District of New Jersey

NEWARK, N.J. – A federal grand jury today returned an indictment charging a Summit, New Jersey, man with racketeering-related murder and attempted murder charges – including a double homicide during the evening rush-hour in March 2014 – and added additional murder charges against several other members and leaders of the New Jersey Grape Street Crips, U.S. Attorney Paul J. Fishman announced.

Ahmad Manley, a/k/a “Fresh,” a/k/a “Moddi G,” 30, was arrested today and charged in a fifth superseding indictment with RICO conspiracy and drug trafficking. Manley was previously charged by the Essex County Prosecutor’s Office with the March 2014 double murder and had been out on bail. He is scheduled to have an initial appearance at 2:00 p.m. tomorrow before U.S. Magistrate Judge James B. Clark III in Newark federal court.

The indictment also charges, for the first time, second-in-command Kwasi Mack, a/k/a “Welchs,” a/k/a “The Prince,” a/k/a “Mini Me,” 27, of Belleville, and Corey Batts, a/k/a “C-Murder,” a/k/a “Cee,” 31, of Newark, with a 2006 shooting that left one rival gang member dead and another wounded. In addition, Tony Phillips, a/k/a “Blue,” 25, also of Newark, was added to counts charging two attempted murders that took place in October 2013. Finally, the indictment added a murder in aid of racketeering count against the leader of the enterprise, Corey Hamlet, a/k/a “C-Blaze,” a/k/a “Blaze,” a/k/a “Blizzie,” a/k/a “Castor Troy,” 39, of Belleville, New Jersey, as well as Batts and Phillips for a May 2013 murder.

According to the indictment returned today:

On March 3, 2014, Manley and Hamlet, the long-time leader of the New Jersey Grape Street Crips, were riding in Manley’s Jeep Cherokee when they pulled alongside a car being driven by an individual referred to in the indictment as “Victim 6.” Although Hamlet aimed a firearm at Victim 6 and the car’s other occupants, Victim 6 pulled off before any shots were fired. A short time later, Manley found Victim 6, and a car chase ensued. The chase concluded when Victim 6’s car crashed into other civilian vehicles at the intersection of Irvine Turner Boulevard and Spruce Street in Newark. Numerous shots fired from Manley’s Jeep Cherokee at Victim 6’s vehicle struck Victim 6 and killed “Victim 7,” a passenger in Victim 6’s car. In addition, “Victim 8” – an innocent bystander who was a passenger in one of the civilian vehicles that had crashed at the intersection – was shot through the head and killed.

The double murder was part of an on-going feud between the Grape Street Crips and a rival (referred to in the indictment as “Victim One”) that resulted in numerous other murders and attempted murders, several of which are charged in today’s indictment.

In August 2013, Hamlet authorized Batts and others to murder Victim One. In October 2013, Hamlet met with Victim One at the Mall at Short Hills in Millburn, New Jersey, in a meeting that had been set-up by “Victim Five,” a member of the New Jersey Grape Street Crips who was a close associate of Victim One and who attempted to broker a truce between Hamlet and Victim One.

After the Short Hills meeting, Hamlet used a social media account to post a report from the Essex County Prosecutor’s Office purportedly indicating that Victim One had provided a statement to law enforcement. Just three days after Hamlet’s social media post, Batts, Manley, Phillips, and another gang member – acting on Hamlet’s orders – repeatedly shot and nearly killed Victim One and “Victim Four,” a bystander who was inside Victim One’s car.

Following the attempted murder of Victim One, Hamlet and other gang members perceived that Victim Five had been disloyal by attempting to put an end to the feud between Hamlet and Victim One. In November 2013, Aaron Terrell, 25, and Rashan Washington, 26, both of Newark, murdered Victim Five. Acting on Hamlet’s orders, Washington lured Victim Five into a Jeep Cherokee and then purposely left Victim Five alone, while Terrell shot Victim Five once in the head.

On the racketeering conspiracy charge, Hamlet, Mack, Manley, Batts, and Phillips face a potential maximum sentence of life in prison and a mandatory minimum term of 10 years in prison. Manley also faces a potential life sentence for the drug trafficking charges. On the murder in aid of racketeering charges, Hamlet, Batts, and Phillips face a mandatory sentence of life in prison.

In total, the fifth superseding indictment charges 15 alleged members and associates of the gang with five murders, three attempted murders, and numerous other crimes committed as part of the racketeering conspiracy. Today’s indictment follows the coordinated takedown in May 2015 of 50 alleged members and associates of the Grape Street Crips who were charged by criminal complaints with drug-trafficking, physical assaults and witness intimidation.                                       

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, and special agents of the DEA, under the direction of Special Agent in Charge Carl J. Kotowski, for the investigation leading to the charges. 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 Newark Department of Public Safety, 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, 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. 

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

Defense counsel: TBD

A Newark, New Jersey, man pleaded guilty today to his role in a violent and long-running racketeering conspiracy perpetuated by the “South Side Cartel,” a set of the Bloods street gang based in Newark, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Paul J. Fishman of the District of New Jersey.

Malik Lowery, aka Leek, 35, pleaded guilty before U.S. District Judge Esther Salas in the District of New Jersey to multiple counts of a second superseding indictment charging him with racketeering, racketeering conspiracy, carjacking, robbery affecting interstate commerce and conspiracy to distribute, and to possess with intent to distribute, one kilogram or more of heroin and 280 grams or more of crack cocaine.  Lowery is scheduled to be sentenced on Dec. 6, 2016.

In pleading guilty to the racketeering charges, Lowery admitted that he was involved in the murder of a South Side Cartel member on Oct. 20, 2007; committing an armed carjacking with fellow South Side Cartel members on Jan. 3, 2008; and robbing a drug dealer on Feb. 3, 2008, among other acts.

The South Side Cartel was once known among law enforcement and the FBI as the most violent street gang operating in Newark, committing numerous murders, shootings, robberies and other violent acts in furtherance of the enterprise.  The gang is a subset of the Bloods street gang that has operated primarily from two apartment buildings, dubbed the “Twin Towers,” located on Hawthorne Avenue in Newark.  Local law enforcement has made repeated narcotics and gun-related arrests at these buildings from 2002 to 2010.  Many of the South Side Cartel members have tattoos depicting these buildings and the gang’s initials.  At its peak, the South Side Cartel had about 20 members or associates, many of whom have since been killed in gang-related murders or are serving prison sentences for gang-related crimes.

Lowery and his co-defendants, Mark Williams, aka B.G., and Farad Roland, aka B.U., represent the last of the gang’s active members.  On Aug. 10, 2016, Williams pleaded guilty to racketeering and related charges before Judge Salas.  Roland is scheduled to begin trial in September 2017 on five murder charges. 

An indictment is merely an accusation, and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law. 

The FBI’s Newark Division, Newark Police Department and Essex County Prosecutor’s Office investigated the case.  Trial Attorney Robert Feitel of the Criminal Division’s Capital Case Section and Assistant U.S. Attorneys Robert Frazer and Courtney Howard of the District of New Jersey’s Organized Crime/Gangs Unit in Newark are prosecuting the case. 

NEWARK, N.J. – A Newark man today admitted his role in a violent and long-running racketeering conspiracy perpetuated by the “South Side Cartel,” a set of the Bloods Street gang based in Newark, New Jersey U.S. Attorney Paul J. Fishman and Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division announced.

Malik Lowery, a/k/a “Leek,” 35, pleaded guilty before U.S. District Judge Esther Salas in Newark federal court to multiple counts of a second superseding indictment charging him with racketeering, racketeering conspiracy, carjacking, Hobbs Act Robbery and conspiracy to distribute, and to possess with intent to distribute, one kilogram or more of heroin and 280 grams or more of crack cocaine.

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

As part of the racketeering charges, Lowery admitted his role in the Oct. 20, 2007, murder of a member of the South Side Cartel that took place on Bragaw Avenue in Newark. Lowery also admitted to committing an armed carjacking with fellow South Side Cartel members on January 3, 2008, and to the robbery of a drug dealer on Feb. 3, 2008, among other acts.

Originally a neighborhood-based gang whose main activities were selling drugs and committing violent acts to aid the drug trafficking business, many of the gang's members were officially brought into the Bloods gang in 2002 and 2003. The gang’s center of activities were apartments located inside buildings dubbed “the Twin Towers,” located at 496-500 Hawthorne Avenue, the location of repeated narcotics and gun arrests by local law enforcement between 2002 and 2010. Many of the South Side Cartel members had tattoos showing these buildings and the logo of “SSC” representing the gang’s initials.

At its peak, the South Side Cartel had about 20 members or associates, many of whom have since been killed in gang-related murders or who are serving prison sentences in state and federal prisons for gang-related crimes. Lowery and his co-defendants, Mark Williams, a/k/a “B.G.” and Farad Roland, a/k/a “B.U.” represent the last of the gang’s active members. Co-founded by Amin Roland and Farad Roland between 2003 and 2010, the South Side Cartel was generally known among law enforcement and the FBI as the most violent street gang operating in Newark, committing numerous murders, shootings, robberies and other violent acts in furtherance of the enterprise.

Lowery faces a sentence of 25 to 30 years in federal prison, according to the terms of the plea agreement. Sentencing is scheduled for Dec. 6, 2016.

On Aug. 10, 2016, Williams pleaded guilty to racketeering and related charges. The criminal case against Roland is pending before Judge Salas, who has scheduled the trial for September 2017. Roland is charged with five death-penalty eligible murders. On Feb. 9, 2015, the Government announced in court that then-U.S. Attorney General Eric Holder had authorized and directed that the death penalty be sought against Roland.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; police officers and detectives of the Newark Department of Public Safety, under the direction of Director Anthony A. Ambrose; and prosecutors and detectives of the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Carolyn A. Murray, with the investigation leading to the charges.

The government is represented by Assistant U.S. Attorneys Robert Frazer and Courtney Howard of the Organized Crime/Gangs Unit in Newark, and Trial Attorney Robert Feitel of the Criminal Division’s Capital Case Section.

Defense counsel:  John Azzarello Esq., Morristown, New Jersey, Anthony Ricco, New York, New York

NEWARK, N.J. – U.S. Attorney Paul J. Fishman announced today that following a thorough federal investigation, there is insufficient evidence to pursue criminal charges in connection with the fatal shooting of Jerame C. Reid. On Dec. 30, 2014, Mr. Reid was killed by Bridgeton Police Officer Braheme Days following a traffic stop of a car in which Mr. Reid was a passenger. Representatives from the New Jersey U.S. Attorney’s Office met today with Mr. Reid’s family to inform them of the decision.

Following Mr. Reid’s death, the New Jersey U.S. Attorney's Office and the FBI, in consultation with the Civil Rights Division of the Department of Justice, opened a criminal investigation into whether that shooting violated federal law. Viewing the evidence as whole, the government determined that federal charges are not warranted.

The federal criminal statute that enforces Constitutional limits on uses of force by law enforcement officers is 18 U.S.C. § 242. A violation of Section 242 requires the government to prove beyond a reasonable doubt that the defendant was acting under color of law, that he deprived a victim of a right protected by the Constitution or laws of the United States, that the deprivation resulted in bodily injury and/or death, and that he acted willfully.

There is no dispute that Officer Days, who was on duty as a police officer for the Bridgeton Police, acted under color of law when he shot Mr. Reid and that the shots resulted in Mr. Reid’s death. However, criminal prosecution is appropriate only if there is sufficient evidence to establish beyond a reasonable doubt that any of the shots fired by Officer Days were unreasonable and that he fired those shots with the requisite willful criminal intent.

As the U.S. Supreme Court has explained, the use of force must be judged from the perspective of a reasonable officer on the scene, rather than with the “20/20 vision of hindsight.”  Allowance must be made for the fact that law enforcement officials are often forced to make split-second judgments in circumstances that are tense, uncertain, and rapidly evolving. The use of deadly force is justified when the officer has probable cause to believe that the suspect poses a threat of serious physical harm, either to the officer or to others.

In addition, the law requires that the government prove that the shooting was done willfully: mistake, fear, misperception, or even poor judgment does not constitute willful conduct prosecutable under the statute.

To make the proper assessment under these standards, federal agents and prosecutors evaluated the physical, forensic, ballistic and crime scene evidence, medical and autopsy reports, the officers’ personnel records, audio and video recordings, internet postings, any relevant leads, as well as the extensive prior investigation conducted by the Cumberland County Prosecutor’s Office to which investigators were given full access. FBI agents and federal prosecutors interviewed the driver of the vehicle, who had given several prior statements about the events that evening, spoke to Mr. Reid's family members, and pursued various leads in an effort to investigate and evaluate every possible source of relevant information. The audio and video from the police dashboard camera, as well as the physical and forensic evidence provided federal prosecutors with a benchmark against which to measure the credibility of the witness’s accounts, including that of Officer Days.

Investigators compared individual witness accounts to the physical and forensic evidence, to other credible witness accounts, and to each witness’s own prior statements made throughout the investigations. Investigators also re-interviewed certain witnesses in an effort to clarify aspects of their testimony, to evaluate their accounts and to obtain more detailed information. In so doing, investigators assessed the witnesses’ demeanor, tone, bias, and ability to accurately perceive or recall the events of Dec. 30, 2014.

The death of Mr. Reid arose out of a traffic stop of a car in which he was a passenger. During the stop, police officers discovered a firearm in the glove compartment of the car. Officer Days and Officer Roger Worley then drew their firearms and ordered Mr. Reid and the driver not to move. The driver complied, while Mr. Reid continued to reach toward the console area between the passenger and driver front seats. Eventually, Mr. Reid forced his way out of the passenger side door against the repeated directives of Officer Days. Mr. Reid was shot as he exited the car in the direction of Officer Days. Although Officer Worley also fired his weapon, only the shots fired by Officer Days struck Mr. Reid.

While in hindsight it is clear that Mr. Reid was unarmed, Officer Days stated that he feared that Mr. Reid either had a firearm or was attempting to grab one from him. In order to bring a federal criminal charge in these circumstances the government would have to prove beyond a reasonable doubt that Officer Days did not fear for his own life and safety, but rather shot and killed Mr. Reid for malicious or improper reasons. The government does not believe it can carry that burden beyond a reasonable doubt. As a result, the New Jersey U.S. Attorney’s Office will not pursue criminal charges against Officer Days.

CAMDEN, N.J. – An Atlantic City, New Jersey, man who was an enforcer and street level dealer for a gang that used threats, intimidation and violence to maintain control of the illegal drug trade in Atlantic City was sentenced today to life in prison, U.S. Attorney Paul J. Fishman announced.

Malik Derry, a/k/a “Lik,” 25, was previously convicted of conspiracy to distribute one kilogram or more of heroin, possessing and discharging firearms in furtherance of the conspiracy and using a communications device in furtherance of a drug trafficking crime. He was convicted after a six-week trial before U.S. District Judge Noel L. Hillman, who imposed the sentence today in Camden federal court.

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

Malik Derry was an enforcer and a street level seller for “Dirty Block,” a/k/a “Crime Fam,” “3.6.6.12,” or “3.6,”, which was led by his brother Mykal Derry, a/k/a “Koose,” 36, of Atlantic City. The gang used force, gun violence and intimidation to control the lucrative drug trafficking area of the Stanley Holmes public housing complex, Brown’s Park and the surrounding area.

The evidence at trial showed that Malik Derry, Mykal Derry, enforcer Shaamel Spencer, 32, of Atlantic City, and other members of the gang routinely carried loaded handguns and engaged in at least eight drug related shootings between October 2010 and February 2013, including the shooting of a teenager on April 17, 2011, which left the teenager paralyzed.

Additional testimony established that Mykal Derry and Malik Derry planned and carried out the shooting murder of a rival drug dealer in Atlantic City on the evening of Feb. 10, 2013. Mykal Derry told members of his gang that he wanted them to “put him down” (referring to an order to shoot the rival dealer) when they saw him. Malik Derry shot the victim in the head from close range while riding a bicycle past him as the victim stood in front of an Atlantic City restaurant.

The murder weapon, a stolen .380 caliber semi-automatic handgun, was later recovered from the drop ceiling in an apartment located on Green Street in Atlantic City, which, at the time, was shared by Mykal Derry and his girlfriend, Kimberly Spellman, 34, of Egg Harbor Township, New Jersey. Atlantic City police detectives also found 18 “bricks” of heroin (approximately 900 individual packets of heroin) and drug packaging materials inside the apartment.

The evidence presented by the government at trial consisted of recordings of hundreds of telephone calls and text messages between Mykal Derry, Malik Derry, and over 19 other members of the gang, physical evidence including the recovery of twenty firearms, ballistics evidence from shooting scenes, crime scene evidence from eight different shooting scenes in Atlantic City, recovery of substantial quantities of heroin and drug packaging materials, approximately $40,000 in drug proceeds, the testimony of dozens of FBI agents and Atlantic City police detectives, ballistics experts, a narcotics expert, and two cooperating witnesses who had previously pleaded guilty to federal drug trafficking offenses.

In addition to the prison term, Judge Hillman sentenced Malik Derry to serve a term of 10 years of supervised release.

Mykal Derry was sentenced on Jan. 7, 2016 to life in prison.  He was previously convicted at trial of conspiracy to distribute one kilogram or more of heroin, distributing heroin, maintaining a place for the purposes of storing and distributing heroin, possessing, brandishing and discharging firearms in furtherance of the drug conspiracy and using a communications device in furtherance of a drug trafficking crime. 

U.S. Attorney Fishman credited special agents of the FBI’s Newark Division, Atlantic City Resident Agency, under the direction of Special Agent in Charge Timothy Gallagher; the Atlantic County Prosecutor’s Office, under the direction of Acting Prosecutor Diane M. Ruberton; the Atlantic City Police Department, under the direction of Chief Henry White; and the South Jersey Safe Streets Violent Incident and Gang (Safe Streets) Task Force, with the investigation leading to today’s sentencing.

He also thanked the N.J. State Police; the Atlantic County Sheriff’s Office; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Northfield Police Department; the Vineland Police Department; the Brigantine Police Department; and the Millville Police Department.

The government is represented by Assistant U.S. Attorneys Patrick Askin and Justin Danilewitz of the U.S. Attorney’s Office in Camden and Special Assistant U.S. Attorney Edmund Mallqui-Burgos of the Atlantic County Prosecutor’s Office.

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

NEWARK, N.J. – Five Newark men associated with the New Jersey set of the Grape Street Crips were charged today in three separate indictments with drug distribution and firearms offenses, U.S. Attorney Paul J. Fishman announced.

Marvin Eure, a/k/a “Man Man,” 22, is charged in a two-count indictment with heroin distribution and possessing firearms as a previously convicted felon. Louis Coston, a/k/a “Real Rell,” 26, is charged in a separate two-count indictment with conspiracy to distribute one kilogram or more of heroin and one count of heroin possession with intent to distribute.

Ahmad Mann, a/k/a “P.O.,” a/k/a “P-Easy,” 37, Milton Latham, a/k/a “Murder,” 42, and Vincent J. Carter, a/k/a “Vince,” a/k/a “Vin,” 61, are charged in a third indictment with conspiracy to distribute 100 grams or more of heroin. In addition, Latham is charged with unlawful possession of a firearm as a previously convicted felon, and Mann is charged with three counts of heroin possession with intent to distribute.

According to the indictments:

The New Jersey Grape Street Crips controlled drug trafficking and other criminal activities in various areas of Newark. Coston and Ahmed Singleton, 26, a/k/a “Gangsta-Mu,” a/k/a “Mooshie,” both members of the New Jersey Grape Street Crips, allegedly sold prolific quantities of heroin to both Newark residents and out-of-town customers. Mann, Latham, and Carter allegedly worked together to distribute brick quantities of heroin in and around the Pennington Court, Hyatt Court, and Riverview public housing complexes in Newark, New Jersey.

Eure was a long-time member of the New Jersey Grape Street Crips who, after a violent dispute with the group’s leadership, formed a rival gang with various associates. In August 2012, Eure allegedly sold a Remington Arms 870 Magnum shotgun and a 7.62 caliber SKS rifle to a confidential informant working with the FBI.  On Oct. 24, 2014, Eure also distributed heroin at the Kemsco Village housing complex in Newark.

To date, 37 members and associates of the New Jersey Grape Street Crips have pleaded guilty to drug trafficking, firearms and other charges. The leadership and senior members of the gang are awaiting trial on a racketeering indictment that includes four murders, three attempted murders, and numerous other crimes.

Eure faces a potential sentence of 10 years in prison for the firearms charge and a potential sentence of 20 years in prison for heroin distribution. Coston faces a mandatory minimum term of 10 years in prison and a potential maximum of life in prison for the heroin conspiracy charge, as well as a potential 20-year sentence for the heroin distribution charge.

Mann, Latham, and Carter face a mandatory minimum term of five years in prison for the heroin distribution charge. Mann faces a 20-year sentence for each of the three heroin distribution counts. Latham faces a 10-years sentence for the firearms charge.

Eure, Coston, Mann, and Latham remain in custody. Carter is out on bail.

U.S. Attorney Fishman credited special agents of the DEA, under the direction of Special Agent in Charge Carl J. Kotowski, and special agents of the FBI, under the direction of Acting Special Agent in Charge Timothy Gallagher, for the investigation leading to the charges. U.S. Attorney Fishman 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 Newark Department of Public Safety, 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.

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

TRENTON, N.J. – A Camden, New Jersey, woman pleaded guilty today in federal court to sex trafficking of a minor, U.S. Attorney Paul J. Fishman announced.

Aja M. Easley, 22, pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton federal court to an information charging her with one count of sex trafficking of a minor. Easley, Aaron J. Gray, 29, of Camden, and Kenneth A. Mertz, 35, of Collingswood, were previously charged in a criminal complaint with sex trafficking of a minor and conspiracy to engage in sex trafficking of a minor. Gray was also charged in the complaint with being a felon in possession of a firearm.

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

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

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

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

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

The count to which Easley pleaded guilty carries a statutory mandatory minimum of 10 years in prison, a statutory maximum of life in prison, and a maximum fine of $250,000. Sentencing is scheduled for Nov. 22, 2016.

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

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

The pending charges and allegations against Gray and Mertz are merely accusations, and the defendants are considered innocent unless and until proven guilty.

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

NEWARK, N.J. – A Pennsylvania man employed as a regional manager for a contractor involved with construction projects at Picatinny Arsenal (PICA) and at Joint Base McGuire-Dix- Lakehurst (Ft. Dix) admitted today his role in a fraud scheme that caused losses of $1.4 million, U.S. Attorney Paul J. Fishman announced.

James Conway, 45, pleaded guilty before U.S. District Judge Susan D. Wigenton in Newark federal court to an information charging him with one count of wire fraud and one count of accepting unlawful kickbacks.

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

From September 2009 to August 2015, Conway secretly owned a company called Walsh Construction Services, LLC (Walsh Construction), which purported to provide construction services. Using his position as regional manager for a construction contractor, Conway steered subcontracts to Walsh Construction for jobs at PICA and Ft. Dix. To conceal his ownership of Walsh Construction, Conway signed the subcontracts as Keith Walsh, the purported owner or vice president of Walsh Construction. There was, in fact, no person by that name who owned or was the vice president of Walsh Construction.

Conway used Walsh Construction to obtain payments from the construction contractor by submitting invoices and bills on behalf of Walsh Construction for work purportedly performed at PICA and Ft. Dix. Many of the invoices and bills included charges for work that Walsh Construction only partially did, or for work that was not performed at all by Walsh Construction, causing losses of $1.4 million.

Conway also accepted kickbacks totaling $180,345, from four subcontractors who served as subcontractors to the contractor on various construction projects at PICA and Ft. Dix knowing that the subcontractors expected, in return, to obtain favorable treatment from Conway.

The wire fraud charge to which Conway pleaded guilty carries a maximum potential penalty of 20 years in prison. The charge for accepting unlawful kickbacks to which Conway pleaded guilty carries a maximum potential penalty of 10 years in prison. Both charges carry a maximum fine of $250,000 or twice the gross gain or loss associated with the offense, whichever is greatest. Sentencing is scheduled for Nov. 30, 2016.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher; the U.S. Department of Defense, Defense Criminal Investigative Service, under the direction of Special Agent in Charge Craig Rupert; and the U.S. Army, Major Procurement Fraud Unit, Criminal Investigation Command, under the direction of Special Agent in Charge Larry Scott Moreland, with the investigation leading to today’s guilty plea.   

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

Defense counsel: James Friedman Esq., New Brunswick, New Jersey

NEWARK, N.J. – Two Rockaway, New Jersey, residents who owned a mobile diagnostic testing company were each sentenced today to over six years in prison for receiving more than $4.8 million from Medicare and private insurance companies for diagnostic testing and reports that were never interpreted by a licensed physician, U.S. Attorney Paul J. Fishman announced.

Kirtish N. Patel, 54, and Nita K. Patel, 53, were sentenced to 100 and 78 months in prison, respectively. Both defendants previously pleaded guilty before U.S. District Judge William H. Walls to separate informations charging them each with one count of health care fraud. Judge Walls imposed the sentences today in in Newark federal court.

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

From 2006 through June 2014, Kirtish and Nita Patel owned and operated Biosound Medical Services Inc. and Heart Solutions (collectively, “Biosound”), of Parsippany, New Jersey, which were mobile diagnostic companies and approved Medicare providers. The companies provided mobile diagnostic testing, including ultrasounds, echocardiograms and nerve conduction studies that were used to diagnose heart defects, blood clots, abdominal aortic aneurysms and other serious medical conditions. 

Biosound technicians would travel to the office of a primary care physician in the New York and New Jersey area to conduct diagnostic testing. Biosound was responsible for sending the tests to a “reading physician” – an appropriate specialist who would interpret the results. After the reading physician prepared a report, Biosound was responsible for providing it to the referring physician. Biosound was paid millions of dollars by Medicare and other payors for the diagnostic testing, the reading physician’s interpretation of the results and the reports.

Kirtish Patel admitted to, from October 2008 through June 2014, fraudulently interpreting and writing diagnostic reports produced by Biosound despite having no medical license and knowing that the reports would be used by the referring physicians to make important patient treatment decisions. Nita Patel admitted assisting her husband in forging physician signatures on the fraudulently produced reports to make them appear legitimate. Kirtish and Nita Patel Patel also admitted falsely representing to Medicare that the neurological testing performed by Biosound was being supervised by a licensed neurologist.

More than 10,000 diagnostic reports generated by Biosound between October 2008 and June 2014 were never actually reviewed or interpreted by a physician. Kirtish and Nita Patel were paid more than $4.8 million by Medicare and private insurance companies for the fraudulent reports, which they used for personal expenses, including multiple residences and luxury vehicles.

Judge Walls also ordered Kirtish and Nita Patel to serve three years of supervised release, forfeit $4,803,875.40, and pay restitution of $4,803,875.40.

Pursuant to a civil judgment entered in July 2016, U.S. District Judge Stanley R. Chesler ordered Nita and Kirtish Patel, Biosound Medical Services and Heart solutions to pay the United States $5 million in damages and $2.75 million in civil monetary penalties.

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

The government is represented by Assistant U.S. Attorney Danielle Alfonzo Walsman of the U.S. Attorney’s Health Care and Government Fraud Unit in Newark.

U.S. Attorney Paul J. Fishman 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 $1.31 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:

Kirtish Patel: Anthony Fusco Jr. Esq. and Shay Deshpande Esq., Passaic, New Jersey
Nita Patel: Frank Arleo Esq., West Orange, New Jersey

NEWARK, N.J. – Two senior engineering officers employed by an Italian shipping company admitted today they deliberately concealed their vessel’s discharge of oily waste into the sea, U.S. Attorney Paul J. Fishman announced.

Girolamo Curatolo, 50, of Custonaci, Sicily, the chief engineer of an oil tanker, the M/T Cielo di Milano, pleaded guilty before U.S. District Judge Susan D. Wigenton in Newark federal court to an information charging him with one count of conspiring to violate the Act to Prevent Pollution from Ships. Danilo Maimone, 31, of Furci Siculo, Sicily, the ship’s first assistant engineer, pleaded guilty to an information charging him with conspiring to obstruct justice.

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

The vessel, owned by D’Amico Shipping Italia S.p.A. and managed by D’Amico Societa di Navigazione S.p.A., visited ports in New Jersey multiple times, as well as ports in Maryland and Florida. Curatolo admitted that the crew had intentionally bypassed required pollution prevention equipment by discharging oily waste from the engine room through its sewage system into the sea. He also admitted that he falsified the vessel’s Oil Record Book, a required log regularly inspected by the U.S. Coast Guard. Curatolo admitted he made false statements to the Coast Guard during its inspection of the M/T Cielo di Milano in January 2015, instructing lower-level crew members to make false statements and destroying the vessel’s sounding log – which records the contents of storage tanks aboard the vessel, including those containing oily waste – by ripping the pages out and burning it in the vessel’s boiler after the Coast Guard had boarded the vessel.

Maimone admitted concealing the discharge of oily waste as well as causing a false Oil Record Book to be presented to the Coast Guard during its inspection of the vessel. He admitted making false statements and instructing lower-level crew members to make false statements during the January 2015 inspection.

The charges to which Curatolo and Maimone pleaded guilty each carry a maximum penalty of five years in prison and a maximum fine of $250,000 or twice the gross gain or loss resulting from the offenses. Sentencing for both is scheduled for Nov. 21, 2016.

U.S. Attorney Fishman credited special agents of the U.S. Coast Guard Investigative Service, under the direction of Special Agent in Charge Richard D. Cox, with the investigation leading to today’s guilty pleas. 

The government is represented by Assistant U.S. Attorneys Kathleen P. O’Leary of the U.S. Attorney’s Office Health Care and Government Fraud Unit and Kelly Graves of the U.S. Attorney’s Office General Crimes Unit in Newark, and Trial Attorney Brandy Parker of the Environmental Crimes Section of the U.S. Department of Justice Environment and Natural Resources Division.

Defense counsel:

Curatolo: Michael G. Chalos Esq. of New York

Maimone: Ronald A. Sarachan Esq. of Philadelphia

CAMDEN, N.J. – Another Camden man was sentenced this week to over 12 years in prison for his role in a large-scale drug trafficking organization that distributed hundreds of grams of cocaine base, cocaine and heroin, U.S. Attorney Paul J. Fishman announced today. 

Fuquan Pulliam, 26, previously pleaded guilty before U.S. District Judge Robert B. Kugler to a superseding information charging him with one count of conspiracy to distribute and to possess with intent to distribute 28 grams or more of cocaine base, 500 grams or more of cocaine, and 100 grams or more of heroin, as well as one count of being a felon in possession of a firearm. Judge Kugler imposed the sentence today in Camden federal court.

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

Pulliam admitted that, from January 2012 through April 2013, he stored, packaged and distributed cocaine and heroin for sale in the area of 8th and Tulip Streets and the Crestbury Apartments. Pulliam also admitted that during that time, he and others within the drug trafficking organization sold 2,328 grams of cocaine base, 675 grams of cocaine and 926 grams of heroin.

Pulliam – a previously convicted felon – was arrested in April 2013 and found with numerous firearms in his possession.

In April 2013, seven members of the drug trafficking organization, including Pulliam, were charged by criminal complaint with conspiring to distribute cocaine base, cocaine, and heroin. All of the defendants have pleaded guilty. Co-defendant Carl Wiles was sentenced to 148 months in prison on Aug. 8, 2016.

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

The government is represented by Special Assistant U.S. Attorney Erin M. Fay and Special Litigation Counsel Jason Richardson.

U.S. Attorney Fishman credited special agents of the FBI’s South Jersey Violent Offender and Gang Task Force, Philadelphia Division, under the direction of FBI Special Agent in Charge William F. Sweeney Jr.; the Camden County Prosecutor’s Office, under the direction of Prosecutor Mary Eva Colalillo; the Camden County Police Department, under the direction of Chief Scott Thomson; the N.J. State Police, under the direction of Col. Rick Fuentes; and the Camden Collaborative Crime Commission (“C4”), with the investigation.

He also thanked the Philadelphia Police Department, the N.J. Parole Board, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the N.J. Division of Criminal Justice, the Voorhees Police Department, the Gloucester County Prosecutor’s Office, the Salem County Prosecutor’s Office, the Camden County Sheriff’s Office, the Woodbury Police Department and the Pennsauken Police Department for their roles in the case.

This case was developed through the work of the Camden Collaborative Crime Commission (C-4). Every federal, state and local law enforcement agency and prosecutor’s office responsible for combating drug trafficking, gang activity and violent crime in Camden has come together in one location to share intelligence, develop investigative strategies and support the investigative and prosecutorial efforts of its partners. C-4 has merged the individual missions of the various law enforcement agencies into a single strategic attack on drug trafficking and drug-related violent crime. Such intense coordination greatly enhances the law enforcement community’s ability to correctly identify and successfully prosecute the most dangerous criminals in one of our nation’s most dangerous cities.

Defense counsel: Justin Loughry Esq.

NEWARK, N.J. – A Branchburg, New Jersey, man who previously worked as a high school music teacher today admitted soliciting a boy to engage in sexually explicit conduct in exchange for money, U.S. Attorney Paul J. Fishman announced. 

David M. Adams, 30, pleaded guilty before U.S. District Judge William H. Walls in Newark federal court to an information charging him with one count of online enticement of a minor to engage in criminal sexual conduct.

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

Adams admitted that, between May 2014 and September 2014, he used the internet, including Skype, to induce a victim who was less than 18-years-old to engage in sexually explicit conduct. In exchange for allowing Adams to view the conduct on Skype, Adams paid the victim using PayPal and other means.

During that time, Adams was a music teacher at Eisenhower Middle School in Roxbury, New Jersey. Subsequently, Adams was a music teacher at Bridgewater-Raritan High School in Somerset County, New Jersey.

The charge to which Adams pleaded guilty carries a maximum penalty of life in prison, a mandatory minimum prison sentence of 10 years in prison and a $250,000 fine. Adams will be required to register as a sex offender. Sentencing is scheduled for Nov. 30, 2016.

U.S. Attorney Fishman credited special agents of Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Newark Division, under the direction of Acting Special Agent in Charge Terence S. Opiola, with the investigation leading to the guilty plea. He also thanked the Branchburg Police Department and the Somerset County Prosecutor’s Office for their assistance in this case.

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

Defense counsel: Michael Baldassare, Esq. and Dillon Malar, Esq., Newark

CAMDEN, N.J. – A Camden man was sentenced today to 148 months in prison for his role in a large-scale drug trafficking organization that distributed hundreds of grams of cocaine base, cocaine and heroin, U.S. Attorney Paul J. Fishman announced. 

Carl Wiles, 26, previously pleaded guilty before U.S. District Judge Robert B. Kugler to a superseding information charging him with one count of conspiracy to distribute and to possess with intent to distribute 28 grams or more of cocaine base, 500 grams or more of cocaine, and 100 grams or more of heroin, as well as one count of being a felon in possession of a firearm. Judge Kugler imposed the sentence today in Camden federal court.

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

Wiles admitted that from January 2012 through April 2013, he stored, packaged and distributed cocaine and heroin for sale in the area of 8th and Tulip Streets and the Crestbury Apartments. Wiles also admitted that during that time, he and others within the drug trafficking organization sold 2,328 grams of cocaine base, 675 grams of cocaine and 926 grams of heroin.

Wiles – a previously convicted felon – was arrested in April 2013 and found with numerous firearms in his possession, including handguns, assault rifles and a shotgun.

In April 2013, seven members of the drug trafficking organization, including Wiles, were charged by criminal complaint with conspiring to distribute cocaine base, cocaine, and heroin. All of the defendants have pleaded guilty.

In addition to the prison term, Judge Kulgler sentenced Wiles to five years of supervised release.

The government is represented by Special Assistant U.S. Attorney Erin M. Fay and Special Litigation Counsel Jason Richardson.

U.S. Attorney Fishman credited special agents of the FBI’s South Jersey Violent Offender and Gang Task Force, Philadelphia Division, under the direction of Special Agent in Charge William F. Sweeney Jr.; the Camden County Prosecutor’s Office, under the direction of Prosecutor Mary Eva Colalillo; the Camden County Police Department, under the direction of Chief Scott Thomson; the N.J. State Police, under the direction of Col. Rick Fuentes; and the Camden Collaborative Crime Commission (“C4”), with the investigation.

He also thanked the Philadelphia Police Department, the N.J. Parole Board, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the N.J. Division of Criminal Justice, the Voorhees Police Department, the Gloucester County Prosecutor’s Office, the Salem County Prosecutor’s Office, the Camden County Sheriff’s Office, the Woodbury Police Department and the Pennsauken Police Department for their roles in the case.

This case was developed through the work of the Camden Collaborative Crime Commission (C-4). Every federal, state and local law enforcement agency and prosecutor’s office responsible for combating drug trafficking, gang activity and violent crime in Camden has come together in one location to share intelligence, develop investigative strategies and support the investigative and prosecutorial efforts of its partners. C-4 has merged the individual missions of the various law enforcement agencies into a single strategic attack on drug trafficking and drug-related violent crime. Such intense coordination greatly enhances the law enforcement community’s ability to correctly identify and successfully prosecute the most dangerous criminals in one of our nation’s most dangerous cities.

Defense counsel: Ed Borden Esq.

CAMDEN, N.J. – A Camden County, New Jersey, woman today admitted conspiring with her former boyfriend to produce sexually explicit images of two children, U.S. Attorney Paul J. Fishman announced. 

Janine Kelley, 35, of Audubon, N.J., pleaded guilty before U.S. District Judge Jerome B. Simandle in Camden federal court to an information charging her with one count of conspiring with her former boyfriend, Alexander Capasso, 42, of Collingswood, New Jersey, to engage in the sexual exploitation of two children by producing sexually explicit images of them. 

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

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

The conspiracy count to which Kelly pleaded guilty carries a minimum penalty of 15 years in prison, a maximum penalty of 30 years in prison, and a fine of up to $250,000.  Sentencing is scheduled for Nov. 18, 2016.

U.S. Attorney Fishman credited special agents of the FBI’s Philadelphia Division, under the direction of Special Agent in Charge William Sweeney, and the Washington, D.C., Field Office, under the direction of Assistant Director in Charge Paul M. Abbate, with the investigation leading to today’s guilty plea.

Capasso was indicted by a federal grand jury in Camden on July 6, 2016, for allegedly possessing and distributing images of child sex abuse and also for conspiring to sexually exploit two minor children. The charges and allegations contained in that indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

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

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

NEWARK, N.J. – An associate of the DeCavalcante organized crime family of La Cosa Nostra was sentenced today to 30 months in prison for his role in distributing more than 500 grams of cocaine, U.S. Attorney Paul J. Fishman announced.

Mario Galli, 24, of Toms River, New Jersey, previously pleaded guilty before U.S. District Judge William H. Walls to an information charging him with one count of distribution of more than 500 grams of cocaine.

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

Galli was arrested and charged by complaint in March 2015, along with nine members of the DeCavalcante crime family. He admitted that between Dec. 12, 2014, and March 2015, in conjunction with other family associates, he sold more than one-half a kilo of cocaine to an undercover FBI agent for at least $78,000.  

In addition to the prison term, Judge Walls sentenced Galli to three years of supervised release and fined him $1,000.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; the N.J. State Commission of Investigation, under the direction of Acting Executive Director Lee C. Seglem; the Waterfront Commission of New York Harbor, under the direction of Executive Director Walter M. Arsenault; and the Union County Prosecutor’s Office, under the direction of Acting Union County Prosecutor Grace H. Park.

The government is represented by Senior Litigation Counsel V. Grady O’Malley and Assistant U.S. Attorney James Donnelly of the U.S. Attorney’s Office’s Organized Crime/Gangs Unit.

Defense counsel: James N. Butler Jr. Esq., Asbury Park, New Jersey

NEWARK, N.J. – An Elizabeth, New Jersey, man who allegedly sold guns to an undercover federal agent was arrested this morning and charged with possessing firearms as a previously convicted felon, U.S. Attorney Paul J. Fishman announced.

Daniel Bigelow, 27, is charged by complaint with one count of being a felon in possession of a firearm. He made his initial appearance this afternoon before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court and was detained.

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

After obtaining information that he was illegally selling firearms in New Jersey, special agents with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) conducted controlled purchases with Bigelow. On April 12, 2016, Bigelow allegedly sold a Hi-Point Model 995 9mm rifle and a .357 Smith and Wesson revolver to an undercover federal agent. At the time, Bigelow had at least one prior felony conviction in Union 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.

U.S. Attorney Fishman credited ATF special agents, under the direction Special Agent in Charge George P. Belsky in Newark, with the investigation. He also thanked the Elizabeth Police Department for their work in the case.

The government is represented by Assistant U.S. Attorney Jihee G. Suh 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: Patrick McMahon Esq., Assistant Federal Public Defender, Newark

NEWARK, N.J. – A Passaic, New Jersey, man has been arrested and charged in connection with a spree of bank robberies in Hudson, Union, and Passaic counties last month,  U.S. Attorney Paul J. Fishman announced today.

Quentin Morales, a/k/a “Quinton Morales,” 25, is charged by criminal complaint with four counts of bank robbery and one count of attempted bank robbery. He appeared Aug. 3, 2016, before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court and was detained. Prior to his arrest Morales was one of Newark FBI’s most wanted bank robbers.

According to the complaint, Morales robbed, or attempted to rob, the following New Jersey banks:

Bank

Location

Date

Wells Fargo Bank

Kearny, New Jersey

June 24, 2016

Capital One Bank*

Elizabeth, New Jersey

June 27, 2016

Wells Fargo Bank

Kenilworth, New Jersey

June 30, 2016

Wells Fargo Bank

Linden, New Jersey

July 6, 2016

Wells Fargo Bank

Clifton, New Jersey

July 13, 2016

*attempted bank robbery

At each bank, Morales presented a note demanding cash from bank tellers. During the July 13, 2016, robbery, for example, Morales handed the teller a note which stated: “You are being robbed. Give me all your large bills. No alarms. No dye packs. You got 10 seconds.” On at least two occasions, Morales said he had a gun and urged bank tellers to hurry. He was apprehended on Aug. 2, 2016, by officers of the N.J. State Parole Board.

Each bank robbery or attempted bank robbery charge carries a maximum potential penalty of 20 years in prison and a $250,000 fine.

U.S. Attorney Fishman credited special agents of the FBI’s Violent Crimes/Interstate Theft Task Force, under the direction of Special Agent in Charge Timothy Gallagher in Newark, with the investigation leading to the charges. He also thanked the N.J. State Parole Board and the Kearny, Elizabeth, Kenilworth, Linden, Clifton, Union Township and Newark police departments, as well as the Essex County Prosecutor’s Office for their efforts in the investigation and apprehension of Morales.

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

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

Defense counsel: Linda Foster Esq., Assistant Federal Public Defender

NEWARK, N.J. – A Passaic, New Jersey, man has been arrested and charged in connection with a spree of bank robberies in Hudson, Union, and Passaic counties last month,  U.S. Attorney Paul J. Fishman announced today.

Quentin Morales, a/k/a “Quinton Morales,” 25, is charged by criminal complaint with four counts of bank robbery and one count of attempted bank robbery. He appeared Aug. 3, 2016, before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court and was detained. Prior to his arrest Morales was one of Newark FBI’s most wanted bank robbers.

According to the complaint, Morales robbed, or attempted to rob, the following New Jersey banks:

Bank

Location

Date

Wells Fargo Bank

Kearny, New Jersey

June 24, 2016

Capital One Bank*

Elizabeth, New Jersey

June 27, 2016

Wells Fargo Bank

Kenilworth, New Jersey

June 30, 2016

Wells Fargo Bank

Linden, New Jersey

July 6, 2016

Wells Fargo Bank

Clifton, New Jersey

July 13, 2016

*attempted bank robbery

At each bank, Morales presented a note demanding cash from bank tellers. During the July 13, 2016, robbery, for example, Morales handed the teller a note which stated: “You are being robbed. Give me all your large bills. No alarms. No dye packs. You got 10 seconds.” On at least two occasions, Morales said he had a gun and urged bank tellers to hurry. He was apprehended on Aug. 2, 2016, by officers of the N.J. State Parole Board.

Each bank robbery or attempted bank robbery charge carries a maximum potential penalty of 20 years in prison and a $250,000 fine.

U.S. Attorney Fishman credited special agents of the FBI’s Violent Crimes/Interstate Theft Task Force, under the direction of Special Agent in Charge Timothy Gallagher in Newark, with the investigation leading to the charges. He also thanked the N.J. State Parole Board and the Kearny, Elizabeth, Kenilworth, Linden, Clifton, Union Township and Newark police departments, as well as the Essex County Prosecutor’s Office for their efforts in the investigation and apprehension of Morales.

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

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

Defense counsel: Linda Foster Esq., Assistant Federal Public Defender

NEWARK, N.J. – A Morris County, New Jersey, man was arrested and charged today for producing and distributing images of child sexual abuse and enticing a minor to engage in criminal sexual activity, U.S. Attorney Paul J. Fishman announced.

Colin M. Skeele, 30, of Florham Park, New Jersey, was arrested by agents of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). He is charged by complaint with two counts of production of child pornography, one count of enticement of a minor to engage in criminal sexual activity, and one count of distribution of child pornography. Skeele appeared in before U.S. Magistrate Court Judge Joseph A. Dickson today and was detained without bail.

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

Skeele worked as a counselor at a boys’ summer camp in Hardwick, New Jersey, and as a teacher at a parochial school located in Boonton, New Jersey, and a parochial school located in Stirling, New Jersey.

In 2011, Skeele became Facebook friends with an underage boy he met while working as a counselor at a summer camp. The investigation revealed Facebook messages between the boy and Skeele in which Skeele offered to pay him money to take sexually explicit photographs and send them to Skeele.  In one instance, Skeele paid the boy $100 to send nude images of himself.  Skeele later sent at least one pornographic image of that boy to another boy that had also attended the summer camp. 

In February 2012, Skeele communicated online with individuals located in the Philippines to purchase live child sexual abuse shows, which Skeele viewed via an online video chat service. Instant messages obtained during the investigation revealed that Skeele used an online fund transfer service to purchase live child sexual abuse videos involving children as young as 1 year old.  

Anyone with information regarding possible victims of this activity is urged to contact the Department of Homeland Security in Newark: 973-776-5500. 

The two counts of producing child pornography each carry a mandatory minimum sentence of 15 years in prison, a maximum potential penalty of 30 years in prison and a $250,000 fine. The count of enticement of a minor to engage in criminal sexual activity carries a mandatory minimum sentence of 10 years in prison, a maximum potential penalty of life in prison and a $250,000 fine. 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. 

U.S. Attorney Fishman credited special agents of the ICE-HSI, under the direction of Special Agent in Charge Terrence S. Opiola, with the investigation leading to today’s charges and arrest. 

The government is represented by Assistant U.S. Attorney Jonathan M. Peck 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: Anthony P. Alfano Esq., Lyndhurst, New Jersey

NEWARK, N.J. – A Newark man today admitted distributing large quantities of heroin in and around downtown Newark, U.S. Attorney Paul J. Fishman announced today.

Jarez Baron a/k/a “Little Bro,” 28, of Newark, pleaded guilty before U.S. District Judge Jose L. Linares in Newark federal court to a superseding information charging him with conspiracy to distribute 100 grams or more of heroin.

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

Between February 2013 and August 7, 2013, Baron conspired with others to distribute large quantities of heroin and oxycodone out of a downtown Newark clothing store called Ballas Boutique. Over the course of the conspiracy, Baron and others sold drugs out of Ballas Boutique to a confidential source more than 35 times. The majority of the sales were audio and video recorded.

Additionally, law enforcement intercepted conversations of Baron and his conspirators pursuant to court orders. The intercepted conversations revealed that Baron and other employees sold drugs for Lamont Vaughn at Ballas Boutique.

On Aug. 7, 2013, law enforcement officers executed arrest and search warrants at Ballas Boutique and at Vaughn and Baron’s home in Newark. Among the items recovered were dozens of oxycodone pills, two firearms, and a large amount of cash.

The conspiracy charge carries a maximum potential penalty of 20 years in prison and a $1 million fine. Sentencing is scheduled for Nov. 21, 2016.

Vaughn previously pleaded guilty on June 22, 2016, to conspiracy to distribute 100 grams or more of heroin and oxycodone and to being a felon in possession of two firearms.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, as well as the N.J. State Police Street Gangs North Unit with the investigation leading to today’s plea.

The government is represented by Special Litigation Counsel Margaret Ann Mahoney and Assistant U.S. Attorney Francisco J. Navarro of the U.S. Attorney’s Office Criminal Division in Newark.

Defense counsel: Frank Arleo, Esq.

NEWARK, N.J. – A Passaic County, New Jersey, man was convicted in federal court today of illegally operating a Clifton, New Jersey, ambulance company despite having been banned from participating in federal health care programs due to a prior conviction, U.S. Attorney Paul J. Fishman announced.

Imadeldin Awad Khair, a/k/a “Nadr Awad,” 56, of Clifton, was convicted of all 17 counts of an indictment charging him with health care fraud, obstructing a federal audit, tax evasion, and money laundering. He was convicted following a nine-day bench trial before U.S. District Judge Susan D. Wigenton in Newark federal court.

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

In 2004, as a result of his conviction on a New Jersey state health care fraud charge, Khair was excluded from participating in any capacity in Medicare, Medicaid, or other federal health care programs for a minimum of 11 years. After realizing that he would be excluded from federal health care programs, Khair began operating a business named K&S Invalid Coach in his brother’s name. Since the date of his exclusion, Medicare and Medicaid paid over $9 million in claims submitted by K&S, none of which would have been paid had Medicare and Medicaid known that Khair was operating the business.

Khair’s plan to defraud Medicare and Medicaid began almost immediately after he was excluded by authorities from participating in federal health care programs. In 2004 and 2005, Khair recruited a business associate to tell authorities that Khair was his full-time employee so that Khair could continue running K&S in violation of his exclusion. Khair also used fraudulent paystubs provided by his business associate to convince authorities that he was not violating the terms of his exclusion.

In 2014, when special agents with the FBI and the U.S. Department of Health and Human Services, Office of Inspector General, executed a search warrant at K&S’s offices, Khair’s top managers directed employees via group text message to tell the agents that Khair’s brother was really in charge at K&S. In addition, on the first day of trial, Khair tried to influence a government witness just outside of the courtroom by claiming that he had over two dozen employees who were going to testify that his brother had really been in charge at K&S.

Khair also paid numerous K&S employees, including nearly all of the employees’ overtime wages, “off the books” and without withholding the necessary payroll taxes. To carry out the tax evasion scheme, Khair paid the wages in cash or handwritten check and directed K&S employees to keep two separate sets of books. Khair then directed company employees to send only the fraudulent set of books to the company’s payroll accountant.

In response to a U.S. Department of Labor audit of K&S in 2014, Khair held an employee meeting in which he directed K&S employees to lie to the Department of Labor by stating that they never worked more than 80 hours in a biweekly pay period. Khair also directed K&S employees to alter and falsify K&S timekeeping records to match the false amounts previously reported to the company’s payroll accountant.

The money laundering counts arose from K&S checks that were written and endorsed by Khair and made payable to “cash” or Khair himself, which were used to pay the undisclosed wages and enrich Khair personally.

Khair faces a maximum penalty of 10 years in prison on the health care fraud count, a maximum of five years for the obstruction of a federal audit and tax evasion counts, and a maximum of 20 years in prison for the money laundering counts. All the counts also carry a $250,000 fine, or twice the gross gain or loss from the offense. Following the verdict, Khair was detained pending sentencing, which is set for Nov. 9, 2016.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; special agents of the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert; and special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation.

The trial was conducted by Assistant U.S. Attorneys Danielle M. Corcione and Osmar J. Benvenuto of the U.S. Attorney’s Office Criminal Division in Newark.

U.S. Attorney Fishman reorganized the health care fraud practice shortly after taking office, 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 $1.3 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: Harvey R. Poe, Roseland, New Jersey

CAMDEN, N.J. – A Gloucester County, New Jersey, woman today admitted embezzling more than $600,000 from dormant TD Bank customer accounts, U.S. Attorney Paul J. Fishman announced.

Telisha Trent, 43, of Williamstown, New Jersey, pleaded guilty before U.S. District Judge Renee Marie Bumb in Camden federal court to an information charging her with one count of bank fraud and one count of money laundering.

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

From Aug. 9, 2014, through Sept. 11, 2015, Trent used her position as a financial services representative and bank teller at a TD Bank branch in Sewell, New Jersey, to identify dormant checking and savings accounts, primarily held by elderly TD Bank customers. Trent would research the account holder in order to assess the risk of whether the account holder would notice that the funds in the account were removed. She would steal the money in the dormant account by transferring the funds to accounts she controlled or have a cashier’s check issued in her name.  

Trent then transferred the funds through a series of accounts that she controlled in order to hide her fraud. Also, in order to avoid detection, Trent closed the dormant accounts. Trent admitted obtaining $608,000 in cash from eight TD Bank customers in New Jersey, Connecticut, and Ohio. She admitted to spending the money on home renovations, lavish trips, two luxury BMW sedans, items for her children, and other items. 

After the fraud was discovered, TD Bank reimbursed the victims for the money and funds stolen by Trent.

The count of bank fraud carries a maximum potential penalty of 30 years in prison and a $1 million fine; the count of money laundering carries a maximum potential penalty of 10 years in prison and $250,000 fine. Sentencing is scheduled for Nov. 7, 2016.

U.S. Attorney Fishman credited special agents of the FBI’s South Jersey Resident Agency, under the direction of Special Agent in Charge William F. Sweeney Jr. in Philadelphia, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Matthew T. Smith of the U.S. Attorney’s Office in Camden.

Defense counsel: James Conley Esq., Haddon Heights, New Jersey

NEWARK, N.J. - An airline passenger was charged with sexually touching a sleeping woman who did not know him aboard a flight from Los Angeles International Airport to Newark Liberty International Airport, U.S. Attorney Paul J. Fishman announced today.

Veerabhadrarao Kunam, 58, of Visakhapatnam, India, is charged by complaint with one count of abusive sexual contact. He appeared yesterday afternoon before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court and was released on $50,000 secured bond.

Kunam was arrested on July 30, 2016 – the day his flight arrived in Newark – and was taken into federal custody by the FBI.

According to the complaint:

Kunam was seated next to a woman who occupied a middle seat on a Virgin America redeye flight from Los Angeles to Newark. While the plane was in the air, the woman fell asleep. She awoke to find Kunam massaging her genitals and rubbing his bare feet against her bare feet.

Upon noticing Kunam touching her, the victim alerted her male travel companion who traded seats with the victim and confronted Kunam. Kunam allegedly told the victim’s travel companion that he wanted everyone to forget about the incident and offered to buy the travel companion a drink for any trouble he may have caused. The travel companion declined Kunam’s offer and alerted a flight crew member about what had occurred.

A member of the flight crew then moved Kunam to another seat and instructed him not to return to his original seat. Kunam allegedly told the flight crew member that he would not touch the victim again.

The federal government has exclusive jurisdiction over all sexual abuse cases that occur on aircraft in flight in the United States.

The abusive sexual contact charge carries a maximum potential penalty of two years in prison and a $250,000 fine.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher, and the Port Authority Police Department, under the direction of Superintendent Michael A. Fedorko, with the investigation leading to the charge.

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

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

Defense counsel: Alexander Spiro Esq., New York

A Tampa, Florida, man pleaded guilty today to helping funnel $80,000 in campaign contributions from a foreign source to the joint fundraising committee of the President of the United States during the 2012 presidential election and to making a false declaration before the grand jury, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Paul J. Fishman of the District of New Jersey.

William Argeros, 57, pleaded guilty before U.S. District Judge Madeline Cox Arleo of the District of New Jersey to an information charging him with knowingly and willfully making foreign contributions and donations in connection with the 2012 presidential election and to a fundraising and political campaign committee of the president, aggregating $25,000 or more during a calendar year, and to knowingly making a false declaration before the grand jury concerning his role in facilitating and concealing the foreign contribution.  Sentencing has been scheduled for Nov. 9, 2016, before Judge Arleo.

According to his plea agreement, Argeros admitted that in September 2012, he facilitated the transfer of $80,000 from a foreign source to Bilal Shehu, a U.S. citizen residing in New Jersey.  Shehu, in turn, provided it to a joint fundraising committee – including the authorized campaign committee of the president – in an effort to disguise the true origin of the money and so that a foreign national could attend a campaign event on Oct. 8, 2012, in San Francisco, according to Argeros’s plea.  Argeros also admitted to providing instructions to foreign individuals on how to transfer the money and provide payment to the joint fundraising committee.  Federal law prohibits foreign nationals from making contributions to federal candidates or fundraising committees. 

Argeros also admitted that on Feb. 18, 2015, he falsely testified under oath that he did not participate in arranging the transfer of money to the joint fundraising committee before a grand jury in the District of New Jersey.

On June 29, 2016, Shehu pleaded guilty to helping to funnel $80,000 in campaign contributions from a foreign source to the joint fundraising committee.

No one on the joint fundraising committee has been accused of any wrongdoing and the committee has fully cooperated in the investigation leading to today’s guilty plea. 

The FBI investigated the case.  Trial Attorneys Charles R. Walsh and Peter N. Halpern of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Mark J. McCarren of the District of New Jersey’s Special Prosecutions Division are prosecuting the case. 

NEWARK, N.J. – A Tampa, Florida, man pleaded guilty today to helping funnel $80,000 in campaign contributions from a foreign source to the joint fundraising committee of the President of the United States during the 2012 presidential election and lying about it to a federal grand jury, U.S. Attorney Paul J. Fishman and Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division announced.

William Argeros, 57, pleaded guilty before U.S. District Judge Madeline Cox Arleo in Newark federal court to an information charging him with knowingly and willfully making foreign contributions and donations in connection with the 2012 presidential election and to a fundraising and political campaign committee of the president, aggregating $25,000 or more during a calendar year. Argeros also pleaded guilty to knowingly making a false declaration before a federal grand jury concerning his role in facilitating and concealing the foreign contribution.

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

Argeros admitted that in September 2012, he facilitated the transfer of $80,000 from a foreign source to Bilal Shehu, a U.S. citizen residing in New Jersey, who, in turn, provided it to a joint fundraising committee – including the authorized campaign committee of the president – in an effort to disguise the true origin of the money and so that a foreign national could attend a campaign event on Oct. 8, 2012, in San Francisco. Argeros also admitted to providing instructions to foreign individuals on how to transfer the money and provide payment to the joint fundraising committee.

In addition, Argeros admitted providing false testimony before a grand jury sitting in the District of New Jersey. On Feb. 18, 2015, Argeros falsely testified under oath that he did not participate in arranging the transfer of money to the joint fundraising committee.

Federal law prohibits foreign nationals from making contributions to federal candidates or fundraising committees. Shehu pleaded guilty to the same charge on June 29, 2016.

Both charges to which Argeros pleaded guilty carry a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for Nov. 9, 2016.

No one on the joint fundraising committee has been accused of any wrongdoing, and the committee has fully cooperated in the investigation leading to today’s guilty plea.

U.S. Attorney Fishman and Assistant Attorney General Caldwell 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 plea. The government is represented by Assistant U.S. Attorney Mark J. McCarren of the District of New Jersey’s Special Prosecutions Division and Trial Attorneys Charles Walsh and Peter Halpern of the Criminal Division’s Public Integrity Section.

Defense counsel: John A. Azzarello Esq.

NEWARK, N.J. – Two men will appear in federal court today to face charges that they attempted to rob a Paterson, New Jersey, residence while dressed in Passaic County Sheriff uniforms and wielding a firearm, U.S. Attorney Paul J. Fishman announced.

Clemente R. Carlos, 29, of Newark, New Jersey, and Jason Thompson, 33, of Paterson, New Jersey, were charged in a superseding criminal complaint with one count of conspiracy to commit Hobbs Act robbery. Both men will appear this afternoon before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court. The complaint also charges Thompson with being a felon in possession of a firearm.

According to the complaint:

On Aug. 12, 2015 at around 7:00 a.m., Carlos and Thompson, both dressed in Passaic County Sherriff’s uniforms, accosted a female victim and her infant as the victim was leaving her residence in Paterson, New Jersey. The two men, posing as members of the Passaic County Sherriff’s Office, led the victim back into her apartment inside the residence.

Once inside, Thompson removed a firearm from a sidearm holster and pointed it at the victim’s brother, who had been sleeping inside the apartment. Thompson then used a zip-tie to restrain the man’s hands behind his back and instructed him to kneel on the floor. After searching the apartment and failing to find the money they were looking for, Carlos and Thompson then left the residence.

In December 2015, the Passaic County Prosecutor’s Office charged both Carlos and Thompson with multiple crimes arising from the home invasion, including kidnapping, weapons offenses, endangering the welfare of a minor, and robbery.

The Hobbs Act conspiracy charge carries a statutory maximum of 20 years in prison and a $250,000 fine, or twice the gain or loss from the offense.  The charge of being a felon in possession of a firearm carries a maximum of 10 years in prison and a $250,000 fine.

U.S. Attorney Fishman 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 charges. He also thanked the Passaic County Sheriff’s Office and the Paterson Police Department for their assistance.

The government is represented by Assistant U.S. Attorney Josh Hafetz of the U.S. Attorney’s Organized Crime/Gangs Unit in Newark.

Defense counsel:

Carlos: Gary Cutler Esq, Newark

Thompson: Sean McGovern Esq., Newark

CAMDEN, N.J. – A Philadelphia man was sentenced today to 135 months in prison for his role in a conspiracy to obtain firearms from Philadelphia-area licensed dealers and resell them in New Jersey for a profit, U.S. Attorney Paul J. Fishman announced.

Michael Wayne Lee, 35, previously pleaded guilty before U.S. District Judge Renée Marie Bumb to an information charging him with one count of conspiring to deal firearms without a license and one count of possession of a firearm by a previously convicted felon. Judge Bumb imposed the sentence today in Camden federal court.

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

Between June 30, 2012, and July 19, 2012, Rosselyn M. DeJesus, 29, of Philadelphia, bought five pistols from Philadelphia-area gun shops, which she then transferred for resale to Lee. Lee, a previously convicted felon, resold them. Two of the five weapons were sold by a third individual, Ammie Steward, 41, of Pennsauken, New Jersey, to a witness cooperating with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). These two weapons are now in the custody of law enforcement.

Also in connection with this investigation, on May 5, 2014, ATF agents arrested Wendelle L. Ford, 43, of Camden. Ford was charged with conspiracy to deal firearms without a license. 

From January 2012 through July 2012, Ford obtained firearms from different sources, who purchased them in gun shops in Philadelphia and pawn shops in North Carolina. Ford then resold the firearms, including at least two firearms to Steward, who in turn sold the weapons to an ATF informant. In total, Ford dealt 15 firearms without a license. 

In addition to the prison term, Judge Bumb sentenced Lee to three years of supervised release.

DeJesus previously pleaded guilty to conspiracy to deal firearms without a license and was sentenced to one year in prison on Oct. 20, 2015. Steward previously pleaded guilty to dealing firearms without a license and possessing a firearm as a previously convicted felon. He is scheduled to be sentenced Sept. 23, 2016.

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

U.S. Attorney Fishman credited special agents of the ATF, under the direction of Special Agent in Charge George P. Belsky, with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorney Matthew T. Smith of the U.S. Attorney’s Office in Camden.

Defense counsel: Stanley King Esq., Woodbury, New Jersey

NEWARK, N.J. – A Hudson County, New Jersey, man appeared in court today on charges he tried to run down a federal officer with a 2009 Jeep Grand Cherokee, U.S. Attorney Paul Fishman announced.

Hakim G. Taylor, a/k/a “Scott Taylor,” a/k/a “Hakeem Horton,” a/k/a “Anthony Lance,” a/k/a “Hakim Smith,” of Bayonne, New Jersey, is charged by complaint with assault on a federal officer. He appeared today before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court and was detained.

According to the complaint:

On July 19, 2016, federal law enforcement agents were conducting surveillance in Newark when they observed Taylor and other individuals engage in suspected narcotics transactions.  Upon being alerted to the presence of law enforcement officers, Taylor and another associate entered the Jeep Grand Cherokee, with Taylor in the driver’s seat. As Taylor began to drive, law enforcement agents maneuvered themselves and their vehicles in an effort to box in the Jeep to conduct further investigation.

A special agent of the U.S. Department of Homeland Security, Homeland Security Investigations (HSI), identified in the complaint as “Victim One,” activated his red and blue flashing emergency lights and exited his undercover vehicle to approach the Jeep. The agent was wearing an HSI-issued external ballistic vest carrier, which is marked with large white letters stating “POLICE – HSI” on both the front and back and also displays a large gold “Special Agent” badge. The agent identified himself as police and repeatedly ordered Taylor to stop and not to move.  Taylor accelerated the Jeep and aimed it toward the agent, striking the agent as Taylor drove away.

The agent was hit on his left shoulder and arm by the Jeep, and the momentum of the impact threw the agent to the road, causing multiple lacerations and abrasions. The agent was subsequently treated at a hospital emergency room. If convicted, Taylor faces a maximum potential penalty of 20 years in prison and a $250,000 fine.

U.S. Attorney Fishman credited special agents of HSI, under the direction of Special Agent in Charge Terence S. Opiola, with the investigation leading to today’s charges.

The government is represented by Special Assistant U.S. Attorney Stephanie Raney of the U.S. Attorney’s Office General Crimes Unit.

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

Defense Counsel: John Yauch Esq., Assistant Federal Public Defender, Newark

NEWARK, N.J. – A New York man today admitted his role in a conspiracy to traffic approximately two kilograms of cocaine from Puerto Rico to New Jersey, U.S. Attorney Paul J. Fishman announced.

Ramis Esteves, 33, pleaded guilty before U.S. District Court Judge Claire C. Cecchi to an information charging him with one count of conspiring to distribute cocaine. 

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

Esteves was arrested on March 24, 2015 in Bergen County after he accepted delivery of approximately two kilograms of cocaine which had been sent by mail from Puerto Rico. Esteves admitted today that he conspired with a co-defendant, Sasha Melendez, 37, of Bergenfield, New Jersey, to distribute the cocaine.

The conspiracy charge to which Esteves pleaded guilty today carries a maximum potential penalty of 20 years in prison and a $1 million fine. Sentencing is scheduled for Nov. 29, 2016. 

Melendez pleaded guilty to conspiracy to distribute cocaine on June 22, 2016 and awaits sentencing.

U.S. Attorney Fishman credited postal inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Cynthia L. Shoffner, and special agents of the DEA, under the direction of Special Agent in Charge Carl J. Kotowski, with the investigation. 

The government is represented by Assistant U.S. Attorney Jonathan M. Peck of the U.S. Attorney’s Office General Crimes Unit.

Defense Counsel: Paul Brenner, Esq.

NEWARK, N.J. – A Filipino national today admitted running an international cashing operation that monetized stolen credit and debit card information obtained through computer hacking and ATM skimming operations, U.S. Attorney Paul J. Fishman announced.

Angelo Virtucio, a/k/a “ZaiR,” a/k/a “ZaiRe,” a/k/a “Omega,” a/k/a “Omega10,” 30, of Quezon City, Philippines, pleaded guilty before U.S. District Judge Susan D. Wigenton in Newark federal court 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.

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

Virtucio monetized millions from stolen credit and debit card data using a global network of “cashers” that he employed 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 then used the counterfeit cards to make unauthorized ATM withdrawals and purchases at physical retail locations. 

The conspiracy to commit bank fraud charge is punishable by a potential maximum of 30 years in prison and a $1 million fine. Sentencing is scheduled for Oct. 24, 2016.

U.S. Attorney Fishman credited the special agents of the U.S. Secret Service, Newark Division, under the direction of Special Agent in Charge Mark McKevitt, with the ongoing investigation.

The government is represented by Assistant U.S. Attorney Andrew S. Pak of the Computer Hacking and Intellectual Property Section of the Economic Crimes Unit.

Defense counsel: Kathleen Theurer Esq. and A. Paul Condon Esq.

TRENTON, N.J. – A Branchburg, New Jersey, man today admitted his role in a scheme to produce sexually explicit images of children through a website he operated from his home computer, U.S. Attorney Paul J. Fishman announced.

Jonathan Soto, 26, pleaded guilty before U.S. District Judge Freda L. Wolfson in Trenton federal court to Count One of an indictment charging him with conspiracy to produce child pornography. He has remained in federal custody since his arrest on April 16, 2015.

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

Soto admitted that, from July 2014 through April 2015, he administered and operated a website designed to produce child pornography by tricking minor victims into engaging in sexually explicit activity on web cameras. As part of the conspiracy, Soto designed the website with certain online tools and a chatroom function that enabled users to target minor victims online, share victims’ social media profiles and discuss ways to get minors to produce child pornography over the internet.

Users of the website created false profiles on popular social media websites purporting to be young children, aged from about 10 to 16. Using these false profiles, the users chatted with actual children and lured the minor victims to other websites to engage in private chats. Once in a private chat room, users then persuaded child victims to engage in sexually explicit activity. Unbeknownst to the victims, when they engaged in sexually explicit activity, they were secretly recorded, and those videos were shared with other users on Soto’s website.

The conspiracy to produce child pornography count to which Soto pleaded guilty carries a minimum penalty of 15 years in prison, a maximum potential penalty of 30 years in prison, and a $250,000 fine. Sentencing is scheduled for Nov. 10, 2016.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, and the Branchburg Township Police Department, under the direction of Chief David Young, 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.

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

Pharmaceutical Employees, Military Beneficiaries and Others Recruited as Part of the Scheme

NEWARK, N.J. – A pharmaceutical employee today admitted filling his own medically unnecessary prescriptions and recruiting others to do the same as part of a scheme to fraudulently obtain reimbursements for compound medication prescriptions, causing losses of $3.69 million, U.S. Attorney Paul J. Fishman announced.

Peter Pappas, 44, of Drexel Hill, Pennsylvania, pleaded guilty before U.S. District Judge John Michael Vazquez in Newark federal court to an information charging him with one count of conspiracy to commit health care fraud.

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

Pappas, an employee of a New Jersey pharmaceutical company, admitted that in August 2014, he was recruited by an individual identified in the information as “co-conspirator #1 (CC-1),” to assist a marketing business identified in the information as “Company A.”  Company A was paid by various compounding pharmacies for referring beneficiaries whose insurance plans would pay for compounded medication, such as pain creams, scar creams and vitamins.

CC-1 offered Pappas “commission” payments in return for compounded medication, creams and vitamins that Pappas obtained at specific specialty pharmacies for himself and family members and that were billed to his employer’s prescription drug benefit plan. In furtherance of the scheme, Pappas received a preprinted prescription form with compounded medications and creams from CC-1, took the forms to a friend who was a doctor, and asked the doctor to prescribe those medications.

Afterwards, the compounded prescription products were sent to Pappas from a pharmacy outside his home state. On Oct. 15, 2014, Pappas received a $9,023.86 check from Company A, which was a percentage of the amount paid by Pappas’s employer to the compounding pharmacy for filling the prescriptions.

From September 2014 through November 2015, Pappas refilled compounded prescriptions on forms provided by CC-1 and Company A at certain specific compounding pharmacies selected by Company A, and in return, received commission checks and wire transfers from Company A.  

Pappas also recruited co-workers and others to join the scheme, including TRICARE beneficiaries. TRICARE, which is managed by the Defense Health Agency at the U.S. Department of Defense, is a health care benefit program for uniform service members of the U.S. military and their families. Pappas admitted that he attempted to recruit TRICARE beneficiaries because he knew that TRICARE gave high reimbursements for compounded medication and creams.

Altogether, Pappas received $481,773 from Company A for his role in the conspiracy.  His employer, TRICARE, and other insurance companies lost at least $3.69 million from the scheme.   

Pappas faces a statutory maximum of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for Oct. 25, 2016.

On June 29, 2016, Stephanie Naar, 27, of St. Louis, Missouri, who had been an employee of the same New Jersey pharmaceutical company as Pappas, pleaded guilty before Judge Vazquez and admitted accepting thousands of dollars in exchange for obtaining and filling her own medically unnecessary prescriptions for compounded medication and creams.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; and the U.S. Department of Defense, Defense Criminal Investigative Service, Office of Inspector General, under the direction of Special Agent in Charge Craig Rupert, with the ongoing investigation leading to today’s plea.

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

U.S. Attorney Paul J. Fishman 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 $1.3 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: Walter Cohen and Rebecca Warren Esqs., Harrisburg, PA

CAMDEN, N.J. – A Cumberland County, New Jersey, man was sentenced today to 121 months in prison for his role in a conspiracy to distribute methamphetamine, U.S. Attorney Paul J. Fishman announced.

Alex Rodriguez, 35, of Vineland, New Jersey, was previously convicted on an indictment charging him with one count of conspiracy to possess with intent to distribute more than 500 grams of methamphetamine. Rodriguez was convicted following a two-week trial before U.S. District Judge Robert B. Kugler, who imposed the sentence today in Camden federal court.

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

Rodriguez conspired to broker a deal in which four pounds of high quality methamphetamine were sold for $100,000 in Millville, New Jersey. On behalf of a co-conspirator, who bought the drugs, Rodriguez cut one pound of the purchased drugs to create four additional, diluted pounds of methamphetamine. Two co-conspirators then traveled to Florida seeking to sell five pounds of the newly constituted methamphetamine, where the DEA apprehended them. Rodriguez, meanwhile, remained in New Jersey with the three remaining pounds of high quality methamphetamine. He was later apprehended following an investigation stemming from the arrest of his co-conspirators in Florida.

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

U.S. Attorney Fishman credited the Drug Enforcement Administration, Atlantic City office, under the direction of Special Agent in Charge Carl J. Kotowski; the DEA’s Orlando office; and the Cumberland County Prosecutor’s Office, under the direction of Prosecutor Jennifer Webb-McRae, with the investigation leading to today’s sentencing. He also thanked the Florida Highway Patrol and the U.S. Attorney’s Office, Middle District, Florida.

The government is represented by Senior Litigation Counsel V. Grady O’Malley and Assistant U.S. Attorney Bernard J. Cooney of the U.S. Attorney’s Office, Criminal Division.

Defense counsel: Wayne Powell Esq., Cherry Hill, N.J.      

NEWARK, N.J. – Two Amtrak supervisors were charged today with overbilling Amtrak a combined total of more than 800 overtime hours and more than 60 regular hours they claimed to be working when they were actually not present at Amtrak work sites, causing $92,000 in losses to Amtrak, U.S. Attorney Paul J. Fishman announced.

Richard Vogel, 63, of Edison, New Jersey, and Donald Harper, Sr., 46, of Somerset, New Jersey, were arrested this morning by federal agents and charged in separate criminal complaints with defrauding Amtrak as a result of their fraudulent overbilling of work hours. Both are scheduled to appear this afternoon before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court.

According to the criminal complaints:

Vogel, who has been employed by Amtrak since January 1977, currently supervises approximately 35 employees in work gangs on the Construction Signals side of the Communications and Signals Department of Amtrak’s New York Division. Between November 2015 and June 2016, Vogel fraudulently billed Amtrak for 41 regular hours and 687.75 overtime hours when he was not actually present at Amtrak work sites, resulting in losses to Amtrak of more than $71,000. 

Harper, who has been employed by Amtrak since February 1990, currently supervises approximately 19 employees in a work gang on the Signals side of the Communications and Signals Department of Amtrak’s New York Division. Harper fraudulently billed Amtrak for 27.75 regular hours and 192.25 overtime hours when he was not actually present at Amtrak work sites, between October 2014 and October 2015, resulting in losses to Amtrak of more than $20,000.

Both defendants are facing maximum potential penalties of 10 years in prison each on the fraud offense and theft of funds offense, in addition to fines equal to the greatest of $250,000 per count or twice the gain or loss resulting from the offenses. 

U.S. Attorney Fishman credited special agents of Amtrak’s Office of Inspector General, Office of Investigations, Philadelphia office, under the direction of Special Agent in Charge Robert J. Koons, with the investigation leading to today’s charges.

The government is represented by Assistant U.S. Attorney Mala Ahuja Harker of the U.S. Attorney’s Office Special Prosecutions Division.

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

CAMDEN, N.J. – Three former employees of The Vacation Ownership Group LLC have been sentenced for their respective roles in conspiring to defraud owners of timeshare properties by offering phony consulting services, U.S. Attorney Paul J. Fishman announced today.

Jeffrey Sawyer, 53, of Mullica Hill, New Jersey, was sentenced to 12 months in prison and three years of supervised release. Aimee Allen, 30, of Myrtle Beach, South Carolina, was sentenced to three years of probation, with eight months of home confinement, 50 hours of community service and ordered to pay restitution of $197,440. Vincent Giordano, 31, was sentenced to four months in prison, four months of home confinement, 200 hours of community service and three years of supervised release.

All three defendants previously pleaded guilty before U.S. District Court Judge Noel L. Hillman in Camden federal court to one count of conspiracy to commit mail and wire fraud. Judge Hillman imposed the sentences on July 15, 2016.

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

The Vacation Ownership Group, a/k/a VO Group LLC, had offices in Mays Landing and Egg Harbor Township, N.J., and claimed to offer consulting services to owners of timeshares, including cancelling, purchasing and upgrading the timeshares.

Sawyer pretended to be a satisfied VO Group customer to persuade others to send money to the VO Group. He admitted causing more than $70,000 in losses; Allen would call customers and give them the false impression that she was working for a bank or lending institution. Allen then would falsely represent that the VO Group could pay off the customers' timeshares or have their timeshares cancelled. Allen also served as a "reference" for other VO Group employees by posing as a satisfied customer to persuade a new customer to send the VO Group money. After hearing Allen's false representations, some customers sent checks to the VO Group. Allen admitted to causing over $200,000 in losses.

U.S. Attorney Fishman credited special agents from the FBI’s Atlantic City Resident Agency, under the direction of Special Agent in Charge Timothy Gallagher in Newark; and special agents from the Department of Labor, Office of Inspector General, under the direction of Acting Special Agent in Charge Shannon Woolard, New York Region, for their roles in the investigation leading to the guilty pleas. He also thanked the N.J. Department of Labor, Benefit Payment Control Unit, for its assistance.

The government is represented by Assistant U.S. Attorney R. David Walk Jr. of the U.S. Attorney’s Office Criminal Division in Camden.

Defense counsel:

Sawyer: Mark E. Roddy Esq., Pleasantville, N.J.

Allen: Edward F. Borden Jr. Esq., Cherry Hill, N.J.

Giordano: Paul A. Sarmousakis Esq., Avalon, N.J.

Former New Jersey Transportation Commissioner Also Charged in Bribery Scheme

United Continental Holdings Inc. Agrees to Reforms, Will Pay $2.25 Million Penalty

David Samson, 76, of Aiken, South Carolina, and the former chairman of the Board of Commissioners of the Port Authority of New York and New Jersey, today pleaded guilty to bribery for using his official authority to pressure the parent company of United Airlines Inc. to institute a non-stop flight from Newark, New Jersey, to South Carolina for his personal benefit.

Jamie Fox, 61, of Lambertville, New Jersey, who at the time was a paid consultant and lobbyist for United Continental Holdings Inc. (United), the Chicago-based parent company of United Airlines Inc., was charged in a separate criminal complaint with conspiring to commit bribery.  United, which operated the route between Newark Liberty International Airport and Columbia Metropolitan Airport in South Carolina solely because Samson wanted it to travel to his house in South Carolina, entered into an agreement with the U.S. Attorney’s Office to cooperate, to institute substantial reforms to its compliance program and to pay a $2.25 million penalty.

These matters were announced today by U.S. Attorney Paul J. Fishman for the District of New Jersey, Inspector General Michael Nestor of the Port Authority of New York and New Jersey, Office of Inspector General and Special Agent in Charge Timothy Gallagher of the FBI’s Newark Division.

“This kind of case shakes public confidence in our institutions of government when people who are so accomplished, and who have occupied so many positions of public trust, misuse their authority to get something for themselves,” said U.S. Attorney Fishman.  “It’s a betrayal of our trust and what we have the right to expect from those in public life and it makes the job of every honest public employee just that much harder.”

“This case should serve as a strong wake-up call and warning to those public servants at all levels, who might consider abusing their official positions for their personal benefit, or the benefit of others,” said Inspector General Nestor.  “They should focus their efforts on fulfilling their agency’s mission without any consideration for how the agency can be misused for personal and other improper purposes.”

“The FBI’s stance on public corruption is that of zero tolerance and therefore one of our highest priorities,” said Special Agent in Charge Gallagher.  “We in the FBI believe that public corruption is among the most serious of criminal violations.  It is a betrayal of the public’s sacred trust.  If allowed to grow, public corruption permeates all aspects of society and affects all other criminal priorities.  And if allowed to spread unchecked, public corruption can threaten the very foundation of democracy.  These charges reflect the FBI’s commitment to fighting public corruption and we will continue to aggressively pursue those that participate in these types of crimes.”

Samson, who served as New Jersey Attorney General from 2002 to 2003 and was the founding member and chairman of the law firm Wolff & Samson PC, pleaded guilty today before U.S. District Judge Jose L. Linares in Newark federal court to an information charging him with one count of bribery. Fox, who was the commissioner of the New Jersey Department of Transportation from September 2014 to October 2015, was charged separately with conspiring with Samson to commit bribery.  Fox will have an initial appearance at a date to be determined.   

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

The Port Authority operates Newark Airport, one of United’s largest hubs.  In September 2011, several months after Samson became the chairman of the Port Authority, Samson and Fox met with representatives of United for dinner at a restaurant in New York.  During that dinner and following a discussion of certain of United’s priorities for Newark Airport, Samson told the United representatives that Continental Airlines Inc., a predecessor of United, used to have non-stop flight route between Newark Airport and Columbia Airport and that the route had made his travel from New Jersey to his home in South Carolina more convenient.  A United representative responded that United generally stopped flying routes because they were not profitable, but told Samson that United would look into reinstating the Newark/Columbia route.

Subsequent to this dinner and additional inquiries from Fox on Samson’s behalf, United concluded that reinstating the Newark/Columbia route would not be profitable and communicated United’s lack of interest to Fox.  Samson and Fox used Samson’s official position and authority as chairman of the Port Authority’s Board of Commissioners – which included control over the board’s agenda – to pressure United to reinstate the Newark/Columbia route.  In November 2011, Samson and Fox were aware that an agreement between United and the Port Authority relating to United’s construction of a wide-body maintenance hangar at Newark Airport was to be presented to the Port Authority Board for its consideration at its Nov. 5, 2011, meeting.  In an email exchange between Samson and Fox on Nov. 2, 2011, Samson and Fox discussed using Samson’s official authority to remove from the agenda the hangar agreement for the purpose of pressuring United to reinstate the Newark/Columbia route. Samson wrote Fox that he was “reviewing current Board agenda items of interest.”  Referring to the hangar agreement, Fox suggested to Samson that “[m]aybe it needs further review!!!!!,” to which Samson responded “[y]es, it’s already off this month’s agenda: I hate myself.”  Following through on this exchange with Fox, Samson caused the hangar agreement to be removed from the Port Authority Board’s agenda.         

In advance of the board’s next meeting on Dec. 8, 2011, Samson and Fox continued to use Samson’s official authority to pressure United.  On multiple occasions, Fox communicated to United that its failure to reinstate the route had made Samson angry and was having a negative impact on United’s relationship with the Port Authority. Samson and Fox also discussed further using Samson’s official authority over the board’s agenda to pressure United.  On Dec. 7, 2011, the day before the Port Authority Board’s meeting, Samson sent Fox an email telling him that Samson had given instructions to remove the hangar agreement from the agenda.  Fox responded that he thought it was a good time to put the agreement back on the agenda and Samson agreed to do so.  The Port Authority Board then considered the hangar agreement on Dec. 8, 2011, and approved it. Fox later emailed Samson: “Finally have their [United’s] attention.  Having item off/on this week worked,” referring to the hangar agreement.

As a result of the repeated use of Samson’s official authority to pressure United by Samson and Fox, United decided to reinstate the Newark/Columbia route. Based on Samson’s preferred travel schedule to South Carolina, which Fox communicated to United, the airline implemented a weekly schedule that only included flights from Newark Airport to Columbia Airport departing at 6:00 p.m. on Thursdays (with a returning flight the same night) and from Columbia Airport to Newark Airport departing at 6:20 a.m. on Mondays (after a flight to Columbia Airport the evening before).  United began flying the Newark/Columbia route in September 2012 and operated the route until March 2014.  Samson used the Newark/Columbia route on 27 occasions between October 2012 and January 2014.  Samson and others referred to the Newark/Columbia route as the “Chairman’s Flight” and Fox referred to it as “Samson Air.”   

Samson faces a maximum statutory penalty of 10 years in prison and a fine of $250,000 or twice the gross gain or loss from the offense.  Pursuant to the terms of the plea agreement between Samson and the U.S. Attorney’s Office, the maximum prison term that can be imposed on Samson is 24 months.  The count with which Fox is charged carries a maximum potential penalty of five years in prison and a fine of $250,000 or twice the gross gain or loss from the offense.

United has entered into an agreement with the U.S. Attorney’s Office regarding its conduct and the conduct of its employees in relation to the Newark/Columbia route.  United personnel understood that Samson wanted the route reinstated for his own personal use and that failing to reinstate it could adversely affect United’s business interests.  United’s decision to reinstate the route departed from its standard process for adding a route to United’s network, which included forecasts on how the route could be expected to perform, multiple levels of review and presentation to a group of senior United executives.  Consistent with analyses performed both before and after the decision to reinstate the route, United lost money by operating the route.  United has acknowledged that at no time prior to reinstating the route did United consult with any legal counsel or compliance personnel and United failed to report discussions about the Newark/Columbia route to law enforcement.

In addition to the monetary penalty, United agreed to cooperate with the U.S. Attorney’s Office, to report periodically to the office during a two-year period concerning United’s compliance efforts and to continue to implement an enhanced compliance program designed to prevent and detect bribery and corruption violations.  If United abides by the terms of the agreement, the office has agreed not to prosecute United for its conduct relating to the Newark/Columbia route.

The agreement acknowledges United’s extensive, thorough, timely and voluntary cooperation, including disclosing all non-privileged information regarding the conduct of its employees and agents related to the Newark/Columbia route, conducting an internal investigation, making its employees available for interviews, producing documents and other materials and making multiple presentations to the office.  United has engaged in early and extensive remediation, including improving its Ethics and Compliance Office, enhancing its global code of conduct and anti-bribery/anti-corruption policies, conducting extensive anti-bribery/anti-corruption training, separating from certain employees involved in the conduct relating to the Newark/Columbia route and developing a third-party due diligence process and compliance audit.     

U.S. Attorney Fishman credited criminal investigators of the Port Authority, Office of Inspector General, under the direction of Inspector General Nestor; special agents of the FBI, under the direction of Special Agent in Charge Gallagher and criminal investigators of the U.S. Attorney’s Office, for the investigation leading to today’s charges and guilty plea.   

The government is represented by Assistant U.S. Attorneys Vikas Khanna and Lee M. Cortes Jr. and Senior Litigation Counsel J Fortier Imbert of the U.S. Attorney’s Office Special Prosecutions Division and Assistant U.S. Attorney Steven G. Sanders, Deputy Chief of the Appeals Division.

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

Former New Jersey Transportation Commissioner Also Charged in Bribery Scheme

United Continental Holdings Inc. Agrees to Reforms, Will Pay $2.25 Million Penalty

NEWARK, N.J. – David Samson, the former chairman of the Board of Commissioners of the Port Authority of New York and New Jersey, today pleaded guilty to bribery for using his official authority to pressure the parent company of United Airlines Inc. to institute a non-stop flight from Newark to South Carolina for his personal benefit.

Jamie Fox, who at the time was a paid consultant and lobbyist for United Continental Holdings Inc. (United), the Chicago-based parent company of United Airlines Inc., was charged in a separate criminal complaint with conspiring to commit bribery. United, which operated the route between Newark Liberty International Airport and Columbia Metropolitan Airport in South Carolina solely because Samson wanted it to travel to his house in South Carolina, entered into an agreement with the U.S. Attorney’s Office to cooperate, to institute substantial reforms to its compliance program, and to pay a $2.25 million penalty.

These matters were announced today by U.S. Attorney Paul J. Fishman, Inspector General Michael Nestor of the Port Authority of New York and New Jersey, Office of Inspector General, and Special Agent in Charge Timothy Gallagher of the FBI’s Newark Division.

“This kind of case shakes public confidence in our institutions of government when people who are so accomplished, and who have occupied so many positions of public trust, misuse their authority to get something for themselves,” U.S. Attorney Fishman said. “It’s a betrayal of our trust and what we have the right to expect from those in public life and it makes the job of every honest public employee just that much harder.”

“This case should serve as a strong wake-up call and warning to those public servants at all levels, who might consider abusing their official positions for their personal benefit, or the benefit of others,” Inspector General Nestor said. “They should focus their efforts on fulfilling their agency’s mission without any consideration for how the agency can be misused for personal and other improper purposes.”

“The FBI’s stance on public corruption is that of zero tolerance and therefore one of our highest priorities,” Special Agent in Charge Gallagher said. “We in the FBI believe that public corruption is among the most serious of criminal violations. It is a betrayal of the public’s sacred trust. If allowed to grow, public corruption permeates all aspects of society and affects all other criminal priorities. And if allowed to spread unchecked, public corruption can threaten the very foundation of democracy. These charges reflect the FBI’s commitment to fighting public corruption and we will continue to aggressively pursue those that participate in these types of crimes.”

Samson, 76, of Aiken, South Carolina, who served as New Jersey Attorney General from 2002 to 2003 and was the founding member and chairman of the law firm Wolff & Samson PC, pleaded guilty today before U.S. District Judge Jose L. Linares in Newark federal court to an information charging him with one count of bribery. Fox, 61, of Lambertville, New Jersey, who was the commissioner of the N.J. Department of Transportation from September 2014 to October 2015, was charged separately with conspiring with Samson to commit bribery. Fox will have an initial appearance at a date to be determined.   

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

The Port Authority operates Newark Airport, one of United’s largest hubs. In September 2011, several months after Samson became the chairman of the Port Authority, Samson and Fox met with representatives of United for dinner at a restaurant in New York. During that dinner and following a discussion of certain of United’s priorities for Newark Airport, Samson told the United representatives that Continental Airlines Inc., a predecessor of United, used to have non-stop flight route between Newark Airport and Columbia Airport, and that the route had made his travel from New Jersey to his home in South Carolina more convenient. A United representative responded that United generally stopped flying routes because they were not profitable, but told Samson that United would look into reinstating the Newark/Columbia route.

Subsequent to this dinner and additional inquiries from Fox on Samson’s behalf, United concluded that reinstating the Newark/Columbia route would not be profitable and communicated United’s lack of interest to Fox. Samson and Fox used Samson’s official position and authority as chairman of the Port Authority’s Board of Commissioners – which included control over the board’s agenda – to pressure United to reinstate the Newark/Columbia route. In November 2011, Samson and Fox were aware that an agreement between United and the Port Authority relating to United’s construction of a wide-body maintenance hangar at Newark Airport was to be presented to the Port Authority Board for its consideration at its Nov. 5, 2011, meeting. In an email exchange between Samson and Fox on Nov. 2, 2011, Samson and Fox discussed using Samson’s official authority to remove from the agenda the hangar agreement for the purpose of pressuring United to reinstate the Newark/Columbia route. Samson wrote Fox that he was “reviewing current Board agenda items of interest.” Referring to the hangar agreement, Fox suggested to Samson that “[m]aybe it needs further review!!!!!,” to which Samson responded “[y]es, it’s already off this month’s agenda: I hate myself.” Following through on this exchange with Fox, Samson caused the hangar agreement to be removed from the Port Authority Board’s agenda.         

In advance of the board’s next meeting on Dec. 8, 2011, Samson and Fox continued to use Samson’s official authority to pressure United. On multiple occasions, Fox communicated to United that its failure to reinstate the route had made Samson angry and was having a negative impact on United’s relationship with the Port Authority. Samson and Fox also discussed further using Samson’s official authority over the board’s agenda to pressure United. On Dec. 7, 2011, the day before the Port Authority Board’s meeting, Samson sent Fox an email telling him that Samson had given instructions to remove the hangar agreement from the agenda. Fox responded that he thought it was a good time to put the agreement back on the agenda and Samson agreed to do so. The Port Authority Board then considered the hangar agreement on Dec. 8, 2011, and approved it. Fox later emailed Samson: “Finally have their [United’s] attention. Having item off/on this week worked,” referring to the hangar agreement.

As a result of the repeated use of Samson’s official authority to pressure United by Samson and Fox, United decided to reinstate the Newark/Columbia route. Based on Samson’s preferred travel schedule to South Carolina, which Fox communicated to United, the airline implemented a weekly schedule that only included flights from Newark Airport to Columbia Airport departing at 6:00 p.m. on Thursdays (with a returning flight the same night) and from Columbia Airport to Newark Airport departing at 6:20 a.m. on Mondays (after a flight to Columbia Airport the evening before). United began flying the Newark/Columbia route in September 2012 and operated the route until March 2014. Samson used the Newark/Columbia route on 27 occasions between October 2012 and January 2014. Samson and others referred to the Newark/Columbia route as the “Chairman’s Flight” and Fox referred to it as “Samson Air.”   

Samson faces a maximum statutory penalty of 10 years in prison and a fine of $250,000 or twice the gross gain or loss from the offense. Pursuant to the terms of the plea agreement between Samson and the U.S. Attorney’s Office, the maximum prison term that can be imposed on Samson is 24 months. The count with which Fox is charged carries a maximum potential penalty of five years in prison and a fine of $250,000 or twice the gross gain or loss from the offense.

United has entered into an agreement with the U.S. Attorney’s Office regarding its conduct and the conduct of its employees in relation to the Newark/Columbia route. United personnel understood that Samson wanted the route reinstated for his own personal use and that failing to reinstate it could adversely affect United’s business interests. United’s decision to reinstate the route departed from its standard process for adding a route to United’s network, which included forecasts on how the route could be expected to perform, multiple levels of review, and presentation to a group of senior United executives. Consistent with analyses performed both before and after the decision to reinstate the route, United lost money by operating the route. United has acknowledged that at no time prior to reinstating the route did United consult with any legal counsel or compliance personnel, and United failed to report discussions about the Newark/Columbia route to law enforcement.

In addition to the monetary penalty, United agreed to cooperate with the U.S. Attorney’s Office, to report periodically to the Office during a two-year period concerning United’s compliance efforts, and to continue to implement an enhanced compliance program designed to prevent and detect bribery and corruption violations. If United abides by the terms of the agreement, the Office has agreed not to prosecute United for its conduct relating to the Newark/Columbia route.

The agreement acknowledges United’s extensive, thorough, timely, and voluntary cooperation, including disclosing all non-privileged information regarding the conduct of its employees and agents related to the Newark/Columbia route, conducting an internal investigation, making its employees available for interviews, producing documents and other materials, and making multiple presentations to the Office. United has engaged in early and extensive remediation, including improving its Ethics and Compliance Office, enhancing its global code of conduct and anti-bribery/anti-corruption policies, conducting extensive anti-bribery/anti-corruption training, separating from certain employees involved in the conduct relating to the Newark/Columbia route, and developing a third-party due diligence process and compliance audit.     

U.S. Attorney Fishman credited criminal investigators of the Port Authority, Office of Inspector General, under the direction of Inspector General Nestor; special agents of the FBI, under the direction of Special Agent in Charge Gallagher, and criminal investigators of the U.S. Attorney’s Office, for the investigation leading to today’s charges and guilty plea.   

The government is represented by Assistant U.S. Attorneys Vikas Khanna and Lee M. Cortes Jr. and Senior Litigation Counsel J Fortier Imbert of the U.S. Attorney’s Office Special Prosecutions Division and Assistant U.S. Attorney Steven G. Sanders, Deputy Chief of the Appeals Division.

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

Defense counsel:

Samson: Michael Chertoff Esq., Washington, D.C., & Justin Walder Esq., Hackensack, N.J.

Fox: Michael Critchley Esq., Roseland, N.J.

United Continental Holdings Inc.: Jenner & Block LLP, Chicago

TRENTON, N.J. – A Pennsylvania woman was sentenced today to 60 months in prison for her role in a long-running, large-scale scheme involving the fraudulent sale of telecommunications equipment belonging to a company she worked for as a consultant, U.S. Attorney Paul J. Fishman announced.

Following an 11-day trial before U.S. District Judge Peter G. Sheridan in Trenton federal court, Juanita L. Berry, 48, of Phoenixville, Pennsylvania, was convicted in December 2015 of four counts of wire fraud, which caused more than $3.5 million in losses, and two counts of tax evasion for evading taxes in 2010 and 2011. The jury deliberated for 75 minutes before returning the guilty verdicts.

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

From 2008 to 2011, Berry worked as a consultant for an Indiana company that installed and removed telecommunications systems, first as a sales representative and later as the company’s vice president for major accounts. Initially, Berry worked out of the company’s Levittown, Pennsylvania, facility and, later, out of its Dayton, New Jersey, facility. The “brains” of the telecommunications systems the company installed and removed were the electronic circuit boards of varying complexity that range in price between several hundred to tens of thousands of dollars.

Berry owned a company named J. Starr Communications Inc., (J. Starr) through which she arranged her consulting agreement and allegedly operated her fraudulent scheme.

Without the knowledge or authorization of the telecommunications company’s management, Berry sold both used cards and new cards with other telecommunications equipment owned by the company as though such equipment belonged to her or J. Starr. She then pocketed the proceeds from such fraudulent sales. Berry deceived employees at the Levittown and Dayton facilities into thinking that the shipments of used cards were part of the telecommunications company’s normal course of business. Between 2008 and 2011, the Florida company that purchased the cards from Berry or J. Starr wired in excess of $3.5 million in payment to J. Starr’s bank account.

In addition to the prison term, Judge Sheridan sentenced Berry to three years of supervised release and ordered her to pay restitution of $3.4 million.           

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

The government is represented by Senior Litigation Counsel Andrew Leven and Assistant U.S. Attorney Lucy Muzzy of the U.S. Attorney’s Office in Newark.

NEWARK, N.J. - A Springfield, New Jersey, man was sentenced today to more than four years in prison for his role in a scheme that used bogus records and unqualified home health aides to defraud Medicare out of $7 million, U.S. Attorney Paul J. Fishman announced. 

Paul Mil, 67, previously pleaded guilty before U.S. District Judge Katharine S. Hayden in Newark federal court to an information charging him with conspiracy to commit health care fraud, money laundering and tax evasion. Judge Hayden imposed the sentence today in Newark federal court.

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

Mil was the owner of People Choice Home Care Inc., a home health care agency located in Elizabeth, New Jersey, that provided home health aides and health care services to New Jersey residents. Mil was also the registered agent for HHCH Health Care Inc. in Linden, New Jersey, a home health care agency owned by Irina Krutoyarsky, 62, of Springfield, New Jersey. Home health aides visit patients at their homes and provide a variety of services, such as assistance with eating, dressing and grooming. These services were subsidized under the New Jersey Medical Assistance Program (Medicaid).

Mil, Krutoyarsky and others defrauded Medicaid through a variety of ways. First, they submitted false documents to the New Jersey Board of Nursing, the state agency responsible for issuing home health aide certifications. Krutoyarsky falsely represented that prospective home health aides had attended and satisfactorily completed required training and testing. In truth, Krutoyarsky charged prospective home health aides hundreds of dollars for fraudulently obtaining their certifications.   

Second, Mil, Krutoyarsky and others fraudulently billed Medicaid for services not actually rendered to patients. Numerous HHCH home health aides routinely falsified records that claimed they had visited patients and provided them health care services. In truth, these home health aides had other jobs, were on vacations overseas, or were in other parts of the state during the times they claimed they were with patients. In certain instances, home health aides gave cash kickbacks to patients who were also participating in the scheme. 

Third, Mil, Krutoyarsky and others hired individuals with no home health certifications and no status in the country and then sent them to patients’ homes. They then billed Medicaid, fraudulently claiming that the services had been provided by duly certified home health aides. 

In total, Mil and others defrauded Medicaid out of $7 million. After Medicaid paid the claims and transferred the funds into bank accounts controlled by Mil, he used the proceeds to purchase real estate and personal property.

Additionally, between 2007 and 2011, Mil cheated the IRS out of approximately $918,000 in taxes due and owing. As part of the scheme, home health aides were sent to the homes of patients who were not eligible for Medicaid. These patients wrote checks payable to HHCH and People Choice. Mil then cashed these checks at check cashing businesses and equally divided the cash with Krutoyarsky. On his corporate tax returns, he falsely characterized these payments as legitimate business deductions, thus reducing his business’ corporate taxes.  He then filed federal individual income tax returns that concealed this income.

In addition to the prison term, Judge Hayden sentenced Mil to serve three years of supervised release and ordered him to pay forfeiture of $7 million. As part of his plea agreement, Mil also had to forfeit six homes and properties in New Jersey and New York.

U.S. Attorney Fishman credited agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; U.S. Citizenship and Immigration Services; New Jersey Office of the State Comptroller, Medicaid Fraud Division under the direction of Director Josh Lichtblau; The Enforcement Bureau of the New Jersey Attorney General’s Office on behalf of the Board of Nursing, Acting Attorney General Christopher S. Porrino; the New Jersey Department of Labor under the direction of Commissioner Harold J. Wirths; the Marlboro Police Department, under the direction of Chief Bruce Hall; and the U.S. Department of State-Diplomatic Security with the investigation leading to today’s sentencing.

The government is represented by Senior Litigation Counsel V. Grady O’Malley and Assistant U.S. Attorneys Peter Gaeta and Anthony Moscato of the New Jersey U.S. Attorney’s Office Criminal Division in Newark.

Defense Counsel: Nicholas G. Kaizer Esq., New York

TRENTON, N.J. – A Lancaster, Pennsylvania, man today admitted transporting goods stolen through a string of commercial burglaries in New Jersey, New York, and Pennsylvania, U.S. Attorney Paul Fishman announced. 

Jose Medina, 39, pleaded guilty before U.S. District Judge Mary L. Cooper in Trenton federal court to a superseding information charging him with one count of conspiracy to transport stolen goods in interstate commerce and one count of transportation of stolen goods in interstate commerce.

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

Jose Medina admitted that from October 2012 through August 2014, he conspired with his brother, Eliezer Medina, 38, of Ronks, Pennsylvania, and others to steal money by burglarizing stores in New Jersey, New York, Pennsylvania, and elsewhere, and thereafter transporting the stolen money across state lines. The conspiracy involved at least 22 burglaries and caused over $480,000 in losses. When committing the burglaries, the conspirators would typically scout the target store in advance, disable the alarm system, and use pry-bars, electrical saws, and other tools to gain access to the stores and safes.

The conspiracy charge to which Jose Medina pleaded guilty is punishable by a maximum penalty of five years in prison and carries $250,000 fine. The interstate transport of stolen goods charge is punishable by a maximum penalty of 10 years in prison and $250,000 fine.  

As part of his plea agreement, Medina has agreed to forfeit $487,364.44 in stolen proceeds. Sentencing is scheduled for Oct. 19, 2016.

U.S. Attorney Fishman credited special agents of the FBI in Newark, under the direction of Special Agent in Charge Timothy Gallagher, and special agents of the FBI in Philadelphia Branch, under the direction of Special Agent in Charge William F. Sweeney Jr., with the investigation leading to today’s guilty plea. He also thanked the Paramus, New Jersey; Wayne, New Jersey; and Pennsauken Township, New Jersey, police departments; the N.J. State Police; and the Lancaster City, Pennsylvania; East Lampert, Pennsylvania; Manor Township, Pennsylvania; Manheim Township, Pennsylvania; and East Hempfield, Pennsylvania, police departments for their work on the case.

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

Defense counsel:  Angelo Servidio, Esq.

Defendants to be Sentenced on Related Criminal Charges in August

NEWARK, N.J. – A Morris County, N.J., couple and their diagnostic imaging companies were ordered to pay more than $7.75 million for knowingly submitting false claims to Medicare for thousands of falsified diagnostic test reports and the underlying tests, U.S. Attorney for New Jersey Paul J. Fishman announced today.

Judge Stanley R. Chesler, sitting in Newark federal court, also found the defendants liable for knowingly submitting false claims for neurological tests conducted without physician supervision.

Judge Chesler ordered Nita K. Patel, 53, and Kirtish N. Patel, 53, both of Rockaway, New Jersey, and two companies that they owned and operated, Biosound Medical Services Inc. and Heart Solution PC, of Parsippany, New Jersey, to pay the United States $5 million in damages and $2.75 million in civil monetary penalties, plus interest for a total of $7,756,865. Judge Chesler ordered these payments after granting the United States’ motion for summary judgment on the two False Claims Act counts of a civil complaint that was filed in November 2015.

The Patels each pleaded guilty Nov. 17, 2015, to informations charging them with health care fraud related to this conduct.  Sentencing is currently scheduled for Aug. 16, 2016, before U.S. District Judge William H. Walls.

The government’s civil complaint alleged that defendants created fraudulent diagnostic test reports, forged physician signatures on these reports, and then billed Medicare for the fraudulent reports and the underlying tests that were used solely to create these reports. The complaint also alleged that defendants billed Medicare for neurological tests that they conducted without the required physician supervision.

The lawsuit was filed under the qui tam, or whistleblower, provisions of the False Claims Act.  The Act allows private citizens with knowledge of fraud to bring civil actions on behalf of the government and to share in any recovery. The False Claims Act also permits the government to intervene in such lawsuits, as it has done in this case. The whistleblower – a former employee of Biosound who brought the misconduct to the government’s attention – will receive 15 to 25 percent of the more than $7.7 million recovered by the government.

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

The government is represented by Assistant U.S. Attorney Charles Graybow of the U.S. Attorney’s Office Health Care and Government Fraud Unit. 

U.S. Attorney Paul J. Fishman 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 $1.3 billion in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug, and Cosmetic Act and other statutes.

The qui tam case is captioned U.S. ex rel. Jane Doe v. Heart Solution, PC, et al., No. 14-3644 (D.N.J.). 

Defense counsel:

Kirtish Patel: Anthony Fusco Jr. Esq., Passaic, New Jersey

Nita Patel: Frank Arleo Esq., West Orange, New Jersey

 

Counsel for relator:

Timothy J. McInnis Esq., New York

NEWARK, N.J. - A Nevada woman was convicted by a federal jury today for her role in a drug trafficking ring that supplied between 150 and 250 pounds of methamphetamine annually to the Jersey City, New Jersey, area from 2004 through 2014, U.S. Attorney Paul J. Fishman announced.

Margaret Tiangco, 40, of Las Vegas, was convicted of one count of distributing methamphetamine and one count of conspiring to distribute methamphetamine after a one-week trial before U.S. District Judge Kevin McNulty in Newark federal court. The jury deliberated for less than an hour before returning the verdict.

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

In 2003, Tiangco moved to Orange County, California, where she made contact with bulk suppliers of methamphetamine and brokered an agreement to ship as much crystal methamphetamine to New Jersey as the other conspirators could sell.  Over the course of the next 10 years, Tiangco served as a broker, distributor, retailer and organizer in the network as she travelled between Orange County, California, Las Vegas, Nevada, and Jersey City, New Jersey.

Tiangco and at least 14 others B  all of whom have since pleaded guilty B were arrested in 2014 on methamphetamine distribution and conspiracy charges.  For more than one year, the DEA High Intensity Drug Trafficking Area Task Force (HIDTA) led an investigation into a methamphetamine distribution network that operated in at least seven states and was responsible for shipping between 150 and 250 pounds of methamphetamine annually to the Jersey City area from 2004 through 2014.

Agents performed numerous controlled purchases of methamphetamine from members of the conspiracy using confidential informants. Between February 2014 and May 2014, agents obtained court orders to wiretap phones used by John Freehauf, 39, of Jersey City, a former immigration officer with U.S. Customs and Border Protection who was one of Tiangco’s conspirators.           

The distributing methamphetamine and conspiracy to distribute methamphetamine counts each carry a minimum penalty of 10 years in prison, a maximum penalty of life in prison and a $10 million fine. Sentencing is scheduled for Nov. 9, 2016.

U.S. Attorney Fishman credited special agents of the DEA, under the direction of Special Agent in Charge Carl J. Kotowski; inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Cynthia Shoffner; law enforcement officers from the N.J. National Guard Counter Drug Task Force, under the direction of the Adjutant General, Brig. Gen. Michael L. Cunniff; the Edison Police Department, under the direction of Chief Thomas Bryan, and the Joplin, Missouri, Police Department, under the direction of Chief Matt Stewart, with the investigation leading to today’s verdict. 

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

The government is represented by Assistant U.S. Attorneys Adam N. Subervi and Sharon Ashe of the U.S. Attorney’s Office Criminal Division in Newark.

Defense counsel: Paulette L. Pitt, Esq.

NEWARK, N.J. – An associate of the DeCavalcante organized crime family of La Cosa Nostra was sentenced today to 60 months in prison for his role in distributing more than 500 grams of cocaine, U.S. Attorney Paul J. Fishman announced.

James Heeney, 36, of Elizabeth, New Jersey, previously pleaded guilty before U.S. District Judge William H. Walls to an information charging him with one count of conspiring to distribute more than 500 grams of cocaine. Judge Walls imposed the sentence today in Newark federal court.

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

Heeney was arrested and charged by complaint in March 2015, along with eight members of the DeCavalcante crime family. At his plea hearing, he admitted that between August 2012 and March 2013, in conjunction with other family associates, he sold more than one-half a kilo of cocaine to an undercover FBI agent for at least $30,000.  

In addition to the prison term, Judge Walls sentenced Heeney to four years of supervised release.    

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; the N.J. State Commission of Investigation, under the direction of Acting Executive Director Lee C. Seglem; detectives of the Waterfront Commission of New York Harbor, under the direction of Executive Director Walter M. Arsenault; and the Union County Prosecutor’s Office, under the direction of Acting Union County Prosecutor Grace H. Park, for the investigation leading to today’s sentencing.

The government is represented by Senior Litigation Counsel V. Grady O’Malley and Assistant U.S. Attorney James Donnelly of the U.S. Attorney’s Office’s Organized Crime/Gangs Unit.

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

TRENTON, N.J. – A part owner of Bayway Lumber, a Linden, New Jersey, company that sold commercial and industrial products to numerous public and private entities, was sentenced today to 48 months in prison for his role in a scheme to defraud customers out of $708,386, U.S. Attorney Paul J. Fishman announced.

Robert R. Dattilo, 61, previously pleaded guilty before U.S. District Judge Peter G. Sheridan to an information charging him with one count of conspiracy to commit mail and wire fraud. Judge Sheridan imposed the sentence today in Trenton federal court.

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

From 2007 to November 2015, Dattilo conspired with others to defraud certain customers by engaging in fraudulent business practices, including overbilling, charging for more expensive items or larger quantities of items, and providing free items to employees of customers, then recouping the cost of the items (and additional profits) by overbilling and fraudulent billing.

At Dattilo’s direction, Bayway Lumber inflated the prices on items sold or intentionally failed to provide the prices called for in contractual agreements between Bayway Lumber and customers, including the University of Medicine and Dentistry of New Jersey (UMDNJ) and its successor entities – Rutgers University and University Hospital; the City of Elizabeth; and the New York Transit Authority. These methods included:

• Concealing the true cost of items to Bayway Lumber, sometimes by manually altering vendor invoices, in order to enable Bayway Lumber to bill UMDNJ higher mark-ups.

• Charging Elizabeth prices that did not apply the discounts called for by contracts.

• Consistently billing the Transit Authority for the most expensive items, such as doors, frames and door hardware, permitted by the contract, although Bayway Lumber was providing less-expensive items than what was ordered.

Dattilo also conspired to provide certain customers, such as the Philadelphia Housing Authority, Con Edison, the New York Department of Corrections and the City of Newark, with lower-quality lumber than the customers ordered and paid for. The lower-quality lumber, including “reject” lumber, did not meet certain industry specifications and was not of construction-grade quality, as required by contract.

To conceal this product substitution scheme, Dattilo directed Bayway Lumber employees to spray paint or rearrange the lower-quality lumber sent to the customer entities in order to hide any markings on the lumber that would indicate that it was the lower-quality lumber. At Dattilo’s direction, Bayway Lumber also issued invoices to customers that falsely described the lower-quality lumber as the higher-quality lumber that the customers ordered.

Employees of some of Bayway Lumber’s customers, including Amtrak, the Plainfield Board of Education and a Bergen County company identified in the information as “Company 1,” were given a variety of items, including electronics, tickets to sporting events, merchandise and gift cards. Bayway Lumber then overbilled and fraudulently billed those customers to recoup the cost of the gifts, plus additional profits. Dattilo kept a running tally of how much Bayway Lumber overbilled and fraudulently billed those customers, which Dattilo referred to as the “Bank,” to ensure that Bayway Lumber recovered the full cost of the free items.

In addition to the prison term, Judge Sheridan sentenced Dattilo to three years of supervised release and ordered him to pay restitution of $708,386 and a $2,000 fine.

U.S. Attorney Fishman credited special agents with the Office of Inspector General, U.S. Department of Housing and Urban Development, under the direction of Special Agent in Charge Christina Scaringi; special agents of the FBI, under the direction of Acting Special Agent in Charge Timothy Gallagher; and the Office of Inspector General, Amtrak, under the direction of Special Agent in Charge Robert Koons, as well as investigators of the U.S. Attorney’s Office, with the investigation leading to today’s sentencing.   

The government is represented by Assistant U.S. Attorneys Barbara R. Llanes and Cari Fais of the U.S. Attorney’s Office Special Prosecutions Division and Barbara Ward, Acting Chief of the U.S. Attorney’s Office Asset Forfeiture and Money Laundering Unit in Newark.    

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

NEWARK, N.J. – A Jersey City, New Jersey, man today admitted using social media to promote a sophisticated website that sold fake driver’s licenses, some of which were later used to commit financial crimes, U.S. Attorney Paul J. Fishman announced.

Abraham Corcino, 34, pleaded guilty before U.S. District Judge Jose L. Linares in Newark federal court to an information charging him with conspiracy to commit fraud in connection with authentication features. 

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

From October 2012 through August 2014, Ricardo Rosario, 33, of Jersey City, with the assistance of Corcino and Alexis Scott Carthens, 38, of Newark, New Jersey, sold fake driver’s licenses over the Internet. In connection with their illegal operation, the defendants ran a website that was available at “fakeidstore.co” and “fakedlstore.com.”

A number of the fake driver’s licenses sold by Corcino and other conspirators were used by criminal actors in connection with “cash out” schemes where stolen credit card information, usually obtained through hacking or ATM skimming operations, was encoded on to counterfeit credit cards and used to steal cash from victims’ accounts. 

Rosario created and ran the website. Corcino and Carthens assisted Rosario by creating and mailing the fake driver’s licenses purchased through the website. Corcino also maintained an Instagram account to promote the website.

The website sold fake New Jersey, Florida, Illinois, Pennsylvania, Rhode Island, and Wisconsin driver’s licenses, and the website boasted that the licenses had “scannable barcodes” and “real” holographic overlays. The price for each fake driver’s license was approximately $150, but the website offered bulk pricing for orders of 10 or more.

The website allowed its users to pay by bitcoin, a cryptographic-based digital currency, or MoneyPak, a type of prepaid payment card that could be purchased at retail stores. The “FAQ” section of the website indicated that orders would be received approximately one to two days after payment was received and described the website’s policy with respect to returns: “No Refunds. No snitching.” 

At the plea hearing, Corcino admitted promoting the website on social media and mailing the fake driver’s licenses to the website’s customers. 

The conspiracy to commit fraud in connection with authentication features charge carries a maximum potential penalty of 15 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for Oct. 19, 2016.

Carthens pleaded guilty to his role in the scheme on April 25, 2016 and awaits sentencing. The charges against Rosario are pending. The charges and allegations against him are merely accusations, and he is considered innocent unless and until proven guilty.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, and inspectors of the U.S. Postal Inspection Service, under the direction of Assistant Inspector in Charge Cynthia Shoffner, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorneys Andrew S. Pak of the Computer Hacking and Intellectual Property Section of the Economic Crimes Unit and Barbara Ward, Acting Chief of the U.S. Attorney’s Office Asset Forfeiture and Money Laundering Unit in Newark.

Defense counsel: Chistopher Adams, Esq.

NEWARK, N.J. – A West Orange, New Jersey, man who was the sole proprietor of two companies that purportedly provided printing and digital marketing services to the Newark Watershed Conservation and Development Corporation (NWCDC) today admitted his role in a conspiracy to fraudulently bill the NWCDC for more than $110,000 for work that was never performed, U.S. Attorney Paul J. Fishman announced.

Kevin Gleaton, 52, pleaded guilty before U.S. District Judge Jose Linares in Newark federal court to an information charging him with one count of conspiring to commit wire fraud with Donald Bernard, Sr., Linda Watkins Brashear, and others, to defraud the NWCDC of money and property and one count of misuse of Social Security numbers in connection with personal bankruptcy proceedings.

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

From May 2011 to September 2012, Gleaton conspired with Bernard, who was then employed as manager of Special Projects for the NWCDC, Brashear who was then the NWCDC executive director, and others, to defraud the NWCDC of more than $110,000 for work that was never performed by Gleaton or his companies. Gleaton was the owner of the Synergy Group, a company that received more than $58,000 in 2011 from the NWCDC, purportedly for printing services, as well as Mindshare Media, which received more than $52,000 from the NWCDC in 2012, purportedly for digital marketing services.

Gleaton deposited the payments issued to his companies by the NWCDC on the basis of fraudulent invoices, and then provided a substantial portion of the money received – more than $97,000 – to Bernard, who, in turn, shared a portion with Brashear, among others. Gleaton provided the money to Bernard either directly, or indirectly through the “consultant intermediary,” an individual who operated a firm that provided consulting services to the NWCDC. The conspiracy was facilitated by interstate wire transmissions, including emails sent by Bernard to Brashear and the consultant intermediary. Brashear pleaded guilty in December 2015 to scheming to defraud the NWCDC of her honest services in the affairs of the NWCDC by taking kickbacks (from various vendors including Gleaton), and of the NWCDC’s money and property, as well as to subscribing to a false federal personal income tax return. In January 2016, Bernard pleaded guilty to Counts 9 and 10 of a 20-count indictment returned in December 2014, charging him with the use of interstate facilities to promote and facilitate bribery in violation of the Travel Act, and Count 1 of an information that charged him with making and subscribing a false personal tax return.

Gleaton also admitted to using multiple Social Security numbers, other than the number lawfully issued to him by the Commission of Social Security, in connection with his bankruptcy filings in 2011 and 2012.

The counts of wire fraud conspiracy and misuse of Social Security numbers each carry a maximum potential penalty of five years in prison and a fine of the greatest of $250,000 per count or twice the gain or loss resulting from the offenses. Sentencing is scheduled for October 19, 2016.

U.S. Attorney Fishman credited special agents of the FBI’s Newark Field Office, under the direction of Special Agent in Charge Timothy Gallagher; the Social Security Administration, Office of the Inspector General, Office of Investigations, New York Field Division under the direction of Special Agent in Charge John Grasso; U.S. Department of Housing and Urban Development Office of Inspector General, Newark office, under the direction of Special Agent in Charge Christina Scaringi; IRS–Criminal Investigation, Newark Field Office, under the direction of Special Agent in Charge Jonathan D. Larsen; and criminal investigators of the U.S. Attorney’s Office, for the investigation leading to today’s guilty plea. U.S. Attorney Fishman also thanked the New Jersey Comptroller’s Office, under the direction of Philip J. Degnan, for its assistance in the investigation.

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

Defense counsel:  Ray Hamlin Esq., Newark

CAMDEN, N.J. – A Camden County, New Jersey, man was arraigned today on an indictment returned last week by a federal grand jury in Camden for allegedly possessing and distributing images of child sex abuse and also for conspiring to sexually exploit two minor children, U.S. Attorney Paul J. Fishman announced.

Alexander Capasso, 42, of Collingswood, New Jersey, appeared before U.S. Magistrate Judge Karen M. Williams and was detained without bail.

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

Capasso was originally charged by complaint in July 2015 by the Washington, D.C., U.S. Attorney’s Office with receiving and distributing images of child pornography after having sent several images of child pornography to an undercover law enforcement officer. The case was transferred to the District of New Jersey by the filing of a complaint in November 2015. The indictment returned last week charges one count of conspiracy to sexually exploit two minor children, five counts of distribution of images of child pornography and one count of possession of additional images of child pornography. Capasso has been held in federal custody since his July 20, 2015 arrest.

In July 2015, Capasso answered an ad placed by an undercover officer and began a series of communications by which Capasso sought sexually explicit images of children from the officer and sent images containing child pornographic images to the officer. As a result of the communications, federal agents obtained a search warrant for Capasso’s home and seized various electronic media containing numerous additional images and videos of child sexual abuse. Included among those images were photographs and videos of two minor children manufactured by Capasso and his ex-girlfriend in southern New Jersey.

The count of conspiracy to sexually exploit children carries a mandatory minimum penalty of 15 years in prison, a maximum potential penalty of 30 years in prison and a $250,000 fine.  The distribution of child pornography counts each carry a mandatory minimum penalty of five years in prison, a maximum possible penalty of 20 years in prison and fine of $250,000 per count. The count of possession of child pornography carries a maximum penalty of 10 years in prison and a $250,000.

U.S. Attorney Fishman credited special agents of the FBI, Philadelphia Division, under the direction of Special Agent in Charge William Sweeney, and the Washington, D.C., Field Office, under the direction of Assistant Director in Charge Paul M. Abbate, with the investigation leading to the charges.

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

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

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

TRENTON, N.J. – Two former executives of Louis Berger International (LBI), a New Jersey-based construction management company, have been sentenced in connection with a long-running bribery scheme to secure government construction management contracts by bribing officials in India, Indonesia, Vietnam and Kuwait. 

U.S. Attorney Paul J. Fishman of the District of New Jersey, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, and Special Agent in Charge Timothy Gallagher of the FBI’s Newark Division made the announcement today.

Richard Hirsch, 62, of Makaati, Philippines, was sentenced by U.S. District Judge Mary L. Cooper to two years of probation and fined $10,000.  Hirsch previously served as the senior vice president responsible for the company’s operations in Indonesia, Thailand, the Philippines and Vietnam. James McClung, 60, of Dubai, United Arab Emirates, was sentenced by Judge Cooper on July 7, 2016, to one year plus one day in jail.  McClung previously served as the senior vice president responsible for the company’s operations in India and Vietnam. On July 17, 2015, McClung and Hirsch each pleaded guilty before Judge Cooper in Trenton federal court to one count of conspiracy to violate the Foreign Corrupt Practices Act (FCPA) and one substantive count of violating the FCPA.    

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

From 1998 through 2010, LBI and its employees, including Hirsch and McClung, orchestrated $3.9 million in bribe payments to foreign officials in various countries in order to secure government contracts.  To conceal the payments, the conspirators made payments under the guise of “commitment fees,” “counterpart per diems” and other payments to third-party vendors.  In reality, the payments were intended to fund bribes to foreign officials who had awarded contracts to LBI or who supervised LBI’s work on contracts, the defendants admitted.

McClung cooperated with the government’s investigation by identifying other executives at LBI who had knowledge of bribery. Some of the information provided by McClung was also helpful to the government’s successful prosecution of LBI’s former CEO, Derrish Wolff, who pleaded guilty to accounting fraud in December 2014. 

On July 17, 2015, LBI entered into a deferred prosecution agreement and admitted its own criminal conduct, including its participation in a conspiracy to violate the anti-bribery provisions of the FCPA.  Pursuant to the DPA, LBI agreed to pay a $17.1 million criminal penalty, to implement rigorous internal controls, to continue to cooperate fully with the department and to retain a compliance monitor for at least three years. 

This case was investigated by the FBI’s Newark Division under the direction of Special Agent in Charge Gallagher. The government is represented by Assistant U.S. Attorney Thomas J. Eicher, chief of the Criminal Division for the U.S. Attorney’s Office, District of New Jersey, and Trial Attorney John W. Borchert of the Criminal Division’s Fraud Section.  The Criminal Division’s Office of International Affairs also provided assistance.  

Defense counsel:

Hirsch: William G. Sullivan Esq., Chicago, Illinois

McClung: Kelly B. Kramer Esq., Washington, D.C.

CAMDEN, N.J. – A Hudson County, New Jersey, man was sentenced today to 60 months in prison for his role in a $13 million mortgage fraud scam that used phony documents and “straw buyers” to make illegal profits on overbuilt condos in Wildwood and Wildwood Crest, New Jersey, U.S. Attorney Paul J. Fishman announced.

John Leadbeater, 59, of Kearny, New Jersey, previously pleaded guilty before U.S. District Judge Jerome B. Simandle to a superseding indictment charging him with conspiracy to commit wire fraud. Judge Simandle imposed the sentence today in Camden federal court.

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

Leadbeater and his conspirators located condominiums overbuilt by financially distressed developers in Wildwood and Wildwood Crest, New Jersey. They then recruited “straw buyers” from New Jersey, New York, Ohio, Arkansas, and California, to purchase those properties. The straw buyers had good credit scores, but lacked the financial resources to qualify for the mortgage loans. The conspirators created false documents, including loan applications that contained fraudulent financial and employment information, to make the straw buyers appear more credit-worthy and induce the lenders to make the loans. 

Once the loans were approved, Leadbeater and his conspirators created and signed fraudulent closing documents in order to induce the mortgage lenders to send the loan proceeds in connection with real estate closings on the properties. Once the mortgage lenders sent the loan proceeds, Leadbeater and his conspirators took a portion of the proceeds, having funds wired or checks deposited into various accounts they controlled. They also distributed a portion of the proceeds to the other members of the conspiracy for their respective roles.

Leadbeater admitted to personally participating in fraudulent activity related to nine properties in Wildwood and Wildwood Crest.  He admitted causing mortgage lenders to fund $4,711,557 worth of mortgages based on the bogus loan applications and closing documents prepared by him and his conspirators.

In addition to the prison term, Judge Simandle sentenced Leadbeater to five years of supervised release. A restitution hearing has been set for July 28, 2016.

U.S. Attorney Fishman credited special agents from the FBI’s Atlantic City Resident Agency, under the direction of Special Agent in Charge Timothy Gallagher in Newark; and special agents of IRS-Criminal Investigation in Mays Landing, under the direction of Special Agent in Charge Jonathan D. Larsen in Newark, for the investigation leading to today’s sentencing. 

The government is represented by Assistant U.S. Attorneys Jacqueline M. Carle and Matthew T. Smith of the U.S. Attorney's Office Criminal Division in Camden.

Defense counsel: Thomas J. Cammarata Esq. and Jeffrey Garrigan Esq., Jersey City

NEWARK, N.J. –A Union County, New Jersey, woman today admitted accepting kickbacks in exchange for using her company as a “straw” contractor that allowed non-minority owned firms to circumvent regulations on federally funded transportation projects, U.S. Attorney Paul J. Fishman announced.

Carol Sanzo, 69, of Cranford, New Jersey, pleaded guilty before U.S. District Judge William H. Walls in Newark federal court to an information charging her with one count of conspiracy to commit wire fraud.   

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

The U.S. Department of Transportation requires that general contractors seeking to perform certain work on federally funded transportation projects must either subcontract, or demonstrate a good faith effort to subcontract, a percentage of the work to Disadvantaged Business Enterprises (DBEs), which include small businesses that are at least 51 percent owned by women, Hispanic Americans, African Americans, Native Americans, and Asian Americans.

Sanzo owned Sanzo Ltd., a purported broker and supplier of construction materials that she operated as a DBE. Sanzo admitted that in return for kickbacks, her company would act as a “straw” or “pass-through” DBE and accept payment for goods and services that were actually provided by non-DBE contractors on federally funded projects.

For instance, Sanzo admitted that from 2008 through July 2011, she acted as a pass-through between a prime contractor and a non-DBE fuel provider on the Willis Avenue Bridge Project in New York. In order to circumvent the DBE requirements, Sanzo submitted multiple documents that falsely represented that Sanzo Ltd. was supplying fuel to the Willis Avenue Bridge Project when it was actually being supplied by the non-DBE fuel company.

The wire fraud conspiracy to which Sanzo pleaded guilty 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 is scheduled for Oct. 18. 2016.

U.S. Attorney Fishman credited special agents with the U.S. Department of Transportation, Office of Inspector General, under the direction of Special Agent in Charge Douglas Shoemaker, and criminal investigators of the Port Authority, Office of Inspector General, under the direction of Inspector General Michael Nestor, with the investigation leading to today’s guilty plea.

The government is represented by Special Litigation Counsel Andrew Leven of the U.S. Attorney’s Office Economic Crimes Unit and Barbara Ward, Acting Chief of the U.S. Attorney’s Office Asset Forfeiture and Money Laundering Unit in Newark.

Defense counsel: Raymond Brown, Esq., Woodbridge, New Jersey