District of New Jersey

NEWARK, N.J. – Saint Michael’s Medical Center Inc., located in Newark, New Jersey, has agreed to pay $450,000 to resolve allegations that it falsely billed Medicare and Medicaid for medically unnecessary cardiac procedures, U.S. Attorney Paul J. Fishman announced today.

Under Medicare and Medicaid rules, health care providers have a duty to provide services only when they are medically necessary. In addition, government health care programs only authorize payment for reasonable and necessary medical services. Today’s settlement resolves allegations that, during the period from Jan. 1, 2009, through Jan. 1, 2015, Saint Michael’s allegedly submitted claims for percutaneous coronary interventions, catheterizations, and stents performed in its cardiac catheterization lab that were not medically necessary.

The allegations were raised in a lawsuit filed under the qui tam, or whistleblower, provisions of the False Claims Act. The act allows private citizens with knowledge of fraud to bring civil actions on behalf of the government and to share in any recovery.

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 to the settlement. 

The government is represented by Assistant U.S. Attorneys Lucy Muzzy and Bernard J. Cooney of the Health Care and Government Fraud Unit and Assistant U.S. Attorney Eamonn J. O’Hagan of the office’s Financial Litigation Unit.

U.S. Attorney 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 $1.29 billion in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.

The claims settled by this agreement are allegations only, and there has been no determination of liability.

Defense counsel: Bruce Levy Esq., Newark.

Relator’s counsel: David J. Caputo Esq., Philadelphia

NEWARK, N.J. – The owners and operators of a purported hedge fund will appear in court today on charges that they defrauded more than two dozen investors by making extraordinary guarantees about investment returns and then used the money for extravagant purchases and to pay off other victims, U.S. Attorney Paul J. Fishman announced. 

Alcibiades Cifuentes, 33, and his wife, Jennifer Wee Cifuentes, 35, both of West New York, New Jersey, were arrested by U.S. Postal Inspectors and criminal investigators with the U.S. Attorney’s office and charged by complaint with commodities fraud and mail fraud. They are scheduled to appear this afternoon before U.S. Magistrate Judge Leda Dunn Wettre in Newark federal court.   

According to the criminal complaint:

Alicbiades and Jennifer Wee Cifuentes allegedly engaged in an investment fraud scheme from 2012 through March 2015. They fraudulently induced victims to invest in the foreign currency and commodity markets through Cifuentes Fund Management (CFM), their hedge fund that purportedly invested in foreign currencies, and then almost immediately spent those investment funds on personal items, such as an Audi R8 and jewelry. The couple would then pay back a portion of the victims’ money with money received from newly duped victims. They allegedly defrauded approximately 25 victims of approximately $590,000. 

The count of mail fraud with which the defendants are each charged carries a maximum potential penalty of 20 years in prison and a fine of $250,000, or twice the gross gain or loss caused by the scheme. The count of commodities fraud carries a maximum potential penalty of 10 years in prison and a fine of $1 million, or twice the gross gain or loss.

U.S. Attorney Fishman credited inspectors of the U.S. Postal Inspection Services under the direction of Acting Inspector in Charge Cynthia Shoffner, and criminal investigators with the U.S. Attorney’s Office, for the investigation leading to the arrests. He also thanked the N.J. Bureau of Securities in the State Attorney General’s Division of Consumer Affairs, under the direction of Acting Attorney General Robert Lougy and Bureau Chief Laura H. Posner, as well as the U.S. Commodity Futures Trading Commission’s Division of Enforcement, under the direction of Director Aitan Goelman, for their respective roles in the investigation.

The government is represented by Assistant U.S. Attorney Paul Murphy, Chief of the U.S. Attorney’s Office’s Economic Crimes Unit.

NEWARK, N.J. – U.S. Attorney Paul J. Fishman announced that Assistant U.S. Attorney Melissa L. Jampol will be recognized by the New Jersey Women In Law Enforcement Inc. (NJWLE) with a 2016 Meritorious Service Award at a ceremony today at the organization’s annual conference in New Brunswick.

 “I am proud to celebrate this extremely talented member of our staff,” said U.S. Attorney Fishman. “And I’m delighted that NJWLE recognizes the important contributions our office makes to law enforcement.”

Jampol was honored for her exceptional achievement in carrying out her duties. Since joining the U.S. Attorney’s Office in 2005, she has served with distinction in the office’s Violent Crimes Unit, Organized Crime & Gangs Unit, and the Health Care and Government Fraud Unit. She is being recognized for her excellent advocacy and litigation skills and her unwavering dedication to justice.

Jampol led the prosecution team that obtained the 2015 convictions of Carolyn Jackson and John E. Jackson for subjecting the three young, developmentally delayed children that they fostered and adopted to an ongoing course of physical abuse, cruelty, malnourishment, and neglect. Jampol has investigated and prosecuted numerous members of the Fruit Town and Brick City Brims Sets of the Bloods Street gang in northern New Jersey for racketeering, conspiracy to commit murder, and distribution of narcotics. She has also prosecuted a multimillion-dollar health care fraud scheme carried out by a blood laboratory company, which paid doctors bribes in exchange for patient referrals and for ordering unnecessary tests.

Founded in 2004, the NJWLE is a professional organization of both men and women who work together to strengthen public recognition of the unique contributions of women to the profession of law enforcement through the celebration of diversity and collaborative leadership.

TRENTON, N.J. – A Piscataway, New Jersey, man today admitted conspiring with employees of Bayway Lumber in Linden, New Jersey, to use phony invoices to defraud the Plainfield Board of Education, resulting in losses of $19,927, U.S. Attorney Paul J. Fishman announced.

Robert E. Banks, 54, pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton federal court to an information charging him with one count of conspiracy to commit mail and wire fraud.

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

From 2007 to September 2015, Bayway Lumber had contracts with the Plainfield Board of Education to provide certain products at specified discounts from the manufacturer’s listed prices. Banks was a carpenter and locksmith in the Plainfield Board of Education’s maintenance department and was responsible for purchasing supplies from vendors.

During that time, Bayway Lumber charged the Plainfield Board of Education prices that did not include the contractual discounts and, at times, even charged the Plainfield Board of Education for items it did not receive. Afterwards, Banks signed off on the fraudulent and overbilled invoices. In return, the Bayway Lumber employees used a portion of the proceeds to purchase over $9,000 in valuable items for Banks, including a laptop computer, a lawnmower, construction materials, and a dishwasher. 

The charge to which Banks pleaded guilty carries a maximum potential penalty of five years in prison and $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for Aug. 29, 2016.

Robert R. Dattilo, a part owner of Bayway Lumber, pleaded guilty before Judge Sheridan on Feb. 18, 2016, to conspiracy to commit mail and wire fraud in connection with this and other fraudulent activity. He is scheduled to be sentenced on July 12, 2016.

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 Special Agent in Charge Timothy Gallagher in Newark; 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 guilty plea.   

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 in Newark.    

Defense counsel: Lorraine Gauli-Rufo Esq., Verona, New Jersey

TRENTON, N.J. – A Jersey City, New Jersey, man was convicted by a federal jury today for his role as a heroin and cocaine supplier to a large-scale drug trafficking organization that operated in Ocean and Monmouth Counties and elsewhere in New Jersey, U.S. Attorney Paul J. Fishman announced.

Thomas Shannon, a/k/a “Cuzzo,” 37, was convicted of four counts of an indictment charging him with one count of conspiracy to distribute cocaine and more than a kilogram of heroin, one count of possession with intent to distribute heroin and cocaine, one count of possession of a firearm in furtherance of a drug trafficking crime, and one count of engaging in a monetary transaction in criminally derived property. Shannon was convicted following a two-week trial before U.S. District Judge Peter G. Sheridan in Trenton federal court. The jury deliberated for three hours before returning the verdict.

Between March and May 2014, 21 other individuals, including numerous alleged members of the drug trafficking organization to which Shannon supplied narcotics, were charged in two separate criminal complaints with conspiring to distribute heroin and other related offenses. The complaint referred to the drug trafficking organization as the “Britt-Young DTO,” after its leaders, Robert Britt, a/k/a “True,” and Rufus Young, a/k/a “Equan,” a/k/a “E-Money,” a/k/a “Kintock.”  Of the 22 individuals charged, 21 have been convicted to date. 

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

Between October 2013 and March 2014, Shannon conspired with others to distribute heroin and cocaine in Ocean and Monmouth counties, including to the Britt-Young DTO. Shannon obtained some of his narcotics from conspirators in California, who shipped packages containing large quantities of heroin and cocaine from California to Shannon in New Jersey. The packages were sent to a residence in Perth Amboy, New Jersey, and received by another conspirator, who then gave the packages to Shannon. Shannon then transported the narcotics to stash house locations that he controlled in Asbury Park and Long Branch, New Jersey, where he packaged the heroin and cocaine and prepared it for distribution to other dealers. Shannon packaged some of the heroin in small plastic bags that were “stamped” with brand names or markings to distinguish it from other narcotics sold in or around the Monmouth County area.

To pay for the drug shipments, Shannon and others acting at his direction deposited cash into numerous third-party bank accounts provided by the conspirators in California, who then withdrew the cash at bank branch locations in California.

Shannon used numerous cellular telephones to communicate with his conspirators, including through text messages, and he and his conspirators often spoke in code to disguise the illegal nature of their communications. For example, Shannon and a leader of the Britt-Young DTO referred to cocaine as “Kristine.” Shannon also acquired and possessed firearms in furtherance of the drug trafficking conspiracy, including a Smith and Wesson .38 caliber revolver and a Sturm, Ruger & Co. Inc. .40 caliber handgun.     

The conspiracy count carries a minimum potential penalty of 10 years in prison, a maximum of life in prison, and a $10 million fine. The possession of controlled substances count with which Shannon is charged carries a minimum potential penalty of five years in prison, a maximum of 40 years in prison, and a $5 million fine. The possession of a firearm in furtherance of a drug trafficking offense count carries a minimum potential penalty of five years in prison and a maximum of life in prison, which must be served consecutive to any sentence imposed in connection with the underlying drug trafficking offenses. The engaging in a monetary transaction in criminally derived property count carries a maximum potential penalty of 10 years in prison and a $250,000 fine. Sentencing is scheduled for Aug. 30, 2016.

U.S. Attorney Fishman credited special agents of the FBI, Red Bank Resident Office, under the direction of Special Agent in Charge Timothy Gallagher in Newark; officers of the Brick Township Police Department, under the direction of Chief James Riccio: and officers of the Toms River Police Department, under the direction of Chief Mitchell A. Little, with the investigation leading to today’s verdict.

He also thanked special agents of the Bureau of Alcohol Tobacco Firearms and Explosives (ATF), under the direction of Special Agent in Charge George P. Belsky; inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Cynthia Shoffner; officers of the Monmouth County Prosecutor’s Office, under the direction of Prosecutor Christopher Gramiccioni; and officers of the Ocean County Prosecutor’s Office, under the direction of Prosecutor Joseph D Coronato. He also thanked the Monmouth County Sheriff’s Office and the Neptune Township, Asbury Park, Marlboro, and Long Branch police departments for their roles in the case.

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

Defense Counsel:  Edward Bertucio Esq., Eatontown, New Jersey

NEWARK, N.J. – An Essex County, New Jersey, man today admitted his role in a conspiracy to illegally obtain and distribute oxycodone in New Jersey, U.S. Attorney Paul J. Fishman announced.

Rickie Horvath, 54, of Belleville, New Jersey, pleaded guilty before U.S. District Judge Esther Salas in Newark federal court to an indictment charging him with one count of conspiracy to distribute oxycodone.

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

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

Horvath admitted that from Feb. 5, 2014, to Aug. 13, 2014, he personally went to various doctors’ offices and obtained prescriptions for pills containing oxycodone, had the prescriptions filled, and sold the pills to members of the conspiracy and others. He said that on a single day in June 2014, he traveled to a doctor’s office in Livingston, New Jersey, where he and two conspirators each obtained a prescription for 60 Endocet pills. Horvath and his conspirators dropped off the three prescriptions to be filled by a pharmacy in East Orange, New Jersey. Horvath admitted that he and his two conspirators then found a fourth conspirator to buy the 180 Endocet pills. Horvath and his conspirators traveled to the East Orange pharmacy with the third conspirator buyer, where Horvath used the fourth conspirator’s money to purchase the filled prescriptions. Horvath and his conspirators then sold the 180 Endocet pills to the fourth conspirator.                                                     

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

abuse, a currently accepted medical use with severe restrictions, and abuse of the drug may lead

to severe psychological or physical dependence. The Endocet pills obtained and sold by Horvath each contained 10 milligrams of oxycodone.

The charge to which Horvath pleaded guilty carries a maximum potential penalty of 20 years in prison and a $1 million fine. Sentencing is scheduled for Sept. 12, 2016.

Of the individuals originally charged with Horvath – Victoria Horvath, 43, of Belleville, New Jersey; Monica Horvath, 22, Tony Marco, 47, and Steven Horvath, 45, all of Rutherford, New Jersey; and Justin Farraj, 24, of Newark, New Jersey – all have pleaded guilty and await sentencing. Brian Perez, 23, was sentenced in September 2014 to 40 months in prison. Luis Rivera, 25, was sentenced in August 2015 to 54 months in prison. In April 2016, Daniel Horvath, 27, was sentenced to 27 months in prison and Johnny Horvath, 46, was sentenced to 30 months in prison. Charges were dismissed against Belleville pharmacist Vincent Cozzarelli after his death in April 2014.

The indictment remains pending against five other conspirators; the charges and allegations in the indictment against them are merely accusations, and they remain innocent unless and until proven guilty.

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

The government is represented by Assistant U.S. Attorney Sara F. Merin of the OCDETF/Narcotics Unit of the U.S. Attorney’s Office in Newark. The principal mission of the OCDETF program, under which this investigation was conducted, is to identify, disrupt and dismantle the most serious drug-trafficking, weapons-trafficking and money-laundering organizations, and those primarily responsible for the nation’s illegal drug supply.

Defense counsel: Damian Conforti Esq., Newark

NEWARK, N.J. – A North Bergen, New Jersey, man was sentenced today to 360 months in prison for leading an armed robbery spree of banks and commercial establishments in Bergen and Hudson counties in July 2013, U.S. Attorney Paul J. Fishman announced.

Gary Bohanan, 47, previously pleaded guilty before U.S. District Judge Claire C. Cecchi in July 2014 to a superseding indictment charging him with one count of conspiracy to commit armed bank robberies and Hobbs Act robberies, two counts of armed bank robbery, and two counts of armed Hobbs Act robbery. Judge Cecchi imposed the sentence today in Newark federal court.

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

On July 10, 2013, Bohanan and Ramon Lopez, 25, of Union City, New Jersey, donned masks and entered a McDonald’s restaurant in North Bergen. Bohanan brandished a handgun and demanded money from the employees. Bohanan and Lopez then took $1,600 from the cash registers and fled in a car driven by Josephine Chenet, formerly of North Bergen.

On July 18, 2013, Bohanan, Angel Feliu, 22, of North Bergen, Lopez, and Chenet cased Le Chateau restaurant in West New York, New Jersey, for the purpose of robbing it. After waiting for an employee to close the restaurant, Bohanan and the other individuals followed the employee home and robbed her at gunpoint of $6,000 in proceeds from the restaurant.

On July 22, 2013, Bohanan, Feliu, and Chenet robbed the Sovereign Bank (now Santander Bank) in Secaucus, New Jersey.  Bohanan and Feliu entered the bank at 10:11 a.m. Both men wore latex gloves and masks. Once inside the Sovereign Bank, Bohanan jumped over the counter and proceeded to empty two drawers of money into a black bag, while pointing a black handgun at the bank tellers. As Bohanan emptied the drawers, Feliu stood guard. Bohanan and Feliu then fled the bank with $21,961 and shared the proceeds of the robbery with Lopez and Chenet.

On July 26, 2013, Bohanan, Feliu, and Chenet robbed the TD Bank in Fairview, New Jersey. Bohanan and Feliu entered the bank at 9:48 a.m. Bohanan and Feliu both wore latex gloves and masks. Feliu, however, was captured by the bank’s video surveillance system before he pulled the mask on. Feliu brandished a knife at employees and customers. Bohanan brandished what appeared to be a black handgun, but was later identified as an air pistol. Bohanan then jumped over the counter and emptied two drawers of money into a black bag, while pointing the air pistol at bank tellers. As Bohanan emptied the drawers, Feliu stood guard and held bystanders back by brandishing the knife.

Bohanan and Feliu fled on foot and were followed by concerned citizens and victims of the bank robbery. Bohanan encountered a white GMC Savana van, pointed the air pistol at the driver and ordered the driver out. Bohanan then attempted to flee the area by driving away in the van, but crashed it into a nearby structure after a short distance, at which point he attempted to flee the area on foot.

Law enforcement and concerned citizens located Bohanan hiding under a truck parked a short distance away. He had with him a black bag containing a black air pistol and money covered with red dye. Feliu separated from Bohanan after the bank robbery and fled in a car driven by Chenet.  Shortly thereafter, Feliu exited Chenet’s vehicle and fled on foot into a nearby cemetery where he was located and arrested.

In addition to the prison term, Judge Cecchi sentenced Bohanan to five years of supervised release.

Feliu pleaded guilty in a separate proceeding to one count of conspiracy to commit armed bank robberies and Hobbs Act robberies and two counts of armed bank robbery.  Feliu was sentenced in March 2015 to 46 months in prison. Lopez also pleaded guilty in a separate proceeding to one count of conspiracy to commit armed bank robberies and Hobbs Act robberies and two counts of Hobbs Act robberies. Lopez was sentenced in March 2015 to 47 months in prison. Charges that had been pending against Chenet for her role in the robberies were dismissed due to her death on June 22, 2014.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, with the investigation. He also thanked the Fairview, North Bergen, and Secaucus police departments for their contributions to the case.

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

Defense counsel: Michael Pedicini Esq., Chatham, New Jersey

NEWARK, N.J. – A Warwick, New York, man was convicted by a federal jury today of coercing a minor to engage in sexually explicit conduct and traveling from New York to Passaic County, New Jersey, to have sexual intercourse with another minor, U.S. Attorney Paul J. Fishman announced.

Clifford W. Wares, 43, was convicted of all six counts of an indictment charging him with one count of production of child pornography, one count of interstate travel to engage in illicit sexual conduct, two counts of online enticement of a minor to engage in criminal sexual conduct, and two counts of interstate extortionate threat. Wares was convicted following a six-day trial before U.S. District Judge Esther Salas in Newark federal court. The jury deliberated for less than three hours before returning the verdict. 

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

From June 2011 through October 2011, Wares used email, telephone and Facebook to communicate with a 13-year-old girl in Passaic County (“Victim 1”). Wares used a fake Facebook account to pretend to be another minor who was known to Victim 1 and introduce himself as someone with whom Victim 1 should communicate. Afterwards, Wares sent Victim 1 pornographic images and engaged in sexually explicit communications, ultimately asking that she send him images and videos of herself nude or engaging in sex acts, which she did. On occasions when she did not comply, Wares threatened to distribute nude images of Victim 1 to her parents and friends.

In June 2011, Wares met a 14-year-old girl residing in Passaic County (“Victim 2”) via an online social network. From June 2011 through August 2011, Wares regularly engaged in sexually explicit communications with Victim 2, sent her pornographic images and told her that he was interested in “hanging out” with her. Wares then drove from his home in Warwick, New York, to Passaic County where he picked her up in his vehicle. Wares engaged in sex acts with Victim 2 in a nearby park. After a second encounter, Wares threatened to harm Victim 2’s reputation and property when she refused to meet him again.

Wares was ultimately apprehended after a search for him was conducted via land and helicopter in an Orange County, New York park. Among his possessions upon his arrest were a roll of duct tape, a pair of handcuffs, a knife, and a handwritten list of the names of other minors who were known to Victims 1 and 2.

The charge of production of child pornography carries a maximum potential penalty of 30 years in prison and a mandatory minimum penalty of 15 years in prison. The charge of interstate travel to engage in illicit sexual conduct carries a maximum potential penalty of 30 years in prison. The counts of online enticement of a minor to engage in criminal sexual conduct each carry a maximum potential penalty of life in prison and a mandatory minimum penalty of 10 years in prison. The interstate extortionate threat counts each carry a maximum potential penalty of two years in prison. Each of the above charges is also punishable by a potential $250,000 fine. Sentencing is scheduled for June 27, 2016.

U.S. Attorney Fishman credited Special Agents with the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, the New Jersey Regional Computer Forensics Laboratory, the Passaic County Prosecutor’s Office, and the New York State Police with the investigation leading to today’s conviction.

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

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

First Hacker Convicted in Conspiracy to Steal 150,000 Press Releases from Three Major Newswire Companies for Use in Illicit Trades

NEWARK, N.J. – A Ukrainian hacker today admitted his role in an international scheme to hack into three business newswires, steal yet-to-be published press releases containing non-public financial information, and use the information to make trades that allegedly generated approximately $30 million in illegal profits, U.S. Attorney Paul J. Fishman announced.

Vadym Iermolovych, 28, of Kiev, Ukraine, pleaded guilty before U.S. District Judge Madeline Cox Arleo to a three-count information charging him with conspiracy to commit wire fraud, conspiracy to commit computer hacking, and aggravated identity theft.

Iermolovych was arrested on Nov. 12, 2014 in connection with other charges related to computer hacking and credit card fraud. Today’s guilty plea marks the first conviction of one of the hackers responsible for breaching the networks of Marketwired L.P. (Marketwired), PR Newswire Association LLC (PRN), and Business Wire (collectively, the “Victim Newswires”), and stealing press releases containing confidential nonpublic financial information relating to hundreds of companies traded on the NASDAQ and NYSE.

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

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

Five other members of the conspiracy – two computer hackers and three securities traders – were charged by federal indictment brought by the District of New Jersey (DNJ). The related 23-count DNJ indictment charged Ivan Turchynov, 28, Oleksandr Ieremenko, 24, and Pavel Dubovoy, 33, all of Ukraine, Arkadiy Dubovoy, 51, and Igor Dubovoy, 29, of Alpharetta, Georgia. Arkadiy Dubovoy and Igor Dubovoy both pleaded guilty to the wire fraud conspiracy charged in Count One of the DNJ indictment on Feb. 18, 2016 and Jan. 20, 2016, respectively.

The Eastern District of New York (EDNY), in a related indictment, charged four securities traders: Vitaly Korchevsky, 50, of Glen Mills, Pennsylvania, Vladislav Khalupsky, 45, of Brooklyn, New York and Odessa, Ukraine, Leonid Momotok, 48, of Suwanee, Georgia, and Alexander Garkusha, 48, of Cummings and Alpharetta, Georgia. Garkusha pleaded guilty to the wire fraud conspiracy charged in Count One of the EDNY indictment on Dec. 21, 2015.

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

The hackers shared the stolen releases with the traders using overseas computer servers that they controlled. In a series of emails, the hackers even shared “instructions” on how to access and use the overseas server where they shared the stolen releases with the traders, and the access credentials and instructions were distributed amongst the traders.  In an email, which was sent by one of the traders, the instructions for accessing the overseas server suggested that users conceal their Internet Protocol address when accessing the server as a precaution to avoid detection.  The traders created “shopping lists” or “wish lists” for the hackers listing desired upcoming press releases for publicly traded companies from Marketwired and PRN. Trading data obtained over the course of the investigation showed that, after the shopping list was sent, the traders and others traded ahead of several of the press releases listed on it. 

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

The traders traded on stolen press releases containing material nonpublic information about the following publicly traded companies that included, among hundreds of others: Align Technology Inc., Caterpillar Inc., Hewlett Packard, Home Depot, Panera Bread Co., and Verisign Inc.

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

The conspiracy to commit wire fraud charge is punishable by a potential penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. The conspiracy to commit fraud and related activity in connection with computers carries a potential penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense.  The aggravated identity theft charge carries a mandatory penalty of two years in prison consecutive to any sentence received in connection with the other two counts. Iermolovych’s sentencing is scheduled for Aug. 22, 2016.

U.S. Attorney Fishman credited the special agents of the U.S. Secret Service, Criminal Investigations Division, under the direction of Director Joseph P. Clancy, and special agents from the Newark Field Office, under the direction of Acting Special Agent in Charge Jeffrey Wood, with the ongoing investigation leading to today’s plea.

The government is represented by Assistant U.S. Attorneys Andrew S. Pak and Daniel Shapiro of the Economic Crimes Unit, Computer Hacking & Intellectual Property Section, David M. Eskew, Deputy Chief of the General Crimes Unit, Assistant U.S. Attorney Svetlana M. Eisenberg of the General Crimes Unit, and Assistant U.S. Attorney Sarah Devlin of the Asset Forfeiture and Money Laundering Unit.

Defense counsel: K. Anthony Thomas, Esq.

TRENTON, N.J. – A Trenton man who was found in possession of 143 grams of heroin and a loaded firearm was sentenced today to 37 months in prison for narcotics possession, U.S. Attorney Paul J. Fishman announced.

Dorian Brown, 37, previously pleaded guilty before U.S. District Judge Freda L. Wolfson to an information charging him with possession with intent to distribute heroin. Judge Wolfson imposed the sentence today in Trenton federal court.

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

On June 4, 2014, Brown, who had been the target of an investigation led by detectives from the Mercer County Prosecutor’s Office, Special Investigations Unit, and officers from the Trenton Police Department, in cooperation with the U.S. Drug Enforcement Administration (DEA), was apprehended during the execution of search warrants on his car, as well as his Trenton home. Law enforcement seized approximately 130 grams of heroin from Brown’s home, where detectives also discovered a loaded semi-automatic handgun. An additional 13 grams of heroin was seized from Brown’s car.

In addition to the prison term, Judge Wolfson sentenced Brown to three years of supervised release.

U.S. Attorney Fishman credited special agents of the DEA, under the direction of Special Agent in Charge Carl J. Kotowski, and detectives of the Mercer County Prosecutor’s Office, Special Investigations Unit, under the direction of Acting Prosecutor Angelo J. Onofri, with the investigation leading to today’s sentencing. He also thanked officers of the Trenton Police Department under the direction of Police Director Ernest Parrey for their assistance.

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

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

NEWARK, N.J. – A Bergen County, New Jersey, woman today admitted her role in conspiring to deposit more than $1 million in fraudulent checks into different bank accounts, U.S. Attorney Paul J. Fishman announced.

Chunhua Jin, 45, of Ridgefield, New Jersey, pleaded guilty before U.S. District Judge Kevin McNulty in Newark federal court to an information charging her with one count of bank fraud conspiracy.

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

From July 2014 to April 2015, Jin and others opened accounts at banks, such as Bank of America, in the names of fake businesses. The conspirators then made small deposits and withdrawals over several weeks to make the accounts appear legitimate. Jin or a conspirator would eventually deposit a fake check for a large dollar amount into the account. The victim banks typically credited some or all of the deposit amount on the fake check for immediate withdrawal. The conspirators then withdrew as much money as possible from the account before the bank realized that the check was fraudulent and blocked further withdrawals. Jin and others made ATM cash withdrawals, submitted cash withdrawal slips and make debit card purchases on merchandise. Jin admitted that the scheme resulted in a loss to the banks of at least $1.7 million.

The charge to which Jin pleaded guilty carries a maximum potential penalty of 30 years in prison and a maximum fine of $1 million. Sentencing is scheduled for Aug. 24, 2016.

U.S. Attorney Fishman credited postal inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Cynthia Shoffner; investigators from the Middlesex County Prosecutor=s Office, under the direction of Prosecutor Andrew C. Carey; and investigators from the Morris County Prosecutor’s Office, under the direction of Prosecutor Fredric M. Knapp with the investigation leading to today’s guilty plea.

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

Defense counsel: Peter Weiner Esq., Union City, New Jersey          

NEWARK, N.J. – Five men appeared in federal court today to face charges for their roles in a heroin distribution conspiracy that reached from Bronx, New York, to Paterson and suburban communities in New York and New Jersey, U.S. Attorney Paul J. Fishman announced. 

Charlie Rodriguez, 32, of Paterson, Reinaldo Rodriguez, 27, of Paterson, Victor Alfonso Alvarez Martinez, 26, of Bronx, Edward M. Stanel, 25, of Parsippany, New Jersey, and Joseph Trimarco, 28, of Stony Point, New York, are each charged by criminal complaint with one count of conspiracy to distribute a kilogram or more of heroin. Martinez and Trimarco were arrested last night. The rest were arrested this morning. All five defendants appeared this afternoon before U.S. Magistrate Judge Michael A. Hammer in Newark federal court. 

According to the complaint:

From June 2015 through May 2016, the defendants participated in a drug trafficking organization that amassed wholesale quantities of heroin at multiple locations in and around Bronx and used couriers to deliver large quantities of that heroin to mid-level drug dealers operating in and around Paterson. The heroin was either sold in the Paterson area or re-distributed to street-level drug dealers in suburban areas, including but not limited to, Morris County, New Jersey and Rockland County, New York. 

In addition to the defendants who appeared in court today, Juan Pablo Goris-Castellano, 25, of Bronx, Edwin Lopez, 30, of Elmwood Park, New Jersey, and Carolina Almonte, 27, of Bronx, were charged on April 20, 2016 in a separate but related federal criminal complaint with conspiring to distribute one kilogram or more of heroin.

Goris-Castellano, who was based out of Bronx, packaged and then distributed large quantities of heroin to Lopez, who operated out of Paterson. Almonte and Martinez brought the heroin to Lopez and returned to Goris-Castellano with Lopez’s payment. Lopez then sold portions of that heroin to Charlie Rodriguez, who worked closely with Reinaldo Rodriguez to re-sell portions of that heroin to street-level dealers in Paterson and to street-level dealers in suburban areas including Stanel who operated in Morris County and Trimarco who operated in Rockland County.

The drug distribution conspiracy charge carries a mandatory minimum penalty of 10 years in prison, a maximum potential penalty of life in prison, and a maximum $10 million fine.

U.S. Attorney Fishman credited special agents of the Drug Enforcement Administration’s New Jersey Division, under the direction of Special Agent in Charge Carl J. Kotowski in Newark, with the investigation leading to today’s charges.

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

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 complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

TRENTON, N.J. – A Spring Valley, New York, man was sentenced today to 15 years in prison for trafficking and forcing a minor into prostitution for profit, U.S. Attorney Paul J. Fishman announced.

Wilbur Senat, 26, aka “Wilby,” was convicted on Count Two and Count Four of a superseding indictment charging him with sex trafficking of children and transportation of a minor to engage in prostitution. He was convicted following an eight-day trial before U.S. District Judge Michael A. Shipp, who imposed the sentence today in Trenton federal court.

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

The minor victim met Senat in the summer of 2011 in Haverstraw, New York. Shortly after they met, Senat took her to a motel in Nyack, New York, where he provided her with marijuana and alcohol and then forced her to engage in commercial sex acts with various individuals for which they paid Senat. The next day, Senat purchased tickets for himself and the minor victim in the names of “Mr. Senat” and “Ms. Senat,” and boarded a bus with her, taking her from New York to Philadelphia, for the purpose of having her engage in further acts of prostitution.

In addition to the prison sentence, Judge Shipp sentenced Senat to a lifetime term of supervised release, the provisions of which restrict his contact with minors, and a $5,000 fine.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, with the investigation leading to today’s sentencing. The New Jersey Division of Criminal Justice also provided assistance.

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

Defense Counsel: Scott A. Krasney, Esq., West Trenton, New Jersey

TRENTON, N.J. – The founder of the United Security and Police Officers of America (USPOA) was convicted today by a federal jury of embezzling hundreds of thousands of dollars in union funds for his personal use, U.S. Attorney Paul J. Fishman announced.

Assane Faye, 61, of Toms River, New Jersey, was convicted of all counts of an indictment charging him with two counts of embezzling union funds and seven counts of mail fraud arising from unemployment insurance fraud. Faye was convicted following a three-week trial before U.S. District Judge Peter G. Sheridan in Trenton federal court. The jury deliberated for five hours before returning the guilty verdict.

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

As the founder, national president, and director of the USPOA, as well as a signatory on the USPOA checking account, Faye was obligated to hold and disperse funds of the USPOA solely for the benefit of the union and its members.

Yet in Feb. 2010, without approval of the USPOA Executive Board, Faye put a woman identified in the indictment as “Individual 1,” with whom he had a prior romantic relationship, on the USPOA payroll for $800 a week, purportedly to act as a USPOA organizer in New York. She received additional allowances of $1500 for monthly medical coverage, as well as disbursements for mileage, tolls, parking and vehicle tune-ups.  Individual 1 had limited ability to communicate in English, lacked labor organizing experience, and did not own a personal vehicle. As such, Faye’s representations to the Executive Board of her organizing successes were fictional. In addition, Faye had access to both Individual 1’s personal data and bank accounts.

For three and one half years, the union dispersed over $244,000 to Individual 1 while she performed no services for the union. Individual 1 testified that, for at least six months of every year she was on the payroll, she resided in her home country of Senegal. During that time, Faye withdrew approximately $180,000 of her union salary and expense payments for his personal use.

In addition, Faye submitted to the USPOA inflated reimbursement vouchers purportedly for mileage and wear and tear on his personal car, even though he was using rental vehicles. Faye even submitted false vouchers when he traveled outside the United States to Paris, Dubai, China and Milan.  

Lastly, despite controlling and collecting disbursements from the USPOA operating account, between April 5, 2010 and June 30, 2010, Faye also committed seven counts of mail fraud by misrepresenting his employment status and fraudulently collecting over $7,000 in unemployment payments from New Jersey’s Unemployment Insurance Division.

Each count of embezzlement carries a maximum potential penalty of five years in prison and a $250,000 fine. Each count of mail fraud arising from Faye’s unemployment insurance fraud carries a maximum potential penalty of twenty years in prison and a $250,000 fine. Sentencing is set for Aug. 22, 2016.

U.S. Attorney Fishman credited the Department of Labor, Office of Inspector General (OIG), under the supervision of Acting Supervisory Agent in Charge Jonathan Mellone, and the Office of Labor Management Standard (OLMS) under the supervision of District Director Andriana Vamvakas for the investigation and trial support leading to today’s verdict.

The government is represented by Senior Litigation Counsel V. Grady O’Malley and Assistant U.S. Attorney Josh Hafetz of the U.S. Attorney’s Office’s Organized Crime and Gang Unit in Newark.

Defense counsel: Andrea Bergman and Lisa Van Hoeck, Federal Public Defenders

A West New York, New Jersey, man today was sentenced to 15 years in prison for conspiring to provide material support to the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization.  The announcement was made by Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Paul J. Fishman of the District of New Jersey and Special Agent in Charge Timothy Gallagher of the FBI’s Newark Division.

Alaa Saadeh, 24, was sentenced by U.S. District Judge Susan D. Wigenton of the District of New Jersey, after pleading guilty on Oct. 29, 2015, to an information charging him with one count of conspiring with others to provide material support to ISIL.  In addition to the prison term, Judge Wigenton sentenced Saadeh to a lifetime of supervised release. 

“With this sentence, Alaa Saadeh is being held accountable for conspiring with his brother and others to travel overseas to join ISIL,” said Assistant Attorney General Carlin.  “The National Security Division’s highest priority is counterterrorism and we will continue to pursue justice against those who seek to provide material support to designated foreign terrorist organizations.”

“Saadeh didn’t just plan to join ISIL, he facilitated his brother’s overseas travel and deliberately took steps to conceal the scheme from law enforcement,” said U.S. Attorney Fishman.  “Today’s sentence is an appropriate punishment for his role in a conspiracy that would have supplied new recruits to a terrorist organization that regularly threatens American lives at home and abroad.”

“I want to commend the work of the FBI’s Joint Terrorism Task Force investigators and the prosecutors in the U.S. Attorney’s Office who worked countless hours throughout this investigation to protect the community in their execution of the FBI’s Counterterrorism strategy to detect, penetrate and disrupt potential acts of terrorism in the United States and abroad,” said Special Agent in Charge Gallagher. 

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

Saadeh admitted that prior to his arrest on June 29, 2015, he planned to travel overseas to join ISIL along with others.  Saadeh discussed the plans to join ISIL with his brother, Nader Saadeh, Samuel Rahamin Topaz and Munther Omar Saleh, and admitted that at various times each of them indicated that they wanted to join ISIL.  Saadeh also admitted that he watched ISIL-related videos with Nader Saadeh and Topaz, some of which depicted the execution of individuals – both Muslim and non-Muslim – regarded by ISIL as enemies.

On May 5, 2015, Nader Saadeh, departed the United States with plans to travel overseas to join ISIL as part of the conspiracy.  Saadeh admitted assisting Nader Saadeh with these plans by letting him purchase airline tickets using Saadeh’s credit card, removing the SIM card from Nader’s smartphone and resetting the smartphone in an effort to avoid detection.  Saadeh also admitted that Saleh assisted Nader Saadeh by giving him contact information for an individual who would facilitate Nader Saadeh’s travel from Turkey to ISIL in Syria. 

Saadeh admitted that after his brother left the United States, Saleh and Topaz intended to travel overseas to join ISIL.  After becoming aware that the FBI was investigating this matter, Saadeh instructed an individual who knew of Nader Saadeh’s support for ISIL to lie if questioned by the FBI on the subject.  Saadeh told this individual to “just play stupid,” “pretend it never happened” and “keep it honest up to a point.”

Saadeh admitted to knowing that ISIL was a designated terrorist organization and was taking over territory overseas, expelling non-Muslims from their homes and executing individuals who did not obey ISIL’s commands. 

Saadeh’s alleged co-conspirators are being prosecuted and are currently in federal custody.  Topaz and Nader Saadeh both previously pleaded guilty to conspiring to provide material support to ISIL and await sentencing. 

Saleh has been indicted on terrorism-related charges in the Eastern District of New York.  The charges and allegations against Saleh are merely accusations, and he is presumed innocent unless and until proven guilty.

Assistant Attorney General Carlin and U.S. Attorney Fishman credited special agents of the FBI’s Newark Division, under the direction of Special Agent in Charge Gallagher, and the Joint Terrorism Task Force with the investigation leading to today’s sentencing. 

The case is being prosecuted by Assistant U.S. Attorneys L. Judson Welle, Dennis C. Carletta and Francisco J. Navarro of the District of New Jersey, with assistance from Trial Attorney Robert Sander of the National Security Division’s Counterterrorism Section.

NEWARK, N.J. – A Hudson County, New Jersey, man was sentenced today to 15 years in prison for conspiring to provide material support to the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization, U.S. Attorney Paul J. Fishman, Assistant Attorney General for National Security John P. Carlin, and Special Agent in Charge Timothy Gallagher of the FBI’s Newark Division announced.

Alaa Saadeh, 24, of West New York, New Jersey, previously pleaded guilty before U.S. District Judge Susan D. Wigenton to an information charging him with one count of conspiring with others to provide material support to ISIL. Judge Wigenton imposed the sentence today in Newark federal court.

“Saadeh didn’t just plan to join ISIL: he facilitated his brother’s overseas travel and deliberately took steps to conceal the scheme from law enforcement,” U.S. Attorney Fishman said. “Today’s sentence is an appropriate punishment for his role in a conspiracy that would have supplied new recruits to a terrorist organization that regularly threatens American lives at home and abroad.”

“With this sentence, Alaa Saadeh is being held accountable for conspiring with his brother and others to travel overseas to join ISIL,” said Assistant Attorney General Carlin.  “The National Security Division’s highest priority is counterterrorism and we will continue to pursue justice against those who seek to provide material support to designated foreign terrorist organizations.”

“I want to commend the work of the FBI’s Joint Terrorism Task Force investigators and the prosecutors in the U.S. Attorney’s Office who worked countless hours throughout this investigation to protect the community in their execution of the FBI’s Counterterrorism strategy to detect, penetrate, and disrupt potential acts of terrorism in the United States and abroad,” stated Newark FBI Special Agent in Charge Timothy Gallagher.

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

Saadeh admitted that, prior to his arrest June 29, 2015, by the FBI Joint Terrorism Task Force (JTTF), he planned to travel overseas to join ISIL along with others. Saadeh discussed the plans to join ISIL with his brother, Nader Saadeh, Samuel Rahamin Topaz, and Munther Omar Saleh, and admitted that at various times each of them indicated that they wanted to join ISIL. Saadeh also admitted he watched ISIL-related videos with Nader Saadeh and Topaz, some of which depicted the execution of individuals – both Muslim and non-Muslim – regarded by ISIL as enemies.

On May 5, 2015, Saadeh’s brother, Nader Saadeh, departed the United States with plans to travel overseas to join ISIL as part of the conspiracy. Saadeh admitted assisting his brother with these plans by letting him purchase airline tickets using Saadeh’s credit card and by removing the SIM card from Nader’s smartphone and resetting the smartphone in an effort to avoid detection. Saadeh also admitted that Saleh assisted Nader Saadeh by giving him contact information for an individual who would facilitate Nader’s travel from Turkey to ISIL in Syria.

Saadeh admitted that, after Nader Saadeh left the United States, Saleh and Topaz intended to travel overseas to join ISIL. After becoming aware that the FBI was investigating this matter, Saadeh instructed an individual who knew of Nader Saadeh’s support for ISIL to lie to the FBI if the individual was interviewed. Saadeh told this individual to “just play stupid,” “pretend it never happened,” and “keep it honest up to a point.”

Saadeh admitted knowing that ISIL was a designated terrorist organization and was taking over territory overseas, expelling non-Muslims from their homes, and executing individuals who did not obey ISIL’s commands. 

In addition to the prison term, Judge Wigenton sentenced Saadeh to a lifetime of supervised release.

Saadeh’s alleged conspirators are being prosecuted and are currently in federal custody.  Topaz and Nader Saadeh both previously pleaded guilty to conspiring to provide material support to ISIL and await sentencing.

Saleh has been indicted on terrorism-related charges brought by the U.S. Attorney’s Office for the Eastern District of New York. The charges and allegations against Saleh are merely accusations, and he is presumed innocent unless and until proven guilty.

U.S. Attorney Fishman and Assistant Attorney General Carlin credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, and the JTTF, with the investigation leading to today’s sentencing. 

The government is represented by Assistant U.S. Attorneys L. Judson Welle, Dennis C. Carletta, and Francisco J. Navarro of the U.S. Attorney’s Office National Security Unit in Newark, with assistance from Trial Attorney Robert Sander of the National Security Division’s Counterterrorism Section.

Defense counsel: Maria Noto Esq., Matawan, New Jersey

TRENTON, N.J. – A West New York, New Jersey, man who fraudulently obtained a federally insured mortgage for a West New York rental property today admitted intentionally failing to make loan payments while using $149,000 in rental income from the property for personal expenses, U.S. Attorney Paul J. Fishman announced.

Ruben Vargas, 65, pleaded guilty before U.S. District Judge Freda L. Wolfson to an information charging him with one count of equity skimming. 

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

On Sept. 21, 2007, Vargas obtained a $417,449 mortgage loan insured by the Federal Housing Administration (FHA), a division of the U.S. Department of Housing and Urban Development (HUD), in order to purchase a property located at 5512 Grant Place in West New York.

Vargas had obtained the loan using supporting documentation that contained inflated income, false employment information and false rental history. By March 1, 2008, he had defaulted on the loan by failing to make timely payments. However, Vargas continued to earn nearly $3,000 in monthly rental income from the property by renting the first and second floors to separate tenants.

From March 2008 through December 2013, while in default on the loan, Vargas received approximately $149,000 in rental income. Vargas admitted that he used the funds for personal expenses instead of paying back the mortgage loan.

The federal equity skimming statute prohibits an individual defaulting on a HUD-insured mortgage note from using rental or other income derived from the property for purposes other than the reasonable and necessary expenses of the property. HUD ultimately paid off Vargas’ past due mortgage loan for losses in the amount of approximately $491,000, inclusive of unpaid principal and interest. 

The charge for equity skimming to which Vargas pleaded guilty, carries a maximum penalty of five years in prison and a $500,000 fine. Vargas’s sentencing is scheduled for Aug. 18, 2016.

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 U.S. Department of Housing and Urban Development, Office of Inspector General, under the direction of Special Agent in Charge Christina Scaringi, for the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Rahul Agarwal of the U.S. Attorney’s Office Special Prosecutions Division in Newark.

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

TRENTON, N.J. – A former employee of a Bergen County, New Jersey, watch manufacturer today admitted using phony documents and corporate records to defraud her employer out of hundreds of thousands of dollars of watches and watch parts, U.S. Attorney Paul J. Fishman announced.

Lissette Delarosa, 37, of Woodland Park, New Jersey, pleaded guilty before U.S. District Judge Michael A. Shipp in Trenton federal court to an information charging her with one count of mail fraud conspiracy.

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

Delarosa admitted that from May 2003 through July 2010, she and Cynthia Alvarez, a/k/a “Cynthia Espejo,” 50, of Kissimmee, Florida, abused their positions in the watch manufacturer’s Bergen County customer service department to fraudulently obtain merchandise. Alvarez and Delarosa created hundreds of fictitious invoices, records, and customer complaints for watches and watch parts in their employer’s invoicing system and directed the merchandise to be sent to addresses they controlled. The watch manufacturer received no payment related to these invoices and no legitimate basis existed for providing the parts free of charge.

The mail fraud conspiracy count carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the amount of loss caused by the offense. Delarosa’s sentencing is scheduled for Aug. 16, 2016.

Alvarez pleaded guilty to the same offense on Sept. 8, 2015 and awaits sentencing.

U.S. Attorney Fishman credited postal inspectors with the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Cynthia Shoffner, with the investigation.

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

Defense counsel: Alan D. Bowman, Esq., Newark, New Jersey

NEWARK, N.J. – U.S. Attorney Paul J. Fishman of the District of New Jersey and Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division, released the following statements regarding the U.S. District Court for the District of New Jersey’s approval of the department’s agreement with the city of Newark to reform the police department’s unconstitutional practices:

"This consent decree, now approved by the court, provides a roadmap for reform in Newark and a model for best practices for police departments across the country," said U.S. Attorney Fishman. "Implementing the systemic changes outlined in the consent decree will take time, but this is what the city of Newark and the men and women who serve in the police department want and need, and it is what the people of Newark deserve: a first-class police department that keeps them safe and respects their constitutional rights."

“We appreciate the court’s swift approval of the Justice Department’s consent decree with the city of Newark,” said Principal Deputy Assistant Attorney General Gupta.  “This agreement will help the Newark Police Department reform policies, improve systems and rebuild trust between officers and the community they serve.  As Newark implements this agreement, we will continue to work closely with city officials, law enforcement and community members to put in place the necessary changes that can make Newark a national model for constitutional, effective and accountable policing.  Once fully implemented, these reforms will make all of those in Newark – officers and civilians alike – safer.  And these reforms will ensure that law enforcement in Newark complies with the Constitution and safeguards the civil rights of every Newark resident.”

CAMDEN, N.J. - A Sicklerville, New Jersey, man today admitted his role in a conspiracy to evade payroll taxes on cash wages paid to illegal immigrants employed at his dry cleaning business, U.S. Attorney Paul J. Fishman announced. 

Phillip Hui, 37, pleaded guilty before  U.S. District Judge Robert B. Kugler to an information charging him with one count of conspiracy to obstruct and impede the IRS relating to the failure to collect, account for and pay payroll taxes and one count of harboring illegal aliens.

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

Hui and Kathy Lei, 35, of Williamstown, New Jersey, owned New Eastern Cleaners in Voorhees Township, New Jersey.  Lei, along with two other individuals, owned a house on South Main Street in Williamstown.

Hui knew he was required to verify that all of his employees were eligible to work in the United States, either as U.S. citizens or immigrants who had work authorization from Immigration and Customs Enforcement. However, at various times in 2012 and 2013, Hui and Lei hired foreign nationals B generally from Mexico or Guatemala B who did not have legal status in the United States. While working at New Eastern Cleaners, the undocumented immigrants lived in the South Main Street house.

At various times, Hui or Lei paid the undocumented immigrants in cash. They were required to work six days a week, approximately 10 hours a day and paid between $400 and $500 dollars per week. Their rent was part of the employment compensation. Hui also admitted that he would transport them or arrange their transportation between the South Main Street house and New Eastern Cleaners.

Hui admitted that when Lei filed Employer's Quarterly Federal Tax Return, Form 941 for all tax quarters in 2012 and the first three quarters in 2013, she only reported wages paid to legal employees of New Eastern Cleaners.  She failed to report the wages and pay employment taxes for at least 13 undocumented immigrant employees in 2012 and at least 14 undocumented immigrant employees in 2013.

By filing the false tax forms in 2012 and 2013, Lei and Hui failed to pay the IRS employment taxes of at least $97,104 for the undocumented immigrant employees.

The conspiracy to obstruct and impede the IRS relating to the failure to collect, account for and pay over payroll taxes carries a maximum potential penalty of five years in prison. The harboring aliens charge carries a maximum potential penalty of 10 years in prison. Both charges carry a potential $250,000 fine. Hui=s sentencing is scheduled for Aug. 11, 2016

Lei pleaded guilty to the same charges on May 2, 2016. Her sentencing is also scheduled for Aug. 11, 2016.

U.S. Attorney Fishman credited special agents of Immigration and Customs Enforcement, Homeland Security Investigations (ICE-HSI), under the direction of Special Agent in Charge Terence S. Opiola, and special agents of IRS–Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s guilty plea. He also thanked ICE’s Enforcement and Removal Operations (ERO), under Newark Field Office Director John Tsoukaris, for its assistance in this investigation.

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

Defense counsel:

Hui: Jeffrey Zucker, Esq., Camden, NJ

Lei: Michael Engle, Esq., Philadelphia, PA

TRENTON, N.J. – A Philadelphia woman who participated in one of the largest credit card fraud schemes ever charged by the Justice Department was sentenced today to 40 months in prison, U.S. Attorney Paul J. Fishman announced.

Vernina Adams, 34, previously pleaded guilty before Judge Anne E. Thompson to an information charging her with one count of conspiracy to commit bank fraud. Judge Thompson imposed the sentence today in Trenton federal court.

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

Adams was originally charged in February 2013 as part of a conspiracy, led by Tahir Lodhi, Babar Qureshi, Ijaz Butt, and others, to fabricate more than 7,000 false identities and obtain tens of thousands of credit cards. Since then, 19 people, including Adams, have pleaded guilty in connection with the scheme.

The scheme involved a three-step process in which the defendants would make up a false identity by creating fraudulent identification documents and a phony credit profile with the major credit bureaus; pump up the credit of the false identity by providing bogus information about that identity’s creditworthiness; then borrowed or spent as much as they could without repaying the debts – causing more than $200 million in confirmed losses to businesses and financial institutions.

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

Adams and her conspirators also used sophisticated methods – including a network of black-market businesses called “tradelines” providers – to commit fraud.  Tradelines come in two varieties: primary tradelines and authorized user tradelines. Primary tradelines are lines of credit in a credit history. If a credit card user has primary tradelines in good standing, it can have a significant impact on the user’s credit score, enabling the user to borrow more from credit card issuers. A second kind of tradeline is the “authorized user” tradeline, where a credit card holder adds another individual to a credit card account. This raises the credit score of the authorized user, who inherits some of the primary user’s credit history.

During her plea proceeding, Adams admitted advertising on Craigslist for individuals willing to add someone onto their credit cards. She also admitted selling other members of the conspiracy fraudulent tradelines, including by working with Acapulco Jewelry, a complicit business in California. Adams would extend a fictitious line of credit to a false identity, backdate the line of credit so it appeared to have existed for a longer period of time, then falsely report the line of credit had been paid. 

In addition to the prison term, Judge Thompson sentenced Adams to five years of supervised release.

U.S. Attorney Fishman credited special agents of the FBI’s Cyber Division, under the direction of Special Agent in Charge Timothy Gallagher in Newark, with the investigation leading to today’s sentencing. He also thanked postal inspectors under the direction of Acting Inspector in Charge Cynthia Shoffner, special agents of the U.S. Secret Service, under the direction of Acting Special Agent in Charge Jeffrey Wood, and the U.S. Social Security Administration for their assistance.

The government is represented by Assistant U.S. Attorneys Zach Intrater and Daniel V. Shapiro of the U.S. Attorney’s Office Economic Crimes Unit, as well as Assistant U.S.

Attorney Barbara Ward, Acting Chief of the Asset Forfeiture and Money Laundering Unit.

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

Defense counsel: Vernina Adams: Todd E. Henry Esq., Philadelphia

Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division, and U.S. Attorney Paul J. Fishman of the District of New Jersey released the following statements regarding the U.S. District Court for the District of New Jersey’s approval of the department’s agreement with the city of Newark, New Jersey, to reform the police department’s unconstitutional practices:

“We appreciate the court’s swift approval of the Justice Department’s consent decree with the city of Newark,” said Principal Deputy Assistant Attorney General Gupta.  “This agreement will help the Newark Police Department reform policies, improve systems and rebuild trust between officers and the community they serve.  As Newark implements this agreement, we will continue to work closely with city officials, law enforcement and community members to put in place the necessary changes that can make Newark a national model for constitutional, effective and accountable policing.  Once fully implemented, these reforms will make all of those in Newark – officers and civilians alike – safer.  And these reforms will ensure that law enforcement in Newark complies with the Constitution and safeguards the civil rights of every Newark resident.”

“This consent decree, now approved by the court, provides a roadmap for reform in Newark and a model for best practices for police departments across the country,” said U.S. Attorney Fishman.  “Implementing the systemic changes outlined in the consent decree will take time, but this is what the city of Newark and the men and women who serve in the Police department want and need, and it is what the people of Newark deserve: a first-class police department that keeps them safe and respects their constitutional rights.”

CAMDEN, N.J. – A former attorney in the Haddonfield, New Jersey, office of a firm specializing in toxic tort litigation was sentenced today to 24 months in prison for falsifying defendants’ names in more than 100 asbestos suits filed in New York State courts in order to increase business and his standing in the firm, U.S. Attorney Paul J. Fishman announced.

Arobert C. Tonagbanua, 47, of Sicklerville, New Jersey, previously pleaded guilty before U.S. District Judge Noel L. Hillman to an information charging him with one count of wire fraud. Judge Hillman imposed the sentence today in Camden federal court.

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

From 2008 through April 9, 2012, Tonagbanua worked at the Haddonfield office of a firm specializing in toxic tort litigation, workers’ compensation and immigration law, during which time he engaged in the wire fraud scheme.

Tonagbanua admitted he obtained copies of legitimately filed asbestos complaints and fraudulently altered them by deleting a named defendant and inserting the name of one or more of his firm’s clients. Unbeknownst to anyone else at the firm, he forwarded those fraudulently altered complaints by email, fax and otherwise to the firm’s clients, their representatives and insurance companies. 

After notifying the firm’s clients of the suits, Tonagbanua – and others at the firm who were not involved in the scheme – undertook the representation of the clients, by attending depositions, answering discovery and even settling claims. It is estimated that Tonagbanua inserted his firm’s clients’ names into more than 100 lawsuits, resulting in the generation of more than $1 million in fraudulent fees, costs and settlements. Tonagbanua personally benefitted from the scheme through bonuses and increased compensation.

In addition to the prison term, Judge Hillman sentenced Tonagbanua to three years of supervised release. Tonagbanua must also pay remaining institution of $232,643.92.

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

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

Defense counsel: Michael Miller Esq., Turnersville, New Jersey

NEWARK, N.J. – A Brooklyn, New York, man who was on the FBI’s Ten Most Wanted Fugitive List in 1988 today admitted robbing a TD Bank in Oakland, New Jersey, in April 2013, U.S. Attorney Paul J. Fishman announced.  

John Edward Stevens, 62, pleaded guilty before U.S. District Judge Claire C. Cecchi to Count Two of an indictment charging him with armed bank robbery.

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

Stevens admitted that on April 15, 2013, he robbed a TD Bank in Oakland. After entering the bank, Stevens approached several bank employees while carrying a zipper pouch. He opened the zipper pouch, pulled out what appeared to be a black handgun, and brandished it at one of the bank employees. He then took several thousand dollars in cash and fled the scene.

Approximately 20 minutes after the robbery, law enforcement stopped a vehicle that was reported stolen. The driver of the stolen vehicle was identified as Stevens. Law enforcement arrested Stevens and located a TD Bank bag filled with money in the vehicle.

Stevens has been convicted of at least eight prior armed bank robberies in the Central District of California and the Southern District of Ohio. Under the terms of today’s plea agreement – if accepted by the court – Stevens will be sentenced to 240 months in prison and three years of supervised release. Sentencing is scheduled for Sept. 7, 2016.

U.S. Attorney Fishman 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. He also thanked the Waldwick Police Department, the Oakland Police Department, the Ho-Ho-Kus Police Department and the Bergen County Sheriff’s Office for their contributions to the case.

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

Defense counsel: Lorraine Gauli-Rufo Esq., Verona, New Jersey

NEWARK, N.J. – A Nevada man was arrested today and charged with defrauding investors out of more than $5 million dollars, U.S. Attorney Paul J. Fishman announced.

Lee Vaccaro, 44, of Las Vegas, Nevada, was arrested by special agents of the FBI this morning and charged by complaint with one count of conspiracy to commit securities fraud and one count of securities fraud. He is scheduled to appear later today before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court.

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

Vaccaro and “Conspirator #1” allegedly sold investors interests in companies they controlled, and falsely represented to investors that the companies held warrants in eAgency, a California-based company developing mobile security products. Warrants are derivative securities that give the holder the right to purchase common stock at a specific price within a certain time frame.

Vaccaro and conspirator #1 allegedly made oral and written misrepresentations concerning the existence, number, validity, and term of eAgency warrants purportedly owned by the investment companies, as well as about the amount of money conspirator #1 had personally invested in and raised for eAgency, and conspirator #1’s current position at eAgency.

Vaccaro and conspirator #1 also allegedly created and showed to investors numerous forged documents purporting to reflect the issuance of warrants to entities controlled by Vaccaro, and the transfer of those warrants to a company controlled by conspirator #1. Most of the eAgency warrants purportedly transferred by Vaccaro to conspirator #1’s company had, in fact, never been issued.

Beginning in January 2011, the dollar amount of interests Vaccaro and conspirator #1 sold in the investment companies began to surpass the dollar amount of valid warrants held by the investment companies. Neither Vaccaro nor conspirator #1 disclosed to investors the risk that their investments would be diluted by the sale of additional interests in the companies.

Vaccaro and conspirator #1’s actions allegedly defrauded investors of more than $5 million.

The conspiracy to commit securities fraud count carries a maximum potential penalty of five years in prison and a fine of up to $250,000, or twice the gross amount of pecuniary gain or loss resulting from the offense. The securities fraud count carries a maximum potential penalty of 20 years in prison and a fine of up to $5 million.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, for the investigation. He also thanked the U.S. Securities and Exchange Commission’s New York Regional Office, under the direction of Sanjay Wadhwa and the New Jersey Bureau of Securities, under the direction of Laura Posner.

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

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

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

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

Defense counsel: Robert C. Scrivo Esq., Newark               

NEWARK, N.J. – A Chicago man was sentenced today to 89 months in prison for his role in a large-scale, long-running, and lucrative scheme to steal bank customer account information – commonly referred to as “ATM skimming” – by installing hidden card-reading devices on ATMs throughout New Jersey, New York, Connecticut, Florida, and elsewhere, U.S. Attorney Paul J. Fishman announced.

Dinu Horvat, 29, was previously convicted on four counts of a superseding indictment – conspiracy to commit bank fraud, aggravated identity theft, conspiracy to possess 15 or more counterfeit access devices, and conspiracy to possess access device-making equipment – following a one-week trial before U.S. District Judge William J. Martini. Judge Martini imposed the sentence today in Newark federal court.

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

Horvat was a high-level member of an extensive ATM skimming scheme organized by Marius Vintila, 33, who previously pleaded guilty to bank fraud conspiracy and aggravated identity theft charges. The scheme defrauded Citibank, TD Bank, Wells Fargo, and multiple other financial institutions out of at least $5 million and affected thousands of bank customers.

Vintila and defendant Bogdan Radu, 33, designed and constructed sophisticated card-reader devices and pinhole camera panels capable of reading and storing customers’ bank account information and personal identification numbers. Horvat and his partners then secretly installed the card-reader devices and the pinhole cameras panels onto bank ATMs and removed them a few days later after they had recorded customer bank account information as customers performed routine bank transactions at ATMs.

The stolen data was used to create thousands of false and fraudulent ATM cards, which Horvat and others used to withdraw millions of dollars from customers’ bank accounts. Horvat also recruited others to participate in the scheme.   

In addition to the prison term, Judge Martini sentenced Horvat to five years of supervised release and ordered him to pay restitution of $7.4 million.

The ATM skimming operation in which Horvat participated is one of the largest ever uncovered by law enforcement. To date, 13 of the 16 individuals charged in connection with the scheme, including Vintila and Radu, have pleaded guilty.

U.S. Attorney Fishman praised special agents of the U.S. Secret Service, Newark Field Office, under the direction of Acting Special Agent in Charge Jeffrey Wood; special agents of Immigration and Customs Enforcement, Homeland Security Investigations (ICE-HSI) in Newark, under the direction of Special Agent in Charge Terence S. Opiola, with the investigation. He also thanked the Barnegat Township Police Department and the Brick Township Police Department for their participation in the case.

The government is represented by Assistant U.S. Attorneys Rahul Agarwal and David M. Eskew of the U.S. Attorney’s Office Criminal Division in Newark.

Defense Counsel: E. Alexander Jardines Esq., West New York, New Jersey          

NEWARK, N.J. – A Little Egg Harbor, New Jersey, man today admitted his role in a scheme to steal and convert hundreds of blank U.S. Postal Service money orders, resulting in nearly $200,000 in losses, U.S. Attorney Paul J. Fishman announced.

Jonel Normil, 26, pleaded guilty before U.S. District Judge Madeline Cox Arleo to an information charging him with one count of conspiring to embezzle, convert to his use and the use of others U.S. Postal Service money orders. 

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

Normil was employed as a letter carrier with the U.S. Postal Service in Cape May Court House, New Jersey. He also picked up and dropped off mail at the U.S. Post Office in Stone Harbor, New Jersey.

Normil admitted that he used his position as a letter carrier to steal hundreds of U.S. Postal Service money orders from the Stone Harbor and Cape May Court House post offices. Normil gave the stolen money orders to other conspirators, who made them look legitimate and imprinted them with dollar values of $900 or $1,000 before depositing them into bank accounts or cashing them at post offices in New Jersey, New York, and Georgia.

The charge for conspiring to embezzle, steal, and convert blank U.S. Postal Service money orders carries a maximum penalty of five years in prison and $250,000 fine. As part of his plea agreement, Normil agreed to the entry of a forfeiture order against him in the amount of approximately $181,000, which represents the approximate losses to financial institutions and the U.S. Postal Service resulting from the scheme. His sentencing is scheduled for Aug. 16, 2016.

U.S. Attorney Fishman credited special agents of the U.S. Postal Service, Office of the Inspector General, under the direction of Executive Special Agent in Charge Monica Weyler of the Eastern Area Field Office, and the U.S. Postal Inspection Service, under the direction of Inspector in Charge David W. Bosch, Philadelphia Division, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorneys Rahul Agarwal of the U.S. Attorney’s Office Special Prosecutions Division in Newark.

Defense counsel: H. Robert Boney Esq., Mays Landing, New Jersey

NEWARK, N.J. – The former chief executive officer of a company that provided pharmacy dispensing services today admitted to filing a false federal income tax return, U.S. Attorney Paul J. Fishman announced.

Gary J. Sekulski, 68, of Flanders, New Jersey, pleaded guilty before U.S. District Judge Katharine S. Hayden to Count 3 of an indictment charging him with filing a false federal income tax return for tax year 2009.

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

Sekulski was the CEO and President of Healthcare Corporation of America (HCA), a New Jersey company that controlled a pharmacy dispensing service to public and non-profit entities. Sekulski admitted that for tax year 2009, received approximately $172,000 from HCA that he willfully failed to report on his federal income tax return. Sekulski admitted that he prepared this return himself, signed it under penalty of perjury, and caused it to be filed with the IRS knowing that it falsely reported his income. He admitted that he intentionally filed materially false federal income tax returns with the IRS for the 2007 and 2008 tax years. In all, Sekulski failed to report approximately $353,000 in taxable income.  

The tax count to which Sekulski pleaded guilty carries a maximum potential penalty of three years in prison and a fine of $250,000 or twice the amount of pecuniary gain or loss from the offense. Sentencing is scheduled for Sept. 8, 2016.

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

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

Defense counsel: William C. Cagney Esq., New Brunswick, New Jersey

CAMDEN, N.J. - A West Wildwood, New Jersey, man was sentenced today to 120 months in prison for possessing images and videos of child sexual abuse, U.S. Attorney Paul J. Fishman announced.

Jeffrey Spicer, 45, previously pleaded guilty before U.S. District Judge Joseph E. Irenas to an information charging him with one count of knowingly possessing child pornography. U.S. District Judge Jerome B. Simandle imposed the sentence today in Camden federal court.

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

Spicer admitted that he possessed images and videos of child sexual abuse on electronic and digital media that were seized from his residence pursuant to a search warrant executed on March 19, 2014. According to a forensic examination of these items, numerous images and videos of child sexual exploitation were discovered, including images on his cellular telephone, which he saved by taking screenshot photos with the telephone. The forensic examination further revealed that Spicer was using a password-protected “app” on his cell phone to store the child pornography.

In addition to the prison term, Judge Simandle sentenced Spicer to 10 years of supervised release and ordered him to pay $7,200 in restitution.

U.S. Attorney Fishman credited special agents of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), under the direction of Special Agent in Charge Terence S. Opiola; the Cape May County Prosecutor’s Office, under the direction of Prosecutor Robert L. Taylor; the Lower Township Police Department, under the direction of Chief William Mastriana; and the West Wildwood Police Department, under the direction of Chief Jackie Ferentz, with the investigation leading to today’s sentencing.

HSI encourages the public to report suspected child predators and any suspicious activity through its toll-free hotline at 1-866-347-2423 or by completing its online tip form. Both are staffed around the clock by investigators. For additional information about wanted suspected child predators, download HSI’s Operation Predator smartphone app or visit the online suspect alerts page.

The government is represented by Assistant U.S. Attorney Matthew J. Skahill of the U.S. Attorney’s Office Special Prosecutions Division in Camden.

Defense counsel: Lisa Evans Lewis Esq., Camden

CAMDEN, N.J. – A Philadelphia man today admitted that he stole more than $1.2 million dollars from the U.S. Government through a food stamp scheme, U.S. Attorney Paul J. Fishman announced.

Kaher Abdullah, 57, pleaded guilty before U.S. District Judge Joseph H. Rodriguez in Camden federal court to an information charging him with one count of theft of government funds.

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

In June 2011, Abdullah opened Express Food Mart on South Broadway in Camden, New Jersey.  From November 2011 until about October 2014, Express Food Mart was a small grocery store that was authorized to accept Supplemental Nutrition and Assistance Program (SNAP) benefits (formerly known as food stamps). The program is administered by the U.S. Department of Agriculture. Retail food stores that have been approved for participation in SNAP may sell food in exchange for food stamp benefits. They may not, however, exchange food stamp benefits for cash.

Every food stamp recipient receives an Electronic Benefits Transfer (EBT) card, similar to a debit card, with which to make purchases. Every retailer authorized to accept food stamp benefits has an EBT terminal. Food purchases are made by swiping the card at the terminal. After the customer enters a Personal Identification Number (PIN), the EBT terminal verifies the PIN, determines whether the customer’s account balance is sufficient to cover the proposed transaction and informs the retailer whether the transaction should be authorized or denied. If the transaction is authorized, the amount of the purchase is then deducted electronically from the food stamp benefits reserved for the customer, and the amount is credited to the retailer’s designated bank account.

Abdullah admitted he controlled a business bank account at CitiBank to receive the reimbursements for SNAP benefits. Bank records listed Abdullah as the president of the corporation that owned Express Food Mart. He admitted that from November 2011 until October 2014, the SNAP redemptions were more than $1.2 million. The volume of SNAP benefits reimbursement received at Express Food Mart substantially exceeded estimates for businesses of similar size, indicating large-scale food stamp fraud.

Law enforcement agents verified the fraudulent exchange of SNAP benefits for cash through the use of undercover law enforcement officers. During a series of transactions, undercover law enforcement agents exchanged SNAP benefits from Abdullah and other employees at Express Food Mart for cash. Abdullah admitted that, in general, he and other employees redeemed SNAP benefits for approximately 50 cents on the dollar.

A review of the bank records showed that Express Food Mart received through its Citibank Business account $1,264,006 for illegally redeemed SNAP benefits.  Abdullah admitted that shortly after receiving the money in the Express Food Mart account, he transferred the money to another account which he used to pay personal expenses.

The count of theft of government funds carries a maximum penalty of 10 years in prison and a fine of $250,000, or two times the amount of the loss to the United States, whichever is greater. Under the terms of the plea agreement, Abduallah has agreed to the entry of a forfeiture money judgment for $1,264,006.  Sentencing is scheduled for Sept. 13, 2016.

U.S. Attorney Fishman credited special agents of the U.S. Department of Agriculture, Office of Inspector General, under the direction of Special Agent in Charge William G. Squires in New York; and the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Terence S. Opiola.

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

Defense counsel: Justin Loughry Esq., Camden

CAMDEN, N.J. – A sergeant with the Atlantic City Police Department (ACPD) today admitted structuring financial transactions to avoid currency reporting requirements and lying to federal agents, U.S. Attorney Paul J. Fishman announced. 

Kiyia M. Harris, 39, of Egg Harbor Township, New Jersey, pleaded guilty before U.S. District Judge Jerome B. Simandle in Camden federal court to an information charging her with one count of structuring and one count of making false statements to FBI agents during two interviews in December 2014.

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

The charges concern Harris’ concealment of financial transactions conducted on behalf of her then-paramour, Donell Williams, who pleaded guilty on Jan. 27, 2016, before Judge Rodriguez to conspiracy to distribute cocaine from March 2012 to June 12, 2013. He also pleaded guilty to five counts of violating the terms of his supervised release from a 2010 federal drug conviction.

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

While working as an ACPD officer, Harris was engaged in a personal relationship with  Williams, who was on federal probation. In June 2012, Harris purchased a 1969 Camaro for Williams in her name and structured the payments for the car in such a manner as to avoid the filing of a Currency Transaction Report (CTR) by the car dealership and also to obscure Williams’ involvement in the purchase.

Harris caused $17,825 to be deposited in amounts less than $10,000. On June 8, 2012, Harris paid $9,999 to the dealership.  Harris paid the balance due for the Camaro by check dated June 11, 2012, which was drawn on one of her personal accounts at TD Bank. Some of the monies Harris used to pay for the car were deposited into that same TD bank account on two separate dates at two different TD Bank branches.

CTR forms require disclosure of the identity of the individual who conducted the transaction and the individual or organization for whom the transaction was completed. Many individuals involved in illegal activities are aware of these reporting requirements and take active steps to cause financial institutions, including car dealerships, not to file CTRs in order to avoid detection of the movement of large amounts of U.S. currency or currency obtained from illegal activities, including drug trafficking, a practice referred to as “structuring.” This typically involves making multiple cash payments, deposits or withdrawals in amounts of $10,000 or less on the same day or consecutive days in order to avoid CTR filings.

During two interviews with special agents from the FBI, Harris made false statements to agents: she falsely told FBI agents that she had never deposited cash into her bank accounts when, in actuality, from Jan. 8, 2007, through Nov. 26, 2014, Harris deposited more than $120,000 into her accounts. Harris repeatedly denied having engaged in financial transactions with Williams, when she in fact had helped him with the purchase of the 1969 Camaro, as well as paying a $6,500 deposit on a 2012 Harley Davidson motorcycle.  

The counts to which Harris pleaded guilty each carry a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for Aug. 10, 2016. According to the Atlantic City Police Department, Harris has been suspended without pay pending the outcome of the prosecution. Williams is scheduled to be sentenced on Sept. 7, 2016.

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 DEA’s New Jersey Division, under the direction of Special Agent in Charge Carl J. Kotowski; the Atlantic County Prosecutor’s Office, under the direction of Prosecutor James P. McClain; and the Atlantic City Police Department, under the direction of Police Chief Henry White, with the investigation leading to today’s guilty plea. 

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

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

Defense counsel: James J. Leonard Jr. Esq. of Atlantic City, New Jersey

NEWARK, N.J. – U.S. Attorney Paul J. Fishman and U.S. Senator Cory A. Booker will deliver remarks this afternoon at the third graduation hosted by the “ReNew” court, a partnership among the U.S. District Court, the U.S. Attorney’s Office, the Federal Public Defender’s Office, and the U.S. Probation Office designed to help ex-offenders recently released from federal custody successfully reintegrate into society.

The event being held in Newark at the Frank R. Lautenberg Post Office and Courthouse, Courtroom 1 at 3:00 p.m.

ReNew, which stands for “re-entry into Newark,” is New Jersey’s first federal re-entry court in New Jersey. It provides participants with close supervision and tangible support services including job placement and training, education, treatment, and counseling. It also gives participants access to a network of support services for housing, identification, driving privileges, child support, and other domestic, health or legal issues that affect successful re-entry into society.

ReNew holds annual graduations for program participants who have successfully completed 52 weeks of rigorous requirements. Since 2013, ReNew has hosted two graduations and will hold its third today. As of today, there are approximately 60 federal re-entry courts around the country.

“Equipping reentrants with the right tools and support during and after their incarceration can help break the cycle of recidivism that traps so many of their peers,” U.S. Attorney Fishman said. “Today, we celebrate the hard work and commitment of the graduates. We also recognize the tireless efforts of our federal partners whose passion and dedication continue to give those returning from federal prison a second chance. It’s inspiring work and I’m proud that my office is leading it.”

Today’s event comes at the end of National Reentry Week, a nationwide undertaking started by the Obama Administration and the Justice Department to raise awareness about the urgency of re-entry issues and highlight efforts to reduce recidivism and help formerly incarcerated individuals compete for jobs, attain stable housing, and support their families. As part of National Reentry Week, the U.S. Attorney's Office, District of New Jersey (USAO NJ), has hosted a number of events, including:

• April 21, 2016 – In collaboration with the U.S. District Court and U.S. Probation Office, USAO NJ hosted a resource and employment fair in Camden, New Jersey, that connected employers with ex-offenders who are looking for jobs.

   

• April 25, 2016 – U.S. Attorney Fishman, U.S. Chief of Probation Willie Torres, ReNew Graduate Amare Terrell, and U.S. Federal Judges Noel Hillman and Karen Williams participated in a stakeholder’s panel at FCI Fairton to discuss what to expect upon release from incarceration, available resources for ex-offenders, common missteps, best practices to ensure successful re-entry, and how families can provide support.

   

• April 26, 2016 – USAO NJ and housing specialists with the U.S. Department of Housing and Urban Development (HUD) gave a presentation at the New Jersey Chapter of the National Association of Housing & Redevelopment Officials to reinforce HUD and White House guidance on how arrests and convictions should be used when screening individuals for public housing eligibility.

   

• April 27, 2016 – In collaboration with the U.S. District Court, U.S. Probation, and Essex County College, USAO NJ hosted a re-entry technology seminar, for individuals whose terms of incarceration prevented them from developing computer and internet skills.

   

• April 29, 2016 – Earlier today, USAO NJ, in collaboration with New Ark Farms (an urban farm in Newark that primarily hires ex-offenders) the U.S. District Court, the Federal Public Defender’s Office, and the U.S. Probation Office hosted an employer breakfast to discuss available jobs for ex-offenders and ways that the ReNew team can alleviate any concerns about hiring them.

   

Each year, more than 600,000 citizens return to their neighborhoods after serving time in federal and state prisons. Nationally, two out of every three people released from state prisons are rearrested for a new offense and about half are re-incarcerated within three years. The long-term impact of a criminal record prevents many of these individuals from obtaining employment, housing, higher education, and credit – and these barriers affect returning individuals even if they are unlikely to reoffend.

The U.S. Attorneys’ Offices and Bureau of Prisons are hosting hundreds of events in all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands, including job fairs and resource fairs, mock interview sessions, resume workshops, family engagement events. In addition, the Justice Department announced its “Roadmap to Reentry,” outlining five evidence-based principles of reform to be implemented by the Bureau of Prisons to ensure DOJ’s commitment to re-entry is incorporated throughout incarceration – from intake to release.

CAMDEN, N.J. – A Pennsylvania man who was previously incarcerated for robbing a Citizens Bank in Philadelphia and a Cape Bank in Atlantic City, New Jersey, was sentenced today to 71 months in prison for robbing the same two banks after his release in April 2015; he was sentenced to an additional 24 months – to be served consecutively – for violation of supervised release, U.S. Attorney Paul J. Fishman announced. 

Keith Ney, 54, formerly of Philadelphia, previously pleaded guilty before U.S. District Judge Reneé Marie Bumb to an information charging him with two counts of bank robbery and violating the conditions of his federal supervised release. Judge Bumb imposed the sentence today in Camden federal court.   

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

In September 2011, Ney was convicted of robbing the Cape Bank at 1501 Pacific Avenue in Atlantic City and the Citizens Bank at 1234 Market Street in Philadelphia in 2010. He was later sentenced to 57 months in prison and a period of supervised release. 

On April 22, 2015, Ney, who had recently finished his prison term and was on supervised release, entered the same Citizens Bank that he robbed in 2010 and approached the teller with a demand note stating that he had a gun. Ney took some cash and fled the bank. 

Ney then took the bus to Atlantic City, where he entered the same Cape Bank that he robbed in 2010. Again, Ney approached the teller with a note stating that he had a gun and fled the bank with a small amount of cash. Afterwards, a bank employee exited the bank, approached an Atlantic City police officer who was working a traffic detail and told the officer that the bank had just been robbed. Ney was immediately spotted and taken into custody.

In addition to the prison time, Judge Bumb sentenced Ney to serve three years of supervised release and ordered restitution of $1,397.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; the Atlantic City Police Department under the direction of Chief Henry White; and the Philadelphia Police Department under with the direction of Commissioner Richard Ross Jr. with the investigation leading to today’s sentencing. He also thanked the U.S. Probation Office, under the direction of Chief Probation Officer Wilfredo Torres, for its assistance with this case. 

The government is represented by Assistant U.S. Attorney Matthew J. Skahill of the U.S. Attorney's Office in Camden.

Defense counsel: Edward F. Borden Jr. Esq., Cherry Hill, New Jersey

NEWARK, N.J. – A native of Romania who was arrested in Spain and extradited to the United States admitted today to participating in a large-scale, long-running scheme to steal bank customer account information, commonly referred to as “ATM skimming,” by installing secret card-reading devices and pinhole cameras on ATMs throughout New Jersey, New York, Connecticut, Florida, and elsewhere, U.S. Attorney Paul J. Fishman announced. 

Robert Mate, a/k/a “Chioru,” a/k/a “Marcel Varga,” 29, pleaded guilty before U.S. District Judge William J. Martini in Newark federal court to Count One of a six-count indictment, which charged him with conspiracy to commit bank fraud. Of the other two individuals charged on the indictment, Alin Dumitru Carabus was apprehended in Spain and extradited to the United States, and his case is pending, and Ionut Vasile Ciurba-Stana remains at large.       

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

Mate participated as a high-level member of an extensive scheme to steal bank customer account information, commonly referred to as “ATM skimming,” by installing secret card-reading devices on ATMs throughout New Jersey, New York, Connecticut, Florida, and elsewhere. The scheme was organized by Marius Vintila, 33, who previously pleaded guilty to bank fraud conspiracy and aggravated identity theft charges. The scheme defrauded Citibank, TD Bank, Wells Fargo, and multiple other financial institutions out of at least $5 million and affected thousands of bank customers. Vintila and Bogdan Radu designed and constructed sophisticated card-reader devices and pinhole camera panels capable of reading and storing customers’ bank account information and personal identification numbers. Mate and others then secretly installed the card-reader devices and the pinhole camera panels onto bank ATMs, and removed them a few days later after they had recorded customer bank account information as customers performed routine bank transactions at ATMs. After the account information was stolen, the stolen data was used to create thousands of false and fraudulent ATM cards, which Mate and others used to withdraw millions of dollars from customers’ bank accounts.    

The ATM skimming operation in which Mate participated is one of the largest ever uncovered by law enforcement. To date, 16 individuals have been charged in connection with this scheme; 13 have pleaded guilty, and one – Dinu Horvat – was convicted after a week-long trial.

The count of conspiracy to commit bank fraud to which Mate pleaded guilty is punishable by up to 30 years in prison and a $1 million fine. Sentencing is scheduled for Sept. 8, 2016.

U.S. Attorney Fishman credited special agents of the U.S. Secret Service, Newark Field Office, under the direction of Acting Special Agent in Charge Kenneth Pleasant, along with special agents of Immigration and Customs Enforcement, Homeland Security Investigations (HSI) in Newark, under the direction of Special Agent in Charge Terence S. Opiola, with the investigation leading to the above-referenced charges and pleas. 

The government is represented by Assistant U.S. Attorneys Rahul Agarwal and David M. Eskew of the office’s Criminal Division. 

Defense Counsel: Angelo Servidio Esq., Nutley, New Jersey

CAMDEN, N.J. – A former U.S. Postal employee from Burlington County, New Jersey, today admitted his role in a conspiracy to steal income tax refund checks from the U.S. Mail, U.S. Attorney Paul J. Fishman announced.

Earl Champagne, 47, of Willingboro, New Jersey, pleaded guilty before U.S. District Judge Robert B. Kugler in Camden federal court to an information charging him with one count of theft of U.S. Mail and one count of theft of government money.

Stolen Identity Refund Fraud

Stolen Identity Refund Fraud (SIRF) is a common type of fraud committed against the United States government that results in more than $2 billion in losses annually to the Treasury. SIRF schemes generally share a number of hallmarks:

• SIRF perpetrators obtain personal identifying information, including Social Security numbers and dates of birth, from unwitting individuals, who often reside in the Commonwealth of Puerto Rico.

• Participants complete Individual Income Tax Return 1040 Forms using the fraudulently obtained information, falsifying wages earned, taxes withheld and other data and always ensuring the fraudulent form generates a tax refund check from the U.S. Treasury.

• They direct the U.S. Treasury Department to mail the fraudulently obtained checks to locations the perpetrators control or can access. In some cases, SIRF perpetrators bribe mail carriers to remove the checks from their mail routes.

• With the checks in hand, they generate cash proceeds by depositing the Treasury checks into bank accounts that they control.

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

From 1995 to November 2014, Champagne was employed by the U.S. Postal Service as a mail carrier.  He was required to deliver mail that had been placed in the mail stream for delivery and was assigned to deliver mail to locations in Pennsauken, New Jersey.

Champagne admitted that from March 2014 to July 2014 he stole U.S. Treasury Checks from the mail and gave them to others. He said he was approached by two individuals who asked him to retrieve checks from the mail with the promise that he would be paid.  The individuals told Champagne that the checks were IRS checks and that they would mostly be addressed to individuals with “Spanish” names. The individuals expected to either pick up the checks from Champagne or for him to notify them that the checks were in the mailbox so that they could retrieve the checks themselves. For this service, Champagne was paid $50 per check for every check stolen from the mail. Champagne admitted that he stole 72 U.S. checks totaling $442,776.

The theft of U.S. Mail and theft of government money charges to which Champagne pleaded guilty each carry a maximum potential penalty of 15 years in prison and a fine of $250,000. Champagne's sentencing is scheduled for Aug. 3, 2016.

U.S. Attorney Fishman credited special agents of the IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan Larsen, and U.S. Postal Service, Office of Inspector General, under the direction of Special Agent in Charge Monica Weyler, with the investigation leading to today’s guilty plea.

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

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

NEWARK, N.J. – A Bronx, New York, man who allegedly posted online advertisements in which he fraudulently offered authentic commercial driver’s licenses without the testing and identification requirements will appear in federal court today, U.S. Attorney Paul J. Fishman announced.

Mahmoud Odetallah, a/k/a “Mike,” 26, is charged by complaint with one count of wire fraud. Odetallah was arrested yesterday by FBI special agents. He is scheduled to appear this afternoon before U.S. Magistrate Judge Mark Falk in Newark federal court.

According to the complaint:

From August 2015 to February 2016, Odetallah allegedly claimed to sell authentic commercial driver’s licenses in one or more Craigslist advertisements. During this time, he solicited and accepted $1,000 in cash from an individual cooperating with the FBI, who is identified in the complaint as the “CW,” for the purchase of a New Jersey commercial driver’s license (“CDL”).

On Oct. 11, 2015, Odetallah allegedly posted an advertisement selling CDLs without the required testing and identification requirements. The advertisement also represented that Odetallah was New Jersey Motor Vehicle Commission (“MVC”) employee or affiliated with an employee of the MVC.

During a Nov. 17, 2005 telephone call, the CW, acting under the supervision of the FBI, responded to the October Craigslist advertisement by calling Odetallah. During the call, Odetallah instructed the CW to supply a copy of the CW’s identification as well as two passport-sized photographs and anything mailed to the CW within the last 90 days as proof of address.  Odetallah, claiming that he worked at the MVC, informed the CW that the transaction would occur in the vicinity of the MVC office in North Bergen, New Jersey.

On Jan. 13, 2016, Odetallah met with the CW at a coffee shop near the North Bergen MVC office. Shortly before the meeting, and at Odetallah’s direction, the CW sent a photograph of his purported passport to Odetallah via text message.  At the coffee shop, Odetallah obtained a $1,000 cash payment from the CW for the purchase of a CDL, along with copies of the CW’s purported passport. Odetallah then left the coffee shop, promising the CW that he would return shortly with the CDL.

However, Odetallah never returned. After defrauding the CW of $1,000, Odetallah harassed the CW for the payment of an additional $1,000.  On Feb. 6, 2016, Odetallah sent a text message to the CW containing an image of the CW’s purported passport identification page, which displayed the CW’s photograph and assumed name, and then sent a separate text message to the CW stating, “Now you must pay 1000$ [sic] again. Good luck[.]”

The wire fraud charge carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, with the investigation leading to the charge.

The government is represented by Assistant U.S. Attorney Shirley U. Emehelu of the U.S. Attorney’s 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.

Anyone with information concerning this alleged scheme should contact the FBI at 973-792-3000.

NEWARK, N.J. – A Newark, New Jersey, man today admitted selling fake driver’s licenses through an online shop and filing fraudulent tax returns using stolen identity information, U.S. Attorney Paul J. Fishman announced.

Alexis Scott Carthens, 38, pleaded guilty before U.S. District Judge Jose L. Linares to a an information charging him with one count of conspiracy to commit fraud in connection with authentication features and one count of conspiracy to defraud the government with respect to claims. 

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

From October 2012 through August 2014, Ricardo Rosario, 33, of Jersey City, New Jersey, with the assistance of Carthens and Abraham Corcino, 34, of Jersey City, 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 Rosario 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. 

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.” 

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.

At today’s plea hearing, Carthens admitted that his role was to create the driver’s licenses and to mail them to the website’s customers. Carthens also admitted that he believed that some of the website’s clients were using the fake driver’s licenses to commit credit card fraud.

Carthens also admitted to his involvement in a separate scheme, spanning from December 2012 through November 2013, to use stolen personally identifiable information to steal tax refund money from the government. At today’s plea hearing, Carthens admitted using information stolen from a medical lab to file false and fraudulent tax returns. Carthens also admitted to working with at least one other conspirator, who assisted Carthens by providing him with email addresses and physical addresses to receive the fraudulently claimed tax refund money.

The count of conspiracy to commit fraud in connection with authentication features 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. The count of conspiracy to defraud the government with respect to claims carries a maximum potential penalty of 10 years in prison and $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for Aug. 1, 2016.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; inspectors of the U.S. Postal Inspection Service, under the direction of Assistant Inspector in Charge James R. Buthorn; and special agents of IRS–Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s guilty plea.

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 and Assistant U.S. Attorney Barbara Ward, Acting Chief of the office’s Asset Forfeiture and Money Laundering Unit.

The charges against Rosario and Corcino are still pending. The charges and allegations against them are merely accusations and the defendants are considered innocent unless and until proven guilty.

Defense counsel: Wanda M. Akin Esq., Newark

CAMDEN, N.J. – An Absecon, New Jersey, man was sentenced today to 18 years in prison for his role in a $3 million conspiracy to scam customers by offering phony consulting services to owners of timeshares through the New Jersey-based Vacation Ownership Group LLC, U.S. Attorney Paul J. Fishman announced.

Ian Resnick, 41, was previously convicted in September 2013 of one count of conspiracy to commit mail and wire fraud, three counts of mail fraud and three counts of wire fraud. He was convicted following a seven-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:

Resnick and his codefendants schemed to defraud hundreds of timeshare owners by offering fraudulent consulting services through their company, the Vacation Ownership Group (now VO Financial). Adam Lacerda, 32, of Egg Harbor Township, New Jersey, the company founder, president and chief executive officer, devised the company’s fraudulent sales pitches. He directed his sales force to tell numerous lies to VO customers, including that VO worked with the banks holding the customers’ loans, would use money sent by customers to pay off the customers’ loans on their timeshares, and could cancel customers’ timeshares with money back.

His wife, Ashley Lacerda, 36, the company vice president and chief operating officer, sent fraudulent contracts to customers and managed the office. Resnick, a convicted bank robber, started as a salesman giving the fraudulent sales pitch but became Adam Lacerda’s enforcer, with the title “director of compliance.” Genevieve Manzoni, 50, of Lake Worth, Florida, was a top VO sales representative who falsely told one victim she worked with a bank, another victim that she worked with a timeshare developer.

All four defendants were convicted at the same trial. The 14 victims who testified – including business executives, veterans, senior citizens, a lawyer and a professor – were defrauded out of tens of thousands of dollars by the defendants’ sophisticated scheme.

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

Adam Lacerda was sentenced to 27 years in prison on June 25, 2015. Ashley Lacerda is scheduled to be sentenced June 3, 2016; Manzoni was sentenced in December 2015 to 42 months in prison.

U.S. Attorney Fishman credited special agents of 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, Office of Labor Racketeering and Fraud Investigations, under the direction of Acting Special Agent in Charge Jonathan Mellone, New York Region, for the investigation. He also thanked the N.J. Department of Labor and Workforce Development 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:

Ian Resnick: Michael E. Reilly Esq., Philadelphia

Adam Lacerda: Mark E. Cedrone Esq., Philadelphia

Ashley Lacerda: Charles Nugent Esq., Marlton, New Jersey

Genevieve Manzoni: Ralph A. Jacobs Esq., Philadelphia

NEWARK, N.J. – A Harrisburg, Pennsylvania, man will appear in federal court today to face charges that he conspired to defraud millions from the Post 9/11 GI Bill, a federal education benefits program designed to help veterans who served in the armed forces following the terrorist attacks on Sept. 11, 2001, U.S. Attorney Paul J. Fishman announced.

David Alvey, 49, is charged by complaint with one count of conspiracy to commit wire fraud. Special agents with the U.S. Department of Veterans Affairs, Office of Inspector General, the FBI, and the U.S. Department of Education, Office of Inspector General, arrested Alvey this morning in Maryland. He will appear this afternoon before U.S. Magistrate Judge Stephanie A. Gallagher in Maryland federal court.

 “The Post 9/11 GI Bill was designed to provide educational opportunities to a generation of men and women who served in the U.S. Armed Forces following the attacks on 9/11,” U.S. Attorney Fishman said. “Alvey and others allegedly sought to pillage those well-earned benefits as part of a complex $35 million scam that targeted veterans and enrolled them in unapproved online courses without their knowledge. Rooting out fraud against the government is always a priority of this office, especially when the conduct exploits those who serve our country with such courage.”

“The allegations of fraud committed by David Alvey are extremely serious because not only did his scheme potentially harm the Department of Veterans Affairs, it also victimized our nations deserving veterans and their families,” Jeffrey G. Hughes, Special Agent in Charge of the U.S. Department of Veterans Affairs, Office of Inspector General’s Northeast Field Office, said. “The VA’s education benefit program is meant to help our veterans who have selflessly made great sacrifices for our country and now are in need of VA assistance. Any fraud against this program directly impacts our nation’s heroes.”

According to the complaint unsealed today:

From November 2009 through August 2013, Alvey and others engaged in a conspiracy to defraud the United States by obtaining tuition assistance and other education-related benefits under the Post 9/11 Education Assistance Act, more commonly known as the Post 9/11 GI Bill.

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

Over the course of the conspiracy, Alvey, operating largely through his own company, ED4MIL LLC (“ED4MIL”), partnered with a New Jersey university (the “University”), to obtain approval from the United States to receive tuition and other education benefits under the Post 9/11 GI Bill for several online non-credit training and certification courses. These courses were purportedly developed, taught, and administered by the faculty of the University, but were, in fact, actually developed, taught, and administered by undisclosed and unapproved sub-contractors of ED4MIL, including an online correspondence school located in Pennsylvania.

Alvey and others at ED4MIL developed marketing materials and a script to be used by ED4MIL salespersons at various military bases around the United States in order to market to and enroll thousands of veterans in the courses. These “field representatives” employed by ED4MIL traveled across the United States pitching the fraudulent courses to veterans using the marketing materials and script developed by Alvey and others at ED4MIL.  Field representatives were instructed to identify themselves to veterans as employees of the University, and were specifically told not to mention ED4MIL or the online correspondence school in which the veterans were actually enrolled. The marketing materials were emblazoned with the University’s insignia, and the field representatives wore t-shirts and handed out pens bearing the University’s name. The field representatives, and several other employees at ED4MIL, were also given University email addresses with which to communicate with the veterans.

Alvey and others then nominally enrolled the veterans in the University while simultaneously enrolling them in the unapproved online correspondence courses. Due to the fact that Alvey and others concealed the true source of the courses and the contract relationships between the University and ED4MIL, the veterans were unaware that the courses they were taking were actually being taught and administered by the online correspondence school.

Even though the University contributed no content or value to the courses whatsoever, the University charged the Post 9/11 GI Bill between ten and thirty times the prices charged by the online correspondence school for the same courses. While most courses at the correspondence school cost between approximately $600 and $1,000 in tuition, the University charged between approximately $5,000 and $26,000 per course. Over the course of the conspiracy, Alvey and others caused the United States to pay out over approximately $35 million in total benefits.

“The FBI’s stance on corruption and fraud is that of zero tolerance and therefore one of our highest priorities,” said Special Agent in Charge Timothy Gallagher. “Our job is to protect victims, especially our veterans who are on the front lines keeping our country safe, and these charges reflect our commitment to that goal.”

“Scams like this steal money from hardworking taxpayers and legitimate students – and in this case, our veterans – and that is completely unacceptable," Brian Hickey, Special Agent in Charge of the U.S. Department of Education, Office of Inspector General's Northeastern Regional Office, said.  "OIG is committed to fighting student financial aid fraud and we will continue to aggressively pursue those that participate in these types of crimes."

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

U.S. Attorney Fishman credited special agents of the U.S. Department of Veterans Affairs, Office of Inspector General, Criminal Investigation Division, Northeast field office,  under the direction of Special Agent in Charge Jeffrey G. Hughes in Newark; the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; and the U.S. Department of Education, Office of Inspector General, under the direction of Special Agent in Charge Brian Hickey of the Northeastern Region, with the investigation leading to today’s arrest.

The government is represented by Assistant U.S. Attorney David M. Eskew of the Economic Crimes Unit, Assistant U.S. Attorneys Jane Yoon and Lucy Muzzy of the Health Care and Government Fraud Unit, and Assistant U.S. Attorney Jafer Aftab of the Asset Forfeiture and Money Laundering Unit.

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

Defense Counsel: Judith Germano Esq., Montclair

TRENTON, N.J. – A former member of the Mount Olive Township Board of Education (MOBOE) today admitted his role in a scheme to defraud the school district of $371,000, U.S. Attorney Paul J. Fishman announced.

Robert Mania, 47, of Flanders, New Jersey, pleaded guilty before U.S. District Judge Freda L. Wolfson in Trenton federal court to an information charging him with wire fraud.

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

From 2007 to 2009, while serving as a board member, Mania and others took part in a scheme to increase the amount of commissions to be paid on the school district’s account and then divert a portion of the commission payments to a company controlled by an individual, referred to in the information as the “Associate,” for distribution to Mania and his co-schemers. Mania admitted secretly inflating the commission rate and then diverting to himself approximately $371,000 in commission payments.

To conceal the rate increase and payments, Mania caused the district’s health insurance provider to send the annual disclosure statements generated by the health insurance carrier – which detailed the true commission rate and the payments to the associate’s company – to Mania’s own personal post office box, rather than to the school district. Approximately $606,000 in commissions was diverted to the associate’s company for distribution to Mania and his co-schemers, including approximately $371,000 that was received by Mania.     

The wire fraud charge to which Mania pleaded guilty carries a maximum potential penalty of 20 years in prison and a fine of $250,000 or twice the amount of the gain or loss from the offense. Sentencing is scheduled for July 27, 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, for the investigation leading to today’s guilty plea.

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

Defense counsel: James A. Plaisted Esq., Roseland, New Jersey

NEWARK, N.J. – A Union County, New Jersey man who admitted sexually abusing children and possessing images of child sexual abuse was sentenced today to 96 months in prison, U.S. Attorney Paul J. Fishman announced.

Gregory J. Aker, 46, of Linden, New Jersey previously pleaded guilty before U.S. District Judge Susan G. Wigenton to an information charging him with possession of child pornography. Judge Wigenton imposed the sentence today in Newark federal court.

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

Aker was a leader with a boys’ youth organization and a religious education teacher with his church. On Feb. 22, 2014, Aker was arrested by the Linden Police Department for sexual assault and endangering the welfare of two minor children.

After his arrest, law enforcement obtained multiple computers and electronic storage media from Aker’s residence. Today, Aker admitted that the devices belonged to him and contained more than 600 images and dozens of videos of child sexual abuse that he knowingly collected. Aker also admitted sexually abusing more than one child who was known to him on more than one occasion.

In addition to the prison term, Judge Wigenton sentenced Aker to a lifetime of supervised release. Aker will be required to register as a sex offender.

U.S. Attorney Fishman credited special agents with the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, the New Jersey Regional Computer Forensics Laboratory, the Union County Prosecutor’s Office and the Linden Police Department with the investigation leading to today’s sentencing.

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

Defense counsel: Jeffrey Hark Esq., Cherry Hill, New Jersey                                                                                                                      

NEWARK, N.J. – A doctor with a medical practice in Randolph, New Jersey was sentenced today to 24 months in prison for accepting bribes in exchange for test referrals as part of a long-running scheme operated by Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, New Jersey, its president and numerous associates, U.S. Attorney Paul J. Fishman announced.

Gary Safier, 73, of Randolph, New Jersey, previously pleaded guilty before U.S. District Judge Stanley R. Chesler to an information charging him with one count of accepting bribes and one count of filing a false tax return. Judge Chesler imposed the sentence today in Newark federal court.

Including Safier, 39 people – 27 of them physicians – have pleaded guilty in connection with the bribery scheme, which its organizers have admitted involved millions of dollars in bribes and resulted in more than $100 million in payments to BLS from Medicare and various private insurance companies. It is believed to be the largest number of medical professionals ever prosecuted in a bribery case. The investigation has to date recovered more than $12 million through forfeiture. A 28th physician – Bernard Greenspan – was indicted in March. His trial is scheduled for September 2016.

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

Safier admitted that from August 2007 through March 2013, he accepted bribes in return for referring patient blood specimens to BLS. Initially, the bribes were paid under the guise of bogus lease and service agreements between BLS and his medical office. Later, BLS paid Safier in monthly cash payments that, at times, exceeded $10,000 per month. According to the information, the total amount of bribes paid by BLS to Safier from the sham agreements and cash payments exceeded $353,000.

Safier also admitted that on his federal tax returns for 2010 and 2011, he failed to report $90,000 in bribes he received from BLS.

In addition to the prison term, Judge Chesler sentenced Safier to two years of supervised release. He must also forfeit $353,152.84.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher; inspectors of the U.S. Postal Inspection Service, under the direction of Assistant Inspector in Charge James R. Buthorn; 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 IRS–Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen with the ongoing investigation.

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

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 $1.29 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: Raymond M. Brown Esq., Woodbridge, New Jersey                                                                                                                                           

NEWARK, N.J. – Two Newark, New Jersey, men admitted their roles in a drug trafficking conspiracy controlled by the New Jersey set of the Grape Street Crips, U.S. Attorney Paul J. Fishman announced today.

Leonardo Arroyo, a/k/a “Leo,” 32, pleaded guilty today before U.S. District Judge Claire C. Cecchi in Newark federal court to an information charging him with conspiracy to distribute 280 grams or more of crack-cocaine. Rakeem Hankerson, a/k/a “Rocco,” 25, pleaded guilty yesterday before U.S. District Judge Madeline Cox Arleo to a superseding information charging him with conspiracy to distribute 28 grams or more of crack-cocaine.

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

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

Hankerson was a member of the New Jersey Grape Street Crips who purchased distribution quantities of crack-cocaine from more senior gang members and sold it to retail level customers on the street.

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

The charge to which Arroyo pleaded guilty carries a minimum of 10 years in prison, a maximum of life in prison, and a $10 million fine. The charge to which Hankerson pleaded guilty carries a minimum of five years in prison, a maximum of 40 years in prison, and a $5 million fine. Sentencing for Arroyo and Hankerson are set for July 26, 2016 and July 25, 2016, respectively.

Clark, Hamilton, Coelho, and numerous other gang members and associates have pleaded guilty to their role in the conspiracy and await sentencing. Charges against Vanderhall, Concepcion, and Washington remain pending. The charges and allegations against them are merely accusations, and they are presumed innocent unless and until proven guilty.

U.S. Attorney Fishman credited special agents of the Drug Enforcement Administration, under the direction of Special Agent in Charge Carl J. Kotowski, and special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher, for the investigation leading to the guilty pleas. 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 Department of Public Safety and Newark Police Division, under the direction of Director Anthony A. Ambrose, and the Essex County Sheriff’s Office, under the direction of Armando B. Fontoura, for their work on the investigation.

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

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

Defense counsel:

Arroyo:  Susan Cassell, Ridgewood, New Jersey

Hankerson:  John P. Holliday, Trenton, New Jersey

NEWARK, N.J. – An owner of a blood diagnostic company located in Essex County, New Jersey, was sentenced today to nine months in prison for paying a doctor cash bribes for patient lab work referrals, U.S. Attorney Paul J. Fishman announced.

Phillip Biondello, 49, of Basking Ridge, New Jersey, previously pleaded guilty before U.S. District Judge Madeline Cox Arleo to an information charging him with violating the Anti-Kickback Statute. Judge Arleo imposed the sentence today in Newark federal court.

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

From June 2011 through June 2013, Biondello paid a doctor cash bribes in return for patient blood sample referrals to Biondello’s company, including a $24,000 bribe paid to the doctor on May 7, 2013. The doctor’s referrals generated approximately $176,710.84 for Biondello’s company.

In addition to the prison term, Judge Arleo sentenced Biondello to three 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, and 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, with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorney Joseph N. Minish of the U.S. Attorney’s Office Health Care and Government Fraud Unit 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 $1.29 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: Joseph A. Hayden Jr. and Kevin Buchan Esq., Roseland, New Jersey.                                                                                                                                                           

NEWARK N.J. – Two New York men who allegedly defrauded credit card companies of hundreds of thousands of dollars are expected to appear in court later today, U.S. Attorney Paul J. Fishman announced.

Nikolay Krechet, 45, of Queens, New York, and James Olla, 24, of Brooklyn, New York, are each charged with one count of conspiracy to commit wire fraud and four counts of wire fraud. They were originally charged by complaint on May 28, 2015, and indicted by a federal grand jury on Feb. 18, 2016. They both arraigned before U.S. Magistrate Judge Leda Dunn Wettre in Newark federal court and entered pleas of not guilty.

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

From January 2014 to August 2015, Krechet, Olla, and others procured stolen information related to credit cards belonging to various individuals, including a victim living in New Jersey. Using this stolen information, the conspirators obtained gift cards from various retailers and then either sold the cards or used them to purchase goods, which they then sold.

Each count of wire fraud and conspiracy to commit wire fraud carries a maximum potential penalty of 30 years in prison and a fine of up to $1 million.

U.S. Attorney Fishman credited special agents of FBI, under the direction of Special Agent in Charge Timothy Gallagher; the U.S. Secret Service, under the direction of Acting Special Agent in Charge Kenneth Pleasant; and the U.S. Postal Inspection Service, under the director of Assistant Inspector in Charge James R. Buthorn, with the investigation.

The government is represented by Assistant U.S. Attorney Svetlana M. Eisenberg of the General Crimes Unit and Assistant U.S. Attorney Sarah Devlin of the Asset Forfeiture and Money Laundering Unit.

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

Olla: Andrew Olesnycky Esq., Westfield, New Jersey

TRENTON, N.J. – The owners of a tax preparation business that filed fraudulent tax returns on behalf of inmates at various New Jersey prisons were sentenced today to multi-year prison sentences, U.S. Attorney Paul J. Fishman and Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division announced. 

Kamal J. James, a/k/a “Bro Messiah Aziz El,” 34, of Seaford, Delaware, and Crystal G. Hawkins, a/k/a “Sis. Crystal Gabri El,” 39, of Laurel, Delaware, were sentenced to 96 and 48 months in prison, respectively. They were previously charged in a superseding indictment with one count of conspiracy, 16 counts of making false claims and three counts of mail fraud. They were convicted on all counts following a one-week trial before U.S. District Judge Peter G. Sheridan, who imposed the sentences today in Trenton federal court.

According to the superseding indictment and the evidence at trial:

Between October 2011 and October 2013, James and Hawkins operated Release Refunds, a purported tax preparation business – previously based in Brick, New Jersey, and in Seaford – through which they solicited current and former New Jersey prison inmates as clients and then filed fraudulent tax returns on their behalf. The company is no longer in business. 

James and Hawkins sent Release Refunds “promotional” flyers to inmates at various New Jersey prisons and halfway houses offering tax return preparation services. The pair asked inmates interested in Release Refunds’ services to provide basic identification information and to sign income tax returns and other IRS documents, but not to include any information about their income or withholdings. James and Hawkins then filled in the missing income information on the return forms, fabricating the inmates’ earnings to trigger fraudulent and inflated refunds.

During the course of the investigation, an undercover IRS-Criminal Investigation agent posing as an inmate in a New Jersey prison submitted a completed Release Refunds form and sent it to James and Hawkins. They then sent the “inmate” blank income tax forms and other IRS documents and instructions to sign the documents. James and Hawkins did not request any financial information from the undercover agent before preparing three fraudulent tax returns – including false income information that James and Hawkins provided – to be filed on behalf of the agent for tax years 2010 through 2012. The fraudulent returns resulted in several thousand dollars in refunds and a $1,485 fee for the defendants.

In addition to the prison terms, Judge Sheridan sentenced both James and Hawkins to three years of supervised release and ordered them to pay restitution of $570,897.

U.S. Attorney Fishman and Acting Assistant Attorney General Ciraolo credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s sentences. They also thanked the U.S. Postal Inspection Service, under the direction of Assistant Inspector in Charge James V. Buthorn; and the N.J. Department of Corrections, under the direction of Commissioner Gary M. Lanigan, for their roles in the case.

The government is represented by Assistant U.S. Attorney Nicholas P. Grippo of the U.S. Attorney’s Office Criminal Division in Trenton and former Trial Attorney Thomas Jaworski of the Justice Department’s Tax Division.

Defense counsel:

James: Pro se; (Bruce Throckmorton Esq., Trenton, standby counsel)

Hawkins: Pro se; (Andrea Bergman Esq. Assistant Federal Public Defender, Trenton, standby counsel)

NEWARK, N.J. – Freedom Mortgage Corp. has agreed to pay the United States $113 million to resolve allegations that it violated the False Claims Act by knowingly originating and underwriting single family mortgage loans insured by the U.S. Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA) that did not meet applicable requirements for the FHA insurance program, the Justice Department announced today. Freedom Mortgage is headquartered in Mt. Laurel, New Jersey.

“Freedom Mortgage did not properly comply with FHA rules for the mortgages it was generating and did not adequately monitor early payment defaults,” U.S. Attorney Paul J. Fishman for the District of New Jersey said. “It also failed to report to HUD the defaults it did discover, as required by its participation in the program.  Today’s settlement recognizes those failures and imposes an appropriate sanction.”

“It is imperative that mortgage lenders that participate in the FHA insurance program follow the rules and requirements set forth by HUD,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “We will continue to work with our partners at HUD, its Office of Inspector General, and U.S. Attorneys around the country to protect homeowners and taxpayers from those who knowingly seek to abuse the FHA program for their own gain.”

During the period covered by the settlement, Freedom Mortgage participated as a direct endorsement lender (DEL) in the FHA insurance program. A DEL has the authority to originate, underwrite and endorse mortgages for FHA insurance. If a DEL approves a mortgage loan for FHA insurance and the loan later defaults, the holder of the loan may submit an insurance claim to HUD, FHA’s parent agency, for the losses resulting from the defaulted loan. Under the DEL program, the FHA does not review a loan for compliance with FHA requirements before it is endorsed for FHA insurance. DELs are therefore required to follow program rules designed to ensure that they are properly underwriting and endorsing mortgages for FHA insurance, to maintain a quality control program that can prevent and correct deficiencies in their underwriting practices and to self-report any deficient loans identified by their quality control program.

The settlement announced today resolves allegations that Freedom Mortgage failed to comply with certain FHA origination, underwriting and quality control requirements.

As part of the settlement, Freedom Mortgage admitted to the following facts:

Between Jan. 1, 2006, and Dec. 31, 2011, it certified mortgage loans for FHA insurance that did not meet HUD underwriting requirements and were therefore not eligible for FHA mortgage insurance. Freedom Mortgage did not adhere to FHA’s quality control (QC) requirements. Between 2006 and 2008, Freedom Mortgage did not share its early payment default (EPD) QC reviews with production and underwriting management, nor did it require responses to its EPD QC findings from its production or underwriting staff. Due to staffing limitations between 2008 and 2010, Freedom Mortgage did not always perform timely QC reviews or perform audits of all EPD loans, as required by HUD. An EPD is a loan that becomes 60 days past due within the first six months of the loan. The EPD QC reviews that Freedom Mortgage did perform revealed high defect rates, exceeding 30 percent between 2008 and 2010. Yet, between 2006 and 2011, Freedom Mortgage did not report a single improperly originated loan to HUD, despite its obligation to do so. In 2012, after identifying hundreds of loans that “possibly should have been self-reported to HUD,” it reported only one. As a result of Freedom Mortgage’s conduct, HUD insured hundreds of loans that were not eligible for FHA mortgage insurance under the DEL program, and that HUD would not otherwise have insured and subsequently incurred substantial losses when it paid insurance claims on the ineligible loans approved by Freedom Mortgage.

“This recovery on behalf of the Federal Housing Administration should serve as a reminder of the potential consequences of not following HUD program rules and demonstrates HUD OIG’s continued efforts to combat fraud in the origination of single family mortgages insured by the FHA,” HUD Inspector General David A. Montoya said.

“FHA-approved lenders have a responsibility to comply with underwriting standards,” HUD’s General Counsel Helen Kanovsky said.  “We are gratified that Freedom Mortgage Corporation has accepted responsibility for its actions.”

The settlement was the result of a joint investigation conducted by HUD, HUD OIG, the Civil Division’s Commercial Litigation Branch, and Senior Litigation Counsel Anthony J. LaBruna and Assistant U.S. Attorney Mark Orlowski of the Civil Division of the U.S. Attorney’s Office for the District of New Jersey.

The former owner of two New Jersey defense contracting businesses was sentenced today to 57 months in prison for conspiring to send sensitive military technical data to India, announced Assistant Attorney General for National Security John P. Carlin and U.S. Attorney Paul J. Fishman of the District of New Jersey.

Hannah Robert, 50, of North Brunswick, New Jersey, previously pleaded guilty before U.S. District Judge Anne E. Thompson of the District of New Jersey to conspiracy to violate the Arms Export Control Act by exporting to India military technical drawings without prior approval of the U.S. Department of State.  

“Hannah Robert circumvented the U.S. government and provided export-controlled technical data related to various types of military technology to an individual in India,” said Assistant Attorney General Carlin.  “We will vigorously prosecute and bring to justice those who abuse their access to sensitive defense information and violate the Arms Export Control Act.”

“Hannah Robert conspired to send to another country thousands of technical drawings of defense hardware items and sensitive military data,” said U.S. Attorney Fishman.  “She was also charged with manufacturing substandard parts that were not up to spec, in violation of the contracts she signed with the Department of Defense.  Enforcement of the Arms Export Control Act is critical to the defense of our country.”

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

In June 2010, Robert was the founder, owner and president of One Source USA LLC, a company located at her then-residence in Mount Laurel, New Jersey, that contracted with the U.S. Department of Defense (DoD) to supply defense hardware items and spare parts.  In September 2012, Robert opened another defense company, Caldwell Components Inc., based at the same address.  Along with a resident of India identified only as P.R., Robert owned and operated a third company located in India that manufactured defense hardware items and spare parts.

From June 2010 to December 2012, Robert conspired to export to India defense technical drawings without obtaining the necessary licenses from the U.S. Department of State.  The exported technical drawings include parts used in the torpedo systems for nuclear submarines, military attack helicopters and F-15 fighter aircraft.

In addition to United States’ sales, Robert and P.R. sold defense hardware items to foreign customers.  Robert transmitted export-controlled technical data to P.R. in India so that Robert and P.R. could submit bids to foreign actors, including those in the United Arab Emirates (UAE), to supply them or their foreign customers with defense hardware items and spare parts.  Neither Robert nor P.R. obtained approval from the U.S. Department of State for this conduct.

On Aug. 23, 2012, P.R. emailed Robert requesting the technical drawing for a particular military item.  P.R.’s email forwarded Robert an email from an individual purporting to be “an official contractor of the UAE Ministry of Defence,” and who listed a business address in Abu Dhabi, UAE.  The UAE e-mail requested quotations for a bid for the “blanket assembly” for the CH-47F Chinook military helicopter and listed the “End User” for the hardware item as the UAE Armed Forces.  Later that same day, Robert replied to P.R.’s email, attaching, among other things, the electronic file for an export-controlled technical drawing titled “Installation and Assy Acoustic Blankets, STA 120 CH-47F,” to be used in the Chinook attack helicopter.

In October 2010, Robert transmitted the military drawings for these parts to India by posting the technical data to the password-protected website of a Camden County, New Jersey, church where she was a volunteer web administrator.  This was done without the knowledge of the church staff.  Robert e-mailed P.R. the username and password to the church website so that P.R. could download the files from India.  Through the course of the scheme, Robert uploaded thousands of technical drawings to the church website for P.R. to download in India. 

On June 25, 2012, P.R. e-mailed Robert, stating: “Please send me the church web site username and password.”  The e-mail was in reference to both an invoice to and a quote for a trans-shipper known to Robert as a broker of defense hardware items for an end user in Pakistan.  This individual used a UAE address for shipping purposes.  Later that day, Robert replied to this e-mail, providing a new username and password for the church website so that P.R. could download the particular defense drawings.

On Oct. 5, 2012, Robert e-mailed P.R. with the subject line “Important.”  The e-mail referenced the Pakistan trans-shipper, a separate potential sale to individuals in Indonesia and the church website: “Please quote [the Pakistan trans-shipper] and Indonesia items today[.] [Dr]awings I cannot do now as if the size exceeds then problem, I should be watching what I upload, will do over the weekend[.]  Ask me if you need any drawing . . . . Talk to you tomorrow . . . .”

There were also quality issues with the parts that Robert provided to the DoD.  After the DoD in October 2012 disclosed that certain parts used in the wings of the F-15 fighter aircraft, supplied by one of One Source USA’s United States customers, failed, Robert and P.R. provided the principal of their customer with false and misleading material certifications and inspection reports for the parts.  These documents, to be transmitted to the DoD, listed only One Source USA’s New Jersey address and not the address of the actual manufacturer in India, One Source India.  As a result of the failed wing pins, the DoD grounded approximately 47 F-15 fighter aircraft for inspection and repair, at a cost estimated to exceed $150,000.

Until November 2012, Robert was an employee of a separate defense contractor in Burlington County, New Jersey, where she worked as a system analyst and had access to thousands of drawings marked with export-control warnings and information on this defense contractor’s bids on DoD contracts.  Robert misrepresented to her employer the nature and extent of her involvement with One Source USA in order to conceal her criminal conduct.

The Arms Export Control Act prohibits the export of defense articles and defense services without first obtaining a license from the U.S. Department of State and is one of the principal export control laws in the United States.

Assistant Attorney General Carlin joined U.S. Attorney Fishman in thanking the special agents of the DoD’s Defense Criminal Investigative Service Northeast Field Office, under the leadership of Special Agent in Charge Craig W. Rupert; and special agents of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, Counter Proliferation Investigations, under the supervision of Special Agent in Charge Terence S. Opiola, with the investigation leading to today’s sentencing.

The case is being prosecuted by Assistant U.S. Attorneys Fabiana Pierre-Louis and L. Judson Welle of the District of New Jersey, with assistance from the National Security Division’s Counterespionage Section.

TRENTON, N.J. – The former owner of two New Jersey defense contracting businesses was sentenced today to 57 months in prison for conspiring to send sensitive military technical data to India, U.S. Attorney Paul J. Fishman and Assistant Attorney General for National Security John P. Carlin announced.

Hannah Robert, 50, of North Brunswick, New Jersey, previously pleaded guilty before U.S. District Judge Anne E. Thompson to Count Six of a superseding indictment, which charged her with conspiracy to violate the Arms Export Control Act by exporting to India military technical drawings without prior approval of the U.S. Department of State. Judge Thompson imposed the sentence today in Trenton federal court.

“Hannah Robert conspired to send to another country thousands of technical drawings of defense hardware items and sensitive military data,” U.S. Attorney Fishman said. “She was also charged with manufacturing substandard parts that were not up to spec, in violation of the contracts she signed with the Department of Defense. Enforcement of the Arms Export Control Act is critical to the defense of our country.” 

“Hannah Robert circumvented the U.S. government and provided export-controlled technical data related to various types of military technology to an individual in India,” said Assistant Attorney General Carlin.  “We will vigorously prosecute and bring to justice those who abuse their access to sensitive defense information and violate the Arms Export Control Act.”

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

In June 2010, Robert was the founder, owner, and president of One Source USA LLC, a company located at her then-residence in Mount Laurel, New Jersey, that contracted with the U.S. Department of Defense (DoD) to supply defense hardware items and spare parts. In September 2012, Robert opened another defense company, Caldwell Components Inc., based at the same address. Along with a resident of India identified only as “P.R.,” Robert owned and operated a third company located in India that manufactured defense hardware items and spare parts.

From June 2010 to December 2012, Robert conspired to export to India defense technical drawings without obtaining the necessary licenses from the U.S. Department of State. The exported technical drawings include parts used in the torpedo systems for nuclear submarines, in military attack helicopters, and in F-15 fighter aircraft.

In addition to United States’ sales, Robert and P.R. sold defense hardware items to foreign customers. Robert transmitted export-controlled technical data to P.R. in India so that Robert and P.R. could submit bids to foreign actors, including those in the United Arab Emirates (UAE), to supply them or their foreign customers with defense hardware items and spare parts. Neither Robert nor P.R. obtained approval from the U.S. Department of State for this conduct.

On Aug. 23, 2012, P.R. e-mailed Robert requesting the technical drawing for a particular military item. P.R.’s e-mail forwarded Robert an e-mail from an individual purporting to be “an official contractor of the UAE Ministry of Defence,” and who listed a business address in Abu Dhabi, UAE. The UAE e-mail requested quotations for a bid for the “blanket assembly” for the CH-47F Chinook military helicopter and listed the “End User” for the hardware item as the UAE Armed Forces. Later that same day, Robert replied to P.R.’s e-mail, attaching, among other things, the electronic file for an export-controlled technical drawing titled “Installation and Assy Acoustic Blankets, STA 120 CH-47F,” to be used in the Chinook attack helicopter.

In October 2010 Robert transmitted the military drawings for these parts to India by posting the technical data to the password-protected website of a Camden County, New Jersey, church where she was a volunteer web administrator. This was done without the knowledge of the church staff. Robert e-mailed P.R. the username and password to the church website so that P.R. could download the files from India. Through the course of the scheme, Robert uploaded thousands of technical drawings to the church website for P.R. to download in India. 

On June 25, 2012, P.R. e-mailed Robert, stating: “Please send me the church web site username and password.” The e-mail was in reference to both an invoice to and a quote for a trans-shipper known to Robert as a broker of defense hardware items for an end user in Pakistan. This individual used a UAE address for shipping purposes. Later that day, Robert replied to this e-mail, providing a new username and password for the church website so that P.R. could download the particular defense drawings.

On Oct. 5, 2012, Robert e-mailed P.R. with the subject line “Important.” The e-mail referenced the Pakistan trans-shipper, a separate potential sale to individuals in Indonesia, and the church website: “Please quote [the Pakistan trans-shipper] and Indonesia items today[.] [Dr]awings I cannot do now as if the size exceeds then problem, I should be watching what I upload, will do over the weekend[.]  Ask me if you need any drawing . . . . Talk to you tomorrow . . . .”

There were also quality issues with the parts that Robert provided to the DoD. After the DoD in October 2012 disclosed that certain parts used in the wings of the F-15 fighter aircraft, supplied by one of One Source USA’s United States customers, failed, Robert and P.R. provided the principal of their customer with false and misleading material certifications and inspection reports for the parts. These documents, to be transmitted to the DoD, listed only One Source USA’s New Jersey address and not the address of the actual manufacturer in India, One Source India. As a result of the failed wing pins, the DoD grounded approximately 47 F-15 fighter aircraft for inspection and repair, at a cost estimated to exceed $150,000.

Until November 2012, Robert was an employee of a separate defense contractor in Burlington County, New Jersey, where she worked as a system analyst and had access to thousands of drawings marked with export-control warnings and information on this defense contractor’s bids on DoD contracts. Robert misrepresented to her employer the nature and extent of her involvement with One Source USA in order to conceal her criminal conduct.

In addition to the prison term, Judge Thompson ordered Robert to serve three years of supervised release and pay $181,015.27 in restitution.

The Arms Export Control Act prohibits the export of defense articles and defense services without first obtaining a license from the U.S. Department of State and is one of the principal export control laws in the United States.

U.S. Attorney Fishman credited special agents of the U.S. Department of Defense, Defense Criminal Investigative Service Northeast Field Office, under the leadership of Special Agent in Charge Craig W. Rupert; and special agents of the Department of Homeland Security, Homeland Security Investigations, Counter Proliferation Investigations, under the supervision of Special Agent in Charge Terence S. Opiola, with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorney Fabiana Pierre-Louis of the U.S. Attorney’s Office Criminal Division in Trenton, and L. Judson Welle of the U.S. Attorney’s Office National Security Unit, with assistance from the National Security Division’s Counterespionage Section.

Defense counsel: David E. Schafer Esq., Lawrenceville, New Jersey

CAMDEN, N.J. - An Egg Harbor Township, New Jersey, man today admitted using online messaging applications to solicit nude photos from minors and transmit a lewd photo to a girl, U.S. Attorney Paul J. Fishman announced.

Zackary McFerren, 24, pleaded guilty before U.S. District Judge Jerome B. Simandle to an information charging him with one count of possession of child pornography and one count of transferring obscene matter to a minor.

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

McFerren admitted that between March 2015 and May 2015, he possessed multiple images of child pornography on his home computer. He also admitted that in April 2015, he used the “Kik” messaging application under the screen name “Emily” to communicate with a minor girl in the Philadelphia area. McFerren admitted that during the conversations, he asked the minor girl and her friend to take nude photographs of themselves and their genitalia. The girl then sent McFerren at least 14 such photographs. 

In addition, McFerren admitted that in September 2015, he used Snapchat to send a picture of his penis to a Florida girl who was under the age of 16.

Both charges to which McFerren pleaded guilty carry a maximum potential penalty of 10 years in prison and $250,000 fine.  Sentencing is scheduled for July 21, 2016.

U.S. Attorney Fishman credited the FBI’s Child Exploitation Task Force, including special agents of the FBI’s Atlantic City Resident Agency, under the direction of Special Agent in Charge Timothy Gallagher in Newark, and detectives of the Atlantic County Prosecutor’s Office, under the direction of Prosecutor James P. McClain, with the investigation leading to today’s plea. He also thanked the FBI’s Philadelphia Division, the Egg Harbor Township Police Department and the Bay County, Florida, Sheriff’s Office for their assistance.

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

Defense counsel: Edward Crisonino, Esq., Collingswood, New Jersey