to New Jersey. After agreeing to the details of the cocaine delivery, Alba and the individual traveled from New Jersey to California to conduct the transaction.

On Feb. 8, 2017, law enforcement officers observed Quintal, Alba, Gil Palomares, Calvio and Cardenas Alcaras meet with the individual in the parking lot of a retail establishment in Burbank, California. Cardenas Alcaras and Calvio allegedly directed the individual to the interior of a Jeep to inspect the drug shipment. Once the presence of cocaine in the Jeep was confirmed, law enforcement arrested the defendants and seized 15 kilograms of cocaine from the scene, along with a .380 caliber pistol.

Each defendant faces a mandatory minimum term of 10 years in prison and a potential maximum sentence of life in prison. The defendants also face a maximum $10 million fine.

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

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

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

Defense counsel:

Froylan Gil Palomares: Mark Leibman Esq.

Efrain Cardenas Alcaras: Michael V. Calabro Esq.

Sergio Kevin Calvio Ayala: Bruce S. Rosen Esq.

Luis Tomas Alba Urena: Linwood A. Jones Esq.

Javier Armando Cortes Quintal: Julian Wilsey Esq.

Kenneth Hammond, a/k/a “Saleem,” 49, previously pleaded guilty before U.S. District Judge Katharine S. Hayden to a superseding information charging him with one count of conspiracy to distribute 280 grams or more of crack-cocaine. Judge Hayden imposed the sentence today in Newark federal court.

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

Hammond supervised a drug trafficking organization that employed multiple associates, including Antonio Bivens, a/k/a “Mo,” 44, also of Irvington. Hammond also stored and distributed multiple kilograms of crack-cocaine and powder cocaine in two residences that he owned in Irvington. In November 2015, law enforcement officers raided Hammond’s residences and seized approximately two kilograms of crack-cocaine and 12 kilograms of powder cocaine.

In addition to the prison term, Judge Hayden sentenced Hammond to five years of supervised release. Bivens previously pleaded guilty to his role in the conspiracy and is scheduled to be sentenced by Judge Hayden on June 27, 2017.

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

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

Defense counsel: John D. Lynch Esq., Union City, New Jersey

NEWARK, N.J. – An East Orange, New Jersey, man was sentenced today to 51 months in prison for his role in a conspiracy to file false federal income tax returns on behalf of inmates at the Essex County Correctional Facility, Acting U.S. Attorney William E. Fitzpatrick announced.

Reginald Eaford, 47, previously pleaded guilty before U.S. District Judge William H. Walls to an information charging him with conspiracy to make and present false, fictitious, and fraudulent claims to the IRS. Judge Walls imposed the sentence today in Newark federal court.

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

From 2013 through Aug. 5, 2014, Eaford, Winfred Moses, 49, also of East Orange, and others conspired to file bogus federal tax returns in order to fraudulently obtain tax refunds.

Eaford was an inmate at the Essex County Correctional Facility from approximately May 20, 2013 through Feb. 12, 2014. As part of the scheme, Eaford, Moses, and others obtained social security numbers, dates of birth, and other information from inmates at the jail. Eaford and Moses would then generate false W-2 forms indicating that the inmates had earned income during the relevant tax year and that federal income tax had been withheld from their paychecks.

Afterwards, Eaford and Moses filed false federal income tax returns on behalf of the inmates and had the refund checks sent to the Essex County Correctional Facility or to Moses’s East Orange residence. The proceeds of the fraud were split among Eaford, Moses, and the relevant inmates. Eaford and Moses admitted that they filed 112 phony tax returns that sought approximately $670,206 in fraudulent refunds.

In addition to the prison term, Judge Walls sentenced Eaford to three years of supervised release and ordered him to pay restitution of $200,045.

Moses also previously pleaded guilty to his role in the scheme and was sentenced April 12, 2017 to 26 months in prison.

Acting U.S. Attorney Fitzpatrick credited special agents of IRS–Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, postal inspectors from the U.S. Postal Inspection Service, under the direction of Inspector in Charge James V. Buthorn, and the Internal Affairs Division of Essex County Jail, under the leadership of Warden Roy Hendricks, with the investigation.

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

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

CAMDEN, N.J. – A Riverside, California, man today admitted his role in a conspiracy to steal 94,000 credit and debit cards from customers at approximately 80 Michaels’ Stores and use that information to make fraudulent withdrawals from the customers’ bank accounts, Acting U.S. Attorney William E. Fitzpatrick announced.

Angel Angulo, 27, pleaded guilty before U.S. District Judge Joseph H. Rodriguez in Camden federal court to Count One and Count Two of an indictment charging him with conspiracy to commit bank fraud and aggravated identity theft.

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

The conspirators installed devices that acquired customers’ bank account and personal identification number (PIN) information on point of sale (POS) terminals at stores operated by Michaels. The stolen account information was used to produce counterfeit bank cards, which were used with the stolen PINs to withdraw funds from the compromised bank accounts.

The conspirators allegedly replaced 88 POS terminals in 80 different stores operated by Michaels across 19 states, including New Jersey, with counterfeit POS devices. Each counterfeit device was equipped with wireless technology, which the conspirators used to retrieve the stolen information. From February 2011 to April 2011, conspirators stole approximately 94,000 debit and credit card account numbers.

From April 2011 to May 2011, Angulo, Crystal Banuelos, and others obtained counterfeit cards with the corresponding PIN numbers written on them from other conspirators. They used the cards and PIN numbers to withdraw money using ATMs from hundreds of bank accounts. On May 14, 2011, Angulo and Banuelos possessed 179 counterfeit cards in New Jersey.

The charge of conspiracy to commit bank fraud carries a maximum potential penalty of 30 years in prison and a $1 million fine. The charge of aggravated identity theft carries a mandatory penalty of two years in prison, to be served consecutively to any other sentence. Angulo’s sentencing is scheduled for Sept. 25, 2017.

Banuelos previously pleaded guilty to her role in the scheme and awaits sentencing.

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

The government is represented by Assistant U.S. Attorney Daniel Shapiro of the Computer Hacking and Intellectual Property Section of the U.S. Attorney’s Office Economic Crimes Unit.

Defense counsel: Lisa Lewis, Esq., Federal Public Defender

NEWARK, N.J. – A family doctor practicing in Bergen County, New Jersey, was sentenced today to 41 months in prison for accepting bribes in exchange for test referrals as part of a long-running and elaborate scheme operated by Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, New Jersey, its president and numerous associates, Acting U.S. Attorney William E. Fitzpatrick announced.

Bernard Greenspan, 79, of River Edge, New Jersey, was convicted March 6, 2017, of one count of conspiring to commit violations of the Anti-Kickback Statute, the Federal Travel Act and wire fraud; three substantive violations of the Anti-Kickback Statute; three substantive violations of the Federal Travel Act; and three substantive violations of wire fraud. Greenspan was convicted following a 11-day trial before U.S. District Judge William H. Walls, who imposed the sentence today in Newark federal court.

“The defendant in this case abused his position of trust by taking bribes in return for referring his patients to BLS,” Acting U.S. Attorney Fitzpatrick said. “People need to trust that their doctors are making medical decisions based on what is in their best interest and not based on who will pay them a bribe.”

“Patients have every right to insist that their physician is making medical referrals based on what is best for the patient—not what’s best for the doctor’s bank account,” said Special Agent in Charge Timothy Gallagher of the Newark FBI Field Office. “Bernard Greenspan decided to accept bribes in exchange for referrals and deprived patients of their right to honest services. These types of kickback arrangements cripple the healthcare industry and severely impact patient care. The FBI remains committed to investing its resources to combat these types of schemes.”

According to the indictment and testimony at trial, between March 2006 and April 2013, Greenspan received bribes totaling approximately $200,000 from BLS employees and associates. Greenspan periodically solicited and received monthly bribe payments in the form of sham rental, service agreement, and consultant payments.

In addition, Greenspan solicited and received other bribes, including payment for holiday parties for Greenspan and his office staff and additional cash bribes for ordering specific blood tests. In addition, BLS hired – at Greenspan’s specific request –a patient of Greenspan’s with whom he was having a sexual relationship. Greenspan’s referrals generated approximately $3 million in lab business for BLS.

The investigation has thus far resulted in 44 convictions – 30 of them of doctors – in connection with the bribery scheme, which its organizers have admitted involved millions of dollars in bribes and resulted in more than $100 million in payments to BLS from Medicare and various private insurance companies. It is believed to be the largest number of medical professionals ever prosecuted in a bribery case.

“Dr. Greenspan violated the Hippocratic Oath taken by medical professionals when he pledged to ‘come for the benefit of the sick, remaining free of all intentional injustice,” Inspector in Charge James V. Buthorn of U.S. Postal Inspection Service, Newark Division, said. “The culture of kickbacks and bribery have no place in our healthcare system, and the U.S. Postal Inspection Service was proud to do our part, working with our law enforcement partners to ensure justice was served today.”

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

In addition to the prison term, Judge Walls sentenced Greenspan to one year of supervised release, fined him $125,000 and ordered forfeiture of $203,693.

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

The government was represented at trial by Assistant U.S. Attorneys Joseph N. Minish and Danielle Alfonzo Walsman of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark.

The U.S. Attorney’s Office, District of New Jersey, reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $1.34 billion in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.

Defense counsel: Damian Conforti Esq. and Eric Kanefsky Esq., Newark, NJ

TRENTON, N.J. – A Trenton man today admitted 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, pleaded guilty before U.S. District Judge Freda L. Wolfson in Trenton federal court to a two-count 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.

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. Proctor is the fifth of the 10 defendants to plead guilty.

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, 2017 by Trenton police officers in possession of a loaded Glock 27 semiautomatic handgun and multiple rounds of ammunition.

The conspiracy charge carries a mandatory minimum term of five years in prison, a maximum potential penalty of 40 years in prison, and a $5 million fine. The firearms possession charge carries a maximum potential sentence of 10 years in prison and a $250,000 fine. Sentencing is scheduled for Sept. 26, 2017.

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 Acting Special Agent in Charge Marcus S. Watson; 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 Brian A. Michael; 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

                             

 

CAMDEN, N.J. – A Camden, New Jersey, man was sentenced today for his role in a crack cocaine distribution conspiracy, one of three members of a drug trafficking organization sentenced this week, Acting U.S. Attorney William E. Fitzpatrick announced.

Tony Wilson, a/k/a “Tony Langston,” a/k/a “Tone,” and a/k/a “H,” 25, 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 and one count of possession of a firearm in furtherance of a drug trafficking crime. He was sentenced today to 96 months in prison.

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. 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. Stallworth had previously pleaded guilty to the same charges for his role in the conspiracy.

All three defendants were sentenced by Judge Simandle in Camden federal court. In addition to their prison terms, they were each sentenced to five years of supervised release.

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

Wilson, Boyd and Stallworth admitted their respective roles in an organization that sold crack cocaine around the 1100 block of Lansdowne Avenue in Camden. Wilson also admitted that he possessed a .40 caliber handgun in connection with the organization’s drug trafficking activities.

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

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 this week’s sentencings.

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:

Wilson: Michael Huff Esq., Mount Ephraim, New Jersey

Boyd: Jose Ongay Esq., Mount Ephraim

Stallworth: Anne C. Singer, Haddonfield, New Jersey

WASHINGTON – Michelle Martinez, administrative officer for the Camden office of the U.S. Attorney’s Office, District of New Jersey, was one of 179 members of the Department of Justice recognized by Deputy Attorney General Rod Rosenstein, and Executive Office for U.S. Attorneys (EOUSA) Director Monty Wilkinson at the 33rd Director’s Awards Ceremony today in Washington, D.C.

The District of New Jersey was one of 35 districts represented at the ceremony, which was held in the Great Hall at the Robert F. Kennedy Department of Justice Building.

In his prepared remarks, Deputy Attorney General Rosenstein told the awardees: “These 179 award recipients embody the best of the Department of Justice. Today’s honorees have earned the esteem of their colleagues. But most importantly, you have earned the gratitude of your fellow citizens – whose communities you have made safer, whose lives you have improved, and whose trust you have rewarded.”

Ms. Martinez’s nomination recognizes her exceptional commitment to the Department’s mission and her sustained excellence as an Administrative Support Specialist. She has effectively and efficiently managed the Camden Office for more than a decade and is respected by everyone in the office for her professionalism, dedication and commitment to the Department’s mission.

“Without Michelle’s able assistance, the Camden office simply would not function with the level of efficiency and productivity for which it has come to be known by the judges in the District and by our law enforcement partners,” Acting U.S. Attorney William E. Fitzpatrick said. “She is the engine that keeps the office running.”

Ms. Martinez effectively functions as the Administrative Officer for the Camden Office, supervising all of the day-to-day operations and working closely with the General Services Administration (GSA), the EOUSA, the District Court, outside contractors and vendors, and the Office’s budget and human resource officers.

Ms. Martinez oversaw a major renovation of the Camden Office, which is located in a historic federal courthouse. She coordinated on a regular basis with Office leadership, the GSA, EOUSA, and the District Court, reviewing architectural plans, discussing the renovation, and dealing with issues as they arose. She also conceived of and developed the idea to convert unused space in the Office's reception area into three new offices. By carefully managing the office’s overall expenses and minimizing other costs and working with Office leadership, Ms. Martinez was able to find enough room in the budget to permit this construction at substantial cost savings and accommodate the Office’s growing needs.

Ms. Martinez also serves as the legal assistant to the First Assistant U.S. Attorney, Attorney-in Charge, and Deputy Attorney-in-Charge, in addition to other line attorneys. She manages all of the personnel who make up the Camden Office’s administrative and support staff, trains new support staff when they enter on duty and supervises the legal assistants in Camden, providing guidance on a daily basis with regard to questions and issues that arise. Ms. Martinez is frequently asked to take on additional special projects, at the request of the U.S. Attorney, the Attorney-in-Charge in Camden, and the Department, and always does so graciously and with great enthusiasm.

EOUSA provides oversight, general executive assistance, and direction to the 94 United States Attorneys’ offices around the country. For more information on EOUSA and its mission, visit http://www.justice.gov/usao.

NEWARK, N.J. – A fire inspector for Middlesex Borough and other New Jersey municipalities and another individual have been charged with conspiracy to commit extortion using threats of force, violence, and fear, Acting U.S. Attorney William E. Fitzpatrick announced today.

Billy A. Donnerstag, 49, of Hackettstown, New Jersey, and Joseph P. Martinelli, 64, of Kenvil, New Jersey, are charged by complaint with one count of conspiracy to commit extortion. Donnerstag is expected to make his initial appearance this afternoon before U.S. Magistrate Judge James B. Clark III in Newark federal court. Martinelli is expected to make his initial appearance on June 16, 2017, before Judge Clark.

According to the complaint:

From December 2016 and through June 2017, Donnerstag and Martinelli conspired to extort the owner and operator of a real estate development and construction company. The victim, identified in the complaint as “Individual 1,” was allegedly threatened with physical harm if Individual 1 did not pay thousands of dollars to Donnerstag and Martinelli, both of whom intimated that they had connections to organized crime. In a series of telephone and in-person conversations with Individual 1, Donnerstag and Martinelli told Individual 1 that, in addition to being a fire inspector for Middlesex Borough, Donnerstag also collected debts. Martinelli and Donnerstag allegedly wanted Individual 1 to pay Martinelli because Individual 1 had not paid Martinelli enough money for the sale of a property a decade earlier.

Donnerstag described himself to Individual 1 as “the guy that you don’t want to see,” “a problem for you right now,” and “someone that you need to deal with about this issue.” Donnerstag explained that he was a collector of debts who operated outside of the legal system and was “not somebody who’s in the yellow pages.” Donnerstag further explained that people who did not want to deal with lawyers would “rather deal with somebody like me, who’s just very cut and dry” because “I get the job done . . . and I get it done fast. Don’t ask me . . . how I get it done fast, cause you already know how I get it done fast.” Donnerstag told Individual 1 to ask others about Donnerstag’s father, whom Donnerstag referred to as “Jerry the Jew,” because, according to Donnerstag, “that’s what I do.” According to publicly available information, in the 1970s, Gerald Donnerstag of Belleville, New Jersey, a/k/a “Jerry the Jew,” reportedly was connected to organized crime, and was convicted of murder in Scranton, Pennsylvania, and theft in Essex County, New Jersey.

Donnerstag made a series of threatening statements to Individual 1 regarding the consequences of failing to pay, including:

• “if you were in front of me right now, you’d be on the floor. Okay? Cause I don’t talk—I don’t get talked to like that. You don’t know who I am.”

• “You need to iron this out with Joe. Again, if, if I have to come meet you now—again, it, it, it, it’d become, it’s gonna be a problem.”

• “What I do, is I make sure that people don’t take advantage of other people. Do you understand that? Now I also do other things, but this is one of the things that I do. Now, again if you’re not figuring wh, what my business is by now, you’re either, and again I, I say this with as much respect as I can, either an idiot, or you’re just lying because you don’t want to, to, to understand that I come from somewhere that most people don’t wanna see.”

Martinelli similarly made threatening statements to Individual 1 about what Donnerstag would do if Individual 1 failed to pay, including:

• “He’s [Donnerstag] a collector. And when he sees those kind of dollars, he gets a percentage of ‘em. He comes hell bent for election. He don’t fucking care . . . . He comes—he’ll collect the money one way or the other that’s the way he is. I don’t want to get involved in that.”

• When asked if Individual 1 could choose not to pay: “If—you know—I can only go so far with this guy cause I don’t know when he’ll stop down to see you.”

• When asked what would happen if Individual 1 would not pay: “you may get a visit. And he’s going to probably want something because he already came out once and that’s his problem, and once he starts, he don’t stop. He’s hopin’ I settle it, that’s what he’s hopin’. And I’m hopin’ I can settle it with something, with some kind of figures, I don’t care how. . . .”

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

The count of conspiracy to commit extortion carries a maximum potential penalty of up to 20 years in prison and a fine of up to $250,000 or twice the gross pecuniary gain or loss.

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

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

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

Defense counsel:

Donnerstag: Carol Gillen Esq. Assistant Federal Public Defender, Newark

Martinelli: Brian N. DiGiacomo Esq., Madison, New Jersey

CAMDEN, N.J. - Federal and local law enforcement authorities arrested eight people this week for their alleged roles in a drug trafficking organization that distributed cocaine, crack cocaine, and heroin in Camden, Acting U.S. Attorney William E. Fitzpatrick announced.

John Gunther, 34, of Blackwood, New Jersey, George Williams, 42 of Oaklyn, New Jersey, Taleaf Gunther, 31, William Roland, 35, Daron Suiter, 23, Karim Johnson, 38, Latoya Whealton, 32, and Rajai Gaines, 33, all of Camden, are charged by complaint with one count of drug trafficking conspiracy.

Taleaf Gunther, Williams, Whealton, Suiter, and Johnson were arrested June 14, 2017. John Gunther, Roland, and Gaines were arrested June 13, 2017. All eight defendants appeared before U.S. Magistrate Judge Joel Schneider in Camden federal court on their respective arrest dates – except for Taleaf Gunther who appeared today – and were detained.

According to the complaints:

The defendants are members of a drug trafficking organization that dealt cocaine, crack cocaine, and heroin in and around Camden, with criminal activities concentrated on the 1700 block of Filmore Street. The organization also supplied drugs to customers and other distributors elsewhere.

John Gunther and Taleaf Gunther, the alleged leaders and managers of the operation, obtained bulk supplies of narcotics, prepared and packaged those controlled substances for street level sale, provided crack cocaine and heroin to other members for resale to customers, collected drug proceeds, and oversaw the daily sales and operation of the organization. Other members of the organization – including Roland, Suiter, Johnson, and Whealton – assisted in the preparation, distribution, and sale of the drugs. Williams allegedly supplied the organization with heroin. Gaines allegedly assisted with the preparation of drugs for resale.

An investigation led by the FBI used surveillance, confidential informants, cooperating witnesses, more than 20 controlled drug purchases, record checks, a GPS vehicle tracker, and multiple telephone wiretaps to uncover the operations of the drug trafficking organization.

The drug trafficking conspiracy count carries a maximum potential penalty of 20 years in prison and a $5 million fine.

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; the Camden County Sherriff’s Department under the direction of Sherriff Gilbert Wilson; the Cherry Hill Police Department, under the direction of William Monaghan; and the N.J. State Police, under the direction of Col. Rick Fuentes, with the investigation leading to the charges.

He also thanked the Gloucester Township Police Department, U.S. Immigration and Customs Enforcement, and U.S. Department of Health and Human Services for their assistance.

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

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

TRENTON, N.J. – A Pottersville, New Jersey, man was sentenced today to 19 months in prison for filing a false tax return and evading corporate taxes of American Tutor Inc., a company that offered supplemental educational services to New Jersey school districts, Acting U.S. Attorney William E. Fitzpatrick announced.

 

James Wegeler, 74, previously pleaded guilty before U.S. District Judge Anne E. Thompson to one count of corporate tax evasion and one count of aiding and assisting in the filing of a false tax return. Judge Thompson imposed the sentence today in Trenton federal court.

 

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

 

Wegeler was a certified public accountant who served as the vice president and chief financial officer of American Tutor. In 2013, Wegeler filed a return on behalf of American Tutor that contained materially false information in order to reduce American Tutor’s tax liability. Wegeler intentionally inflated American Tutor’s business expenses by claiming that it paid wages, tips and other compensation to its employees above and beyond what it had actually paid during the tax year 2012.

 

In addition, in 2011, Wegeler intentionally prepared a fraudulent tax return for an individual taxpayer that did not include substantial income the taxpayer had earned in tax year 2010. Wegeler admitted that his actions resulted in a total tax loss of $1,494,521 to the IRS.

 

In addition to the prison term, Judge Thompson sentenced Wegeler to three years of supervised release.

 

Acting U.S. Attorney Fitzpatrick credited special agents of the IRS, under the direction of Special Agent in Charge Jonathan D. Larsen, and special agents with the U.S. Department of Education Office of Inspector General, under the direction of Assistant Special Agent in Charge Debbi Mayer, with the investigation leading to today’s sentencing.

 

The government is represented by Assistant U.S. Attorney Vikas Khanna of the U.S. Attorney’s Office Special Prosecutions Division.

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

Robert Claude McGrath D.O., 65, and his son Robert Christopher McGrath, 47, both of Cherry Hill, New Jersey, each pleaded guilty before U.S. District Judge Robert B. Kugler in Camden federal court to separate informations charging them each with conspiracy to commit health care fraud.

The McGraths, together with their practice, the Atlantic Spine & Joint Institute, have also agreed to pay $1.78 million as part of a civil settlement to resolve allegations that they illegally billed Medicare for those treatments.

“Elderly patients who need physical therapy deserve properly licensed and supervised caregivers,” Acting U.S. Attorney Fitzpatrick said. “Instead, the McGraths for years used unqualified and unsupervised employees to treat their patients, all while fraudulently billing Medicare for the phony services.”

“Patients undergoing physical therapy at the McGraths’ practice sought simply to feel and move better,” said Michael Harpster, Special Agent in Charge of the FBI’s Philadelphia Division. “It seems all the defendants sought was to enrich themselves at those patients’ – and U.S. taxpayers’ – expense. Medicare fraud deals a big blow to a critical piece of our health care system. Every dollar lost to bogus billing is a dollar less to use for legitimate treatments and services.”

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

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

The defendants each face 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 Sept. 19, 2017.

“These criminals face serving time in prison as well as paying out a $1.78 million settlement,” said Scott J. Lampert, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “Additionally, my agency reserves the right to exclude both father and son from Medicare, Medicaid, and other federal health programs.”

“People trust medical professionals to treat them and not cheat them,” said Special Agent in Charge Mark S. McCormack, FDA Office of Criminal Investigations’ Metro Washington Field Office. “Our office will continue to work with our federal law enforcement partners to pursue and bring to justice those who would exploit this vulnerable population.”

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

The civil settlement resolves certain claims filed by Linda Stevens, a former billing manager at Atlantic Spine, in the District of New Jersey, under the federal False Claims Act. The federal False Claims Act contains a qui tam, or whistleblower, provision that permits whistleblowers to file suit on behalf of the United States for false claims against the government, and to share in any recovery. Ms. Stevens will receive approximately $338,200 from the settlement proceeds, along with her attorney’s fees.

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

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

The New Jersey U.S. Attorney’s Office reorganized its health care practice in 2010 and created a stand-along Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since that time, the office has recovered more than $1.33 billion in health care and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act, and other statutes.

Defense counsel:

Robert Christopher McGrath and Atlantic Spine & Joint Institute: Riza I. Dagli Esq., Roseland, New Jersey.

Robert Claude McGrath: Perry Primavera Esq., Hackensack, New Jersey

Counsel for Relator Linda Stevens: Brian J. McCormick Jr., Philadelphia

CAMDEN, N.J. – A Cherry Hill, New Jersey, woman today admitted embezzling over $40,000 from a nonprofit that provided mental health services to Camden’s poorest residents, Acting U.S. Attorney William E. Fitzpatrick announced.

Maria Tavera, 53, pleaded guilty before U.S. District Judge Noel L. Hillman in Camden federal court to an information charging her with embezzling from a health care benefit program.

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

Tavera was an administrator of Nueva Vida Behavioral Health Center of New Jersey, a nonprofit that provided mental health services to the Camden community, mostly to Medicaid beneficiaries.

Tavera regularly embezzled money from the Nueva Vida bank account in addition to her salary and used the money for personal expenses. She admitted that she used her Nueva Vida debit card to pay dental expenses, make purchases at a guitar store, withdraw cash, and shop for clothes and hardware. In total, Tavera embezzled over $40,000 from Nueva Vida.

Tavera faces a maximum potential penalty of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for Sept. 15, 2017.

Her husband, Cesar Tavera, the former Executive Director of Nueva Vida, previously pleaded guilty to defrauding Medicaid and embezzling money from Nueva Vida. He awaits sentencing.

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

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

The New Jersey U.S. Attorney’s Office reorganized its health care practice in 2010 and created a stand-along Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since that time, the office has recovered more than $1.32 billion in health care and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act, and other statutes.

Defense counsel: Gilbert J. Scutti Esq., Somerdale, New Jersey

NEWARK, N.J. – Two men from Bronx, New York, were each sentenced today to 61 months in prison for their roles in a scheme to obtain stolen identity information and use it to file phony tax returns with the IRS, Acting U.S. Attorney William E. Fitzpatrick announced.     

Jhan Luis Mejia Marcelino, 27, and Odanys Orlando Rojas, a/k/a “El Fuerte,” 39, previously pleaded guilty before U.S. District Judge John Michael Vazquez to separate informations charging them each with one count of conspiracy to commit theft of government funds, one count of theft of government funds, and one count of aggravated identity theft. 

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

Mejia and Rojas admitted that from January 2013 through May 2014, they obtained stolen personal identifying information, including names and Social Security numbers, of victims located in New Jersey, Puerto Rico, and elsewhere. Afterwards, Mejia, Rojas and others used the information to file fraudulent federal tax returns. They also admitted that once they received the refunds, they converted the checks to cash or other proceeds for their own benefit. Overall, the scheme caused losses of over $1 million to the U.S. Treasury.

In addition to the prison terms, Judge Vazquez sentenced each defendant to three years of supervised release and ordered them to pay restitution of $1,109,938.    

Acting U.S. Attorney Fitzpatrick credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; the U.S. Postal Inspection Service, under the direction of Inspector in Charge James V. Buthorn; and the U.S. Secret Service, under the direction of Special Agent in Charge Mark Mckevitt, with the investigation. 

The government is represented by Assistant U.S. Attorney Melissa Wangenheim of the Criminal Division in Newark.

Defense counsel: Marcelino: John Yauch Esq.   Rojas: Tim Anderson Esq. 

CAMDEN, N.J. – A Camden man today admitted distributing heroin in Camden, Acting U.S. Attorney William E. Fitzpatrick announced.

Jose Correa, a/k/a “Ciego,” 45, pleaded guilty before U.S. District Judge Renee M. Bumb in Camden federal court to an information charging him with one count of distributing and possessing with intent to distribute heroin.

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

Correa admitted selling at least 410 grams of heroin to two cooperating witnesses on five separate dates. The sales took place in Camden County and occurred between October 2015 and February 2016. He also admitted to possessing with the intent to distribute a quantity of heroin on the day that he was arrested. Correa was initially charged by complaint on Feb. 25, 2016, and is currently released on bond.

The drug distribution charge carries a maximum potential penalty of 20 years in prison and a $1 million fine. Correa’s sentencing is scheduled for Sept. 15, 2017.

This investigation and prosecution is the result of a collaborative law enforcement initiative by the Philadelphia-Camden High-Intensity Drug Trafficking Area (PCHIDTA), which comprises federal, state and local law enforcement agencies using a coordinated approach to combat drug trafficking and other crimes. PCHIDTA initiatives prioritize violent crimes and emphasize disruption of drug trafficking organizations and criminal activity.

Acting U.S. Attorney Fitzpatrick credited special agents of the Drug Enforcement Administration, under the direction of Special Agent in Charge Carl J. Kotowski; Delaware River Port Authority, under the direction of Chief John L. Stief; the Camden County Prosecutor’s Office, under the direction of Prosecutor Mary Eva Colalillo; the Camden County Metro Police Department, under the direction of Chief J. Scott Thomson; 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 for its assistance.

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

CAMDEN, N.J. – A Vineland, New Jersey, man was sentenced today to 60 months in prison for his role in a scheme to defraud a bank and for filing a fraudulent tax return, Acting U.S. Attorney William E. Fitzpatrick announced.

Richard T. Pepe, 70, previously pleaded guilty before U.S. District Judge Jerome B. Simandle to a superseding information charging him with one count of conspiracy to commit bank fraud and one count of fraud and false statements on his 2008 U.S. Individual Income Tax Return. Judge Simandle imposed the sentence today in Camden federal court.

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

From 2004 through October 2008, Pepe was the general manager of Chevrolet 73. The object of the conspiracy was for Pepe and others acting on his behalf to fraudulently obtain money from M&T Bank, intended as floor plan financing for Chevrolet 73, by providing phony information to the bank, including false liabilities and profits on Chevrolet 73’s monthly financial statements. Pepe then used that money – over $2.95 million – for personal expenses.

Pepe also admitted falsely claiming that his income was $36,628 on his 2008 individual tax return when he knew his actual income exceeded that amount.

In addition to the prison term, Judge Simandle sentenced Pepe to three years of supervised release and ordered him to pay forfeiture in the amount of $2,950,270.57.

Acting U.S. Attorney Fitzpatrick credited special agents of the FBI Philadelphia Division’s Cherry Hill Resident Agency, under the direction of Special Agent in Charge Michael Harpster, and special agents of the IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation.

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

Defense counsel: Thomas Young Esq., Assistant Federal Public Defender, Camden

NEWARK, N.J. – A Filipino national was sentenced today to 63 months in prison for running an international cashing operation that monetized stolen credit and debit card information obtained through computer hacking and ATM skimming operations, Acting U.S. Attorney William E. Fitzpatrick announced.

 

Angelo Virtucio, a/k/a “ZaiR,” a/k/a “ZaiRe,” a/k/a “Omega,” a/k/a “Omega10,” 31, of Quezon City, Philippines, previously pleaded guilty before U.S. District Judge Susan D. Wigenton to an information charging him with one count of conspiracy to commit bank fraud. Virtucio was arrested in the Southern District of Florida on Jan. 29, 2015 and was extradited to the District of New Jersey on Feb. 11, 2015. Judge Wigenton imposed the sentence today in Newark federal court.

 

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

 

Virtucio monetized millions of dollars from stolen credit and debit card data using a global network of “cashers” to enter into unauthorized financial transactions using the accounts related to the stolen information. The stolen credit card data was primarily obtained through computer hacking; the stolen debit card data was mostly obtained through ATM skimming operations. After purchasing the stolen data from other cybercriminals, Virtucio and his conspirators encoded it onto counterfeit credit and debit cards. The cashers used the counterfeit cards to make unauthorized ATM withdrawals and purchases at physical retail locations.

 

In addition to the prison term, Judge Wigenton sentenced Virtucio to two years of supervised release.

 

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

 

The government is represented by Assistant U.S. Attorney L. Judson Welle, coordinator of the Computer Hacking and Intellectual Property Section of the Economic Crimes Unit.

 

Defense counsel: Kathleen Theurer Esq. and A. Paul Condon Esq., Jersey City, New Jersey

CAMDEN, N.J. - A Camden man today admitted his role in a crack cocaine distribution conspiracy operating in Camden, Acting U.S. Attorney William E. Fitzpatrick announced.

Julian Dickerson, a/k/a “Juelz,” 30, 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 to possess with intent to distribute cocaine base.

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

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

Dickerson – along with Joseph Boyd, Jason Boyd, Tony Wilson, Preston Thomas, Derek Stallworth, Jeffrey Whitaker, and Nafeez Griffin – was originally charged 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.

The drug distribution conspiracy charge carries a maximum potential penalty of 20 years in prison and a $1 million fine. Dickerson’s sentencing is scheduled for Sept. 29, 2017.

Jason Boyd, Stallworth, and Wilson have all pleaded guilty to drug distribution conspiracy and firearms possession and await sentencing. Joseph Boyd pleaded guilty to drug distribution conspiracy and awaits sentencing. The charges against Thomas, Whitaker, and Griffin are still pending, 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: Michael Riley Esq.

NEWARK, N.J. – A cardiologist with a practice in Paterson, New Jersey, his wife, and a doctor with a practice in Woodland Park, New Jersey, were charged today with accepting bribes in exchange for test referrals as part of a long-running scheme involving Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, New Jersey, Acting U.S. Attorney William E. Fitzpatrick announced.

A federal grand jury returned a 16-count indictment charging Aiman Hamdan, 50; his wife, Kristina Hamdan 39; and Yousef Zibdie, 53, all of Wayne, New Jersey, with conspiring to commit violations of the Anti-Kickback Statute, the Federal Travel Act and wire fraud, and substantive violations of the Anti-Kickback Statute, the Federal Travel Act, and wire fraud. The defendants will be arraigned before U.S. District Judge Stanley Chesler on a later date.

According to the indictment:

From September 2008 to April 2013, Aiman Hamdan, a cardiologist, received from BLS bribes and other items of value, including a $500,000 loan, and a trip to Florida on a private jet for the purpose of fishing and visiting strip clubs, in exchange for generating millions of dollars of patient referrals. Kristina Hamdan paid bribes to several doctors through a sham entity that also paid the Hamdans’ household and personal expenses. Zibdie, doctor of internal medicine with a practice in Woodland Park, was bribed by Kristina Hamdan in exchange for generating more than $900,000 in lab business for BLS.

Aiman Hamdan and Zibdie are the fifth and sixth doctors indicted in connection with the BLS bribery scheme. Brett Ostrager, Salvatore Conte, and Ahmed El Soury all pleaded guilty after being indicted. On June 8, 2016, Ostrager was sentenced to 37 months in prison. Judge Chesler is scheduled to sentence El Soury on July 20, 2017 and Conte on September 20, 2017. Bernard Greenspan was indicted in March 2016 and convicted after trial in March 2017. Greenspan is scheduled to be sentenced before U.S. District Judge William H. Walls on June 20, 2017.

Aiman Hamdan, Kristina Hamdan and Zibdie face a maximum potential penalty of five years in prison on each of the Anti-Kickback and Federal Travel Act counts and a maximum potential penalty of 20 years in prison on each of the wire fraud counts. Each count also carries a maximum $250,000 fine, or twice the gross gain or loss from the offense.

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

The investigation has thus far resulted in 45 guilty pleas – 31 of them from doctors – in connection with the bribery scheme, which its organizers have admitted involved millions of dollars in bribes and resulted in more than $100 million in payments to BLS from Medicare and various private insurance companies. It is believed to be the largest number of medical professionals ever prosecuted in a bribery case. The investigation has to date recovered more than $12 million through forfeiture. On June 28, 2016, BLS, which is no longer operational, pleaded guilty and was required to forfeit all of its assets.

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

The New Jersey U.S. Attorney’s Office reorganized its health care fraud practice in 2010 and created a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since that time, the office has recovered more than $1.32 billion in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.

Defense counsel:

Aiman Hamdan: Lee Vartan Esq., New York

Kristina Hamdan: Zahid Quraishi Esq., Morristown, New Jersey

Zibdie: Christopher Adams Esq., Holmdel, New Jersey

 

CAMDEN, N.J. – A Collingswood, New Jersey, man today admitted conspiring with his former girlfriend to produce sexually explicit images of two children, Acting U.S. Attorney William E. Fitzpatrick announced.

Alexander Capasso, 43, pleaded guilty before U.S. District Judge Jerome B. Simandle to Count One of an indictment charging him with conspiring with Janine Kelley, 36, of Audubon, New Jersey, to engage in the sexual exploitation of children.

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

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

According to the terms of the plea agreement, if accepted by the court, Capasso will receive a term of between 15 and 20 years in prison as well as a lifetime of supervised release. He also faces a potential $250,000 fine and must pay full restitution to the victims. Sentencing is scheduled for Sept. 20, 2017. Capasso has been in federal custody since his July 20, 2015 arrest.

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

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

Defense counsel: Terri Lodge Esq., Cinnaminson, New Jersey

TRENTON, N.J. – An Ocean County, New Jersey, man was arrested and charged today for allegedly distributing images and videos of child sexual abuse, Acting U.S. Attorney William E. Fitzpatrick announced.

Michael A. Ruggiero, 35, of Forked River, New Jersey, a corrections officer at a juvenile detention facility, was arrested at work this morning by agents of the Department of Homeland Security, Homeland Security Investigations (HSI), on a complaint charging him with one count of distribution of child pornography. Ruggiero is expected to appear later today before U.S. Magistrate Judge Tonianne J. Bongiovanni in Trenton federal court.

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

 

From April 16, 2016, to April 19, 2016, Ruggiero used a mobile chat application to distribute and share over the internet images and videos of children engaged in sexual acts. Anyone with information regarding possible victims of this activity is urged to contact HSI in Newark: (973)-776-5500.

 

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

 

Acting U.S. Attorney Fitzpatrick credited special agents HSI, under the direction of Acting Special Agent in Charge Brian A. Michael; inspectors of the U.S. Postal Inspection Service, under the direction of Postal Inspector in Charge Daniel Brubaker, Philadelphia Division; and members of the Ocean County Prosecutor’s Office, with the investigation leading to today’s charge.

 

The government is represented by Assistant U.S. Attorney Veronica Allende of the U.S. Attorney’s Criminal Division.

 

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

 

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

NEWARK, N.J. – A skilled nursing facility in Sussex County, New Jersey, has agreed to pay to the United States and the State of New York $888,000 to resolve allegations that it provided materially substandard or worthless nursing services to some patients, Acting U.S. Attorney William E. Fitzpatrick announced today.

 

Andover Subacute and Rehab Center Services Two Inc. (Andover) is a skilled nursing facility located in Andover, New Jersey. The settlement announced today 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, with assistance from the Office of the Attorney General of the State of New York.

 

The United States and The State of New York contend that from July 1, 2010, to Dec. 31, 2012, Andover billed New York Medicaid for materially substandard or worthless nursing services provided to certain patients that failed to meet federal standards of care and federal statutory and regulatory requirements.

 

To resolve the federal and state civil claims, Andover has agreed to pay $395,508 to the United States and $492,492 to the State of New York. Andover will enter into a Corporate Integrity Agreement with the Office of Inspector General of the DHHS to enhance quality assurance, accountability and other aspects of its compliance operations.

 

Acting U.S. Attorney Fitzpatrick credited special agents from the DHHS, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert, with the investigation leading to the settlement.

 

The government is represented by Assistant U.S. Attorney Charles Graybow of the Health Care and Government Fraud Unit of the U.S. Attorney’s Office for the District of New Jersey and Trial Attorney Brett Elliott of the Department of Justice’s Civil Division. The government was assisted by Special Assistant Attorney General Sally G. Blinken of the Office of the Attorney General of the State of New York. The Office of Inspector General and the Office of the General Counsel for the Centers for Medicare and Medicaid Services of the DHHS also participated in the investigation and settlement.

 

The U.S. Attorney’s Office for the District of New Jersey reorganized its health care practice in 2010 and created a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since that time, the office has recovered more than $1.33 billion in health care and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act, and other statutes.

 

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

 

Defense counsel: Craig Goodstadt Esq., Andover, New Jersey

NEWARK, N.J. – A Newark man appeared in federal court today to face allegations that he possessed a firearm as a previously convicted felon, Acting U.S. Attorney William E. Fitzpatrick announced.

Richard D. Williams, 39, is charged by indictment with one count of being a felon in possession of a firearm. Williams was detained after his arraigned this afternoon before U.S. District Judge John Michael Vazquez in Newark federal court.

According to the documents filed in this case:

On Feb. 18, 2017, law enforcement officers spotted a white Infiniti car that fit the same description of a vehicle that had been reported stolen. The police attempted to conduct a motor vehicle stop of the Infiniti but it sped away at a very high rate of speed. The police pursued the Infiniti through Newark and into East Orange, New Jersey. Several other police cars and a Newark police department helicopter joined the pursuit.

The police chased the Infiniti until it was traveling east on South Orange Avenue near Bergen Street in East Orange. At that point, the Infiniti crossed into oncoming traffic and collided head-on into an unmarked Newark police SUV, causing both the Infiniti and the SUV to catch fire. The three Newark police officers inside the SUV were able to exit the vehicle safely.

Williams, the alleged driver of the Infiniti, got out of the car and attempted to flee but was caught by a Newark police officer. A N.J. State Trooper who assisted with the arrest searched Williams and allegedly recovered from his waistband a black Amadeo & Rossi special .38 revolver loaded with four rounds of .38 caliber SPL&P Winchester hollow-point ammunition. At the time, Williams had at least one prior felony conviction in federal court.

The felon in possession of a firearm charge carries a maximum potential penalty of 10 years in prison and a $250,000 fine.

Acting U.S. Attorney Fitzpatrick credited ATF special agents, under the direction of Acting Special Agent in Charge Marcus S. Watson in Newark, with the investigation. He also thanked the Newark Department of Public Safety, under the direction of Director Anthony F. Ambrose, and the N.J. State Police, under the direction of Col. Rick Fuentes, for their assistance in this case.

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

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

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

NEWARK, N.J. – Bernards Township, New Jersey, has agreed to settle a federal civil lawsuit to resolve allegations that the township violated federal law when it denied zoning approval to allow the Islamic Society of Basking Ridge (ISBR) to build a mosque on property where zoning permitted houses of worship, U.S. Attorney William E. Fitzpatrick and Acting Assistant Attorney General Tom Wheeler of the Justice Department's Civil Rights Division announced today.

The settlement agreement also resolves allegations that at the time the ISBR’s application was pending, the township revised its zoning code to unreasonably limit any house of worship from building in the township. The settlement resolves a lawsuit the Justice Department filed in November 2016. A separate settlement resolving a similar lawsuit brought by the Islamic Society against the township has also been reached.

 

“Federal law requires towns to treat religious land use applications like any other land use application,” Acting U.S. Attorney Fitzpatrick said. “Bernards Township made decisions that treated the Islamic Society of Basking Ridge differently than other houses of worship. The settlement announced today corrects those decisions and ensures that members of this religious community have the same ability to practice their faith as all other religions.”

“Federal law protects people of all religious communities from discrimination and unlawful obstacles when they seek to build a place of worship,” Acting Assistant Attorney General Wheeler said. “Through this agreement, the Islamic Society of Basking Ridge and its members will be able to build a mosque and exercise the fundamental American right of freedom of worship.”

 

The United States’ complaint alleged that Bernards Township violated the Religious Land Use and Institutionalized Persons Act of 2000 (RLUIPA) when it discriminated against the Islamic Society based on its religion and the religion of its members. The complaint alleged that the township denied the application to build a mosque, applying standards and procedures to the Islamic Society that it had not applied to other religious and non-religious assemblies in the past; it imposed a substantial burden on the Islamic Society’s religious exercise; and it amended its zoning ordinance in a manner that imposes unreasonable limitations on all religious assemblies.

 

As part of the settlement, Bernards Township has agreed to permit the Islamic Society to construct a mosque on its property. The township has also agreed that its leaders and other township employees will undergo training on the requirements of RLUIPA. It has also agreed to publicize its non-discrimination policies and periodically report to the Justice Department on its compliance with the settlement agreement. The township has also agreed to amend its zoning ordinance to limit the zoning restrictions placed on houses of worship. In a separate settlement agreement, the township agreed to pay the Islamic Society $3.25 million to resolve its claims for damages and attorney’s fees caused by the denial of the mosque application.

 

The government is represented by Assistant U.S. Attorney Michael E. Campion, Chief of the U.S. Attorney’s Office’s Civil Rights Unit, Civil Division; Assistant U.S. Attorney Kelly Horan Florio, Civil Rights Unit, Civil Division; and Trial Attorney Beth Pepper, U.S. Department of Justice, Civil Rights Division, Housing and Civil Enforcement Section.

 

RLUIPA prohibits discrimination in land use and zoning decisions. People who believe they have been subjected to discrimination in land use or zoning decisions may contact the U.S. Attorney’s Office Civil Rights Hotline at (855) 281-3339 or the Civil Rights Division Housing and Civil Enforcement Section at (800) 896-7743.

 

NEWARK, N.J. – A gang member who sold crack-cocaine for the New Jersey set of the Grape Street Crips was sentenced today to 112 months in prison, Acting U.S. Attorney William E. Fitzpatrick announced.

Ernest Valentine, a/k/a “Bop,” 32, previously pleaded guilty before U.S. District Judge Jose L. Linares to an information charging him with conspiracy to distribute 28 grams or more of crack-cocaine. Judge Linares imposed the sentence today in Newark federal court.

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

The New Jersey Grape Street Crips controlled drug trafficking and other criminal activities in various areas of Newark, including the neighborhood of 6th Avenue and North 5th Street. Valentine obtained crack-cocaine from more senior gang members and associates who used and shared a dedicated cell phone to accept orders for thousands of clips of crack-cocaine. These gang-members included Hakeem Vanderhall, a/k/a “Keem,” a/k/a “Sugar Bear,” Eric Concepcion, a/k/a “Eddie Arroyo,” a/k/a “E-Wax,” a/k/a “Wax,” and Rashan Washington, a/k/a “Shoota.”

To protect their gang and drug territory, the New Jersey Grape Street Crips operating in the 6th Avenue and North 5th Street location used “community guns” that were easily accessible to gang members. During the course of the investigation, law enforcement agents seized numerous firearms, including a .410 caliber assault rifle, a.45 caliber Thompson semi-automatic carbine, a 7.62 caliber assault rifle, and numerous semi-automatic handguns.

In addition to the prison term, Judge Linares sentenced Valentine to five 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, and special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher, with the investigation leading to today’s sentencing. He also thanked prosecutors and detectives of the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Carolyn A. Murray, police officers and detectives of the Department of Public Safety and Newark Police Division, under the direction of Director Anthony A. Ambrose, and the Essex County Sheriff’s Office, under the direction of Armando B. Fontoura, for their work on the investigation.

The government is represented by Assistant U.S. Attorneys Osmar J. Benvenuto and Barry A. Kamar of the OCDETF/Narcotics Unit of the Criminal Division in Newark.

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

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

NEWARK, N.J. – A Newark man today admitted robbing five banks in October and November 2016, Acting U.S. Attorney William E. Fitzpatrick announced.

Jermaine Mason, a/k/a “Asim Harris,” 39, pleaded guilty before U.S. District Judge William J. Martini in Newark federal court to an information charging him with five counts of bank robbery.

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

Bank

Location

Date

Kearny Bank

Harrison

Oct. 21, 2016

PNC Bank

Jersey City

Nov. 3, 2016

Popular Community Bank

Newark

Nov. 17, 2016

Provident Bank

Jersey City

Nov. 18, 2016

Provident Bank

Kearny

Nov. 29, 2016

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

The bank robbery charges each carry a maximum penalty of 20 years in prison and a $250,000 fine. Sentencing is scheduled for Aug. 29, 2017.

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

Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, with the investigation leading to today’s guilty plea. He also thanked the U.S. Marshals, the Kearny, Jersey City, Harrison, and Newark police departments, as well as the Hudson County and Essex County Prosecutor’s Offices for their efforts in the investigation and apprehension of Mason.

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

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

NEWARK, N.J. – A Bergen County, New Jersey, man today admitted participating in the December 2015 robbery of a North Jersey bar and the violent carjacking and kidnapping that took place shortly afterwards, Acting U.S. Attorney William E. Fitzpatrick announced.

Wilbur Jonathon Barahona, 21, of Ridgewood, New Jersey, pleaded guilty before U.S. District Judge Jose L. Linares in Newark federal court to a three-count information charging him with conspiracy to commit Hobbs Act Robbery, carjacking, and kidnapping.

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

Barahona admitted that on Dec. 25, 2016, he and others forcibly robbed a bar in Hawthorne, New Jersey, and subsequently fled with approximately $200 in cash.

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

The kidnapping charge carries a maximum potential penalty of life imprisonment. The carjacking charge carries a maximum potential penalty of 25 years in prison. The conspiracy charge carries a maximum potential penalty of up to 20 years in prison. Sentencing is scheduled for Aug. 16, 2017.

Balmore Carrillo-Iraheta, 19, of Suffern, New York, who previously was indicted for his role in the Hobbs Act Robbery of the Hawthorne bar, pleaded guilty before Judge Linares in Newark federal court on May 15, 2017, to one count of conspiracy to commit Hobbs Act Robbery. All six men originally charged by complaint for their respective roles in the Hobbs Act Robbery, carjacking, and kidnapping have pleaded guilty and await sentencing.

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

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

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

NEWARK, N.J. – A Queens, New York, man was sentenced today to 50 months in prison for his role in a scheme to distribute controlled substance analogues, which are designer drugs that have chemical structures and hallucinogenic effects similar to Schedule I controlled substances, Acting U.S. Attorney William E. Fitzpatrick announced.     

Elmostafa Charif, 37, previously pleaded guilty before U.S. District Judge Kevin McNulty to an indictment charging him with one count of conspiracy to distribute, and one count of possessing with intent to distribute, the controlled substance analogues NM2201 and 5F-AMB. NM2201 and 5F-AMB are most closely related to synthetic Tetrahydrocannabinol, or THC.

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

Since February 2011, the Drug Enforcement Administration (DEA) has been investigating the importation, distribution, and use of designer drugs popularly known as synthetic cannabinoids. “K2” and “Spice” are common examples of synthetic cannabinoids.

Synthetic cannaboids are created when damiana leaves – an inert, plant-like substance – are sprayed with controlled substance analogues and treated with synthetic flavoring. The flavored and treated damiana leaves are then smoked by users.

Charif admitted that on April 13, 2015, he conspired with others to purchase and distribute approximately 10 kilograms of synthetic cannabinoids, including approximately five kilograms of NM2201 and approximately five kilograms of 5F-AMB. Charif also admitted that he purchased liquid flavoring and damiana leaves with the controlled substance analogues, knowing that they would be used to create a product that was smoked or otherwise consumed by users.

NM2201 and 5F-AMB are each controlled substance analogues as defined under the Analogue Act due to the fact that both NM2201 and 5F-AMB have chemical structures and hallucinogenic properties similar to the Schedule I controlled substances 5F-PB-22 and ADB-PINACA, respectively.

In addition to the prison term, Judge McNulty sentenced Charif to two years of supervised release.     

Acting U.S. Attorney Fitzpatrick credited special agents of the DEA, under the direction of Special Agent in Charge Carl J. Kotowski, with the investigation leading to today’s sentencing. 

The government is represented by Assistant U.S. Attorney Melissa Wangenheim of the Organized Crime Drug Enforcement Task Force Unit in Newark.

NEWARK, N.J. – A Ukrainian hacker was sentenced today to 30 months in prison for his role in an international scheme to hack into three business newswires, steal yet-to-be published press releases containing non-public financial information, and use that information to make trades that generated approximately $30 million in illegal profits, Acting U.S. Attorney William E. Fitzpatrick announced.
 
Vadym Iermolovych, 29, of Kiev, Ukraine, previously pleaded guilty before U.S. District Judge Madeline Cox Arleo to a three-count information charging him with conspiracy to commit wire fraud, conspiracy to commit computer hacking, and aggravated identity theft. Judge Arleo imposed the sentence today in Newark federal court.

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

Iermolovych admitted that he was personally involved in the hacks into Marketwired L.P. (Marketwired), PR Newswire Association LLC (PRN), and Business Wire (collectively, the “Victim Newswires”). He admitted to hacking into PRN’s network between January 2013 and March 2013. He also admitted that he obtained a set of user credentials of PRN employees stolen from a computer hack into a social networking website and then used at least one of those credentials to ultimately gain access into PRN’s computer network. Iermolovych also admitted that he sold press releases stolen from the network intrusion into Marketwired, and purchased access into Business Wire’s network, all in furtherance of a larger conspiracy to profit from the stolen draft press releases.

Five other members of the conspiracy – two computer hackers and three securities traders – were charged by federal indictment brought by the District of New Jersey (DNJ). The related 23-count DNJ indictment charged Ivan Turchynov, 29, Oleksandr Ieremenko, 25, and Pavel Dubovoy, 34, all of Ukraine, as well as Arkadiy Dubovoy, 52, and Igor Dubovoy, 30, both of Alpharetta, Georgia. Arkadiy Dubovoy and Igor Dubovoy both pleaded guilty to the wire fraud conspiracy charged in Count One of the DNJ indictment on Feb. 18, 2016 and Jan. 20, 2016, respectively.

The Eastern District of New York (EDNY), in a related indictment, charged four securities traders: Vitaly Korchevsky, 51, of Glen Mills, Pennsylvania, Vladislav Khalupsky, 46, of Brooklyn, New York, and Odessa, Ukraine, Leonid Momotok, 48, of Suwanee, Georgia, and Alexander Garkusha, 49, of Cummings and Alpharetta, Georgia. Garkusha pleaded guilty to the wire fraud conspiracy charged in Count One of the EDNY indictment on Dec. 21, 2015. Momotok pleaded guilty to the same charge on Aug. 2, 2016. 

As alleged in the indictments, between February 2010 and August 2015, computer hackers based in Ukraine gained unauthorized access into the computer networks of the Victim Newswires. They used a series of targeted cyber-attacks, including “phishing” attacks and SQL injection attacks, to gain access to the computer networks. The hackers moved through the computer networks and stole press releases about upcoming announcements by public companies concerning earnings, gross margins, revenues, and other confidential and material information.

The hackers shared the stolen releases with the traders using overseas computer servers that they controlled. In a series of emails, the hackers even shared “instructions” on how to access and use the overseas server where they shared the stolen releases with the traders, and the access credentials and instructions were distributed amongst the traders.  The traders created “shopping lists” or “wish lists” for the hackers listing desired upcoming press releases for publicly traded companies from Marketwired and PRN.

The traders generally traded ahead of the public distribution of the stolen releases, and their trading activities shadowed the hackers’ capabilities to exfiltrate stolen press releases. In order to execute their trades before the releases were made public, the traders sometimes had to execute trades in extremely short windows of time between when the hackers illegally accessed and shared the releases and when the press releases were disseminated to the public by the newswires, usually shortly after the close of the markets.  Frequently, all of this activity occurred on the same day.  Thus, the trading data often showed a flurry of trading activity around a stolen press release just prior to its public release.

The traders traded on stolen press releases containing material nonpublic information about hundreds of companies, including Align Technology Inc., Caterpillar Inc., Hewlett Packard, Home Depot, Panera Bread Co., and Verisign Inc.

The traders paid the hackers for access to the overseas servers based, in part, on a percentage of the money the traders made from their illegal trading activities. The hackers and traders used foreign shell companies to share in the illegal trading profits.

In addition to the prison term, Judge Arleo sentenced Iermolovych to three years of supervised release and ordered him to pay restitution of $3,004,685.06.

Acting U.S. Attorney Fitzpatrick credited special agents of the U.S. Secret Service, Criminal Investigations Division, under the direction of Director Randolph D. Alles, and special agents from the U.S. Secret Service Newark Field Office, under the direction of Special Agent in Charge Mark McKevitt, with the investigation. He also thanked the U.S. Securities and Exchange Commission, for its significant cooperation and assistance in the investigation and the newswires, which cooperated with law enforcement over the course of the investigation.

The government is represented by Assistant U.S. Attorneys Daniel Shapiro, Justin Herring, and Svetlana Eisenberg of the Economic Crimes Unit, Computer Hacking & Intellectual Property Section, David M. Eskew, Chief of the General Crimes Unit, Trial Attorney Andrew S. Pak, of the Department of Justice’s Criminal Division Computer Crime and Intellectual Property Section, and Assistant U.S. Attorney Sarah Devlin of the Asset Forfeiture and Money Laundering Unit.

Defense counsel: Donna Newman Esq., New York

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

Shaheed Blamahsah, a/k/a “Aboo,” 29, pleaded guilty before U.S. District Judge Madeline Cox Arleo in Newark federal court to a two-count information charging him with one count of conspiracy to commit Hobbs Act robbery and one count of brandishing a firearm during a crime of violence.

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

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

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. 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. Blamahsah’s sentencing is scheduled for Sept. 11, 2017.

Blamahsah was originally charged with Jimmy Cooper, a/k/a “Flip,” 32, of Irvington, New Jersey, and Keontrae Lawrence, a/k/a “Taz,” 28, of South Orange, New Jersey, in November 2016. Cooper and Lawrence were indicted by a federal grand jury on March 24, 2017 for their alleged roles in the robbery of the Passaic club. The charges against Cooper and Lawrence are merely allegations, and they are 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 Division of Public Safety for their assistance.

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

Defense counsel: Kevin Buchan Esq., Holmdel

 

NEWARK, N.J. – Two Essex County, New Jersey, men were arrested this morning and charged in connection with a scheme that allegedly caused losses of approximately $500,000 by deceiving victim banks into crediting certain customer accounts that could be fraudulently accessed by members of the conspiracy, Acting U.S. Attorney William E. Fitzpatrick announced.

 

Yaseen Salih, 19, of East Orange, New Jersey, and Chad Brown, 21, of Orange, New Jersey, are charged by complaint with one count of conspiracy to commit bank fraud. They appeared today before U.S. Magistrate Judge Mark Falk in Newark federal court. Salih was released on $200,000 bond. Brown was detained.

 

According to the complaint:

 

From September 2015 through the present, Salih, Brown, and others conspired to fraudulently obtain money from two victim banks.

 

First, Salih, Brown and others obtained information pertaining to actual bank accounts belonging to customers of the two victim banks, including the customers’ bank account numbers and their personal identification numbers. In some instances, the conspirators obtained debit cards associated with the accounts or Salih and Brown personally requested access from the account owners.

 

Afterwards, a member of the conspiracy called a teller at the victim bank. After deceiving the teller into believing that the caller was an employee of the victim bank, the caller convinced the teller to credit funds into the above customer accounts.

 

Once the funds were credited into the customer accounts, members of the conspiracy used debit cards associated with the accounts to obtain the fraudulently credited funds, either by withdrawing the funds directly from ATM machines at branch locations of the victim banks, or by purchasing postal money orders.

 

To date, the losses associated with the conspiracy exceed approximately $500,000.

 

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

 

Acting U.S. Attorney Fitzpatrick credited postal inspectors from the U.S. Postal Inspection Service, under the direction of Inspector in Charge James V. Buthorn, with the investigation leading to the charges.

 

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

 

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

 

Defense counsel:

 

Salih: Hassen Ibn Abdellah Esq.

Brown: Perry Primavera Esq.

 

 

NEWARK, N.J. – The owners and operators of a purported hedge fund were indicted by a federal grand jury yesterday for allegedly defrauding approximately 20 investors by making extraordinary guarantees about investment returns and then using the money for extravagant purchases or to pay off other victims, Acting U.S. Attorney William E. Fitzpatrick announced. 

Alcibiades Cifuentes, 34, and his wife, Jennifer Wee Cifuentes, 36, both of West New York, New Jersey, are charged with four counts of wire fraud, one count of conspiring to commit wire fraud, and one count of stealing funds intended for investment in commodities. The arraignment is pending.

According to the indictment:

Alicbiades and Jennifer Wee Cifuentes allegedly engaged in an investment fraud scheme from 2012 through March 2015. They fraudulently induced victims to invest in the foreign currency and commodity markets through Cifuentes Fund Management (CFM), their hedge fund that purportedly invested in foreign currencies, and then almost immediately spent those investment funds on personal items, such as an Audi R8 and jewelry. The couple would then pay back a portion of the victims’ money with money received from newly duped victims. They allegedly defrauded approximately 20 victims of approximately $500,000. 

Each count of wire fraud and wire fraud conspiracy carries a maximum potential penalty of 20 years in prison and $250,000 fine, or twice the gross gain or loss from the offense. The count of commodities theft carries a maximum potential penalty of 10 years in prison and a $1 million fine, or twice the gross gain or loss from the offense.

Acting U.S. Attorney Fitzpatrick credited inspectors of the U.S. Postal Inspection Services under the direction of Inspector in Charge James V. Buthorn, and criminal investigators with the U.S. Attorney’s Office, for the investigation. He also thanked the N.J. Bureau of Securities in the State Attorney General’s Division of Consumer Affairs, under the direction of Attorney General Christopher Porrino and Bureau Chief Christopher W. Gerold, as well as the U.S. Commodity Futures Trading Commission’s Division of Enforcement, under the direction of Director James M. McDonald, for their respective roles in the investigation.

The government is represented by Assistant U.S. Attorney David W. Feder of the U.S. Attorney’s Office’s Economic Crimes Unit.  

Defense counsel:

Alcibiades Cifuentes: Joseph Rotella Esq.
Jennifer Wee Cifuentes: Aidan O'Connor Esq. 

NEWARK, N.J. – A Passaic County, New Jersey, man today admitted robbing a TD Bank in Hawthorne, New Jersey, in February 2016, Acting U.S. Attorney William E. Fitzpatrick announced.

Robert Somers, 45, of Little Falls, New Jersey, pleaded guilty before U.S. District Judge Susan D. Wigenton in Newark federal court to an information charging him with one count of bank robbery.

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

On Feb.17, 2016, Somers robbed the TD Bank in Hawthorne, New Jersey, 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 fled the bank in a car driven by another individual.

The bank robbery charge carries a maximum penalty of 20 years in prison and a $250,000 fine or twice the gain to the defendant or loss to any victims. Sentencing is scheduled for Sept. 5, 2017.

Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; 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 leading to the charges.

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.

Defense counsel: Gary Cutler Esq., Newark

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

Ricky J. Sayegh, 44, of Scarsdale, New York, pleaded guilty before U.S. District Judge Stanley R. Chesler in Newark federal court to an information charging him with accepting cash bribes in violation of the Federal Travel Act.

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

Sayegh admitted accepting cash bribes in return for referring blood specimens to BLS. From February 2010 through April 2013, Sayegh received bribes totaling approximately $400,000 from BLS employees and associates. Sayegh’s referrals generated more than $1.4 million in lab business for BLS.

The investigation has thus far resulted in 45 convictions – 31 of them doctors – in connection with the bribery scheme, which its organizers have admitted involved millions of dollars in bribes and resulted in more than $100 million in payments to BLS from Medicare and various private insurance companies. It is believed to be the largest number of medical professionals ever prosecuted in a bribery case.

The investigation has to date recovered more than $12 million through forfeiture. On June 28, 2016, BLS, which is no longer operational, pleaded guilty and was required to forfeit all of its assets.

The charge to which Sayegh pleaded guilty is punishable by a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sayegh’s sentencing is scheduled for Sept. 6, 2017.

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

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

The New Jersey U.S. Attorney’s Office reorganized its health care fraud practice in 2010 and created a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since that time, the office has recovered more than $1.32 billion in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.

Defense counsel: Michael Bachner Esq., New York

NEWARK, N.J. – A Monmouth County, New Jersey, woman today admitted her role in a scheme to defraud a bank and bank regulators, Acting U.S. Attorney William E. Fitzpatrick announced.

Donna Conroy, 57, of Middletown, New Jersey, pleaded guilty before U.S. District Judge Kevin McNulty in Newark federal court to an information charging her with one count of conspiring to make false entries to deceive a bank and bank regulators, and to influence those regulators, and one count of making false entries.

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

 

The three-phase scheme took place from 2009 to 2010. The first phase was to fraudulently infuse $7 million of capital into FSB. In the second phase of the scheme, various conspirators caused FSB to make millions of dollars in loans based on material misrepresentations in order to cover up the fraudulent nature of the capital infusion and end inquiries from FSB’s auditors. The final phase involved lying to the FDIC and FSB, among others, about the fraudulent capital infusion and loans.

 

The conspiracy count to which Conroy pleaded guilty carries a maximum potential penalty of five years in prison and a fine of $250,000, or twice the gross pecuniary gain derived from the offense or twice the gross loss sustained by any victim. The count of making false entries carries a maximum potential penalty of 30 years in prison and a fine of $1 million or twice the gross pecuniary gain derived from the offense or twice the gross loss sustained by any victim. Sentencing is scheduled for Aug. 24, 2017.

 

Acting U.S. Attorney Fitzpatrick credited special agents of the FDIC, Office of Inspector General, under the direction of Special Agent in Charge Patti Tarasca, New York Region; the FBI, under the direction of Special Agent in Charge Timothy Gallagher, Newark; and the Office of the Special Inspector General for Trouble Asset Relief Program, under the direction of Special Inspector General Christy Goldsmith Romero, with the investigation leading to today’s guilty plea.

The government is represented by Senior Litigation Counsel Andrew Leven of the U.S. Attorney=s Office Economic Crimes Unit in Newark.

TRENTON, N.J. – An Elizabeth, New Jersey, man today admitted possessing a shotgun, a rifle, and two handguns despite being a previously convicted felon, Acting U.S. Attorney William E. Fitzpatrick announced.

Daniel Bigelow, 28, pleaded guilty before U.S. District Judge Anne E. Thompson in Trenton federal court to an information charging him with three counts of being a felon in possession of a firearm.

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

Bigelow admitted that despite having prior felony convictions in Union County Superior Court and New York State Supreme Court, he knowingly possessed firearms on three separate occasions. Bigelow admitted that he possessed a Savage Arms Stevens Model 320 12-gauge shotgun on Dec. 29, 2015 and a Hi-Point Model C9 9mm pistol on March 31, 2016. Bigelow also admitted to having a Hi-Point Model 995 9mm rifle and a Smith and Wesson Model 686 .357 revolver in his possession on April 12, 2016.

The felon in possession of a firearm charge carries a maximum potential penalty of 10 years in prison and a $250,000 fine. Sentencing is scheduled for Sept. 21, 2017.

Acting U.S. Attorney Fitzpatrick credited ATF special agents, under the direction Acting Special Agent in Charge Marcus S. Watson in Newark, with the investigation. He also thanked the Elizabeth Police Department for its assistance.

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

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

NEWARK, N.J. – The U.S. Attorney’s Office of the District of New Jersey, the U.S. Department of Justice and 28 states have reached an $8 million settlement with Omnicare Inc. resolving allegations arising from a whistle-blower suit filed under the False Claims Act. The agreement was announced today by Acting U.S. Attorney William E. Fitzpatrick.

The settlement follows an investigation by the U.S. Attorney’s Office of the District of New Jersey and the Commercial Litigation Branch of the Justice Department’s Civil Division. The United States alleged that Omnicare, in an effort to increase business efficiency and profit, designed and implemented an automated label verification system at certain locations that utilized a less specific drug code – known as “MEDID” – during its automated Stage II pharmacist verification process, instead of the more specific National Drug Code (NDC).

This system resulted in the submission by Omnicare of claims for generic drugs different from those actually dispensed to Medicare and Medicaid beneficiaries. It also resulted in the dispensing of drugs with patient-specific labels displaying the incorrect manufacturer or NDC.  The government alleged that the false manufacturer and NDC information on the labels, and within Omnicare’s electronic dispensing information, affected Omnicare’s ability to properly track and, if necessary, conduct patient-level recalls of such drugs.

“Ensuring accuracy in the dispensing of and billing for medication in the Medicare Part D and Medicaid Programs, especially to long-term care patients, is vital to public safety,” Acting U.S. Attorney Fitzpatrick said. 

The relators, or whistler-blowers, in the underlying qui tam will receive more than $2 million as their statutory share of the recovery and to resolve their employment based claims in accordance with the False Claims Act. The civil lawsuit was filed in the District of New Jersey and is captioned U.S. et al. ex rel. Elizabeth Corsi and Christopher Ezzie v. Omnicare Inc.

Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, and special agents from the Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert, for the investigation leading to the settlement.  

The government is represented by the U.S. Attorney’s Office District of New Jersey, Deputy Chief, Civil Division, David Dauenheimer and Assistant U.S. Attorney Bernard Cooney of the Office’s Health Care and Government Fraud Unit, and the Department of Justice’s Civil Division, Senior Litigation Counsel Laurie A. Oberembt. The Office of Inspector General and the Office of the General Counsel for the Centers for Medicare and Medicaid Services of the Department of Health and Human Services also participated in the investigation and settlement.   

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 $1.33 billion in health care and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act, and other statutes.

For more information about the U.S. Attorney’s Office for the District of New Jersey, visit its website at http://www.justice.gov/usao-nj.

Counsel for relators: Charles C. Goetsch Esq., New Haven, Connecticut.
Counsel for defendant: Michael Martinez Esq., New York

NEWARK, N.J. – An Irvington, New Jersey, man appeared in federal court today to face allegations that he possessed a firearm as a previously convicted felon, Acting U.S. Attorney William E. Fitzpatrick announced.

Tyshone T. Overstreet, a/k/a “Tata,” 21, is charged by complaint with one count of being a felon in possession of a firearm. Overstreet was arrested in the evening May 12, 2017. He made his initial appearance this afternoon before U.S. Magistrate Judge Mark Falk in Newark federal court and was detained.

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

On March 3, 2017, law enforcement officers attempted to conduct a motor vehicle stop of a car in which Overstreet was a passenger. Before the car came to a complete stop, Overstreet jumped out of the vehicle and fled on foot. As Overstreet ran away from law enforcement, he threw an object that was later recovered and determined to be a .40 caliber Glock Model 22 handgun. Law enforcement also recovered an extended caliber magazine and 17 rounds of live .40 caliber ammunition. At the time, Overstreet had at least one prior felony conviction in Essex County Superior Court.

The felon in possession of a firearm charge carries a maximum potential penalty of 10 years in prison and a $250,000 fine.

Acting U.S. Attorney Fitzpatrick credited FBI special agents, under the direction Special Agent in Charge Timothy Gallagher, with the investigation. He also thanked the Newark Department of Public Safety, under the direction of Director Anthony F. Ambrose and the Irvington Police Department, under the direction of Director Tracy Bowers, for their assistance.

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

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

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

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

 

Felix Restitullo, 41, Jersey City, New Jersey, was convicted 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 in Newark federal court. The jury deliberated less than three hours before returning the guilty verdicts.

 

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 who is a member of Restitullo’s family. 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.

 

The charge of production of child pornography carries a maximum potential penalty of 30 years in prison, a mandatory minimum penalty of 15 years in prison and a $250,000 fine. Because of Restitullo’s prior conviction for possession of child pornography, he is subject to an increased mandatory minimum sentence of 25 years and a maximum prison term of 50 years. With a qualifying prior conviction, the charge of possession of child pornography carries a mandatory minimum sentence of 10 years, a maximum potential penalty of 20 years in prison, and a $250,000 fine. Sentencing is scheduled for June 20, 2017.

 

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 Special Agent in Charge Brian A. Michael, Newark Field office, and the Hudson County Prosecutor’s Office, under the direction of Prosecutor Esther Suarez, with the investigation leading to today’s guilty verdict.

 

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

 

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

NEWARK, N.J. – An Essex County, New Jersey, man was convicted today of robbing the same Capital One Bank in Newark twice, including once in an armed robbery, Acting U.S. Attorney William E. Fitzpatrick announced.

Gregory A. Jones, 60, of Newark, was convicted of one count of bank robbery, one count of armed bank robbery and one count of using a firearm during a crime of violence. Jones was convicted following a one-week trial before U.S. District Judge Kevin McNulty in Newark federal court. The jury deliberated less than six hours before returning the guilty verdicts.

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

On May 6, 2014, Jones entered the Capital One Bank wearing dark glasses and a scarf around his head and presented the teller a note demanding cash. After Jones left the bank with stolen money a hidden dye pack burst, and he left his glasses, scarf, and hat at the scene of the crime. Law enforcement recovered the glasses, hat and scarf near the bank next to currency, saturated with ink from the dye pack. DNA recovered from the glasses, hat and scarf matched a DNA sample that was lawfully obtained from Jones.

On Sept. 19, 2014, Jones entered the bank again, brandished a firearm from underneath his sweatshirt, and told a teller to give him money, stating that he had a gun and would shoot. Jones fired the weapon into the ceiling and left with several thousands of dollars. He was later identified using surveillance video and witness statements.

The bank robbery count carries a maximum potential penalty of up to 20 years in prison and a fine of up to $250,000 or twice the gross pecuniary gain or loss. The armed bank robbery count carries a maximum potential penalty of up to 25 years in prison and a fine of up to $250,000 or twice the gross pecuniary gain or loss. The discharging a firearm during the bank robbery count carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison, which must be served consecutive to the other counts. Sentencing will be scheduled at a later date.

Acting U.S. Attorney Fitzpatrick credited special agents with the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; N.J. State Police, under the direction of Col. Rick Fuentes; the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Carolyn A. Murray; and the Newark Division of Public Safety, under the direction of Public Safety Director Anthony Ambrose, with the investigation leading to the guilty verdict.

The government is represented by Assistant U.S. Attorneys Svetlana M. Eisenberg and Daniel Shapiro of the U.S. Attorney’s Office Criminal Division in Newark.

NEWARK, N.J. – A Bayonne, New Jersey, police officer was charged today with falsifying records to conceal the use of excessive force during an arrest, Acting U.S. Attorney William E. Fitzpatrick announced.

Francis Styles, 36, of Bayonne, is charged by indictment with one count of falsifying records in a federal investigation and one count of misprision of a felony for his role in attempting to conceal actions taken by former Bayonne police officer Domenico Lillo during an arrest in which Styles, Lillo and others participated. Styles’ arraignment is pending.

According to the indictment:

In the late afternoon of Dec. 27, 2013, Styles, Lillo and another Bayonne police officer went to an address in Bayonne to execute a Sussex County arrest warrant. After the individual was handcuffed and no longer physically resisting arrest, Lillo struck the individual with a flashlight, which resulted in bodily injury requiring hospital treatment.

However, the incident report filed by Styles omitted that Lillo struck the individual in the face with the flashlight, falsely asserted that the individual continued to violently struggle as he was being led to the patrol vehicle, and falsely asserted that the individual sustained injuries as a result of hitting the wall and the ground.

The charge of falsifying records carries a maximum potential penalty of 20 years in prison. The charge of misprision of felony carries a potential penalty of three years in prison.

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

Lillo previously pleaded guilty to deprivation of civil rights under color of law, falsifying records to impede a civil rights investigation, and assisting in the filing of a false report to the U.S. Department of Housing and Urban Development. He awaits sentencing.

Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, and special agents of the U.S. Department of Housing and Urban Development, Office of the Inspector General, under the direction of Special Agent in Charge Christina Scaringi, with the investigation. He also thanked the Hudson County Prosecutor’s Office and the Bayonne Police Department for their assistance.

The government is represented by Assistant U.S. Attorney Jacques S. Pierre of the Special Prosecutions Division and Assistant U.S. Attorney Bruce P. Keller of the Appeals Division.

 

Defense counsel: John D. Arseneault Esq. Chatham, New Jersey

CAMDEN, N.J. - A Williamstown, New Jersey, man was sentenced today to 12 months in prison for hiring illegal immigrants to work in his dry cleaning business and failing to collect and pay over payroll taxes on behalf of those employees, Acting U.S. Attorney William E. Fitzpatrick announced.

Bill Li, 50, previously pleaded guilty before U.S. District Judge Robert B. Kugler to an information charging him with one count of failure to collect, account for, and pay over payroll taxes and one count of harboring illegal aliens. Judge Kugler imposed the sentence today in Camden federal court.

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

Li owned Minuteman Cleaners located on North Black Horse Pike in Williamstown. At the time, Li and Kathy Lei, 36, also of Williamstown, owned a house on South Main Street in Williamstown. Lei and Phillip Hui, 39, of Washington Township, New Jersey, own New Eastern Cleaners in Voorhees Township, New Jersey.

Li was responsible for hiring employees, handling the books and supervising and paying the employees at Minuteman Cleaners. At various times in 2012 and 2013, Li, Lei and Hui hired individuals – generally from Mexico or Guatemala – that were in the United States illegally. The illegal immigrant employees were required to work six days a week, approximately 10 hours a day and paid between $400 and $500 dollars per week. Li paid their wages in cash.

While working at Minuteman Cleaners, Li allowed the illegal immigrant employees to stay at the South Main Street house. Li admitted that the rent was part of their employment compensation. Li or others working for Li would transport the illegal immigrant employees between the South Main Street house and Minuteman Cleaners.

Li admitted that prior 2012, he was aware that he was required to verify that all his employees were eligible to work in the United States. Li also admitted that between Jan. 1, 2012 and Oct. 29, 2013, he knowingly hired individuals that were in the United States illegally and did not report their wages to IRS for his own financial gain.

Li further admitted that as the owner or someone with authority over the employer financial affairs, he was responsible for collecting, accounting for and paying over to the IRS the employment taxes for his businesses’ employees. For tax quarters in 2012 and 2013, Li failed to report the wages and pay over employment taxes for at least eight illegal immigrant employees of Minuteman Cleaners. By filing the false quarterly payroll tax forms, Li failed to pay over to the IRS employment taxes of at least $79,000.

In addition to the prison term, Judge Kugler sentenced Li to three years of supervised release and ordered him to pay restitution of $79,000.

Hui and Lui previously pleaded guilty to one count of conspiracy to obstruct and impede the IRS relating to the failure to collect, account for and pay payroll taxes and one count of harboring illegal aliens. Hui was sentenced Sept. 8, 2016 to 15 months in prison. Lei was sentenced on Feb. 17, 2017 to three years of probation.

Acting U.S. Attorney Fitzpatrick credited Immigration and Customs Enforcement, Homeland Security Investigations (ICE-HSI), under the direction of Acting Special Agent in Charge Brian A. Michael, 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 guilty plea. He also thanked ICE’s Enforcement and Removal Operations (ERO), under Newark Field Office Director John Tsoukaris, for its assistance in this investigation.

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

Defense counsel: Robert Agre, Esq., Haddonfield, New Jersey

CAMDEN, N.J. – The executive director of a nonprofit provider of mental health services to Camden’s poorest residents and a former therapist who worked at the facility have admitted their respective roles in defrauding New Jersey Medicaid, Acting U.S. Attorney William E. Fitzpatrick announced today.

On May 11, 2017, Cesar Tavera, 53, of Cherry Hill, the executive director of Nueva Vida Behavioral Health Center of New Jersey, a nonprofit provider of mental health services to the Camden Hispanic community, pleaded guilty before U.S. District Judge Noel L. Hillman in Camden federal court to an information charging him with conspiracy to commit health care fraud and with embezzling from a health care benefit program. Andres Ayala, 62, of Cherry Hill, New Jersey, pleaded guilty today before Judge Hillman to an information charging him with conspiracy to commit health care fraud.

 

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

 

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

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

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

Ayala worked for many years as a therapist at Nueva Vida Behavioral Health Center of New Jersey, a nonprofit provider of mental health services to the Camden Hispanic community. Ayala conspired with Tavera to submit false billings to New Jersey Medicaid. If patients did not show up for their appointments, Ayala would have Nueva Vida bill Medicaid, and he was paid for the phantom session. If a mother came for therapy, Ayala would bill for a therapy session with the child. If he saw a Medicaid patient for 10 to 15 minutes, he would bill Medicaid for 45 minutes of therapy. Ayala was responsible for $200,000 in losses to Medicaid.

The counts of health care fraud and embezzlement each carry a maximum penalty of 10 years in prison and a fine of the greater of $250,000 or twice the gain or loss caused by the offense. Sentencing for both defendants is scheduled for Aug. 18, 2017.

 

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

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

The U.S. Attorney’s Office reorganized its health care practice in 2010 and created a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since that time, the office has recovered more than $1.33 billion in health care and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act, and other statutes.

Defense counsel:

Tavera: Michael Miller Esq., Haddon Heights, New Jersey

Ayala: Hope C. Lefeber Esq., Philadelphia

Scheme Targeted Hundreds of Investors in More Than 30 Countries, Including United States

NEWARK, N.J. – A Thai man today admitted to orchestrating a scheme to defraud hundreds of investors worldwide of approximately $1.4 million through his operation of Nonko Trading, a purported online day trading firm, Acting U.S. Attorney William E. Fitzpatrick announced. Also, a federal grand jury has indicted two conspirators in connection with the scheme.
 
Naris Chamroonrat, 33, of Bangkok, Thailand, pleaded guilty today before U.S. District Judge Jose L. Linares in Newark federal court to an information charging him with one count of conspiracy to commit securities fraud. On May 10, 2017, a federal grand jury returned an indictment against Yaniv Avnon, 36, of Tel Aviv, Israel, and Ran Armon, 45, of Toronto, Canada, who are each charged with one count of conspiracy to commit securities fraud and one count of wire fraud.     

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

Between December 2013 and June 2015, Chamroonrat, Avnon, Armon and their conspirators solicited individual investors to open day trading accounts with Nonko and to wire thousands of dollars to Nonko to fund those accounts. Instead, the conspirators allegedly stole the victims’ money. To cover up the theft, they provided the victims with online trading simulator, or “demo,” accounts, and told the investors that they were real accounts to be used for trading securities. They allegedly misappropriated at least $1.4 million from more than 260 investors from 30 countries, including at least 180 investors from the United States, several of whom are in New Jersey.

The conspirators selected as victims only those customers who they believed would not be profitable day-traders and would be less likely to seek to withdraw funds from their accounts. They limited the scheme to inexperienced, unsophisticated “losing” traders because those customers would simply believe they lost their money trading in the open markets. If traders on the demo accounts started to appear profitable, Nonko would switch them to real accounts. 

The conspirators discussed the scheme in detail in email and online chat communications.  In one online chat communication between Chamroonrat and Avnon on Feb. 2, 2014, Avnon referred to the profits that the scheme had generated the prior month, noting, “It was a huge month, huge month means that a lot of traders got burned .... New blood, all the time, that’s what we need[.]”  Although Nonko paid back a small percentage of customers,  the majority of misappropriated funds were transferred to foreign bank accounts controlled by Chamroonrat and used for personal expenses or other unauthorized transactions, including transferring proceeds of the scheme to Avnon and Armon.   

The conspiracy count in the information and indictment carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gain or loss from the offense.  The wire fraud count in the indictment carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gain or loss from the offense. Sentencing for Chamroonrat is scheduled for Sept. 20, 2017.

In a separate civil action, the Securities and Exchange Commission today filed an amended complaint in Newark federal court charging Avnon and Armon with, among other things, violating and aiding and abetting violations of the antifraud provisions of the securities laws. The amended complaint seeks a permanent injunction as well as the return of ill-gotten gains plus interest and penalties. Before amending the complaint, the SEC had asserted similar claims against Chamroonrat.

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 and yesterday’s indictment. He also thanked the SEC for its valuable assistance in the investigation.

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

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

Defense counsel:  Chamroonrat: Edward E. Alon Esq., Woodland Hills, California

PHILADELPHIA – An associate of Philadelphia District Attorney Rufus Seth Williams today admitted providing bribes to Williams and making and subscribing a false federal tax return, Acting U.S. Attorney William E. Fitzpatrick announced.

Mohammad N. Ali, 40, of Feasterville, Pennsylvania, pleaded guilty before U.S. District Judge Paul S. Diamond to an information charging him with one count of using facilities in interstate and foreign commerce to promote bribery in violation of Pennsylvania law and one count of federal tax evasion.

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

From July 2010 through May 2015, Ali provided a stream of bribes to Williams – which Williams concealed from timely public disclosure – in exchange for Williams performing and agreeing to perform official acts for Ali and to violate Williams’ legal duties as specific opportunities arose.

For example, Ali provided Williams with an all-inclusive vacation to Punta Cana, Dominican Republic, worth $6,381, a custom sofa worth $3,212, a $502 dinner at a Philadelphia restaurant, a $7,000 check, approximately $2,000 in cash, a Louis Vuitton tie worth $205, an iPad worth approximately $300, a Burberry watch, and a Burberry purse for Williams’ girlfriend.

In exchange, Williams agreed to help Ali with security screenings when Ali returned from foreign travel. For example, on March 15, 2013, Ali met with Williams and a police official and Williams asked the police official to help Ali avoid secondary screening at the airport. That same day, Ali gave Williams a $7,000 check. Williams also repeatedly offered to write an official letter, under his authority as the District Attorney, on Ali’s behalf to pressure and advise another public official to assist Ali with the border encounters.

Ali also sought Williams’ assistance with criminal charges brought by the Philadelphia District Attorney’s Office against Ali’s associate, an individual identified in the information as “Person #1.”

Ali also admitted making and subscribing a false personal federal income tax return, which failed to report taxable income of approximately $246,504.

The bribery count is punishable by a maximum potential penalty of five years in prison. The false tax return count is punishable by a maximum potential penalty of three years in prison. Each count carries a potential fine of $250,000 or twice the gross gain or loss from the offense. Sentencing is scheduled for Aug. 24, 2017.

Williams is charged in a related superseding indictment. The charges and allegations against him are merely accusations, and he is considered innocent unless and until proven guilty.

Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Michael Harpster in Philadelphia; special agents of IRS-Criminal Investigation, Philadelphia Office, under the direction of Acting Special Agent in Charge Gregory Floyd, and special agents of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigation (HSI) Philadelphia, under the direction of Special Agent in Charge Marlon V. Miller, with the investigation.

The U.S. Attorney in the Eastern District of Pennsylvania recused his office from the investigation involving the Philadelphia District Attorney’s Office, and the matter was assigned to the U.S. Attorney’s Office for the District of New Jersey. Two prosecutors from the Eastern District of Pennsylvania office were assigned to the case, subject to the supervision of prosecutors in the New Jersey office.

The government is represented by Deputy Chief Eric W. Moran of the U.S. Attorney’s Office Criminal Division in Newark and Chief of Appeals Robert A. Zauzmer and Assistant U.S. Attorney Vineet Gauri of the U.S. Attorney’s Office in Philadelphia.

Defense counsel: Mark E. Cedrone Esq., Philadelphia

NEWARK, N.J. – A Newark man was sentenced today to 46 months in prison for possessing a firearm as a previously convicted felon, Acting U.S. Attorney William E. Fitzpatrick announced.

Brehon Widgeon, 29, previously pleaded guilty before U.S. District Judge Madeline Cox Arleo to Count One of an indictment charging him with possession of a firearm by a convicted felon. Judge Arleo imposed the sentence today in Newark federal court. 

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

In late June 2014 through July 10, 2014, Widgeon – who had been previously convicted of a felony in Monmouth County, New Jersey – sought to trade a handgun in his possession for either an AK-47 rifle or for a weapon that could be easily concealed on his person. On July 10, 2014, Widgeon was found in possession of a 9 mm handgun along with 18 rounds of 9 mm ammunition and five rounds of .380 caliber ammunition.

In addition to the prison term, Judge Arleo sentenced Widgeon 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.

 

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

 

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

PHILADELPHIA – Philadelphia District Attorney Rufus Seth Williams was indicted today on additional fraud charges stemming from his alleged use of political action committee (PAC) funds and official government vehicles for his personal benefit, Acting New Jersey U.S. Attorney William E. Fitzpatrick announced.

Williams, 50, of Philadelphia, is now charged in a superseding indictment with 11 counts of travel and use of interstate facilities to promote and facilitate bribery contrary to Pennsylvania law (the “Travel Act counts”), two counts of Hobbs Act extortion under color of official right, two counts of honest services wire fraud, 12 counts of wire fraud and two counts of mail fraud.

 Williams was originally charged in a 23-count indictment on March 21, 2017. The superseding indictment now contains 29 counts, including Counts 22 to 29 regarding Williams’ use of PAC funds and official vehicles.

The Fraud Involving PAC Funds Friends of Seth Williams, a/k/a “The Committee to Elect Seth Williams,” was a political action committee that accepted contributions from individuals to support Williams’ campaigns for public office. Under applicable law, the PAC funds could only be used in relation to political campaigns.

According to the superseding indictment, from August 2010 through August 2016, Williams allegedly defrauded the PAC by using its funds for personal expenditures, which he concealed by providing false or incomplete reports to the Commonwealth of Pennsylvania and to the City of Philadelphia.

For instance, between August 2010 and September 2010, the PAC disbursed two checks to a political consultant totaling approximately $4,136.59. The memo line on these checks falsely stated, “Political Consulting.” Within days of the political consultant receiving the PAC checks, Williams obtained checks from the political consultant’s account and deposited them into his own bank account. In total, Williams received approximately $4,036.59 of the approximately $4,136.59 that the political consultant received from the PAC between August 2010 and September 2010. Williams used these funds for personal expenses.

In addition, from October 2011 through April 2015, Williams incurred expenses at a social club for his personal benefit, including dinner parties, lodging, and family events, none of which were incurred in connection with any election. Williams used the PAC’s debit card to pay for these expenses, including charges of $677.98 for a New Year’s Eve celebration at the social club on Dec. 31, 2013 for Williams and his girlfriend; $195.50 for a facial and massage in January 2014; $777.19 for an April 10, 2014 birthday dinner that Williams held for his girlfriend; $491.50 for a massage, facial, gift card, and fitness classes in January 2015; approximately $2,674.41 for an April 10, 2015 birthday dinner that Williams held for his girlfriend; and approximately $211.50 for massages in May 2015.

From January 2013 through May 2015, Williams incurred expenses at a health club for his own personal benefit, including massages, facials, and clothing, none of which were incurred in connection with any election. Williams also used the PAC’s debit card to pay for these expenses, including charges for massages of $222.50 in January 2013, $209 in July 2013, $251.50 in September 2013, and $90 in November 2013.

The Fraud Involving Official Government Vehicles Williams also allegedly engaged in a scheme to use official vehicles – which were provided by the City of Philadelphia and a federal narcotics law enforcement program – for his personal benefit.
 
Some of those vehicles were obtained through grants provided by the High Intensity Drug Trafficking Area (HIDTA) program. The purpose of the HIDTA program was to reduce illegal drug trafficking and drug production in the United States by, among other things, facilitating cooperation among federal, state, and local law enforcement agencies. The HIDTA program provided resources and funding to enhance and promote regional drug control strategies within defined geographic areas. Each geographic area designated as a HIDTA was governed by an Executive Board comprised of federal, state, and local law enforcement agencies.
 
Williams was a member of the Executive Board for the HIDTA of Philadelphia and Camden, New Jersey. The District Attorney’s Office (DAO) assigned HIDTA vehicles to detectives in its Dangerous Drug Offender Unit (DDOU), which often conducted narcotics investigations with federal and state HIDTA partners. Vehicles owned or leased by these agencies could not be used for personal purposes.

According to the superseding indictment, Williams repeatedly used city and HIDTA vehicles for his personal use during non-working hours, including weeknights and weekends. Williams directed his security detail to leave a city or HIDTA vehicle at his home every weeknight, so that he would have access to it during all non-working hours. Williams used the vehicles to transport himself, family members, friends and other non-employees on non-DAO business, including personal trips outside of Philadelphia.

During the scheme, Williams had full-time access to city or HIDTA vehicles for nearly all of his personal vehicular needs and personally incurred almost no expenses related to the use of a personal vehicle for years, including costs of purchasing, leasing, or renting a vehicle, or paying for insurance, fuel, and maintenance.

In addition, Williams’ acquisition and use of the HIDTA vehicles, including a Nissan Armada SUV and two Chevrolet Tahoe SUVs, reduced the number of vehicles available to members of the DAO’s DDOU for undercover operations, surveillance, and other aspects of narcotics investigations.

Bribes Involving Business Owners and Fraud on a Nursing Home and Family Friends

Williams remains charged with the same three schemes that were detailed in the March 21, 2017 indictment:

• From July 2010 through May 2015, Williams allegedly had an arrangement with an individual identified in the superseding indictment as “Business Owner #1,” in which Williams, while serving as the Philadelphia District Attorney, accepted trips, money, and other things of value in exchange for performing and agreeing to perform official acts on behalf of Business Owner #1.

• From March 2012 through July 2015, Williams allegedly had an arrangement with an individual identified in the superseding indictment as “Business Owner #2,” in which Williams accepted airline tickets, money, an automobile, and other things of value in exchange for performing and agreeing to perform official acts on behalf of Business Owner #2.

• From February 2012 through November 2013, Williams allegedly diverted a relative’s pension and Social Security payments to pay for his own personal expenses instead of applying them to the relative’s nursing home costs. In addition, after accepting $10,000 from friends of his relative intended to cover expenses for the relative’s nursing home care, Williams spent the money on his personal expenses instead.

The 29-count superseding indictment presents some alterations to the original counts, without changing the substance of the above allegations. Williams was arraigned on March 22, 2017, and entered a plea of not guilty. The trial is presently set for May 31, 2017.

Each of the Travel Act counts is punishable by a maximum potential penalty of five years in prison. The Hobbs Act extortion under color of official right and the wire and mail fraud charges are each punishable by a maximum potential penalty of 20 years in prison. Each count carries a potential fine of $250,000 or twice the gross gain or loss from the offense. The indictment also seeks forfeiture of a total of approximately $64,878.22, representing the sum of approximately $33,765.52 worth of bribe proceeds and approximately $31,112.70 worth of fraud proceeds.

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

The U.S. Attorney in the Eastern District of Pennsylvania recused his office from the investigation involving the Philadelphia District Attorney’s Office, and the matter was assigned to the U.S. Attorney’s Office for the District of New Jersey. Two prosecutors from the Eastern District of Pennsylvania office were assigned to the case, subject to the supervision of prosecutors in the New Jersey office.

The government is represented by Deputy Chief Eric W. Moran of the U.S. Attorney’s Office Criminal Division in Newark and Chief of Appeals Robert A. Zauzmer and Assistant U.S. Attorney Vineet Gauri of the U.S. Attorney’s Office in Philadelphia.

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

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

CAMDEN, N.J. - A Gloucester County man was sentenced today to 106 months in prison for his role in conspiring over 15 months to sell crack cocaine in Camden, Acting U.S. Attorney William E. Fitzpatrick announced.

Harold Miller, 41, of Sewell, New Jersey, pleaded guilty before U.S. District Judge Joseph H. Rodriguez in Camden federal court to an information charging him with conspiracy to distribute and to possess with intent to distribute cocaine base.   
According to documents filed in this case and statements made in court:

Miller was arrested on Sept. 2, 2015, following a long-term investigation by the FBI’s South Jersey Violent Offender and Gang Task Force into an organization that controlled the distribution of crack cocaine on Pfeiffer Street in Camden. 

Members of the drug organization sold crack cocaine to a confidential source and to customers who arrived in vehicles and on foot. Law enforcement officers intercepted conversations over multiple court-authorized wiretaps during which Miller and his conspirators discussed drug trafficking activities on Pfeiffer Street.  Miller oversaw and managed the activities of this drug trafficking organization. Rasheed Wise, Rodney Wall, and David Wilkerson, all of Camden, previously pleaded guilty to their respective roles in the charged conspiracy. Wall was sentenced May 4, 2017, to 100 months in prison and Wilkerson was sentenced April 5, 2017, to 77 months in prison. Wise is awaiting sentencing. 

In addition to the prison term, Judge Rodriguez sentenced Miller to three years of supervised release.

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

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

CAMDEN, N.J. – The executive director of the Ocean City, New Jersey, Housing Authority (OCHA) today admitted 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, pleaded guilty before U.S. Magistrate Judge Karen M. Williams in Camden federal court 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.

 

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.

 

The embezzlement charge carries a maximum penalty of one year in prison and a $100,000 fine, or twice the gain or loss from the offense. Sentencing is scheduled for Aug. 15, 2017.

 

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 leading to today’s guilty plea.

 

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