District of New Jersey
Press releases recorded for this federal judicial district.
Operator of Botnet and Elite, International Hacking Forums Extradited from Italy to Face Hacking Charges in New JerseyRead the Press Release
Defendant Operated Army of More Than 13,000 Infected Computers and Administered Two Criminal Online Forums for Computer Hackers
NEWARK, N.J. – A Ukrainian citizen is scheduled to appear in Newark federal court today after being extradited from Italy to face charges that he participated in an international conspiracy to hack into the computer networks of individual users and corporations to steal log-in credentials and payment card data, U.S. Attorney Paul J. Fishman announced.
Sergey Vovnenko, a/k/a “Sergey Vovnencko,” “Tomas Rimkis,” “Flycracker,” “Flyck,” “Fly,” “Centurion,” “MUXACC1,” “Stranier,” and “Darklife,” 29, most recently of Naples, Italy, is charged by indictment with one count of wire fraud conspiracy, one count of unauthorized computer access, and four counts of aggravated identity theft. Vovnenko will appear today before U.S. Magistrate Judge Mark Falk. An arraignment has been scheduled for 2:00 p.m., Oct. 19, 2015, before U.S. District Judge Esther Salas in Newark federal court.
Vovnenko was arrested on June 13, 2014, following an international investigation led by the U.S. Secret Service in coordination with Italian law enforcement. He had been detained by the Italian authorities pending the resolution of extradition proceedings, which he contested for more than 15 months.
“As described in the indictment, Vovnenko commandeered thousands of computers to create a virtual army of hacked computers that he and his conspirators used to break into other networks and steal valuable information,” U.S. Attorney Fishman said. “Thanks to the work of our law enforcement partners here and in Italy, he is now in America to answer for his alleged crimes.”
“Over the course of our 150-year history, the Secret Service has evolved into an agency recognized worldwide for its investigative expertise and innovative approaches in detecting, investigating and protecting our nation’s critical financial infrastructure,” Secret Service Director Joseph P. Clancy said. “This case demonstrates the continued commitment of our cyber investigators and showcases the successful results of partnering with our international law enforcement colleagues. Our investigative reach will continue to expand beyond geographical borders despite the perceived anonymity these cybercriminals mistakenly think they enjoy.”
According to documents filed in this case and statements made in court:
From September 2010 through August 2012, Vovnenko and his conspirators operated an international criminal organization that hacked into the computers of individual users and companies located in the United States and elsewhere. They used that access to steal data, including, user names and passwords for bank accounts and other online services, as well as debit and credit card numbers and related personal identifying information.
To steal this data, Vovnenko operated a “botnet” – more than 13,000 computers infected with malicious computer software – programmed to gain unauthorized access to computers and to identify, store, and export information from hacked computers. A number of the infected computers were located in New Jersey. After stealing this data, Vovnenko and his conspirators used that information to illegally access and withdraw money from bank accounts and to incur unauthorized charges.
Vovnenko was also a high-level administrator of several online criminal forums and used his position to traffic in the data he stole as part of the conspiracy. These forums featured electronic bulletin boards, which members used to publicly communicate with all members and also send private messages directly to individual members. The public and private discussions on these forums typically pertained to criminal activity, including the purchase, sale, and use of stolen log-in credentials and payment card data, as well as discussions related to cybercrime activity such as malicious computer hacking. For example, in August 2012, one of the forums offered various illicit products for sale, including access to compromised computer servers located in the United States. A price was listed for each product, and customers could click an “order” button and purchase the product using “credits” associated with their accounts.
The maximum potential penalties for each count are as follows:
Count
Violation
Maximum Penalty
1
Wire Fraud Conspiracy
30 years in prison and a fine of the greater of $1 million or twice the gain or loss from the offense
2
Unauthorized Computer Access
Five years in prison and a fine of the greater of $250,000 or twice the gain or loss from the offense
3-6
Aggravated Identity Theft
Mandatory two years (consecutive to any other imposed sentence) in prison and a fine of the greater of $250,000 or twice the gain or loss from the offense
U.S. Attorney Fishman credited the special agents of the U.S. Secret Service, Criminal Investigations, under the direction of Director Joseph P. Clancy, and special agents from the Newark Division, under the direction of Special Agent in Charge Carl Agnelli, with the ongoing investigation leading to today’s charges.
He also thanked the Department’s Office of International Affairs in Washington and its attaché in Rome; the Office of the U.S. Ambassador to the Italian Republic and the Republic of San Marino, John R. Phillips; and the Italian Ministry of Justice and Italian law enforcement officials for their extraordinary support.
The government is represented by Assistant U.S. Attorney Daniel Shapiro of the Computer Hacking and Intellectual Property Section of the Economic Crimes Unit.
The charges and allegations contained in the indictment are merely accusations, and the defendant is considered innocent unless and until proven guilty.
Two Monmouth County, New Jersey, Sales Representatives Admit Paying More Than $25,000 in Cash Bribes for Patient ReferralsRead the Press Release
CAMDEN, N.J. – The owners of a marketing and sales company admitted paying thousands of dollars in cash bribes to a New Jersey physician in return for patient referrals to their clients, U.S. Attorney Paul J. Fishman announced.
Daniel Gilman, 62, of Ocean Grove, New Jersey, and Kenneth Robberson, 46, of Wall, New Jersey, pleaded guilty before U.S. District Judge Joseph H. Rodriguez in Camden federal court to separate informations charging them each with one count of conspiracy to pay kickbacks.
According to documents filed in this case and statements made in court:
Gilman and Robberson were principles of Promed Practice Consultants LLC (“Promed”), a company specializing in marketing and sales services for testing laboratories. As identified in the information, “Company 1,” a blood testing laboratory, and “Company 2,” a DNA testing laboratory, were two of Promed’s clients. Gilman and Robberson received monthly commission checks from Company 1 and Company 2 for referrals, which were equal to 10 percent of the reimbursements paid to the companies by various payors, including Medicare.
From March 2014 through May 2015, Gilman and Robberson paid a physician, identified in the information as “CC-1,” thousands of dollars in return for patient lab referrals to Company 1 and Company 2. After receiving the commission checks from Company 1 and Company 2, Gilman and Robberson would identify CC-1’s patient referrals to those companies and pay CC-1 corresponding kickbacks in cash. Altogether, Gilman and Robberson paid CC-1 approximately $25,000 in cash bribes.
Neither Company 1 nor Company 2 had any knowledge of or involvement in the kickback scheme.
The kickback conspiracy charge to which Gilman and Robberson pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing for both defendants is scheduled for Jan. 11, 2016.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel, and the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert, with the investigation leading to today’s pleas.
The government is represented by Assistant U.S. Attorney Michael H. Robertson of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark.
U.S. Attorney Paul J. Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $635 million 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:
Gilman: Vincent C. Scoca Esq., Bloomfield, New Jersey
Robberson: Edward J. Dimon Esq., Toms River
South Jersey Man Sentenced to 20 Years in Prison for Distributing Images of Child Sexual AbuseRead the Press Release
CAMDEN, N.J. – A Gloucester County, New Jersey, man was sentenced today to 240 months in prison for distributing images of child sexual abuse over the Internet, U.S. Attorney Paul J. Fishman announced.
Gerrett Conover, 50, of Woolwich Township, New Jersey, previously pleaded guilty before U.S. District Judge Noel L. Hillman to Count Three of the indictment against him, distribution of child pornography. Judge Hillman imposed the sentence today in Camden federal court. Conover has been in custody since his arrest.
According to documents filed in this case and statements made in court:
On Sept. 16, 2012, Conover was intercepted at the United States border on his way from Canada into New York and was found in possession of a laptop containing images of sexually exploited children. Agents obtained a search warrant for Conover’s home in Woolwich Township and seized various computers and other media containing additional images of child sexual abuse. The search also uncovered materials allegedly establishing Conover’s involvement in the Boy Scouts between 1990 and 2000.
At his guilty plea proceeding, Conover admitted that he knowingly distributed images of children engaged in sexually explicit conduct.
In addition to the prison term, Judge Hillman sentenced Conover to lifetime supervised release.
U.S. Attorney Fishman credited special agents of Immigration and Customs Enforcement, Homeland Security Investigations (HSI), under the direction of Acting Special Agent in Charge Kevin Kelly, with the investigation. He also thanked HSI Offices in Boston; Messina, New York; Los Angeles; and San Bernardino, California; as well as Customs and Border Protection in Ogdensburg, New York, for their roles.
The government is represented by Assistant U.S. Attorney Diana Carrig of the U.S. Attorney’s Office Criminal Division in Camden.
Defense counsel: Jerome Brown Esq., Philadelphia
South Jersey Man Sentenced to 14 Years in Prison for Conspiracy to Traffic Guns from South Carolina to New JerseyRead the Press Release
CAMDEN, N.J. – A Camden man was sentenced today to 168 months in prison for his role in a conspiracy to sell 22 guns without a license, U.S. Attorney Paul J. Fishman announced.
Marcus Rutling, a/k/a “Fresh,” 33, of Camden, and Saluda, South Carolina, previously pleaded guilty before U.S. District Judge Renée Marie Bumb to an information charging him with one count of conspiring to deal firearms without a license and one count of possession of a firearm by a previously convicted felon. Judge Bumb imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
Between April 8, 2013, and July 28, 2014, Marcus Rutling and his brother, Joseph Rutling, 24, of Camden, conspired with others to illegally sell firearms without a license, including handguns, shotguns and an assault rifle. They obtained the firearms from pawn shops, gun stores and other sources in South Carolina and brought them to New Jersey, at times using Amtrak trains to transport the guns. Marcus Rutling personally sold or participated in the sale of at least seven firearms, including handguns and shotguns, to a witness cooperating with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). Joseph Rutling personally sold or participated in the sale of at least 15 firearms, including handguns, shotguns and an assault rifle, also to an ATF cooperating witness. On at least five occasions, Joseph Rutling sold ammunition with the firearms.
In addition to the prison term, Judge Bumb sentenced Marcus Rutling to three years of supervised release. Joseph Rutling also pleaded guilty to his role in the conspiracy and is scheduled for sentencing on Oct. 30, 2015.
U.S. Attorney Fishman credited special agents of the ATF, under the direction of Special Agent in Charge George P. Belsky, with the investigation leading to today’s sentencing. He also thanked special agents from the Drug Enforcement Administration, under the direction of Special Agent in Charge Carl J. Kotowski, as well as officers from the Winslow Township and Clementon, New Jersey, police departments, for their work in the case.
The government is represented by Assistant U.S. Attorney Matthew T. Smith of the U.S. Attorney’s Office in Camden.
Defense counsel: Justin Loughry Esq., Camden
Former Union County, New Jersey, Vendor Sentenced to 31 Months in Prison for Paying Bribes and Defrauding County of More Than $120,000Read the Press Release
NEWARK, N.J. – The owner of a company that sold maintenance and cleaning supplies was sentenced today to 31 months in prison for paying bribes to a Union County official and to defrauding the county of more than $120,000 in connection with the purchases, U.S. Attorney Paul J. Fishman announced.
Richard Greer, 56, of Marlboro, New Jersey, previously pleaded guilty before U.S. District Judge William H. Walls to an information charging one count of conspiracy to commit mail fraud. Judge Walls imposed the sentence today in Newark federal court.
According to documents in this case and statements made in court:
From 2006 to 2011, Greer owned and operated Positive Attitude LLC, a commercial vendor that sold, among other products, maintenance and cleaning supplies to Union County. Aniello Palmieri, 59, of Toms River, New Jersey, was the director of the Division of Facilities Management for Union County and oversaw the purchasing of building materials, tools, hardware, janitorial supplies and other supplies used by the various bureaus of the division.
Greer made cash bribe payments to Palmieri of $500 per month in exchange for ensuring continued Union County business for Positive Attitude. Greer generated fictitious invoices to Union County for many industrial cleaning products to cover the monies paid to Palmieri, often including a profit for himself above the kickback he paid to Palmieri. Positive Attitude received $120,000 to $200,000 in fraudulent proceeds from the fictitious invoices. Greer used the mails to facilitate this scheme by having Union County send the checks in payment for these purchases to his company in Marlboro.
In addition to the prison term, Judge Walls sentenced Greer to three years of supervised release and ordered restitution of $185,000.
On Oct. 2, 2013, Palmieri and Frank Donald Vicendes III, 50, of Berkeley Heights, a Union County vendor, admitted to engaging in a similar bribery scheme and to defrauding Union County of more than $120,000 in connection with sale of supplies to Union County. Palmieri and Vicendes entered their guilty pleas to mail fraud before Judge Walls in Newark federal court. Palmieri was sentenced Oct. 6, 2015, to 70 months in prison. Vicendes is scheduled to be sentenced Oct. 21, 2015.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel; and the N.J. State Police, under the direction of Col. Joseph R. Fuentes, superintendent of the state police, for the investigation leading to today’s sentencing. He also thanked the N.J. Attorney General’s Office under the direction of Acting Attorney General John J. Hoffman and Elie Honig, director of the N.J. Division of Criminal Justice, for their work in this investigation.
The government is represented by Assistant U.S. Attorney Mark McCarren of the U.S. Attorney’s Office Special Prosecutions Division in Newark.
Defense counsel: Marc A. Agnifilo Esq., New York
Operator of North Jersey Tax Preparation Business Pleads Guilty to Tax FraudRead the Press Release
NEWARK, N.J. – A Kissimmee, Florida, man today admitted preparing fraudulent income tax returns for himself and his clients, resulting in tax losses of over $320,000, U.S. Attorney Paul J. Fishman announced.
Sixto Rodriguez, 52, pleaded guilty before U.S. District Judge Kevin McNulty in Newark federal court to Count 1 and Count 6 of a second superseding indictment charging him with filing a false tax return on behalf of himself for tax year 2007 and aiding and assisting in the filing of a false and fraudulent tax return on behalf of another for tax year 2009.
According to documents filed in this case and statements made in court:
From 2007 through 2012, Rodriguez operated a tax preparation business in Teaneck, New Jersey, by the name of 1-2-3 Taxes. Rodriguez personally met with clients, prepared their individual income tax returns and filed the returns with the IRS.
Rodriguez admitted to inflating education credits, charitable donations, unreimbursed business expenses and rental losses that he knew his clients had not actually incurred. Rodriguez also admitted reporting only $1,600 of the $237,179 his business made in 2007. Altogether, Rodriguez caused tax losses of $321,061.
Both the false filing charges to which Rodriguez pleaded guilty carry a maximum potential penalty of three years in prison and a $250,000 fine. Sentencing is scheduled for Feb. 8, 2016.
U.S. Attorney Fishman 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 plea.
The government is represented by Assistant U.S. Attorneys Daniel Shapiro and David M. Eskew of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
Defense counsel: Miles Feinstein Esq., Clifton, New Jersey
Former Union County Official Sentenced to 70 Months in Prison for Defrauding Union County of More Than $120,000Read the Press Release
NEWARK, N.J. – The former Director of the Division of Facilities Management for Union County, New Jersey, was sentenced today to 70 months in prison for his role in defrauding the county of more than $120,000 in connection with the purchasing of supplies, U.S. Attorney Paul J. Fishman announced.
Aniello Palmieri, 59, of Toms River, New Jersey, previously pleaded guilty before U.S. District Judge William H. Walls to an information charging him with one count of honest services mail fraud. Judge Walls imposed the sentence today in Newark federal court.
According to documents in this case and statements made in court:
From January 2006 to September 2010, Palmieri was the Director of the Division of Facilities Management for Union County, overseeing the purchasing of building materials, tools, hardware, janitorial supplies and other supplies used by the various Bureaus of the Division of Facilities Management.
During the same time period, his codefendant, Frank Donald Vicendese, III, 50, of Berkeley Heights, New Jersey, owned and operated Viva Group LLC, a commercial maintenance and construction business that sold, among other products, hardware, tools and accessories to counties in New Jersey.
Vicendese generated fictitious invoices to Union County through Palmieri for many hardware items. Palmieri then provided county payment vouchers to Vicendese, who signed and returned the vouchers to Palmieri. Palmieri approved the vouchers for payment by falsely verifying that the products were received by Union County, when in fact, the products were not received. Vicendese then compensated Palmieri with cash, gift cards and valuable items, including a Bowflex physical fitness machine, Panasonic Hard Drive Camcorder, and a Canon PowerShot Digital Camera, in exchange for Palmieri’s official action and assistance in the scheme. Viva Group received between $120,000 and $200,000 in fraudulent proceeds from the fictitious invoices.
In addition to the prison term, Judge Walls sentenced Palmieri to three years of supervised release. Vicendese, who pleaded guilty in October 2013, is scheduled to be sentenced on Oct. 21, 2015.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel; and the N.J. State Police, under the direction of Col. Rick Fuentes, superintendent, with the investigation leading to today’s sentencing. He also thanked the N.J. Attorney General’s Office under the direction of Acting Attorney General John J. Hoffman, and Eli Honig, Director of the New Jersey Division of Criminal Justice, for their work in this investigation.
The government is represented by Assistant U.S. Attorney Mark McCarren of the U.S. Attorney’s Office Special Prosecutions Division in Newark.
Defense counsel:
Palmieri: Anthony Iacullo Esq., Nutley, New Jersey
Vicendese: John P. McDonald Esq., Somerset, New Jersey
Filipino National Admits Conspiring to Export Firearms Parts from the United StatesRead the Press Release
A Filipino national today admitted his role in a conspiracy to smuggle more than $200,000 worth of firearms parts out of the United States.
Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Paul J. Fishman of the District of New Jersey, Special Agent in Charge George P. Belsky of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Newark Field Division and Acting Special Agent in Charge Kevin Kelly of the U.S. Immigration and Customs Enforcement-Homeland Security Investigations (ICE-HSI) Newark Field Office made the announcement.
Kirby Santos, 38, of the Republic of the Philippines, pleaded guilty before U.S. District Judge Noel L. Hillman of the District of New Jersey to an information charging him with one count of conspiracy to violate the Arms Export Control Act and U.S. anti-smuggling laws.
According to the documents filed in this case, other cases and statements made in court:
Santos admitted that from 2008 through October 2013, he and co-conspirators he met in the Philippines or through an online forum agreed to ship firearms parts from the United States to the Philippines. Santos and others used credit cards and other forms of payment to purchase firearms parts from suppliers in the United States. Knowing that they would not ship to the Philippines, Santos arranged for the suppliers to send the firearms parts to the addresses of conspirators in Toms River, New Jersey, and Lynwood, Washington, in order to make the purchases appear to be domestic sales.
At the direction of Santos, the co-conspirators, including Abelardo Delmundo, 53, of Toms River, would then repackage the firearms parts, falsely label the contents of the package and export the firearms parts to the Philippines for ultimate delivery to Santos. To disguise their role in the conspiracy, the conspirators used aliases when sending the packages containing prohibited items. Upon receiving the firearms parts, Santos paid Delmundo and other conspirators in the form of cash or wire transfers to others at their direction.
During the course of the nearly five-year long conspiracy, Santos and others purchased and directed the unlawful exportation of more than $200,000 worth of defense articles from the United States to the Philippines without the required export license.
Santos made his initial appearance in federal court on April 22, 2015, after being charged by criminal complaint with one count of conspiracy to violate the Arms Export Control Act and U.S. anti-smuggling laws. Santos was arrested in Guam on March 31, 2015, by special agents of ICE-HSI and ATF.
The conspiracy charge to which Santos pleaded guilty is punishable by a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for Jan. 20, 2016.
Delmundo pleaded guilty to his role in the conspiracy on Apr. 30, 2015, and sentencing is scheduled for Dec. 10, 2015.
The case was investigated by ICE-HSI and ATF. The case is being prosecuted by Assistant U.S. Attorney Matthew T. Smith of the District of New Jersey and Trial Attorney Nathan M. F. Charles of the National Security Division’s Counterintelligence and Export Control Section.
Santos Plea Agreement
Filipino National Admits Conspiring to Export Firearms Parts from the United StatesRead the Press Release
CAMDEN, N.J. – A Filipino national today admitted his role in a conspiracy to smuggle more than $200,000 worth of firearms parts out of the United States, U.S. Attorney Paul J. Fishman announced.
Kirby Santos, 38, of the Republic of the Philippines, pleaded guilty before U.S. District Judge Noel L. Hillman in Camden federal court to an information charging him with one count of conspiracy to violate the Arms Export Control Act and U.S. anti-smuggling laws.
According to the documents filed in this case, other cases and statements made in court:
Santos admitted that from 2008 through October 2013, he and conspirators he met in the Philippines or through an online forum agreed to ship firearms parts from the United States to the Philippines. Santos and others used credit cards and other forms of payment to purchase firearms parts from suppliers in the United States. Knowing that they would not ship to the Philippines, Santos arranged for the suppliers to send the firearms parts to the addresses of conspirators in Toms River, New Jersey, and Lynwood, Washington, in order to make the purchases appear as domestic sales.
At the direction of Santos, the conspirators, including Abelardo Delmundo, 53, of Toms River, New Jersey, would then repackage the firearms parts, falsely label the contents of the package and export the firearms parts to the Philippines for ultimate delivery to Santos. To disguise their role in the conspiracy, the conspirators used aliases when sending the packages containing prohibited items. Upon receiving the firearms parts, Santos paid Delmundo and other conspirators in the form of cash or wire transfers to others at their direction.
During the course of the nearly five-year long conspiracy, Santos and others purchased and directed the unlawful exportation of more than $200,000 worth of defense articles from the United States to the Philippines without the required export license.
Santos made his initial appearance in federal court on April 22, 2015, after being charged by criminal complaint with one count of conspiracy to violate the Arms Export Control Act and U.S. anti-smuggling laws. Santos was arrested in Guam on March 31, 2015, by special agents of the U.S. Department of Homeland Security-Homeland Security Investigations (DHS-HSI) and the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF).
Delmundo pleaded guilty to his role in the conspiracy on Apr. 30, 2015 and is scheduled for sentencing on Dec. 10, 2015.
The conspiracy charge to which Santos pleaded guilty is punishable by a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for Jan. 20, 2016.
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 DHS-HSI Cherry Hill, New Jersey, under the direction of Acting Special Agent in Charge Kevin Kelly, and ATF special agents, under the direction of Special Agent in Charge George P. Belsky, with the investigation leading to today’s plea.
The government is represented by Assistant U.S. Attorney Matthew T. Smith of the U.S. Attorney’s Office Criminal Division in Camden and Trial Attorney Nathan M. F. Charles of the National Security Division’s Counterintelligence and Export Control Section.
Defense counsel: Timothy Anderson Esq., Red Bank, New Jersey
Two Philadelphia Men Admit Roles in $5.8 Million Reloadable Debit Card Extortion ScamRead the Press Release
CAMDEN, N.J. - Two Philadelphia men today admitted their roles in a conspiracy to extort victims to load prepaid debit cards with funds that were stolen as part of the scheme, U.S. Attorney Paul J. Fishman announced.
Alpeshkumar Patel, 31, and Vijaykumar Patel, 40, each pleaded guilty before U.S. District Judge Renée Marie Bumb to separate informations charging them with conspiracy to commit wire fraud.
According to documents filed in this case and statements made in court:
Alpeshkumar Patel and Vijaykumar Patel admitted that from September 2013 through March 2014, they were part of a conspiracy to steal money using reloadable debit cards. First, conspirators would purchase reloadable Green Dot Cards, and register them in names other than their own. The conspirators contacted victims by phone and used threats or deceit to induce them to put money on MoneyPak cards, which are used along with assigned PIN codes to add funds to Green Dot Cards.
Alpeshkumar Patel and Vijaykumar Patel admitted that they obtained the Green Dot Cards and used them to purchase money orders. Afterwards, they deposited the funds into bank accounts associated with the scheme.
Phone numbers and IP addresses connected with the conspiracy were tied to approximately 2,500 Green Dot Cards that were funded in excess of $5.8 million.
The conspiracy to commit wire fraud charge to which Alpeshkumar Patel and Vijaykumar Patel pleaded guilty is punishable by a maximum potential penalty of 20 years in prison and $250,000 fine, or twice the gross gain or loss from the offense. Sentencing for both defendants is scheduled for Jan. 15, 2016.
U.S. Attorney Fishman credited special agents, detectives and investigators assigned to the Joint Terrorism Task Force, under the direction of FBI Special Agent in Charge Richard M. Frankel in Newark, and FBI Special Agent in Charge William F. Sweeney Jr. in Philadelphia, as well as special agents of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), under the direction of Acting Special Agent in Charge Kevin Kelly in Newark, with the investigation leading to today’s pleas.
The government is represented by Assistant U.S. Attorney Andrew Kogan of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
Defense Counsel:
Alpeshkumar Patel: Alyssa A. Cimino Esq., Fairfield, New Jersey
Vijaykumar Patel: James A. Plaisted Esq., Roseland, New Jersey
Two Grape Street Crips Members Admit Dealing Crack-Cocaine in Newark, New JerseyRead the Press Release
NEWARK, N.J. – Two members of the Grape Street Crips gang admitted their roles in a two-year conspiracy to distribute crack-cocaine in and around Newark, New Jersey, U.S. Attorney Paul J. Fishman announced today.
Monesha Johnson, a/k/a “Smoove,” 35, of Newark, New Jersey, pleaded guilty today before U.S. District Judge Jose Linares in Newark federal court to an information charging her with one count of conspiring to distribute crack-cocaine. Willie Brooks, a/k/a “Animal,” 24, also of Newark, pleaded guilty yesterday before Judge Linares to a separate information charging him with one count of conspiring to distribute crack-cocaine.
In May 2015, over the course of three weeks, 50 alleged members and associates of the Grape Street Crips were charged in criminal complaints that alleged drug-trafficking, physical assaults and witness intimidation. The charges are the result of a long-running investigation led by the DEA and FBI, in conjunction with the Essex County Prosecutor’s Office, the Newark Police Department and Essex County Sheriff’s Office Bureau of Narcotics. Over the course of the entire investigation, 71 defendants have been charged with federal and state charges.
According to documents filed in this case and statements made in court:
Johnson and Brooks both admitted that between May 2013 and May 4, 2015, they conspired with others to distribute 28 grams of crack-cocaine in and around the area of 6th Avenue and North 5th Street, in Newark.
The drug distribution conspiracy charge to which Johnson and Brooks pleaded guilty carries a statutory minimum of five years in prison and maximum potential penalty of 40 years in prison. Sentencing for Johnson and Brooks is scheduled for Jan. 15, 2016 and Dec. 15, 2015, respectively.
U.S. Attorney Fishman credited special agents of the DEA, under the direction of Special Agent in Charge Carl Kotowski, and special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel, for the investigation leading to the pleas. He also thanked prosecutors and detectives of the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Carolyn A. Murray; police officers and detectives of the Newark Police Department, under the direction of Director Eugene Venable and Chief Anthony Campos; and the Essex County Sheriff’s Office under the direction of Armando B. Fontoura, for their work.
The government is represented by Assistant U.S. Attorneys Osmar J. Benvenuto, Elizabeth M. Harris, and Barry A. Kamar 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:
Johnson: Timothy Anderson Esq., Red Bank, New Jersey
Brooks: John P. McDonald Esq., Somerville, New Jersey
Fugitive from Justice for 16 Years Sentenced to Eight Years in Prison for Laundering Illegal Drug ProceedsRead the Press Release
NEWARK, N.J. – After spending 16 years as a fugitive from justice, a man was sentenced today to 96 months in prison for his role in a conspiracy to launder almost $700,000 in illegal drug proceeds, U.S. Attorney Paul J. Fishman announced.
Reinaldo Jimenez, 49, most recently of Madrid, Spain, was previously convicted at trial by a federal jury in 1998 of one count of conspiracy to commit money laundering. Jimenez fled the country before his sentencing and lived abroad as a fugitive for 16 years. He was captured in California in 2014. U.S. District Judge Jose L. Linares imposed the sentence today in Newark federal court.
According to documents filed in this case and the evidence at trial:
From October 1996 through March 14, 1997, Jimenez knowingly laundered nearly $700,000 in drug proceeds collected by co-defendants in New Jersey and elsewhere. Jimenez took possession of the cash in $15,000 bundles wrapped in newspaper and scotch tape and then made numerous small deposits into personal, family and business accounts to avoid triggering mandatory reporting requirements. Jimenez then wired the laundered funds to cartel contacts in Columbia and Venezuela.
In addition to the prison term, Judge Linares sentenced Jimenez to three years of supervised release.
U.S. Attorney Fishman 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 sentencing.
The government is represented by Assistant U.S. Attorney David W. Feder of the U.S. Attorney’s Office, General Crimes Unit, in Newark.
Defense counsel: Assistant Public Defender K. Anthony Thomas Esq., Newark
Florida Man Sentenced to 76 Months in Prison for Drug ConspiracyRead the Press Release
NEWARK, N.J. – A Florida man was sentenced today to 76 months in prison for his participation in a drug distribution conspiracy operating out of a residential housing complex in East Orange, New Jersey, U.S. Attorney Paul J. Fishman announced.
Rafael José Santiago-Soto, 30, previously pleaded guilty before U.S. District Judge Esther Salas to conspiring to distribute methylone, a Schedule I controlled substance. Judge Salas imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Santiago-Soto participated in a drug distribution conspiracy that spanned several months from 2012 through 2013. In March 2013, the Drug Enforcement Administration (DEA) conducted an investigation resulting in the seizure of more than six kilograms of methylone from an apartment leased by Santiago-Soto, which was being operated as a drug packaging mill.
In addition to the prison term, Judge Salas sentenced Santiago-Soto to three years of supervised release.
U.S. Attorney Fishman praised special agents of the DEA, under the direction of Special Agent in Charge Carl J. Kotowski, with the investigation leading to today’s sentencing.
The government is represented by Special Assistant U.S. Attorney Thomas S. Kearney of the U.S. Attorney’s Office General Crimes Unit in Newark.
Defense counsel: Jason Foy Esq., Hackensack, New Jersey
Brooklyn Man Sentenced to More Than 15 Years in Prison for Enticing A Minor to Engage in Criminal Sexual ConductRead the Press Release
NEWARK, N.J. – A Brooklyn, New York, man was sentenced today to 188 months in prison for using the internet to contact minors to get them to engage in criminal sexual conduct and for possessing images of child sexual abuse, U.S. Attorney Paul J. Fishman announced.
Alexander Nayda, 26, previously pleaded guilty before U.S. District Judge Katharine S. Hayden to an information charging him with one count of online enticement of a minor to engage in criminal sexual conduct and one count of possession of child pornography.
According to documents filed in the case and statements made in court:
Nayda admitted at his plea hearing that between August 2013 and February 2014 he used the internet to induce a 14-year-old girl to engage in criminal sexual conduct, including having intercourse with Nayda on multiple occasions and taking pictures of her genitals for him. Nayda also admitted to enticing seven or eight other underage girls located in several different states to have sexual intercourse with him. In at least one instance, the victim stated that Nayda refused to stop the sexual act when she objected to his advances. Nayda also admitted to using online chat applications to get multiple girls to self-produce images and videos of child sexual abuse to send to him. In one instance, Nayda chatted online with an individual whom he believed to be an 11-year-old girl. Nayda attempted, on multiple occasions, to meet with the 11-year-old for sexual contact. When the girl stated that she wasn’t allowed out after dark, Nayda responded, “How does 3:30 sound?” Nayda also asked many of his victims if they could introduce him to even younger children.
In addition to the prison term, Judge Hayden sentenced Nayda to lifetime supervised release. As part of his guilty plea, Nayda must forfeit the computers and computer accessories he used to commit the offense. He will also be required to register as a sex offender.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, and the N.J. Regional Computer Forensics Laboratory 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 Office Health Care and Government Fraud Unit.
Defense counsel: Tony Mirvis Esq. Brooklyn, New York
Two Members of Camden Drug Trafficking Organization Sentenced to Prison for Roles in Conspiracy to DistributeRead the Press Release
CAMDEN, N.J. – Two Camden men were sentenced to prison in connection with their roles as set workers in a large-scale drug trafficking organization (DTO) that distributed cocaine base, cocaine, and/or heroin, U.S. Attorney Paul J. Fishman announced today.
Marqueis Thomas Randall, a/k/a “Marty,” 23, was sentenced to 100 months in prison; Elquinzie Lewis, 23, was sentenced Sept. 29, 2015, to 48 months in prison. Randall previously pleaded guilty before U.S. District Judge Robert B. Kugler in Camden federal court to a superseding information charging him with one count of conspiracy to distribute and to possess with intent to distribute 28 grams or more of cocaine base and 100 grams or more of heroin, and one count of being a previously convicted felon in possession of a firearm. Lewis previously pleaded guilty before Judge Kugler to a superseding information charging him with using a communications facility to further a drug trafficking crime.
In April 2013, seven alleged members of the drug trafficking organization were charged by criminal complaint with conspiring to distribute cocaine base, cocaine, and heroin. The five remaining defendants are scheduled for trial on Jan. 11, 2016.
According to documents filed in this case and statements made in court:
The organization controlled an area that includes the area of Eighth and Tulip Streets, a retail shopping plaza in the 700 block of Morgan Boulevard, and areas within the Crestbury Apartments public housing project, located in the 2500 block of South Eighth Street. The investigation into the organization involved physical surveillance, confidential informants, telephone wiretaps, controlled drug purchases, and record checks. In one recorded conversation from the wiretap, one of the alleged leaders told Lewis: “My thing is loyalty. You rolling with us, you got loyalty. You all right. You rolling with us that mean everybody you see got your back a hundred percent, like that’s what I mean by loyalty. It’s bigger than what’s just going on.”
In addition to the prison term, Judge Kugler sentenced Randall to five years of supervised release and sentenced Lewis to one year of supervised release.
The charges and allegations against the remaining defendants are merely accusations, and the defendants are considered innocent unless and until proven guilty.
The government is represented by Special Assistant U.S. Attorney Erin M. Fay and Assistant U.S. Attorney Jason Richardson of the Camden office.
U.S. Attorney Fishman credited special agents of the FBI’s South Jersey Violent Offender and Gang Task Force, Philadelphia Division, under the direction of FBI Special Agent in Charge William F. Sweeney Jr.; the Camden County Prosecutor’s Office, under the direction of Prosecutor Mary Eva Colalillo; the Camden City Police Department, under the direction of Chief Scott Thomson; the N.J. State Police, under the direction of Col. Rick Fuentes; and the Camden Collaborative Crime Commission (C4), with the investigation leading to today’s sentencings. He also thanked the Philadelphia Police Department, the N.J. Parole Board, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the N.J. Division of Criminal Justice, the Voorhees Police Department, the Gloucester County Prosecutor’s Office, the Salem County Prosecutor’s Office, the Camden County Sheriff’s Office, the Woodbury Police Department and the Pennsauken Police Department for their roles in the case.
This case was developed through the work of C-4. Every federal, state and local law enforcement agency and prosecutor’s office responsible for combating drug trafficking, gang activity and violent crime in Camden has come together in one location to share intelligence, develop investigative strategies and support the investigative and prosecutorial efforts of its partners. C-4 has merged the individual missions of the various law enforcement agencies into a single strategic attack on drug trafficking and drug-related violent crime. Such intense coordination greatly enhances the law enforcement community’s ability to correctly identify and successfully prosecute the most dangerous criminals in one of our nation’s most dangerous cities.
U.S. Attorney Paul J. Fishman Announces $932,805 Grant Award to Help Prisoner Reentry Programs in New JerseyRead the Press Release
NEWARK, N.J. – U.S. Attorney Paul J. Fishman, in conjunction with the U.S. Department of Justice’s Bureau of Justice Assistance (BJA), today announced a $932,805 grant to the N.J. State Parole Board to help reduce the recidivism of individuals reentering their communities after incarceration.
The funds were awarded as part of the Second Chance Act (SCA) Two-Phase Adult Reentry Demonstration Program, which is designed to help jurisdictions develop and implement collaborative strategies to reduce recidivism for medium to high risk parolees. The $932,805 will support a reentry program for 100 parolees from pre to post-release, with an emphasis on improved housing and supportive services.
In April 2008 the SCA was passed with bipartisan support and was backed by a broad spectrum of leaders in law enforcement, corrections, courts, behavioral health and other areas. The Second Chance Act represents a federal investment in strategies to reduce recidivism and increase public safety, as well as to reduce corrections costs for state and local governments. Since 2009, more than 600 Second Chance Act grant awards have been made to government agencies and nonprofit organizations from 49 states for reentry programs serving adults and juveniles. The Second Chance Act’s grant programs are funded and administered by the U.S. Department of Justice’s Office of Justice Programs.
For additional information about SCA programs, visit https://www.bja.gov/.
California Man Sentenced to Six Years in Prison for Shipping More Than One Kilogram of Heroin and Cocaine to New JerseyRead the Press Release
TRENTON, N.J. – A San Bernadino, California, man was sentenced today to 72 months in prison for his role in a large-scale drug trafficking organization that distributed heroin in Ocean and Monmouth counties and elsewhere in New Jersey, U.S. Attorney Paul J. Fishman announced.
Anthony J. Brooks, 46, previously pleaded guilty before U.S. District Judge Peter G. Sheridan to an information charging him with conspiracy to distribute heroin. Judge Sheridan imposed the sentence today in Trenton federal court.
In March 2014, 21 alleged members of the “Britt-Young DTO,” a drug trafficking organization named after its leaders, Robert Britt and Rufus Young, were charged by criminal complaint with conspiring to distribute heroin. Nineteen of the defendants have pleaded guilty.
According to documents filed in this case and statements made in court:
Between November 2013 and March 2014, Brooks shipped through the U.S. Postal Service packages from California containing large quantities of heroin and cocaine to conspirators in New Jersey, including an individual who supplied heroin to the Britt-Young DTO. The conspirators in New Jersey then transported and packaged the narcotics and distributed them to others. Brooks admitted that he shipped more than one kilogram of heroin and 1.5 kilograms of cocaine from California to New Jersey.
In addition to the prison term, Judge Sheridan sentenced Brooks to serve four years of supervised release.
U.S. Attorney Fishman credited special agents of the FBI, Red Bank Resident Agency, under the direction of Special Agent in Charge Richard M. Frankel, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Nicholas Grippo of the U.S. Attorney’s Office Criminal Division in Newark.
Defense Counsel: Ryan Clark Esq., Freehold, New Jersey
Essex County, New Jersey, Man Sentenced to 53 Months in Prison for Illegally Possessing Firearm, Smuggling Drugs into Federal JailRead the Press Release
NEWARK, N.J. – An Orange, New Jersey, man was sentenced today to 53 months in prison for illegally possessing a firearm and conspiring with others to smuggle contraband, including marijuana and tobacco, into a federal pretrial detention facility, U.S. Attorney Paul J. Fishman announced.
Muhammad Subpunallah, 34, previously pleaded guilty before U.S. District Judge Katharine S. Hayden to an indictment charging him with illegal possession of a firearm and to an information charging him with one count of conspiring to smuggle contraband into the Essex County Correctional Facility. Judge Hayden imposed the sentence today in Newark federal court.
According to the documents filed in this case and other cases and statements made in court:
On Oct. 11, 2011, Subpunallah had a loaded .38 caliber Cobra firearm in his waistband while standing near Broad and Market streets in Newark. He had previously been convicted of robbery in Essex County Superior Court. After Subpunallah was arrested and detained on the illegal possession of a firearm, he engaged in a conspiracy to smuggle contraband into the Essex County Correctional Facility. From September 2013 to February 2014, Subpunallah directed a relative, Vladimir Sauzereseteo, 41, of East Orange, New Jersey, to deliver contraband, including marijuana and tobacco, to Brian Kapalin, 68, of Maplewood, New Jersey, a lawyer, who then smuggled the contraband into the Essex County Correctional Facility in exchange for a cash fee. Subpunallah sent inmates to the attorney visitor room to meet with Kapalin and retrieve the contraband.
In January 2014, Subpunallah spoke with Kapalin over a recorded correctional facility phone. Subpunallah asked Kapalin to deliver contraband to an inmate at the Essex County Correctional Facility. Sauzereseteo was then paid $1,650 via Western Union money transfers, which he used to purchase marijuana that he delivered to Kapalin, along with a cash payment for Kapalin’s service. A few days later, Kapalin met the inmate from the Essex County Correctional Facility in the attorney visitor room and delivered the marijuana.
In addition to the prison term, Judge Hayden sentenced Subpunallah to serve three years of supervised release.
U.S. Attorney Fishman credited officers with the Newark Police Department, under the direction of Director Eugene Venable and Chief Anthony Campos; special agents with the Bureau of Alcohol, Tobacco, Firearms, and Explosives, under the direction of Special Agent in Charge George P. Belsky; special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark; and investigators with the Internal Affairs Division of the Essex County Correctional Facility, under the leadership of Warden Roy Hendricks, with the investigation leading to today’s sentencing.
The government is represented by Special Assistant U.S. Attorney Andrew Tyler and Assistant U.S. Attorneys Cari Fais of the Criminal Division, General Crimes Unit; Robert Frazer, of the Organized Crime/Gangs Unit; and Rahul Agarwal of the Special Prosecutions Division, in Newark.
Defense counsel: David Holman Esq., Assistant Federal Public Defender, Newark
CEO of New Jersey Engineering Consulting Firm Admits Role in $130,000 Unemployment Insurance Fraud ConspiracyRead the Press Release
Also Admits Failure to Collect More Than $100,000 in Payroll Taxes
TRENTON, N.J. – The head of an engineering consulting firm in Wall Township, New Jersey, today admitted that in order to reduce his payroll costs, he launched a scheme in which several of his employees fraudulently collected unemployment benefits while he paid the remaining portion of their salaries, U.S. Attorney Paul J. Fishman announced.
Lino DeAlmeida Jr., 68, of Point Pleasant, New Jersey, pleaded guilty before U.S. District Judge Freda L. Wolfson in Trenton federal court to an information charging him with one count of conspiracy to defraud the N.J. State Division of Unemployment Insurance (NJUI) and one count of failing to collect Social Security, Medicare, and income payroll taxes.
According to documents filed in this case and statements made in court:
DeAlmeida operated an engineering consulting firm, Consolidated Construction Management Services (CCMS) in Wall Township. In late 2011, DeAlmeida told his four employees that due to financial difficulties, he could not continue paying their salaries. He proposed a scheme in which the employees would claim to have been terminated from CCMS and seek unemployment benefits from the NJUI. In return, he promised to continue to pay them “under the table” for the remaining portion of their salaries that would not be covered by the benefits. Three of the CCMS employees agreed to the scheme and submitted false applications with the NJUI.
DeAlmeida’s employee conspirators received a total of $130,363 in benefits between July 2011 and January 2013 while receiving CCMS checks from DeAlmeida. In addition, DeAlmeida failed to pay payroll taxes of $109,068 on the undisclosed wages of $790,860 he and his conspirators received during the scheme.
The conspiracy to defraud the NJUI charge to which DeAlmeida pleaded guilty 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. The failure to collect payroll taxes charge carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for Jan. 5, 2016.
U.S. Attorney Fishman credited special agents of the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, under the direction of Special Agent in Charge Cheryl Garcia, New York Region; and IRS–Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s plea.
The government is represented by V. Grady O’Malley, Senior Litigation Counsel of the U.S. Attorney’s Office Organized Crime/Gangs Unit in Newark.
Defense counsel: Jeffrey D. Smith Esq., Teaneck, New Jersey
U.S. Attorney Paul J. Fishman Announces over $2.1 Million in Federal Law Enforcement Grants to Help Address Gang Activity, Heroin Distribution in New JerseyRead the Press Release
NEWARK, N.J. – U.S. Attorney Paul J. Fishman, in conjunction with the U.S. Office of Community Oriented Policing Services (COPS), today announced federal funding awards to four state and city law enforcement agencies in the District of New Jersey that investigate gang activity and heroin distribution through statewide collaboration.
COPS will award over $18 million nationally through the COPS Anti-Gang Initiative (CAGI), the COPS Anti-Heroin Task Force Program (AHTF), and the COPS Anti-Methamphetamine Program, including $2,107,166 for New Jersey law enforcement agencies. The list of this year’s grantees includes:
CAGI Grants:
Agency Name
Award Amount
Essex County Prosecutor’s Office
$594,023
Jersey City
$750,000
New Jersey Department of Law and Public Safety
$659,916
AHTF Grants:
Agency Name
Award Amount
New Jersey Department of Law and Public Safety
$103,227
“These grants provide much-needed funding to several important law enforcement initiatives to battle the ongoing problems of gang violence and illegal drug trafficking. Providing our local law enforcement partners with more than $2 million in federal funding specifically targeted to these areas will give them additional tools to push back against the relentless threat of drugs and gangs. These awards are especially important, as they are being used to target gangs that have a nationwide footprint.”
The CAGI provides funds directly to law enforcement agencies with a multijurisdictional partnership composed of federal, state, and local partners. Primary consideration was given to agencies that target gangs of national significance. The AHTF provides funds to agencies that use statewide collaboration to investigate heroin or unlawful prescriptive opioid distribution.
For the entire list of grantees and additional information about the CAGI, the AHTF, and the COPS Anti-Methamphetamine Program, visit the COPS website at www.cops.usdoj.gov.
Newark One of Five Cities Added to Justice Department’s Violence Reduction NetworkRead the Press Release
NEWARK, N.J. – Newark was chosen one of five cities that will join the Department of Justice’s Violence Reduction Network (VRN), a comprehensive approach to reducing violent crime in communities around the country, U.S. Attorney Paul J. Fishman announced.
Newark was added to the program along with Little Rock, Arkansas; West Memphis, Arkansas; Compton, California; and Flint, Michigan. They join the inaugural sites of Detroit; Chicago; Camden, New Jersey; Wilmington, Delaware; and Oakland and Richmond, California.
“The selection of Newark as a VRN city will enable us to build on the success we’ve already achieved in Camden over the past year,” U.S. Attorney Fishman said, “and I'm pleased that my colleagues in Washington appreciate the strength of our federal, state, county, and local partnerships. This program ensures that federal resources are carefully targeted to the areas where they will provide the greatest benefit, allowing us to work with our local partners in ensuring we continue to create safe, thriving communities for all our citizens.”
Today’s announcement was made by Deputy Attorney General Sally Q. Yates and Assistant Attorney General Karol V. Mason of the Office of Justice Programs (OJP) before an audience of U.S. Attorneys, police chiefs, sheriffs, mayors, local leaders from the 10 sites and Department of Justice representatives at the second annual VRN Summit in Detroit, Michigan.
Through the VRN, the Justice Department enlists tactical and operational expertise available from the Bureau of Justice Assistance, the Federal Bureau of Investigation (FBI), the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the United States Marshals Service (USMS), the Drug Enforcement Administration (DEA), the Executive Office of the United States Attorneys, the Community Oriented Policing Services Office and the Office on Violence Against Women.
Deputy Attorney General Yates cited the progress reported by the current VRN sites in their first year. In Camden, for example, the FBI assisted the local police display wanted felons’ information on digital billboards, resulting in the arrest of two felons The ATF helped the Camden County Police Department acquire National Integrated Ballistic Information Network (NIBIN) equipment and training. NIBIN has allowed the county to initiate eTrace, an Internet-based firearms tracing and analysis tracking process to enhance criminal investigations.
In addition to announcing the five new VRN sites, Deputy Attorney General Yates announced Smart Policing grant awards totaling more than $2 million to law enforcement agencies to develop innovative, data-driven approaches to crime.
For more VRN information visit: www.bja.gov/Programs/VRN.html
Romanian Native in Large-Scale Atm Skimming Scheme Extradited to the United States to Face ChargesRead the Press Release
NEWARK, N.J. – A native of Romania who was arrested in Spain will make his initial court appearance and be arraigned tomorrow following his extradition to face charges that he participated in a large-scale lucrative ATM skimming scheme targeting New Jersey bank customers, U.S. Attorney Paul J. Fishman announced.
Alin Dumitru Carabus, 41, will appear tomorrow afternoon before U.S. Magistrate Judge Leda D. Wettre in Newark federal court. He is charged by indictment with conspiracy to commit bank fraud, aggravated identity theft, conspiracy to possess 15 or more counterfeit access devices, and possession of 15 or more counterfeit access devices. One of the other individuals charged in the indictment, Robert Mate, was previously apprehended in Spain and extradited to the United States. The third individual charged in the indictment, Ionut Vasile Ciurba-Stana, has been apprehended in Spain, and a request for extradition is pending.
According to documents filed in this and other cases and statements made in court:
Carabus participated in 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. Carabus and others 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. After the account information was stolen, the stolen data was used to create thousands of false and fraudulent ATM cards, which Carabus and others used to withdraw millions of dollars from customers’ bank accounts.
The ATM skimming operation in which Carabus participated is one of the largest ever uncovered by law enforcement. To date, 16 individuals have been charged in connection with this scheme. Twelve have pleaded guilty, and one individual, Dinu Horvat, was convicted after a week-long trial.
Carabus is charged with four counts, as described below, which carry the following maximum penalties and fines:
Count
Offense
Maximum Penalty
Maximum Fine
1
Conspiracy to commit bank fraud
Thirty years in prison
$1 million
2
Aggravated identity theft
Mandatory, consecutive penalty of two years in prison
$250,000, or twice the gross pecuniary gain or loss from the offense
5
Conspiracy to possess 15 or more counterfeit access devices
Five years in prison
$250,000, or twice the gross pecuniary gain or loss from the offense
6
Possession of 15 or more counterfeit access devices
Ten years in prison
$250,000, or twice the gross pecuniary gain or loss from the offense
U.S. Attorney Fishman credited special agents of the U.S. Secret Service, Newark Field Office, under the direction of Special Agent in Charge Carl Agnelli, along with special agents of U.S. Immigration and Customs Enforcement’s (ICE), Homeland Security Investigations (HSI) in Newark, under the direction of Acting Special Agent in Charge Kevin Kelly, with the investigation leading to the charges.The government is represented by Assistant U.S. Attorneys Rahul Agarwal and David M. Eskew of the Criminal Division in Newark.
Defense counsel: Christopher Patella Esq., Bayonne, New Jersey
Justice Department and Consumer Financial Protection Bureau Reach Settlement with Hudson City Savings Bank to Resolve Allegations of Mortgage Lending DiscriminationRead the Press Release
Settlement Provides Over $27 Million to Ensure Equal Lending Services to Predominantly Black and Hispanic Communities
The Justice Department and Consumer Financial Protection Bureau (CFPB) filed a consent order today to resolve allegations that Hudson City Savings Bank (Hudson City) engaged in a pattern or practice of “redlining” predominantly Black and Hispanic neighborhoods in its residential mortgage lending practices. “Redlining” is the discriminatory practice by banks or other financial institutions to deny or avoid providing credit services to a consumer because of the racial demographics of the neighborhood in which the consumer lives. This resolution represents the Justice Department’s largest residential mortgage redlining settlement in its history.
The settlement, which is subject to court approval, was filed in conjunction with the agencies’ complaint in the U.S. District Court for the District of New Jersey. The complaint alleges that Hudson City violated the Fair Housing Act and Equal Credit Opportunity Act (ECOA), which prohibit financial institutions from discriminating on the basis of race, color or national origin in their mortgage lending practices. Specifically, the complaint alleges that from at least 2009 to 2013, Hudson City failed to serve the credit needs of majority-Black-and-Hispanic neighborhoods throughout its major market areas, including in New Jersey, New York City and its surrounding counties, and the Philadelphia and Bridgeport, Connecticut, metropolitan areas. Hudson City has agreed to settle this matter without contested litigation.
“This case should send a message to lenders throughout the country that the Justice Department will not tolerate racial discrimination in the extension of credit,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division. “A lending institution must treat all potential borrowers equally, regardless of their race or the racial composition of their neighborhood, when deciding to offer its loan services. We encourage all lenders to proactively identify responsible lending opportunities that exist in predominantly minority neighborhoods within their lending areas.”
“Hudson City Savings Bank structured its business operations to systemically avoid providing credit services in predominantly minority neighborhoods,” said U.S. Attorney Paul J. Fishman of the District of New Jersey. “There is no room for such behavior in our banking system. In addition to paying $25 million for a loan subsidy program, today’s settlement agreement will require the bank to take a number of concrete steps to ensure that they improve access to responsible and affordable credit to qualified borrowers in Black and Hispanic neighborhoods.”
“We allege that Hudson City's redlining practices illegally cut off opportunities for consumers in predominantly Black and Hispanic neighborhoods to get a mortgage and achieve the dream of homeownership,” said CFPB Director Richard Cordray. “Without access to affordable credit, neighborhoods deteriorate in the long shadow cast by unfair lending. Today's action seeks to remove the redline by bringing $27 million in mortgage subsidies and outreach programs, along with new bank branches to the communities who should have had access from the beginning.”
The lawsuit originated from a joint investigation with the CFPB that commenced in March 2015.
Under the terms of the proposed settlement, Hudson City will invest $25 million in a loan subsidy fund to increase the amount of credit the bank extends to majority-Black-and-Hispanic neighborhoods across its market areas. In order to make residential mortgage loans available to residents of minority neighborhoods that were not adequately served by Hudson City, the bank will further invest $2.25 million in advertising, outreach, financial education, and community partnership efforts and open two full-service branches in these neighborhoods. The settlement will require Hudson City to further develop robust internal controls to ensure compliance with fair lending obligations, provide fair lending training to its employees, senior management, and the Board of Directors, and create a comprehensive long-term plan to increase lending in previously redlined areas. Hudson City will further pay a civil monetary penalty of $5.5 million.
The Justice Department’s enforcement of fair lending laws and the Servicemembers Civil Relief Act is conducted by the Housing and Civil Enforcement Section in the Civil Rights Division. Since 2010, the Civil Rights Division has provided approximately $1.3 billion in monetary relief for individual borrowers and impacted communities through its enforcement of the Fair Housing Act, ECOA and the SCRA. The Attorney General’s annual reports to Congress on ECOA enforcement highlight the department’s accomplishments in fair lending and are available at www.justice.gov/crt/publications/.
The Civil Rights Division, the U.S. Attorney’s Office for the District of New Jersey, and the Consumer Financial Protection Bureau are members of the Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information on the task force, visit www.StopFraud.gov.
A copy of the complaint, as well as additional information about fair lending enforcement by the Justice Department, can be obtained from the Justice Department’s website at http://www.justice.gov/fairhousing.
Justice Department and Consumer Financial Protection Bureau Reach Settlement with Hudson City Savings Bank to Resolve Allegations of Mortgage Lending DiscriminationRead the Press Release
Settlement Provides Over $27 Million to Ensure Equal Lending Services to Predominantly Black and Hispanic Communities
NEWARK, N.J. – The U.S. Attorney’s Office for the District of New Jersey, the U.S. Department of Justice Civil Rights Division, and the Consumer Financial Protection Bureau (CFPB) filed a consent order today to resolve allegations that Hudson City Savings Bank (Hudson City) engaged in a pattern or practice of redlining predominantly Black and Hispanic neighborhoods throughout its major market areas with respect to the extension of residential mortgage credit. This resolution represents the Justice Department’s largest residential mortgage redlining settlement in its history.
The settlement, which is subject to court approval, was filed in conjunction with the agencies’ complaint in the U.S. District Court for the District of New Jersey. The complaint alleges that Hudson City violated the Fair Housing Act and Equal Credit Opportunity Act (ECOA), which prohibit financial institutions from discriminating on the basis of race, color, or national origin in their mortgage lending practices. The complaint alleges that from at least 2009 to 2013, Hudson City failed to serve the credit needs of majority-Black-and-Hispanic neighborhoods throughout its lending footprint, including in New Jersey, New York City and its surrounding counties, the Bridgeport, Connecticut, and Philadelphia, Pennsylvania, metropolitan areas, and the City of Camden. Hudson City has agreed to settle this matter without contested litigation.
“Hudson City Savings Bank structured its business operations to systemically avoid providing credit services in predominantly minority neighborhoods. There is no room for such behavior in our banking system,” U.S. Attorney Fishman said. “In addition to paying $25 million for a loan subsidy program, today’s settlement agreement will require the bank to take a number of concrete steps to ensure that they improve access to responsible and affordable credit to qualified borrowers in Black and Hispanic neighborhoods.”
“This case should send a message to lenders throughout the country that the Justice Department will not tolerate racial discrimination in the extension of credit,” Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division, said. “A lending institution must treat all potential borrowers equally, regardless of their race or the racial composition of their neighborhood, when deciding to offer its loan services. We encourage all lenders to proactively identify responsible lending opportunities that exist in predominantly minority neighborhoods within their lending areas.”
“We allege that Hudson City's redlining practices illegally cut off opportunities for consumers in predominantly Black and Hispanic neighborhoods to get a mortgage and achieve the dream of homeownership,’ CFPB Director Richard Cordray said. “Without access to affordable credit, neighborhoods deteriorate in the long shadow cast by unfair lending. Today’s action seeks to remove the redline by bringing $27 million in mortgage subsidies and outreach programs, along with new bank branches to the communities who should have had access from the beginning.”
The lawsuit originated from a joint investigation with the Consumer Financial Protection Bureau that commenced in March 2015.
Under the terms of the proposed settlement, Hudson City will invest $25 million into a loan subsidy fund to increase the amount of credit the bank extends to majority-Black-and-Hispanic areas across its market areas. To enable the bank to make residential mortgage loans available to residents of minority neighborhoods that were not adequately served by Hudson City, the bank will further invest $2.25 million into advertising, outreach, financial education, and community partnership efforts and open two full-service branches in these neighborhoods. The settlement will require Hudson City to develop robust internal controls to ensure compliance with fair lending obligations, provide fair lending training to employees, senior management, and the Board of Directors, and create a comprehensive long-term plan to increase lending in previously redlined areas. Hudson City will pay a civil monetary penalty of $5.5 million.
The Justice Department’s enforcement of fair lending laws and the Servicemembers Civil Relief Act is conducted by the Housing and Civil Enforcement Section in the Civil Rights Division. Since 2010, the Civil Rights Division has provided approximately $1.3 billion in monetary relief for individual borrowers and impacted communities through its enforcement of the Fair Housing Act, ECOA and the SCRA. The Attorney General’s annual reports to Congress on ECOA enforcement highlight the department’s accomplishments in fair lending and are available at www.justice.gov/crt/publications/.Individuals who believe they may have been victims of discrimination may file a complaint with the U.S Attorney’s Office at http://www.justice.gov/usao-nj/civil-rights-enforcement/complaint or call the U.S. Attorney’s Office’s Civil Rights Complaint Hotline at (855) 281-3339.
A copy of the complaint, as well as additional information about fair lending enforcement by the Justice Department, can be obtained from the Justice Department’s website at http://www.justice.gov/fairhousing.
The government is represented by Assistant U.S. Attorneys Michael E. Campion and Svetlana Eisenberg of the District of New Jersey, and Trial Attorney Ronald Lee, U.S. Department of Justice, Civil Rights Division, Housing and Civil Enforcement Section.
The Civil Rights Division, the U.S. Attorney’s Office for the District of New Jersey, and the Consumer Financial Protection Bureau are members of the Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information on the task force, visit www.StopFraud.gov
El Departmento de Justicia y la Oficina para la Protección Financiera del Consumidor Realizan un Acuerdo Conciliatorio con Hudson City Savings Bank en Resolución de Alegatos de Discriminación en el Otorgamiento de HipotecasRead the Press Release
WASHINGTON – El Departamento de Justicia y la Oficina para la Protección Financiera del Consumidor [Consumer Financial Protection Bureau (CFPB)] radicaron una orden de consentimiento hoy para resolver alegatos de que Hudson City Savings Bank (Hudson City) exhibió un patrón o una práctica de excluir delimitando (“redlining” en inglés) vecindarios predominantemente negros e hispanos en sus prácticas de otorgamiento de préstamos hipotecarios residenciales. Excluir delimitando es la práctica discriminatoria ejercida por bancos u otras instituciones financieras de negar o evitar brindar servicios de crédito a un consumidor debido a la situación demográfica racial del vecindario en el que vive el consumidor. Esta resolución representa el acuerdo conciliatorio más grande asociado con exclusión delimitada hipotecaria residencial realizado por el Departamento de Justicia.
El acuerdo conciliatorio, el que está sujeto a la aprobación del tribunal, fue radicado en conjunto con la demanda de las agencias en el Tribunal Federal de Distrito para el Distrito de Nueva Jersey. La demanda alega que Hudson City violó la Ley de Vivienda Justa y la Ley de Igualdad de Oportunidades de Crédito [Equal Credit Opportunity Act (ECOA)], que prohíben a las instituciones financieras discriminar debido a raza, color u origen nacional en sus prácticas de otorgamiento de préstamos hipotecarios. Específicamente, la demanda alega que desde al menos 2009 hasta 2013, Hudson City dejó de atender las necesidades de crédito de vecindarios con mayoría negra e hispana en las principales áreas de su mercado, incluidas Nueva Jersey, la ciudad de Nueva York y los condados que las rodean, y las áreas metropolitanas de Filadelfia y Bridgeport, Connecticut. Hudson City ha aceptado resolver este caso sin litigio controvertido.
“Este caso debe transmitir un mensaje a prestamistas de todo el país de que el Departamento de Justicia no tolerará la discriminación racial en el otorgamiento de crédito”, indicó la Secretaria de Justicia Auxiliar Adjunta Principal Vanita Gupta, líder de la División de Derechos Civiles. “Una institución de préstamos debe tratar a todos los potenciales prestatarios de manera igualitaria, independientemente de su raza o la composición racial de su vecindario, al decidir ofrecer sus servicios de préstamo. Instamos a todos los prestamistas a que identifiquen proactivamente oportunidades de otorgamiento de préstamos responsables que existan en vecindarios predominantemente minoritarios en sus áreas de actuación”.
“Hudson City Savings Bank estructuró sus operaciones comerciales de modo a sistemáticamente evitar brindar servicios de crédito en vecindarios predominantemente minoritarios”, señaló el Fiscal Federal Paul J. Fishman del Distrito de Nueva Jersey. “No hay lugar para ese tipo de comportamiento en nuestro sistema bancario. Además de pagar 25 millones de dólares por un programa de subsidios crediticios, el acuerdo de hoy exigirá que el banco tome una serie de pasos concretos para garantizar que se mejore el acceso a crédito responsable y asequible a prestatarios calificados en vecindarios negros e hispanos”.
“Alegamos que las prácticas de exclusión delimitada discriminatorias de Hudson City recortaron ilegalmente las oportunidades de consumidores de vecindarios predominantemente negros e hispanos de obtener un préstamo hipotecario y cumplir su sueño de la casa propia”, dijo el Director de la CFPB Richard Cordray. “Sin acceso a crédito de precio razonable, los vecindarios se deterioran bajo la sombra lanzada por el otorgamiento injusto de préstamos. La acción de hoy busca eliminar este tipo de discriminación al proveerles a estas comunidades que tendrían que haber tenido acceso a hipotecas desde un principio, 27 millones de dólares en subsidios hipotecarios y programas de extensión, junto con nuevas sucursales bancarias”.
La demanda se originó a partir de una investigación conjunta con la CFPB iniciada en marzo de 2015.
Bajo los términos del acuerdo conciliatorio propuesto, Hudson City invertirá 25 millones de dólares en un fondo de subsidios para hipotecas para incrementar la cantidad de crédito que el banco otorga a vecindarios con mayoría negra e hispana en todas las áreas de su mercado. A fin de que los préstamos hipotecarios residenciales estén disponibles a residentes de vecindarios minoritarios que no fueron atendidos adecuadamente por Hudson City, el banco investigará, además, 2,25 millones de dólares en publicidad, extensión, educación financiera e iniciativas e asociación comunitaria, y abrirá dos sucursales de servicios integrales en estos vecindarios. El acuerdo exigirá que Hudson City desarrolle fuertes controles internos adicionales para garantizar el cumplimiento de sus obligaciones de otorgamiento justo de préstamos, brinde capacitación sobre el otorgamiento justo de préstamos a sus empleados, altos ejecutivos y a la Junta de Directores, y cree un plan integral de largo plazo para incrementar el otorgamiento de préstamos en las áreas anteriormente excluídas por delimitación. Asimismo, Hudson City pagará una multa civil de 5,5 millones de dólares.
La coacción asociada a las leyes de otorgamiento justo de préstamos y la Ley de Reparación Judicial Civil para los Miembros de las Fuerzas Armadas [Servicemembers Civil Relief Act] por parte del Departamento de Justicia es realizada por la Sección de Vivienda y Cumplimiento de la Ley Civil de la División de Derechos Civiles. Desde 2010, la División de Derechos Civiles ha proporcionado alrededor de 1,3 mil millones de dólares en reparación monetaria a prestatarios individuales y comunidades afectadas, al hacer valer la Ley de Vivienda Justa, la ECOA y la SCRA. Los informes anuales del Secretario de Justicia de EE.UU. al Congreso sobre la coacción asociada a la ECOA destacan los logros del departamento en el tema del otorgamiento justo de préstamos y están disponibles en www.justice.gov/crt/publications/.
La División de Derechos Civiles, la Fiscalía Federal para el Distrito de Nueva Jersey y la Oficina para la Protección Financiera del Consumidor son miembros de la Fuerza de Tarea de Coacción contra el Fraude Financiero. El Presidente Obama fundó la Fuerza de Tarea de Coacción contra el Fraude Financiero para generar una iniciativa enérgica, coordinada y proactiva para investigar y enjuiciar los delitos financieros. La fuerza de tarea incluye a representantes de una amplia gama de agencias federales, autoridades regulatorias, inspectores generales y fuerzas del orden público estatales y locales quienes, trabajando juntos, ponen en uso un conjunto poderoso de recursos de coacción penal y civil. La fuerza de tarea está trabajando para mejorar las iniciativas en todo el poder ejecutivo federal y, junto con asociados estatales y locales, investigar y enjuiciar delitos financieros importantes, garantizar un castigo justo y eficaz para quienes cometen delitos financieros, combatir la discriminación en los mercados de préstamos y financieros, y recuperar ganancias para las víctimas de delitos financieros. Para obtener más información sobre la fuerza de tarea, visite www.StopFraud.gov.
Para obtener una copia de la demanda, así como información adicional sobre la labor del Departamento de Justicia para hacer valer las leyes de otorgamiento justo de préstamos, visite el portal del Departamento de Justicia en http://www.justice.gov/fairhousing.
Middlesex County, New Jersey, Man Sentenced to 87 Months in Prison for Multiple Bank RobberiesRead the Press Release
NEWARK, N.J. - A Middlesex County, New Jersey, man was sentenced today to 87 months in prison for his role in two bank robberies, U.S. Attorney Paul J. Fishman announced.
Peter Greer, 41, of New Brunswick, New Jersey, previously pleaded guilty before U.S. District Judge Katharine S. Hayden to an information charging him with two counts of bank robbery. Judge Hayden imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Greer admitted using intimidation to rob the Valley National Bank in Newark on Sept. 27, 2012. Greer entered the bank, approached the bank teller and provided a note that said “give me the money in hundred dollar bills.” The teller complied and Greer fled the bank with the money. Greer also admitted to using intimidation to rob the rob Sovereign Bank, located in Newark on Oct. 31, 2012. Greer entered the bank, approached the bank teller and provided a note that said “I have a gun, give me money.” This time the teller did not comply, and Greer fled the bank without any money.
In addition to the prison term, Judge Hayden sentenced Greer to three years of supervised release and ordered him to pay restitution of $18,094.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, with the investigation leading to charges. He also thanked the Passaic Police Department and the Passaic County Sheriff’s Department for their contribution to the case.
The government is represented by Assistant U.S. Attorney Meredith Williams of the Criminal Division in Newark, N.J.
Defense counsel: Linda Foster Esq., Assistant Federal Public Defender, Newark
Chief Financial Officer and Co-Founder of Defunct Charter Flight Company Admits Role in Multi-Million Dollar FraudRead the Press Release
NEWARK, N.J. - The former CFO and co-founder of a now-defunct South Carolina public charter operator today admitted using phony documents and inflated revenue figures to defraud a New Jersey bank and other financial institutions out of millions of dollars, U.S. Attorney Paul J. Fishman announced.
Robert Keilman, 70, of Marlboro, New Jersey, pleaded guilty to an information charging him with one count of conspiracy to commit wire fraud affecting a financial institution and to commit bank fraud.
According to documents filed in this case and statements made in court:
Keilman was one of the founding members of Southern Sky Air & Tours d/b/a Myrtle Beach Direct Air & Tours, commonly referred to as Direct Air. From January 2010 through September 2011, Keilman was Direct Air’s chief financial officer. Direct Air offered airline services in a number of cities, including Newark, New Jersey.
Keilman acknowledged that U.S. Department of Transportation regulations required charter operators like Direct Air to protect passengers financially by posting a security or by keeping passenger payments for future flights in a designated depository or escrow account with an approved bank. Pursuant to this regulation, Direct Air set up an escrow account with a bank headquartered in Wayne, New Jersey. According to Keilman, Direct Air and the bank agreed that money in the escrow account for future flights would not be released to Direct Air until after the flights were completed. Additionally, Direct Air would have to submit a request for payment along with summary reports detailing the flights purportedly flown.
Keilman admitted that, from 2010 through September 2011, he conspired with others, including a pair of Direct Air executives identified in court documents as “Executive 1” and “Executive 2,” to engage in a “double-dipping” scheme wherein they submitted release requests for passenger payments designated as “membership fees” prior to the completion of the flights, and then after the flights were completed, submitted release requests for the same funds.
Keilman admitted that he, Executive 1, Executive 2 and others also submitted release requests containing inflated passenger revenue figures, causing the bank to release millions of dollars in revenues for fictitious passengers. In addition, Keilman stated that he, Executive 1, Executive 2 and others concealed the shortfall in Direct Air’s bank account by sending fraudulent financial statements to creditors.
The conspiracy to commit wire and bank fraud charge to which Keilman pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for Jan. 6, 2015.
Fishman credited Special Agents of the U.S. Department of Transportation, Office of the Inspector General, under the direction of Special Agent in Charge Todd Damiani, for the investigation leading to today’s plea.
The case is being prosecuted by Assistant U.S. Attorney Andrew Kogan and Deputy Chief Scott B. McBride of the U.S. Attorney’s Office’s Economic Crimes Unit, and by Trial Attorneys L. Rush Atkinson and Carol L. Sipperly of the U.S. Department of Justice’s Criminal Division, Fraud Section.
Defense counsel: Gina L. Simms Esq., Washington, D.C.; Michael Baldassare Esq., Newark, N.J.
Hudson County, New Jersey, Check-Casher Admits Failing to File Federally Required Reports for Cash Transactions over $10,000Read the Press Release
NEWARK, N.J. – A Hudson County, New Jersey, man today admitted to failing to file federally required currency transaction reports in connection with his check-cashing business, U.S. Attorney Paul J. Fishman announced.
Louis Sclafane, 83, of Bayonne, pleaded guilty before U.S. District Judge Kevin McNulty in Newark federal court to an information charging him with causing a domestic financial institution to fail to file Currency Transaction Reports (CTR), which are required for U.S. currency transactions in excess of $10,000 conducted by or on behalf of a single person on the same day, totaling $381,595 over a year and a half.
According to documents filed in this case and statements made in court:
Sclafane was the owner and sole proprietor of Advance Financial (AF), a check-cashing establishment located in Bayonne. Sclafane oversaw the day-to-day operations of AF, such as cashing checks for its customers and withdrawing currency from bank accounts associated with AF.
Between Sept. 29, 2010 and April 2012, Sclafane cashed at least 20 checks over $10,000 each without filing CTRs with the U.S. Treasury, despite being required to do so by the Federal Bank Secrecy Act.
The charge of causing a financial institution to fail to file CTRs for the purpose of evading the reporting requirements of the Bank Secrecy Act, to which Sclafane pleaded guilty, carries a maximum potential penalty of 10 years in prison and a maximum fine of $500,000. Sentencing is scheduled for Jan. 6, 2016.
U.S. Attorney Fishman credited special agents of the IRS Criminal Investigations Division, under the direction of Special Agent in Charge Jonathan D. Larsen in Newark; special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, and special agents of the U.S. Department of Housing and Urban Development, Office of the Inspector General, under the direction of Special Agent in Charge Christina Scaringi, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Jacques S. Pierre of the Special Prosecutions Division and Assistant U.S. Attorney Steven G. Sanders of the Appeals Division.
Defense counsel: Perter Carter Esq., Assistant Federal Public Defender, Newark
Bayonne, New Jersey, Police Officer Admits Using Excessive Force During Arrest, Filing False ReportRead the Press Release
Also Admits Role in Fraudulent $20,000 Home Rehabilitation Loan Scheme
NEWARK, N.J. – A Hudson County, New Jersey, man today admitted using excessive force during an arrest, falsifying records in an attempt to conceal his conduct and helping a relative fraudulently obtain a home rehabilitation loan, U.S. Attorney Paul J. Fishman announced.
Domenico Lillo, 45, of Bayonne, New Jersey, pleaded guilty before U.S. District Judge Kevin McNulty in Newark federal court to an indictment charging him with one count of deprivation of civil rights under color of law and one count of falsifying records to impede a civil rights investigation. Lillo also pleaded guilty to an information charging him with assisting in the filing of a false report to the U.S. Department of Housing and Urban Development (“HUD”) in connection with a federally funded home rehabilitation loan worth $20,000.
According to documents filed in this case and statements made in court:
On the early evening of Dec. 27, 2013, Lillo and other police officers from the Bayonne Police Department went to an address in Bayonne to execute a Sussex County arrest warrant. Lillo admitted that he struck the subject of the warrant in the head with a flashlight while the individual was handcuffed and not resisting arrest, which resulted in bodily injury. Lillo also admitted that he falsified a Bayonne Police Department Use of Force Report related to the arrest with the intent to impede an investigation into the case.
In addition, Lillo admitted that on May 10, 2012, he aided a relative in preparing and submitted a fraudulent HUD application to get a federally funded rehabilitation loan on a home Lillo co-owned.
The excessive force charge to which Lillo pleaded guilty carries a maximum penalty of 10 years in prison. The charge of falsifying records to impede an investigation carries a maximum penalty of 20 years in prison. The charge of making false reports to HUD carries a maximum penalty of one year in prison. Sentencing is scheduled for Jan. 6, 2015.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, special agents of the U.S. Department of Housing and Urban Development, Office of the Inspector General, under the direction of Special Agent in Charge Christina Scaringi, and the Hudson County Prosecutor’s Office, under the direction of Prosecutor Esther Suarez, with the investigation leading to today’s plea.
The government is represented by Assistant U.S. Attorney Jacques S. Pierre of the Special Prosecutions Division and Assistant U.S. Attorney Steven G. Sanders of the Appeals Division.
Defense counsel: Frank Arleo Esq. and Thomas Cammarata Esq., West Orange, N.J.
U.S. Justice Department Awards Transitional Housing Grant Assistance to Two New Jersey OrganizationsRead the Press Release
NEWARK, N.J. – The U.S. Department of Justice Office on Violence Against Woman today awarded more than $550,000 in grants to two New Jersey organizations that provide housing assistance to victims of sexual assault, domestic or dating violence and stalking, U.S. Attorney Paul J. Fishman announced.
Jersey Battered Women’s Services (JBWS) Inc. of Morristown, New Jersey, was awarded a $305,576 grant and 180 Turning Lives Around Inc. of Hazlet, New Jersey, was awarded a $255,284 grant. Both grants were made through the Transitional Housing Grant Assistance program.
The primary purpose of the Transitional Housing Assistance Program is to provide aid to victims of sexual assault, domestic violence, dating violence, and stalking who are homeless, or in need of transitional housing, or other housing assistance, including short-term housing assistance and supportive services; and for whom emergency shelter services or other crisis intervention services are unavailable or insufficient. The program also focuses on supporting a holistic, victim-centered approach to provide transitional housing services that move individuals into permanent housing. It is critical that successful transitional housing programs provide a wide range of flexible and optional services that reflect the differences and individual needs of victims and that allow victims to choose the course of action that is best for them.
JBWS will partner with Literacy Volunteers of Morris County for ESL instruction, the Women’s Center for computer classes, the Health Careers Program at the County College of Morris for access to high-earning career tracks, the Northwest New Jersey Community Action Partnership (NORWESCAP) for financial literacy, Child & Family Resources for child care referral as well as parenting education, and the Greater Morristown YMCA for afterschool and summer camp care. These partnerships will provide a broader range of supportive services needed and requested by clients. Housing and supportive services will be co-located in a cluster model facility for 11 families. The project will provide at least 30 victims the tools necessary to become self-sufficient and achieve long-term safety.
180 Turning Lives Around is a non-profit organization located in Monmouth County, New Jersey, a county encompassing both some of the richest and some of the poorest municipalities in the state. Monmouth County, with a population of 629,735, has had either the 2nd or 3rd highest number of domestic violence reports out of New Jersey’s 21 counties during the past five years. 180 will partner with Long Branch Concordance and contracted service providers to support 10 families in the 180 agency owned scattered site townhomes. 180 Turning Lives Around will limit its use of Transitional Housing Assistance Grant Program funds to supportive services. Funds for housing are designated from the U.S. Department of Housing and Urban Development.
For more information about this grant, contact the Office on Violence Against Women, Outreach and Communications Division, at (202) 307-6026.
U.S. Attorney Paul J. Fishman Announces over $5 Million in Law Enforcement Hiring Grants to Help Build Trust, Reduce Violence and Protect Schools in New JerseyRead the Press Release
NEWARK, N.J. – U.S. Attorney Paul J. Fishman, in conjunction with the U.S. Office of Community Oriented Policing Services (COPS Office), today announced funding awards to four New Jersey cities and counties, aimed at creating and, in some cases, protecting 39 law enforcement positions.
The COPS Hiring Program (CHP) will award over $107 million nationally, including $5,187,015 in New Jersey. The list of this year’s grantees includes:
State and Agency Name
Number of Officers Funded
Award Amount
Camden County Police Department
15
$2,187,015
City of East Orange
12
$1,500,000
Essex County Sheriff’s Office
6
$750,000
Wildwood Police Department
6
$750,000
“There is no doubt that community policing is integral to our crime prevention strategy,” U.S. Attorney Fishman said. “These federal grants help mitigate the effect of diminishing resources on our local law enforcement partners who use face-to-face engagement to build better relationships with their communities.”
“The COPS Office is pleased to assist local law enforcement agencies throughout the country in addressing their most critical public safety issues,” said Ronald L. Davis, Director of the COPS Office. “These grants are not simply about putting more officers on the street, they are about expanding the capacity of law enforcement agencies to engage in community policing.”
CHP provides grants to state, local and tribal law enforcement agencies to hire or rehire community policing officers. The program provides salaries and benefits for officer and deputy hires for three years.
Priority consideration was given this year to agencies that selected any of the Building Trust focus areas or School Based Policing through School Resource Officers. All applicants were encouraged to refer to the report of the President's Task Force on 21st Century Policing for suggested actions to incorporate into their proposed community policing strategy.
The COPS Office is a federal agency responsible for advancing community policing nationwide. Since 1995, COPS has invested over $14 billion to advance community policing, including grants awarded to more than 13,000 state, local, and tribal law enforcement agencies to fund the hiring and redeployment of approximately 127,000 officers and provide a variety of knowledge resource products including publications, training, and technical assistance.
For the entire list of grantees and additional information about the 2015 COPS Hiring Program, visit the COPS website at www.cops.usdoj.gov.
Member of Drug Trafficking Organization Admits Role in Conspiracy to Sell Heroin in New Jersey; Another Sentenced to 10 Years in PrisonRead the Press Release
TRENTON, N.J. – A Monmouth County man pleaded guilty and another was sentenced today to prison in connection with their roles in a large-scale drug trafficking organization that distributed heroin in Ocean and Monmouth counties, U.S. Attorney Paul J. Fishman announced.
Tyshon Young, a/k/a “Young Money,” a/k/a “Young Boy,” 29, of Asbury Park, New Jersey, 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 distribute heroin. Kenneth Greenhow, a/k/a “Fame,” 41, also of Asbury Park, was sentenced by Judge Sheridan to 120 months in prison. Greenhow pleaded guilty on May 11, 2015, to an information charging him with one count of conspiring to distribute heroin.
In March 2014, 21 alleged members of the “Britt-Young DTO,” a drug trafficking organization named after its leaders, Robert Britt and Rufus Young, were charged by criminal complaint with conspiring to distribute heroin. Nineteen of the defendants have pleaded guilty.
According to documents filed in this case and statements made in court:
Between February 2013 and March 2014, Tyshon Young conspired with Rufus Young and others to distribute heroin in Ocean and Monmouth counties. Tyshon Young admitted distributing between 40 and 60 grams of heroin in furtherance of the conspiracy. Greenhow admitted that between October 2013 and March 2014, he also participated in the conspiracy and distributed between 40 and 60 grams of heroin.
The distribution conspiracy charge to which Tyshon Young pleaded guilty carries a maximum potential penalty of 20 years in prison and $1 million fine. Sentencing is scheduled for Dec. 22, 2015.
In addition to the prison term, Judge Sheridan sentenced Greenhow to serve three years of supervised release.
U.S. Attorney Fishman credited special agents of the FBI, Red Bank Resident Agency, under the direction of Special Agent in Charge Richard M. Frankel, with the investigation leading to today’s sentencing and guilty plea.
The government is represented by Assistant U.S. Attorney Nicholas Grippo of the U.S. Attorney’s Office Criminal Division in Newark.
The allegations in complaint against the remaining defendants are merely accusations, and they are presumed innocent unless and until proven guilty.
Defense Counsel:
Young: James R. Murphy Esq., Princeton, New Jersey
Greenhow: Mark Davis Esq., Trenton
Hudson County, New Jersey, Man Sentenced to 19 Months in Prison for Racketeering Conspiracy Related to Illegal Online Gambling EnterpriseRead the Press Release
NEWARK, N.J. – A Hudson County, New Jersey, man was sentenced to 19 months in prison for his roles in conspiring with a criminal enterprise that engaged in illegal online sports betting in New Jersey and elsewhere, U.S. Attorney Paul J. Fishman announced.
Robert J. Scerbo, 57 of Bayonne, New Jersey, previously pleaded guilty before U.S. District Judge Claire C. Cecchi in Newark federal court to separate informations charging them with one count of racketeering conspiracy. Judge Cecchi imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Members of the conspiracy, referred to as “agents,” were given access to Beteagle.com, a website located in Costa Rica and used to facilitate illegal online sports betting. Before the advent of computerized betting, these agents would have been referred to as “bookmakers” or “bookies.” The agents had the ability to track the “sub-agents,” under them and the wagers placed by their bettors. The agent or sub-agent maintained a group of bettors (the “package”) and were responsible for those bettors.
To place bets online, the agent or sub-agent issued the bettor a username and password to access Beteagle. This access was not given online and no money or credits were made or transferred through the website. Instead, Scerbo and his conspirators paid out winnings and collected losses in person. Scerbo admitted that he conspired with the criminal enterprise to commit racketeering acts, namely, the illegal sports betting operation, and that he and his conspirators profited through this criminal venture.
In addition to the prison terms, Judge Cecchi sentenced Scerbo to two years of supervised release and fined him $5,000.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark; the Bayonne Police Department, Special Investigations Unit, under the direction of Chief Drew Niekrasz; IRS-Criminal Investigation under the direction of Acting Special Agent in Charge Jonathan D. Larsen; the N.J. State Police, under the direction of Superintendent Rick Fuentes; and the Monmouth County Prosecutor’s Office, under the direction of Acting Prosecutor Christopher Gramiccioni, with the investigation leading to today’s sentencings.
The government is represented by Assistant U.S. Attorney Anthony Moscato of the New Jersey U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel:
Scerbo: Thomas J. Cammarata Esq., Jersey City, New Jersey
Bruder: Daniel J. Welsh Esq., Jersey City, New Jersey
Essex County, New Jersey, Woman Admits Participating in Stolen Identity Refund Fraud SchemeRead the Press Release
TRENTON, N.J. – An Essex County, New Jersey, woman today admitted that she conspired to obtain more than $1 million through fraudulently generated refund checks issued by the U.S. Treasury, U.S. Attorney Paul J. Fishman announced.
Marie Poitevien, 53, of Orange, New Jersey, pleaded guilty before U.S. District Judge Anne E. Thompson in Trenton federal court to an information charging her with conspiring to steal government funds.
Background on Stolen Identify Refund Fraud
Stolen Identity Refund Fraud (SIRF) is a common type of fraud committed against the United States government that involves the use of stolen identities to commit tax refund fraud. 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.
- SIRF perpetrators complete Form 1040 tax returns using the fraudulently obtained information and falsifying wages earned, taxes withheld, and other data, always ensuring that the fraudulent tax return generates a refund.
- They direct the U.S. Treasury Department to mail refund checks to locations that the perpetrators control or can access.
- With the fraudulently obtained refund checks in hand, SIRF perpetrators generate cash proceeds by depositing the checks into bank accounts that they control.
According to documents filed in this case and statements made in court:
From October 2009 through June 2013, Poitevien participated in a scheme by which her conspirators made fraudulent tax refund applications and had the U.S. Treasury send the refund checks to Poitevien’s residence. Poitevien then negotiated the checks by depositing them into her personal bank account and withdrawing the funds. Poitevien admitted cashing 298 tax refund checks, made payable to 139 different victims, and totaling $1,101,689.
The count of conspiracy to steal government funds to which Poitevien pleaded guilty is punishable by a maximum potential penalty of five years in prison and a fine of $250,000, or twice the pecuniary gain or loss from the offense. Sentencing is scheduled for Dec. 17, 2015.
U.S. Attorney Fishman 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 guilty plea.
The government is represented by Assistant U.S. Attorney David W. Feder of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: Linda Foster Esq. Assistant Federal Public Defender, Trenton
Somerset County High School Teacher Charged with Online Enticement of A MinorRead the Press Release
NEWARK, N.J. – A Somerset County, N.J., man who works as a high school teacher was charged today with soliciting a minor victim online to produce images of sexually explicit conduct in exchange for money, U.S. Attorney Paul J. Fishman announced.
David N. Adams, 29, of Branchburg, New Jersey, was charged by complaint with one count of online enticement of a minor to engage in criminal sexual activity. He appeared this afternoon before U.S. Magistrate Judge Steven C. Mannion in Newark federal court. He was detained without bail; a bail hearing is scheduled for Sept. 16, 2015.
According to documents filed in this case and statements made in court:
From June 2014 through September 2014, Adams was a resident of Morris County and taught at Eisenhower Middle School in Roxbury, Morris County. During this time, he allegedly communicated with a 13-year-old victim who lived outside of New Jersey. Adams met the victim through an online gaming community and they communicated through text and video chats.
Adams allegedly offered to send payment to a child, identified in the complaint as “Minor Victim 1,” in exchange for sexually explicit images of the child, as well as live video chat sessions during which the victim engaged in sexually explicit conduct while defendant Adams watched and directed the victim’s actions. The victim did, in fact, send sexually explicit images to Adams and engage in sexually explicit conduct in live video chat sessions.
Adams is currently a teacher at Bridgewater-Raritan High School in Somerset County, New Jersey.
The charge of online enticement carries a mandatory minimum penalty of 10 years in prison, a maximum potential penalty of life in prison and a $250,000 fine.
U.S. Attorney Fishman credited special agents with the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), under the direction of Acting Special Agent in Charge Kevin Kelly in Newark; the Branchburg Police Department; and the Somerset County Prosecutor’s Office with the investigation leading to the charges.
The government is represented by Assistant U.S. Attorney Svetlana M. Eisenberg and Special Assistant U.S. Attorney Erica D. Liu of the U.S. Attorney’s Office General Crimes Unit in Newark.
Russian National Pleads Guilty to Largest Known Data Breach Conspiracy Ever ChargedRead the Press Release
CAMDEN, N.J. – A Russian national today admitted his role in a worldwide hacking and data breach scheme that targeted major corporate networks, compromised more than 160 million credit card numbers and resulted in hundreds of millions of dollars in losses – the largest such scheme ever prosecuted in the United States.
The guilty plea was announced by New Jersey U.S. Attorney Paul J. Fishman, U.S. Secret Service Director Joseph P. Clancy and Assistant Attorney General Leslie Caldwell.
Dmitriy Smilianets, 32, of Moscow, pleaded guilty pleaded guilty before U.S. District Judge Jerome B. Simandle to Count Two of the second superseding indictment, charging him with conspiracy to commit wire fraud in a manner affecting a financial institution. Smilianets was arrested in the Netherlands on June 28, 2012 and was extradited to the District of New Jersey on Sept. 7, 2012.
According to documents filed in this case and statements made in court:
The five defendants each played specific roles in the scheme. Vladimir Drinkman, 34, of Syktyvkar, Russia, and Moscow and Alexandr Kalinin, 28, of St. Petersburg, Russia, specialized in penetrating network security and gaining access to the corporate victims’ systems. Drinkman and Roman Kotov, 34, of Moscow, also a hacker, specialized in mining the networks to steal valuable data. The hackers hid their activities using anonymous web-hosting services provided by Mikhail Rytikov, 28, of Odessa, Ukraine. Smilianets, 32, of Moscow, sold the information stolen by the other conspirators and distributed the proceeds of the scheme to the participants.
Drinkman and Kalinin were previously charged in New Jersey as “Hacker 1” and “Hacker 2” in a 2009 indictment charging Albert Gonzalez, 34, of Miami, Florida, in connection with five corporate data breaches – including the breach of Heartland Payment Systems Inc., which at the time was the largest ever reported. Gonzalez is currently serving 20 years in federal prison for those offenses. Kalinin is also charged in two federal indictments in the Southern District of New York: the first charges Kalinin in connection with hacking certain computer servers used by NASDAQ and the second charges him and another Russian hacker, Nikolay Nasenkov, with an international scheme to steal bank account information from U.S.-based financial institutions. Rytikov was previously charged in the Eastern District of Virginia with an unrelated scheme.
Drinkman and Smilianets were arrested at the request of the United States while traveling in the Netherlands on June 28, 2012. Drinkman pleaded guilty Sept. 15, 2015, to one count of conspiracy to commit unauthorized access of protected computers and one count of conspiracy to commit wire fraud to Kalinin, Kotov and Rytikov remain at large.
The Attacks
The five defendants penetrated the computer networks of several of the corporate victims and stole user names and passwords, means of identification, credit and debit card numbers and other corresponding personal identification information of cardholders. The conspirators allegedly acquired more than 160 million card numbers through hacking.
The initial entry was often gained using a “SQL injection attack.” SQL, or Structured Query Language, is a type of programing language designed to manage data held in particular types of databases; the hackers identified vulnerabilities in SQL databases and used those vulnerabilities to infiltrate a computer network. Once the network was infiltrated, the defendants placed malicious code, or malware, in the system. This malware created a “back door,” leaving the system vulnerable and helping the defendants maintain access to the network. In some cases, the defendants lost access to the system due to companies’ security efforts, but were able to regain access through persistent attacks.
Instant message chats obtained by law enforcement revealed the defendants often targeted the victim companies for many months, waiting patiently as their efforts to bypass security were underway. The defendants had malware implanted in multiple companies’ servers for more than a year.
The defendants used their access to the networks to install “sniffers,” which were programs designed to identify, collect and steal data from the victims’ computer networks. The defendants then used an array of computers located around the world to store the stolen data and ultimately sell it to others.
Selling the Data
After acquiring the card numbers and associated data – which they referred to as “dumps” – the conspirators sold it to resellers around the world. The buyers then sold the dumps through online forums or directly to individuals and organizations. Smilianets was in charge of sales, selling the data only to trusted identity theft wholesalers. He charged approximately $10 for each stolen American credit card number and associated data, approximately $50 for each European credit card number and associated data and approximately $15 for each Canadian credit card number and associated data – offering discounted pricing to bulk and repeat customers. Ultimately, the end users encoded each dump onto the magnetic strip of a blank plastic card and cashed out the value of the dump by withdrawing money from ATMs or making purchases with the cards.
Covering Their Tracks
The defendants used a number of methods to conceal the scheme. Unlike traditional Internet service providers, Rytikov allowed his clients to hack with the knowledge he would never keep records of their online activities or share information with law enforcement.
Over the course of the conspiracy, the defendants communicated through private and encrypted communications channels to avoid detection. Fearing law enforcement would intercept even those communications, some of the conspirators attempted to meet in person.
To protect against detection by the victim companies, the defendants altered the settings on victim company networks to disable security mechanisms from logging their actions. The defendants also worked to evade existing protections by security software.
* * *
As a result of the scheme, financial institutions, credit card companies and consumers suffered hundreds of millions in losses – including more than $300 million in losses reported by just three of the corporate victims – and immeasurable losses to the identity theft victims in costs associated with stolen identities and false charges. The charges and allegations contained in indictments against the remaining defendants are merely accusations and they are presumed innocent unless and until proven guilty.
The count of conspiracy to commit wire fraud in a manner affecting a financial institution carries a maximum penalty of 30 years in prison and a fine of the greater of $1 million or twice the gain or loss from the offense. Sentencing is scheduled for Jan. 13, 2016.
U.S. Attorney Fishman credited the special agents of the U.S. Secret Service, Criminal Investigations, under the direction of Director Clancy, and the Newark Division, under the direction of Special Agent in Charge Carl Agnelli, for the ongoing investigation leading to today’s guilty plea.
The government is represented by Gurbir S. Grewal, Chief of the U.S. Attorney’s Office Economic Crimes Unit, and Assistant U.S. Attorney Andrew S. Pak of the Computer Hacking and Intellectual Property Section of the Economic Crimes Unit, Trial Attorneys Richard Green of the Criminal Division’s Computer Crime and Intellectual Property Section, and Judith Friedman of the Office of International Affairs.
The government is represented by Gurbir S. Grewal, Chief of the U.S. Attorney’s Office Economic Crimes Unit, and Assistant U.S. Attorney Andrew S. Pak of the Computer Hacking and Intellectual Property Section of the Economic Crimes Unit, Trial Attorney Richard Green of the Criminal Division’s Computer Crime and Intellectual Property Section, and Judith Friedman of the Office of International Affairs.
U.S. Attorney Fishman also thanked public prosecutors with the Dutch Ministry of Security and Justice and the National High Tech Crime Unit of the Dutch National Police.
Passaic County, New Jersey, Woman Admits Criminal Violation of HIPAARead the Press Release
TRENTON, N.J. – A Passaic County, New Jersey, woman today admitted her involvement in selling documents containing the individually identifiable health information of patients who received services at a New Jersey hospital, U.S. Attorney Paul J. Fishman announced.
Okeisha Carey, 48, of Paterson, New Jersey, pleaded guilty before U.S. District Judge Michael Shipp in Trenton federal court to an information charging her with wrongful disclosure of individually identifiable health information.
According to documents filed in this case and statements made in court:
From July 2010 through April 2011, Carey was employed as a billing supervisor for a hospital in Bergen County, New Jersey. During that time, she obtained patient records containing personally identifiable information, including patients’ names, dates of birth, Social Security numbers, and Medicare and Medicaid insurance information. She later transferred more than 250 patient records to another individual in exchange for cash payments.
The wrongful disclosure of individually identifiable health information charge carries a maximum sentence of 10 years in prison and a fine of up to $250,000 or twice the gross gain or loss from the offense. Sentencing is scheduled for Dec. 11, 2015.
U.S. Attorney Fishman praised special agents of the U.S. Secret Service, under the direction of Special Agent in Charge Carl Agnelli, with the investigation leading to today’s guilty plea.
The government is represented by Special Assistant U.S. Attorney Thomas S. Kearney of the U.S. Attorney’s Office General Crimes Unit in Newark.
Monmouth County, New Jersey, Man Charged with Distributing Sexually Explicit Images of ChildrenRead the Press Release
NEWARK, N.J. – A Monmouth County, New Jersey, was arrested today for allegedly possessing and distributing sexually suggestive images of children, U.S. Attorney Paul J. Fishman announced.
Donald Haring, 60, of Long Branch, is charged by complaint with two counts of distributing child pornography and one count of possessing child pornography. He is scheduled to make his initial court appearance later today before U.S. Magistrate Judge Steven C. Mannion in Newark federal court.
According to documents filed in this case and statements made in court:
In June 2014, an undercover agent downloaded files containing child sexual abuse from Haring’s computer via a peer-to-peer file sharing network. Haring was sharing more than 100 files of child sexual abuse.
In October 2014, Haring applied to an online child pornography forum covertly operated by undercover agents from the Department of Homeland Security (DHS) to identify individuals who transmit images of child sexual abuse. The online forum was maintained in a controlled environment in a manner that appeared to the prospective user that it was an exclusive and secure members-only website. The “terms of admission” for the online forum required prospective members to, among other things, upload images of child sexual abuse. Using the same IP address he used to share child pornography in June 2014, Haring uploaded eight images of child sexual abuse to satisfy the criteria for admission to the online forum.
In December 2014, DHS agents executed a federal search warrant at Haring’s home. A forensic examination of one of the devices seized from the home revealed more than 4,600 images and 75 movies of child sexual abuse.
Each count of distribution of child pornography carries a maximum penalty of 20 years in prison, a minimum penalty of five years in prison, and a fine of $250,000. The possession count carries a maximum penalty of 10 years in prison and a fine of $250,000.
U.S. Attorney Fishman credited special agents of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), under the direction of Acting Special Agent in Charge Kevin Kelly, with the investigation leading to today’s arrest.
The government is represented by Assistant U.S. Attorney David W. Feder of the U.S. Attorney’s Office Criminal Division in Newark.
The charges and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Colorado Woman Admits Participation in Conspiracy to Illegally Transfer FirearmsRead the Press Release
TRENTON, N.J. – A former resident of Colorado today admitted her involvement in a conspiracy to illegally transfer firearms from Colorado to a felon in New Jersey, United States Attorney Paul J. Fishman announced.
Krystel Lopez, 28, of Greeley, Colorado, pleaded guilty before U.S. District Judge Freda L. Wolfson in Trenton federal court to one count of an indictment charging her with conspiracy to illegally transfer firearms interstate.
According to documents filed in this case and statements made in court:
Between February and April 2013, Lopez purchased an assault rifle and a handgun in Colorado. Later in April 2013, she mailed both the assault rifle and the handgun to the business address of a known felon in New Jersey, who was prohibited from possessing such weapons.
The charge of conspiracy to illegally transfer firearms interstate to a known felon carries a maximum sentence five years in prison and a fine of up to $250,000, or twice the gross gain or loss from the offense. Sentencing is scheduled for Jan. 5, 2016.
U.S. Attorney Fishman praised special agents of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), under the direction of Acting Special Agent in Charge Kevin Kelly with the investigation leading to today’s guilty plea.
The government is represented by Special Assistant U.S. Attorney Thomas S. Kearney of the U.S. Attorney’s Office General Crimes Unit in Newark.
Broker-Dealer Admits Role in Scheme to Trade on Inside Information Stolen from Prominent Law FirmRead the Press Release
A broker-dealer admitted today to participating in a five-year insider trading scheme that relied on information stolen from a prominent, international law firm, yielding net profits of more than $5.6 million, announced U.S. Attorney Paul J. Fishman for the District of New Jersey.
Vladimir Eydelman, 43, formerly of Colts Neck, New Jersey, pleaded guilty before U.S. District Judge Michael A. Shipp in Trenton federal court to an information charging him with one count of conspiracy to commit securities and tender offer fraud, one count of securities fraud and one count of tender offer fraud.
According to documents filed in this case and statements made in court: From 2009 to 2013, Eydelman, a broker-dealer employed first by Oppenheimer & Co. and most recently by Morgan Stanley, repeatedly traded on material nonpublic information provided to him by his brokerage client, Frank Tamayo, 42, of Brooklyn, New York, who, in turn, had obtained the inside information from his friend and former law school classmate, Steven Metro, 41, of Katonah, New York. Metro was the managing clerk of the New York office of Simpson Thacher & Bartlett LLP, one of the nation’s premier mergers and acquisitions firms. The inside information divulged by Metro to Tamayo and, in turn, by Tamayo to Eydelman, related to corporate transactions, such as mergers and acquisitions or tender offers, in which the law firm represented a party or financial advisor to the transaction. As the law firm’s managing clerk, a litigation-related function, Metro did not personally work on most of the corporate transactions at issue. In most instances, Metro stole the inside information from the firm by scouring its computer system using search terms such as “merger agreement,” “bid letter,” “engagement letter,” “due diligence,” as well as client names and client-matter numbers.
After obtaining the information, Metro divulged it to Tamayo in person, usually meeting at a bar, coffee shop or other location near their respective workplaces in midtown Manhattan. During such meetings, Metro provided Tamayo inside information pertaining to, among other things, the names and/or ticker symbols of the companies whose securities should be purchased, the general timing of the planned deals and information related to how the deals would affect the issuers’ stock price once announced. Tamayo generally would write the security’s ticker symbol on a small piece of paper or napkin and commit to memory any pricing/timing inside information provided by Metro.
After Tamayo received the inside information from Metro, Tamayo would meet with Eydelman, usually at a location near Eydelman’s workplace, such as under the large clock in New York City’s Grand Central Terminal, where Tamayo would pass it on to Eydelman. Tamayo would show Eydelman the paper or napkin on which Tamayo had written the ticker symbol of the company whose securities should be purchased. After Eydelman memorized the ticker symbol, Tamayo then would place the paper or napkin into his mouth and chew it until it was destroyed.
After receiving the inside information provided by Metro, whom Eydelman knew as Tamayo’s source at a law firm, Eydelman purchased securities for himself, family members, friends and clients, including Tamayo. Eydelman quickly sold the shares and covered any positions once the relevant deal was publicly announced and the stock price rose.
Throughout the course of the five-year scheme, Tamayo reinvested the approximately $7,000 in profits that Metro made on the first deal and updated Metro on the running balance of his profits from the insider trading scheme. As of October 2013, by which time the conspirators had traded ahead of at least 13 planned corporate transactions, Metro’s share of the profits had reached approximately $168,000. Metro sought to cash out his share of the accrued profits from the insider trading scheme, pressing Tamayo to “liberate some cash” during a meeting in January 2014. Eydelman paid approximately $7,000 in cash to Tamayo in February 2014, with the expectation that Tamayo would use the cash to compensate his law firm source, Metro, for providing them inside information.
By exploiting the information that Metro had stolen from the law firm, Eydelman and conspirators Metro and Tamayo netted more than $5.6 million in illicit profits.
Eydelman faces a maximum potential penalty of five years in prison and a fine of $250,000 on the conspiracy count and a maximum potential penalty of 20 years in prison and a fine of $5 million on the securities and tender offer fraud counts. He also must forfeit the proceeds of the criminal offenses. Sentencing is scheduled for Dec. 21, 2015.
Tamayo pleaded guilty to conspiracy and securities and tender offer fraud on Sept. 19, 2014. Metro has pleaded not guilty to the charges against him and is scheduled to go to trial before Judge Shipp on Feb. 8, 2016.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, New Jersey, for the investigation leading to today’s guilty plea. He also thanked the U.S. Securities and Exchange Commission’s Market Abuse Unit, under the direction of Robert Cohen and Joseph Sansone.
The government is represented by Assistant U.S. Attorneys Shirley U. Emehelu of the U.S. Attorney’s Office in Newark and Joseph R. Gribko of the U.S. Attorney’s Office in Trenton, New Jersey, as well as Acting Chief Barbara Ward and Assistant U.S. Attorney Jafer Aftab of the Office’s Asset Forfeiture and Money Laundering Unit.
These charges are part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorney’s 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 more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.Broker-Dealer Admits Role in Scheme to Trade on Inside Information Stolen from Prominent Law FirmRead the Press Release
TRENTON, N.J. B A broker-dealer admitted today to participating in a five-year insider trading scheme that relied on information stolen from a prominent, international law firm, yielding net profits of more than $5.6 million, U.S. Attorney Paul J. Fishman announced.
Vladimir Eydelman, 43, formerly of Colts Neck, New Jersey, pleaded guilty before U.S. District Judge Michael A. Shipp in Trenton federal court to an information charging him with one count of conspiracy to commit securities and tender offer fraud, one count of securities fraud, and one count of tender offer fraud.
According to documents filed in this case and statements made in court:
From 2009 to 2013, Eydelman, a broker-dealer employed first by Oppenheimer & Co. and most recently by Morgan Stanley, repeatedly traded on material nonpublic information provided to him by his brokerage client, Frank Tamayo, 42, of Brooklyn, New York, who, in turn, had obtained the inside information from his friend and former law school classmate, Steven Metro, 41, of Katonah, New York. Metro was the managing clerk of the New York office of Simpson Thacher & Bartlett LLP, one of the nation’s premier mergers and acquisitions firms. The inside information divulged by Metro to Tamayo and, in turn, by Tamayo to Eydelman, related to corporate transactions, such as mergers and acquisitions or tender offers, in which the law firm represented a party or financial advisor to the transaction. As the law firm’s managing clerk, a litigation-related function, Metro did not personally work on most of the corporate transactions at issue. In most instances, Metro stole the inside information from the firm by scouring its computer system using search terms such as “merger agreement,” “bid letter,” “engagement letter,” “due diligence,” as well as client names and client-matter numbers.
After obtaining the information, Metro divulged it to Tamayo in person, usually meeting at a bar, coffee shop, or other location near their respective workplaces in midtown Manhattan. During such meetings, Metro provided Tamayo inside information pertaining to, among other things, the names and/or ticker symbols of the companies whose securities should be purchased, the general timing of the planned deals, and information related to how the deals would affect the issuers’ stock price once announced. Tamayo generally would write the security’s ticker symbol on a small piece of paper or napkin and commit to memory any pricing/timing inside information provided by Metro.
After Tamayo received the inside information from Metro, Tamayo would meet with Eydelman, usually at a location near Eydelman’s workplace, such as under the large clock in New York City’s Grand Central Terminal, where Tamayo would pass it on to Eydelman. Tamayo would show Eydelman the paper or napkin on which Tamayo had written the ticker symbol of the company whose securities should be purchased. After Eydelman memorized the ticker symbol, Tamayo then would place the paper or napkin into his mouth and chew it until it was destroyed.
After receiving the inside information provided by Metro, whom Eydelman knew as Tamayo’s source at a law firm, Eydelman purchased securities for himself, family members, friends, and clients, including Tamayo. Eydelman quickly sold the shares and covered any positions once the relevant deal was publicly announced and the stock price rose.
Throughout the course of the five-year scheme, Tamayo reinvested the approximately $7,000 in profits that Metro made on the first deal and updated Metro on the running balance of his profits from the insider trading scheme. As of October 2013, by which time the conspirators had traded ahead of at least 13 planned corporate transactions, Metro’s share of the profits had reached approximately $168,000. Metro sought to cash out his share of the accrued profits from the insider trading scheme, pressing Tamayo to “liberate some cash” during a meeting in January 2014. Eydelman paid approximately $7,000 in cash to Tamayo in February 2014, with the expectation that Tamayo would use the cash to compensate his law firm source, Metro, for providing them inside information.
By exploiting the information that Metro had stolen from the law firm, Eydelman and conspirators Metro and Tamayo netted more than $5.6 million in illicit profits.
Eydelman faces a maximum potential penalty of five years in prison and a fine of $250,000 on the conspiracy count and a maximum potential penalty of 20 years in prison and a fine of $5 million on the securities and tender offer fraud counts. He also must forfeit the proceeds of the criminal offenses. Sentencing is scheduled for Dec. 21, 2015.
Tamayo pleaded guilty to conspiracy and securities and tender offer fraud on Sept. 19, 2014. Metro has pleaded not guilty to the charges against him and is scheduled to go to trial before Judge Shipp on Feb. 8, 2016.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, for the investigation leading to today’s guilty plea. He also thanked the U.S. Securities and Exchange Commission’s Market Abuse Unit, under the direction of Robert Cohen and Joseph Sansone.
The government is represented by Assistant U.S. Attorneys Shirley U. Emehelu of the U.S. Attorney’s Office in Newark, and Joseph R. Gribko of the U.S. Attorney’s Office in Trenton, as well as Acting Chief Barbara Ward and Assistant U.S. Attorney Jafer Aftab of the Office’s Asset Forfeiture and Money Laundering Unit.
These charges are part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorney’s 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 more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.Russian National Admits Role in Largest Known Data Breach Conspiracy Ever ProsecutedRead the Press Release
Hackers Targeted Major Payment Processors, Retailers and Financial Institutions Around the World
A Russian national today admitted his role in a worldwide hacking and data breach scheme that targeted major corporate networks, compromised more than 160 million credit card numbers and resulted in hundreds of millions of dollars in losses – the largest such scheme ever prosecuted in the United States.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Paul J. Fishman of the District of New Jersey and Director Joseph P. Clancy of the U.S. Secret Service made the announcement.
Vladimir Drinkman, 34, of Syktyvkar, Russia, and Moscow, pleaded guilty before Chief U.S. District Judge Jerome B. Simandle of the District of New Jersey to one count of conspiracy to commit unauthorized access of protected computers and one count of conspiracy to commit wire fraud. Drinkman was arrested in the Netherlands on June 28, 2012, and was extradited to the District of New Jersey on Feb. 17, 2015. Sentencing is scheduled for Jan. 15, 2016.
“This hacking ring’s widespread attacks on American companies caused serious harm and more than $300 million in losses to people and businesses in the United States,” said Assistant Attorney General Caldwell. “As demonstrated by today’s conviction, our close cooperation with our international partners makes it more likely every day that we will find and bring to justice cyber criminals who attack America – wherever in the world they may be. As law enforcement around the world responds to the cyber threat that affects us all, I am confident that this type of international cooperation that led to this result will be the new normal.”
“Defendants like Vladimir Drinkman, who have the skills to break into our computer networks and the inclination to do so, pose a cutting edge threat to our economic well-being, our privacy and our national security,” said U.S. Attorney Fishman. “The crimes to which he admitted his guilt have a real, practical cost to our privacy and our pocketbooks. Today’s guilty plea is a tribute to the skill and perseverance of the agents and prosecutors who brought him to justice.”
“This cyber case highlights the effectiveness of global law enforcement partnerships in the detection and dismantling of criminal enterprises targeting U.S. citizens,” said Director Clancy. “The support of U.S. Attorney’s offices and the resulting plea enhances the Secret Service’s commitment to vigorously pursue transnational threats to the U.S. financial infrastructure.”
According to documents filed in this case and statements made in court, Drinkman and four co-defendants allegedly hacked into the networks of corporate victims engaged in financial transactions, retailers that received and transmitted financial data and other institutions with information that the conspirators could exploit for profit, including the computer networks of NASDAQ, 7-Eleven, Carrefour, JCP, Hannaford, Heartland, Wet Seal, Commidea, Dexia, JetBlue, Dow Jones, Euronet, Visa Jordan, Global Payment, Diners Singapore and Ingenicard.
According to the indictment in this case and statements made in court, the five defendants each played specific roles in the scheme. Drinkman and Alexandr Kalinin, 28, of St. Petersburg, Russia, allegedly specialized in penetrating network security and gaining access to the corporate victims’ systems. Drinkman and Roman Kotov, 34, of Moscow, allegedly specialized in mining the networks to steal valuable data. The hackers hid their activities using anonymous web-hosting services allegedly provided by Mikhail Rytikov, 28, of Odessa, Ukraine. Dmitriy Smilianets, 32, of Moscow, allegedly sold the information stolen by the other conspirators and distributed the proceeds of the scheme to the participants.
Drinkman and Kalinin were previously charged in New Jersey as “Hacker 1” and “Hacker 2” in a 2009 indictment charging Albert Gonzalez, 34, of Miami, in connection with five corporate data breaches, including the breach of Heartland Payment Systems Inc., which at the time was the largest ever reported. Gonzalez is currently serving 20 years in federal prison for those offenses. Kalinin is also charged in two federal indictments in the Southern District of New York: the first charges Kalinin in connection with hacking certain computer servers used by NASDAQ and the second charges him and another Russian hacker, Nikolay Nasenkov, with an international scheme to steal bank account information from U.S.-based financial institutions. Rytikov was previously charged in the Eastern District of Virginia in an unrelated scheme.
Drinkman and Smilianets were arrested at the request of the United States while traveling in the Netherlands on June 28, 2012. Smilianets was extradited on Sept. 7, 2012, and remains in federal custody. Kalinin, Kotov and Rytikov remain at large.
The Attacks
According to documents filed in this case and statements made in court, the five defendants penetrated the computer networks of several of the corporate victims and stole user names and passwords, means of identification, credit and debit card numbers and other corresponding personal identification information of cardholders. The conspirators allegedly acquired more than 160 million card numbers through hacking.
The initial entry was often gained using a “SQL injection attack.” SQL, or Structured Query Language, is a type of programming language designed to manage data held in particular types of databases; the hackers allegedly identified vulnerabilities in SQL databases and used those vulnerabilities to infiltrate a computer network. Once the network was infiltrated, the defendants allegedly placed malicious code (malware) in the system. This malware created a “back door,” leaving the system vulnerable and helping the defendants maintain access to the network. In some cases, the defendants lost access to the system due to companies’ security efforts, but were allegedly able to regain access through persistent attacks.
Instant message chats obtained by law enforcement revealed that the defendants allegedly targeted the victim companies for many months, waiting patiently as their efforts to bypass security were underway, sometimes leaving malware implanted in multiple companies’ servers for more than a year.
The defendants allegedly used their access to the networks to install “sniffers,” which were programs designed to identify, collect and steal data from the victims’ computer networks. The defendants then allegedly used an array of computers located around the world to store the stolen data and ultimately sell it to others.
Selling the Data
According to documents filed in this case and statements made in court, after acquiring the card numbers and associated data – which they referred to as “dumps” – the conspirators sold it to resellers around the world. The buyers then sold the dumps through online forums or directly to individuals and organizations. Smilianets was allegedly in charge of sales, selling the data only to trusted identity theft wholesalers. He allegedly charged approximately $10 for each stolen American credit card number and associated data, approximately $50 for each European credit card number and associated data and approximately $15 for each Canadian credit card number and associated data – offering discounted pricing to bulk and repeat customers. Ultimately, the end users encoded each dump onto the magnetic strip of a blank plastic card and cashed out the value of the dump by withdrawing money from ATMs or making purchases with the cards.
Covering Their Tracks
According to documents filed in this case and statements made in court, the defendants allegedly used a number of methods to conceal the scheme. Unlike traditional Internet service providers, Rytikov allegedly allowed his clients to hack with the knowledge he would never keep records of their online activities or share information with law enforcement.
Over the course of the conspiracy, the defendants allegedly communicated through private and encrypted communications channels to avoid detection. Fearing law enforcement would intercept even those communications, some of the conspirators allegedly attempted to meet in person.
To protect against detection by the victim companies, the defendants allegedly altered the settings on victim company networks to disable security mechanisms from logging their actions. The defendants also allegedly worked to evade existing protections by security software.
As a result of the scheme, financial institutions, credit card companies and consumers suffered hundreds of millions of dollars in losses – including more than $300 million in losses reported by just three of the corporate victims – and immeasurable losses to the identity theft victims in costs associated with stolen identities and false charges.
The charges and allegations contained in indictments are merely accusations and the defendants are presumed innocent unless and until proven guilty.
The case is being investigated by the U.S. Secret Service’s Criminal Investigations Division and Newark, New Jersey, Division. The case is being prosecuted by Trial Attorney Richard Green of the Criminal Division’s Computer Crime and Intellectual Property Section, Chief Gurbir S. Grewal of the District of New Jersey’s Economic Crimes Unit and Assistant U.S. Attorney Andrew S. Pak of the District of New Jersey. The Criminal Division’s Office of International Affairs, public prosecutors with the Dutch Ministry of Security and Justice and the National High Tech Crime Unit of the Dutch National Police also provided valuable assistance.
Drinkman Plea Agreement
Russian National Admits Role in Largest Known Data Breach Conspiracy Ever ChargedRead the Press Release
Hackers Targeted Major Payment Processors, Retailers and Financial Institutions Around the World
CAMDEN, N.J. – A Russian national today admitted his role in a worldwide hacking and data breach scheme that targeted major corporate networks, compromised more than 160 million credit card numbers and resulted in hundreds of millions of dollars in losses – the largest such scheme ever prosecuted in the United States.
The guilty plea was announced by New Jersey U.S. Attorney Paul J. Fishman, U.S. Secret Service Director Joseph P. Clancy and Assistant Attorney General Leslie Caldwell.
Vladimir Drinkman, 34, of Syktyvkar, Russia, and Moscow, pleaded guilty before Chief U.S. District Judge Jerome B. Simandle of the District of New Jersey to one count of conspiracy to commit unauthorized access of protected computers and one count of conspiracy to commit wire fraud. Drinkman was arrested in the Netherlands on June 28, 2012, and was extradited to the District of New Jersey on Feb. 17, 2015.
“Defendants like Vladimir Drinkman, who have the skills to break into our computer networks and the inclination to do so, pose a cutting edge threat to our economic well-being, our privacy and our national security,” U.S. Attorney Fishman said. “The crimes to which he admitted his guilt have a real, practical cost to our privacy and our pocketbooks. Today’s guilty plea is a tribute to the skill and perseverance of the agents and prosecutors who brought him to justice.”
“This hacking ring’s widespread attacks on American companies caused serious harm and more than $300 million in losses to people and businesses in the U.S.,” said Assistant Attorney General Caldwell. “As demonstrated by today’s conviction, our close cooperation with our international partners makes it more likely every day that we will find and bring to justice cyber criminals who attack America – wherever in the world they may be. As law enforcement around the world responds to the cyber threat that affects us all, I am confident that this type of international cooperation that led to this result will be the new normal.”
“This cyber case highlights the effectiveness of global law enforcement partnerships in the detection and dismantling of criminal enterprises targeting United States citizens,” Director Clancy said. “The support of U.S. Attorney’s offices and the resulting plea enhances the Secret Service’s commitment to vigorously pursue transnational threats to the U.S. financial infrastructure”.
According to documents filed in this case and statements made in court:
Drinkman and four co-defendants hacked into the networks of corporate victims engaged in financial transactions, retailers that received and transmitted financial data and other institutions with information that the conspirators could exploit for profit, including the computer networks of NASDAQ, 7-Eleven, Carrefour, JCP, Hannaford, Heartland, Wet Seal, Commidea, Dexia, JetBlue, Dow Jones, Euronet, Visa Jordan, Global Payment, Diners Singapore and Ingenicard.
The five defendants each played specific roles in the scheme. Drinkman and Alexandr Kalinin, 28, of St. Petersburg, Russia, specialized in penetrating network security and gaining access to the corporate victims’ systems. Drinkman and Roman Kotov, 34, of Moscow, also a hacker, specialized in mining the networks to steal valuable data. The hackers hid their activities using anonymous web-hosting services provided by Mikhail Rytikov, 28, of Odessa, Ukraine. Dmitriy Smilianets, 32, of Moscow, sold the information stolen by the other conspirators and distributed the proceeds of the scheme to the participants.
Drinkman and Kalinin were previously charged in New Jersey as “Hacker 1” and “Hacker 2” in a 2009 indictment charging Albert Gonzalez, 34, of Miami, Florida, in connection with five corporate data breaches – including the breach of Heartland Payment Systems Inc., which at the time was the largest ever reported. Gonzalez is currently serving 20 years in federal prison for those offenses. Kalinin is also charged in two federal indictments in the Southern District of New York: the first charges Kalinin in connection with hacking certain computer servers used by NASDAQ and the second charges him and another Russian hacker, Nikolay Nasenkov, with an international scheme to steal bank account information from U.S.-based financial institutions. Rytikov was previously charged in the Eastern District of Virginia with an unrelated scheme.
Drinkman and Smilianets were arrested at the request of the United States while traveling in the Netherlands on June 28, 2012. Smilianets was extradited Sept. 7, 2012, and remains in federal custody. Kalinin, Kotov and Rytikov remain at large.
The Attacks
The five defendants penetrated the computer networks of several of the corporate victims and stole user names and passwords, means of identification, credit and debit card numbers and other corresponding personal identification information of cardholders. The conspirators allegedly acquired more than 160 million card numbers through hacking.
The initial entry was often gained using a “SQL injection attack.” SQL, or Structured Query Language, is a type of programing language designed to manage data held in particular types of databases; the hackers identified vulnerabilities in SQL databases and used those vulnerabilities to infiltrate a computer network. Once the network was infiltrated, the defendants placed malicious code, or malware, in the system. This malware created a “back door,” leaving the system vulnerable and helping the defendants maintain access to the network. In some cases, the defendants lost access to the system due to companies’ security efforts, but were able to regain access through persistent attacks.
Instant message chats obtained by law enforcement revealed the defendants often targeted the victim companies for many months, waiting patiently as their efforts to bypass security were underway. The defendants had malware implanted in multiple companies’ servers for more than a year.
The defendants used their access to the networks to install “sniffers,” which were programs designed to identify, collect and steal data from the victims’ computer networks. The defendants then used an array of computers located around the world to store the stolen data and ultimately sell it to others.
Selling the Data
After acquiring the card numbers and associated data – which they referred to as “dumps” – the conspirators sold it to resellers around the world. The buyers then sold the dumps through online forums or directly to individuals and organizations. Smilianets was in charge of sales, selling the data only to trusted identity theft wholesalers. He charged approximately $10 for each stolen American credit card number and associated data, approximately $50 for each European credit card number and associated data and approximately $15 for each Canadian credit card number and associated data – offering discounted pricing to bulk and repeat customers. Ultimately, the end users encoded each dump onto the magnetic strip of a blank plastic card and cashed out the value of the dump by withdrawing money from ATMs or making purchases with the cards.
Covering Their Tracks
The defendants used a number of methods to conceal the scheme. Unlike traditional Internet service providers, Rytikov allowed his clients to hack with the knowledge he would never keep records of their online activities or share information with law enforcement.
Over the course of the conspiracy, the defendants communicated through private and encrypted communications channels to avoid detection. Fearing law enforcement would intercept even those communications, some of the conspirators attempted to meet in person.
To protect against detection by the victim companies, the defendants altered the settings on victim company networks to disable security mechanisms from logging their actions. The defendants also worked to evade existing protections by security software.
* * *
As a result of the scheme, financial institutions, credit card companies and consumers suffered hundreds of millions in losses – including more than $300 million in losses reported by just three of the corporate victims – and immeasurable losses to the identity theft victims in costs associated with stolen identities and false charges. The charges and allegations contained in indictments against the remaining defendants are merely accusations and the defendants are presumed innocent unless and until proven guilty.
The count of conspiracy to commit wire fraud in a manner affecting a financial institution to which Drinkman pleaded guilty carries a maximum potential penalty of 30 years in prison and a fine of the greatest of $1 million or twice the gain or loss from the offense. The count of conspiracy to gain unauthorized access to computers to which Drinkman pleaded guilty carries a maximum potential penalty of five years in prison and a fine of the greatest of $250,000 or twice the gain or loss from the offense. Sentencing is scheduled for Jan. 15, 2016.
U.S. Attorney Fishman credited the special agents of the U.S. Secret Service, Criminal Investigations, under the direction of Director Clancy, and the Newark Division, under the direction of Special Agent in Charge Carl Agnelli, for the ongoing investigation leading to today’s guilty plea.
The government is represented by Gurbir S. Grewal, Chief of the U.S. Attorney’s Office Economic Crimes Unit, and Assistant U.S. Attorney Andrew S. Pak of the Computer Hacking and Intellectual Property Section of the Economic Crimes Unit, Trial Attorneys Richard Green of the Criminal Division’s Computer Crime and Intellectual Property Section, and Judith Friedman of the Office of International Affairs.
U.S. Attorney Fishman also thanked public prosecutors with the Dutch Ministry of Security and Justice and the National High Tech Crime Unit of the Dutch National Police.
Defense counsel: Florian Miedel Esq., New York; Bart Stapert Esq., Amsterdam, Netherlands
Lawsuit Settled Against Heathcare Commons Inc. to Enforce Employment Rights of National Guard SergeantRead the Press Release
CAMDEN, N.J. – A settlement was reached today with Healthcare Commons Inc., resolving claims that the South Jersey company failed to re-employ a Delaware woman when she returned from her deployment with the National Guard, New Jersey U.S. Attorney Paul J. Fishman and Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division, announced.
The civil lawsuit, filed in Camden federal court, alleged that Healthcare Commons, of Carneys Point, New Jersey, willfully violated the Uniformed Services Employment and Re-employment Rights Act of 1994 (USERRA), which protects the rights of uniformed service members to retain their civilian employment following absences due to military service obligations, and provides that service members shall not be discriminated against because of their military obligations.
“Cases like this one not only provide financial relief to soldiers returning from overseas but also ensure that employers fully understand their employment obligations to servicemembers,” Acting Associate Attorney General Stuart F. Delery said. “Through the Servicemembers and Veterans Initiative, the Department of Justice will continue using every tool at our disposal to protect the men and women who serve in our Armed Forces from unjust actions and illegal burdens.”
“The men and women who wear our nation’s uniform need to know that they will be protected from the types of injustice experienced by Ms. Tolliver,” Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division said. “The Department of Justice, through its enforcement of USERRA, strongly supports the right of service members to retain their rightful positions in the workforce both while they serve and after they complete their military service to our country.”
According to the complaint:
Megan Toliver, 32, of New Castle, Delaware, is a former employee of Healthcare Commons. She joined the U.S. Army National Guard in September 2004 and, most recently, had served as a sergeant, with honorable service as a mental health specialist. When Toliver returned from her military deployment in May 2014, she notified Healthcare Commons that she was seeking re-employment. Healthcare Commons willfully violated USERRA by not re-employing her as a mental health screener or in another comparable position.
Under the terms of a consent decree, which was filed today in federal court, Healthcare Commons agreed to pay $18,500 as back pay and liquidated damages to Toliver. HCI also agreed to adopt a new personnel policy that informs employees of their rights and obligations under USERRA and to provide USERRA training to all supervisory staff.
The case was referred by U.S. Department of Labor following an investigation by the department’s Veterans’ Employment and Training Service.
The plaintiff is represented by Assistant U.S. Attorney Michael E. Campion, U.S. Attorney’s Office, District of New Jersey, and Special Litigation Counsel Andrew Braniff, U.S. Department of Justice, Civil Rights Division, Employment Law Section.
In March 2015, the Attorney General created of the Service Members and Veterans Initiative, which is led by three dedicated career Justice Department attorneys with strong ties to the military community. They will further the Department’s existing efforts by coordinating and expanding enforcement, outreach, and training efforts on behalf of service members, veterans, and their families. The initiative will address the unique challenges that service members face while on active duty, that veterans face upon returning home, and that families face when a loved one is deployed.
Additional information about USERRA can be found on the U.S. Attorney’s Office website at www.justice.gov/usao-nj and the Justice Department’s websites at www.usdoj.gov/crt/emp and www.servicemembers.gov, as well as on the Labor Department’s website at www.dol.gov/vets/programs/userra/main.htm.
Lawsuit Settled Against Healthcare Commons to Enforce Employment Rights of National Guard SergeantRead the Press Release
The Department of Justice has reached a settlement today with Healthcare Commons Inc., resolving claims that the South Jersey company failed to re-employ a Delaware woman when she returned from her deployment with the National Guard, announced Principal Deputy Assistant Attorney General Vanita Gupta, head of the Department of Justice’s Civil Rights Division, and U.S. Attorney Paul J. Fishman of the District of New Jersey.
The civil lawsuit, filed in Camden federal court, alleged that Healthcare Commons, of Carneys Point, New Jersey, willfully violated the Uniformed Services Employment and Re-employment Rights Act of 1994 (USERRA), which protects the rights of uniformed service members to retain their civilian employment following absences due to military service obligations, and provides that service members shall not be discriminated against because of their military obligations.
“Cases like this one not only provide financial relief to soldiers returning from overseas but also ensure that employers fully understand their employment obligations to servicemembers,” said Acting Associate Attorney General Stuart F. Delery. “Through the Servicemembers and Veterans Initiative, the Department of Justice will continue using every tool at our disposal to protect the men and women who serve in our Armed Forces from unjust actions and illegal burdens.”
“The men and women who wear our nation’s uniform need to know that they will be protected from the types of injustice experienced by Ms. Tolliver,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division. “The Department of Justice, through its enforcement of USERRA, strongly supports the right of service members to retain their rightful positions in the workforce both while they serve and after they complete their military service to our country.”
According to the complaint, Megan Toliver, 32, of New Castle, Delaware, is a former employee of Healthcare Commons. She joined the U.S. Army National Guard in September 2004 and, most recently, had served as a sergeant, with honorable service as a mental health specialist. When Toliver returned from her military deployment in May 2014, she notified Healthcare Commons that she was seeking re-employment. Healthcare Commons willfully violated USERRA by not re-employing her as a mental health screener or in another comparable position.
Under the terms of a consent decree, which was filed today in federal court, Healthcare Commons agreed to pay $18,500 as back pay and liquidated damages to Toliver. Healthcare Commons also agreed to adopt a new personnel policy that informs employees of their rights and obligations under USERRA and to provide USERRA training to all supervisory staff.
The case was referred by the U.S. Department of Labor following an investigation by the department’s Veterans’ Employment and Training Service.
The plaintiff is represented by Special Litigation Counsel Andrew Braniff of the Department of Justice’s Civil Rights Division and Assistant U.S. Attorney Michael E. Campion of the District of New Jersey.
In March 2015, the Attorney General created the Servicemembers and Veterans Initiative, which is led by three dedicated career Justice Department attorneys with strong ties to the military community. They will further the department’s existing efforts by coordinating and expanding enforcement, outreach and training efforts on behalf of service members, veterans and their families. The initiative will address the unique challenges that service members face while on active duty, that veterans face upon returning home, and that families face when a loved one is deployed.
Additional information about USERRA can be found on the Justice Department’s websites at www.usdoj.gov/crt/emp and www.servicemembers.gov, as well as the U.S. Attorney’s Office website at www.justice.gov/usao-nj and on the Labor Department’s website at www.dol.gov/vets/programs/userra/main.htm.
Grape Street Crips Member Admits Conspiring to Sell HeroinRead the Press Release
NEWARK, N.J. – A member of the Grape Street Crips street gang today admitted conspiring to distribute heroin in and around Newark, U.S. Attorney Paul J. Fishman announced.
Sharod Brown, 30, of Newark, pleaded guilty today before U.S. District Judge Esther Salas in Newark federal court an information charging him with one count of conspiring to distribute heroin.
According to documents filed in this case and statements made in court:
In May 2015, 50 alleged members and associates of the Grape Street Crips were charged over a three-week period in criminal complaints that alleged drug-trafficking, physical assaults, and witness intimidation. In addition to controlling drug-trafficking across large swaths of Newark, the Grape Street Crips allegedly engaged in acts of violence — including murder, shootings, aggravated assaults, and witness intimidation. Over the course of the entire investigation, 71 defendants have been charged with federal and state charges.
Brown admitted that, between November 2014 and May 2015, he conspired with others to distribute 10 bricks of heroin in and around the Pennington Court public-housing complex, located on Pennington Street in Newark, New Jersey.
The count of conspiring to distribute heroin to which Brown pleaded guilty is punishable by a maximum potential penalty of 20 years in prison. Sentencing is scheduled for Dec. 21, 2015.
U.S. Attorney Fishman credited special agents of the DEA, under the direction of Special Agent in Charge Carl J. Kotowski; and special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel, for the investigation leading to today’s guilty plea. He also thanked prosecutors and detectives of the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Carolyn A. Murray; police officers and detectives of the Newark Police Department, under the direction of Director Eugene Venable and Chief Anthony Campos; 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, Elizabeth M. Harris, and Barry Kamar of the Criminal Division in Newark.
This case was conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF) and the FBI’s Safe Streets Task Force, a partnership between federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
The charges and allegations contained in the federal criminal complaints and indictment against the remaining defendants are merely accusations, and they are presumed innocent unless and until proven guilty.
Defense counsel: Jason F. Orlando Esq., Jersey City, New Jersey
Hudson County, New Jersey, Man Sentenced to 15 Months in Prison for Role in Illegal Online Gambling EnterpriseRead the Press Release
NEWARK, N.J. – A Bayonne, New Jersey, man was sentenced today to 15 months in prison for conspiring with a criminal enterprise that engaged in illegal sports betting in New Jersey and elsewhere, U.S. Attorney Paul J. Fishman announced.
Mark A. Sanzo, 57, previously pleaded guilty before U.S. District Judge Claire C. Cecchi to an information charging him with one count of racketeering conspiracy. Judge Cecchi imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Members of the conspiracy, referred to as “agents,” were given access to Beteagle.com, a website located in Costa Rica and used to facilitate illegal online sports betting. Before the advent of computerized betting, these agents would have been referred to as “bookmakers” or “bookies.” The agents had the ability to track the “sub-agents,” under them and the wagers placed by their bettors. The agent or sub-agent maintained a group of bettors (the “package”) and were responsible for those bettors. Sanzo was an agent of the gambling enterprise.
To place bets online, the agent or sub-agent issued the bettor a username and password to access Beteagle. This access was not given online and no money or credits were made or transferred through the website. Instead, Sanzo and his conspirators paid out winnings and collected losses in person. During his plea hearing, Sanzo admitted that he conspired to commit racketeering acts in connection with the illegal sports betting operation, and that he and other conspirators profited from the scheme.
In addition to the prison term, Judge Cecchi ordered Sanzo to serve three years of supervised release and pay a $5,000 fine.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark; the Bayonne Police Department, Special Investigations Unit, under the direction of Chief Drew Niekrasz; IRS-Criminal Investigation under the direction of Special Agent in Charge Jonathan D. Larsen; the N.J. State Police, under the direction of Superintendent Rick Fuentes; the Monmouth County Prosecutor’s Office, under the direction of Acting Prosecutor Christopher Gramiccioni; and the Waterfront Commission of New York Harbor, under the direction of Executive Director Walter M. Arsenault, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Anthony Moscato of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: Christopher L. Patella Esq., Bayonne, New Jersey
South Jersey Woman Sentenced to 15 Months in Prison for Role in Conspiracy to Traffic Guns from North Carolina to New JerseyRead the Press Release
CAMDEN, N.J. – A Camden woman was sentenced today to 15 months in prison for buying five firearms in North Carolina for her cousin to sell in New Jersey, U.S. Attorney Paul J. Fishman announced.
Johanna Betty Young, 25, previously pleaded guilty before U.S. District Judge Renée Marie Bumb to an information charging her with one count of conspiring to deal firearms without a license. Judge Bumb imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
In January 2012, Young’s cousin, Wendelle Ford, 42, also of Camden, gave Young money to apply for firearms purchase permits in North Carolina, where Young lived at the time. Young admitted she knew that neither she nor Ford were federally licensed firearms dealers. She also knew that Ford had a prior felony conviction and therefore could not legally purchase or possess firearms.
Once Young obtained the purchase permits, Ford traveled to North Carolina and he and Young visited gun shops. After Ford told her which firearms to buy, Young lied on the purchase paperwork, stating that she was the actual buyer. Young bought five handguns and gave them to Ford knowing that he was going to bring them to New Jersey and sell them. Later, Ford gave Young $200 for each firearm.
In addition to the prison term, Judge Bumb sentenced Young to serve two years of supervised release.
The case against Ford is still pending. The charges and allegations against him are merely accusations and he is considered innocent unless and until proven guilty.
U.S. Attorney Fishman credited special agents of the ATF, under the direction of Special Agent in Charge George P. Belsky in Newark, New Jersey, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Matthew Smith of the U.S. Attorney’s Office in Camden.
Defense counsel: Jose Luis Ongay Esq., Camden
Essex County, New Jersey, Man Admits Defrauding Veterans AffairRead the Press Release
NEWARK, N.J. – An Essex County, New Jersey man today admitted he defrauded the Department of Veterans Affairs of over $150,000 in disability benefits over a 13-year period, U.S. Attorney Paul J. Fishman announced.
Paul Tillson, 49, of Bloomfield, New Jersey, pleaded guilty before U.S. District Judge Claire C. Cecchi in Newark federal court to an indictment charging him with embezzlement of funds from the United States.
According to documents filed in this case and statements made in court:
From July 1991 through January 1992, Tillson served as an administrative clerk in the U.S. Army in Saudi Arabia and Kuwait. From November 2000 through July 2013, Tillson received $150,164 in disability benefits based on his claims of combat related injuries. Through an investigation by the Department of Veterans Affairs, it was determined that Tillson did not serve in a combat function or engage in combat during his tour of duty overseas, which commenced after cease-fire terms had been accepted by Iraq. Tillson also acknowledged that he falsified information related to his alleged combat stressors.
The charge of embezzlement of funds from the United States carries a maximum sentence of up to 10 years in prison and a fine of up to $250,000 or twice the gross gain or loss from the offense. Sentencing is scheduled for Dec. 16, 2015.
U.S. Attorney Fishman credited special agents of the U.S. Department of Veterans Affairs, Office of Inspector General, Criminal Investigation Division, under the direction of Special Agent in Charge Jeffrey G. Hughes, with the investigation leading to today’s guilty plea.
The government is represented by Special Assistant U.S. Attorney Thomas S. Kearney of the U.S. Attorney’s Office General Crimes Unit in Newark.
Defense counsel: Patrick McMahon Esq., Newark
Deputy Director of Hudson County Correctional Facility Sentenced to 21 Months in Prison for Illegal WiretappingRead the Press Release
NEWARK, N.J. – The deputy director of the Hudson County Correctional Facility was sentenced today to 21 months in prison for illegally wiretapping his co-workers and another individual, U.S. Attorney Paul J. Fishman announced.
Kirk Eady, 47, of East Brunswick, New Jersey, was previously found guilty of one count of intentionally intercepting the wire, oral or electronic communications of others following a four-day trial before Judge Jose L. Linares, who imposed the sentence today in Newark federal court.
According to the documents filed in this case and the evidence at trial:
From March 8, 2012, to July 8, 2012, while working as the deputy director of the Hudson County Correctional Facility, Eady used the services of a website on more than 10 occasions to intercept the telephone calls of other Hudson County Correctional Facility employees and another individual who were critical of his work performance. Eady was able to conceal the telephone number from which the call originated. He then called two of the employees at the same time and made it appear that one or both of the other individuals initiated the call. Eady also recorded these telephone conversations and never told the other employees he was recording these private communications. These individuals did not consent to their private conversations being monitored and recorded by Eady.
In addition to the prison term, Judge Linares sentenced Eady to three years of supervised release.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney David L. Foster of the U.S. Attorney’s Office Special Prosecution Division.
Defense counsel: Peter Willis Esq., Jersey City, New Jersey