District of New Jersey
Press releases recorded for this federal judicial district.
Bergen County, New Jersey, Man Pleads Guilty to Multimillion-Dollar Investment Fraud SchemeRead the Press Release
NEWARK, N.J. – A Bergen County, New Jersey, man admitted today that he conspired to defraud 15 victims of more than $3 million, U.S. Attorney Paul J. Fishman announced.
Paul Mancuso, 49, of Glen Rock, New Jersey, pleaded guilty before U.S. District Judge William J. Martini in Newark federal court to one count of conspiracy to commit wire fraud.
According to documents filed in this case and statements made in court:
On Aug. 21, 2014, a federal grand jury in Newark indicted Mancuso on one count of conspiracy to commit wire fraud and five counts of wire fraud. It also charged Pasquale Stiso, 53, of West Harrison, New York, with one count of conspiracy to commit wire fraud and one count of wire fraud.
Since 2009, Mancuso posed as a real estate investor, broker and developer, as well as a “hard money” lender for other investments. Stiso, a disbarred New York attorney, held himself out as an individual working with Mancuso on various investment projects.
During the plea hearing, Mancuso admitted that he and Stiso fraudulently obtained financing for projects that did not exist or in which they had no actual involvement. Some of the purported projects touted by Mancuso, Stiso, and other conspirators included investments in a phony ticket scam, the development of a pizzeria at a resort in the Bahamas, the development of a casino in Atlantic City, the development of a commercial shopping center, and the “flipping” of a piece of real estate in Matawan.
Victims lost all of their investments in Mancuso’s schemes. Instead of funding the purported projects, Mancuso and Stiso used the money for personal expenses and to finance their involvement in illegal gambling.
The charge of wire fraud conspiracy to which Mancuso pleaded guilty carries a maximum potential penalty of 20 years in prison and a maximum fine of $250,000 or twice the gross gain or loss associated with the offense, whichever is greater. The indictment also includes a notice of forfeiture of $3,425,750, representing the fraudulent payments Mancuso and Stiso received from the scheme. Sentencing is scheduled for Jan. 12, 2016.
The charges against Stiso are merely accusations, and he is presumed innocent unless and until proven guilty.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel; special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, and criminal investigators from the U.S. Attorney’s Office for the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorneys Francisco J. Navarro and Anthony Mahajan of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: Stacy Ann Biancamano Esq., Newark
Owner of Dietary Supplement Company Sentenced to 40 Months in Prison for Multimillion-Dollar Scheme to Adulterate Dietary SupplementsRead the Press Release
NEWARK, N.J. – The owner and president of a dietary supplement manufacturing company in Flanders, New Jersey, was sentenced today to 40 months in prison for directing the sale of diluted and adulterated dietary ingredients and supplements sold by his company, U.S. Attorney Paul J. Fishman announced.
Barry Steinlight, 70, of Hackettstown, New Jersey, previously pleaded guilty before U.S. District Judge Esther Salas to a one-count information charging him with conspiring to commit wire fraud. Judge Salas imposed the sentence today in Newark federal court.
“Consumers expect labels that accurately describe the products they ingest,” U.S. Attorney Fishman said. “Steinlight deceived his customers as part of a four-year scheme in which he delivered bogus, mislabeled products. Today he was appropriately punished for his crime.”
“The Justice Department has increased its attention on supplement sellers like Barry Steinlight who sell products that are not what they claim to be,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “We will investigate and prosecute companies and individuals that sell supplements that threaten the health of the American public and drain their bank accounts with misrepresented products.”
“Today’s announcement demonstrates that those who sell adulterated dietary supplements and purposely subvert the regulatory functions of the FDA by providing false and misleading information will be held accountable for their actions,” stated Jeffrey J. Ebersole, Acting Special Agent in Charge, FDA Office of Criminal Investigations’ New York Field Office. “We commend the efforts of the Department of Justice for vigorously pursuing the prosecution of this matter.”
According to documents filed in this case and statements made in court:
Steinlight was the president and owner of Raw Deal Inc., a dietary supplement manufacturing facility. From at least 2009 through November 2013, Steinlight instructed Raw Deal employees to add “fillers,” including maltodextrin, viobin cocoa replacer and rice flours to the dietary ingredients and supplements packaged for, and sold to, Raw Deal’s customers. These “fillers” were added without customer consent or knowledge. Steinlight also directed Raw Deal employees not to list the “fillers” as ingredients on the certificates of analysis (COAs) issued to its customers as proof of the identity of the ingredients contained in the products.
In addition to directing the dilution and adulteration of Raw Deal’s products, Steinlight also directed Raw Deal employees to create COAs that falsely certified that certain of Raw Deal’s products were kosher or organic. Also, during an FDA inspection of Raw Deal in February 2012, Steinlight instructed employees to alter a document before providing it to the FDA.
Raw Deal’s executive vice president, Catherine Palmer, 38, of Budd Lake, New Jersey, admitted that during the 2012 FDA inspection, she ordered a subordinate to falsify an ingredient list of a dietary supplement product before submitting it to the FDA. In addition, she admitted instructing a Raw Deal employee not to run blenders during the 2012 inspection so that the FDA would not see “fillers” being added to customer orders.
In addition to the prison term, Judge Salas sentenced Steinlight to one year of supervised release. During his plea hearing, Steinlight admitted that Raw Deal’s gross profits during the scheme were between $7 million and $20 million. As part of his plea agreement, Steinlight must forfeit $1,036,834 in profits from the scheme.
Palmer pleaded guilty yesterday to a one-count information charging her with obstructing an FDA investigation. The obstruction charge carries a maximum potential sentence of five years in prison and a $250,000 fine, or twice the gain or loss caused by the offense. Her sentencing is scheduled for Dec. 21, 2015.
The government is represented by Assistant U.S. Attorney Joseph Mack, Deputy Chief of the U.S. Attorney’s Office’s Health Care and Government Fraud Unit, Special Assistant U.S. Attorney Shannon M. Singleton from the FDA’s Office of Chief Counsel, and Trial Attorneys Patrick Runkle and David Sullivan of the Civil Division’s Consumer Protection Branch.
U.S. Attorney Fishman reorganized the health care fraud practice at the U.S. Attorney’s Office for the District of New Jersey 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.
New Jersey Man Pleads Guilty to Conspiring to Provide Material Support to ISILRead the Press Release
A Bergen County, New Jersey, man pleaded guilty today to conspiring to provide material support to the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization.
Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Paul J. Fishman of the District of New Jersey and Special Agent in Charge Richard M. Frankel of the FBI’s Newark, New Jersey, Division made the announcement.
Samuel Rahamin Topaz, 21, of Fort Lee, New Jersey, pleaded guilty before U.S. District Judge Susan D. Wigenton of the District of New Jersey to an information charging him with one count of conspiring with others to provide material support to ISIL. He remains detained without bail.
“Samuel Rahamin Topaz conspired to provide material support to ISIL and sought to travel overseas with others to fight on behalf of the designated foreign terrorist organization,” said Assistant Attorney General Carlin. “Counterterrorism is the National Security Division’s highest priority, and we remain committed to stemming the flow of foreign fighters abroad and bringing to justice those who attempt to provide material support to terrorists.”
“The crimes Samuel Topaz admitted today threatened the safety of Americans here and abroad,” said U.S. Attorney. “Our efforts to cut off the flow of fighters and resources to known terrorist organizations will not stop with his guilty plea. We have charges pending against his conspirators and remain vigilant against these terrorist operations.”
“Samuel Topaz admitted to conspiring to provide material support to the Islamic State of Iraq and the Levant (ISIL) today in the U.S. District Court of New Jersey,” said Special Agent in Charge Frankel. “Now Topaz will face up to 20 years in prison rather than take up arms overseas. Disrupting recruitment efforts by terrorist organizations and preventing acts of terror remains the FBI’s number one priority, and due to the unflagging efforts of the Newark FBI’s Joint Terrorism Task Force this threat was eliminated. I ask the citizens of New Jersey to remain vigilant and contact the FBI if they see or hear something suspicious.”
According to documents filed in this case and related cases and statements made in court:
Topaz admitted that prior to his arrest by the FBI Joint Terrorism Task Force (JTTF) on June 17, 2015, he planned to travel overseas to join ISIL and had saved money for that purpose. Topaz discussed plans to join ISIL with Nader Saadeh, Alaa Saadeh and Munther Omar Saleh, and he admitted that at various times, each of them indicated that they wanted to join ISIL. Topaz also admitted that they all watched ISIL-related videos, some of which depicted the execution of non-Muslims and individuals regarded as apostates from Islam.
On May 5, 2015, Nader Saadeh departed the United States with plans to travel overseas to join ISIL as part of the conspiracy, according to Topaz’s statements in court today. Topaz further admitted that he and others planned to travel overseas separately, meet up with Nader Saadeh and then travel together to join ISIL. After Nader Saadeh left the United States, Topaz met with Saleh and contacted Alaa Saadeh to discuss those plans.
Topaz admitted to knowing that ISIL was a designated foreign terrorist organization taking over territory overseas, expelling non-Muslims from their homes and executing individuals who did not obey ISIL’s commands.
The count of conspiracy to provide material support to a designated foreign terrorist organization carries a statutory maximum potential penalty of 20 years in prison and a fine of $250,000. Sentencing is scheduled for Nov. 18, 2015.
Topaz’s alleged co-conspirators are being prosecuted and are currently in federal custody. Nader and Alaa Saadeh have been charged in separate criminal complaints brought in the District of New Jersey with conspiring to provide material support to ISIL, among other charges. Saleh has been indicted on terrorism-related charges brought in the Eastern District of New York. The charges and allegations against them are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
The case is being investigated by the FBI’s JTTF. The case is being prosecuted by Assistant U.S. Attorneys L. Judson Welle, Dennis C. Carletta and Francisco J. Navarro of the District of New Jersey, with assistance the assistance of Trial Attorney Robert Sander of the National Security Division’s Counterterrorism Section.
Topaz Plea Agreement
Topaz Information
Essex County, New Jersey, Man Sentenced to 30 Years in Prison for Recording His Sexual Abuse of A GirlRead the Press Release
NEWARK, N.J. – A Newark man was sentenced to 360 months in prison today for inducing a girl to engage in sexually explicit conduct while he took pictures and video, U.S. Attorney Paul J. Fishman announced.
Pedro Rios, 59, previously pleaded guilty before U.S. District Judge Stanley R. Chesler to Counts One through Five and Count Seven of a superseding indictment charging him with sexual exploitation of a child and possession of child pornography. Judge Chesler imposed the sentence today in Newark federal court.
According to documents filed in the case and statements made in court:
Rios admitted that on five separate dates between March 4, 2008 and Nov. 8, 2011, he induced a girl under the age of 12 to engage in sexually explicit conduct for the purpose of taking pictures and videos of the child’s genitals and the sexually explicit conduct. Rios’s also admitted that he possessed images of child sexual abuse on Feb. 5, 2013. Several of the videos charged in the superseding indictment depict Rios’s abuse of the child victim in the cab of a tractor trailer truck.
In addition to the prison term, Judge Chesler sentenced Rios to a lifetime of supervised release.
U.S. Attorney Fishman credited special agents of the FBI Newark Division’s Child Exploitation Task Force, under the direction of Special Agent in Charge Richard M. Frankel; the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Carolyn A. Murray; and the N.J. Regional Computer Forensics Laboratory with the investigation leading to today’s sentencing.
The government is represented by Assistant United States Attorneys Danielle Alfonzo Walsman and Jonathan W. Romankow of the U.S. Attorney’s Office’s Criminal Division in Newark.
Defense counsel: Brian J. Neary Esq., Hackensack, New Jersey
Employee of New Jersey-Based Trucking Company Charged with Stealing More Than $1 Million from Her EmployerRead the Press Release
NEWARK, N.J. – An employee of a New Jersey based-trucking company was arrested today and charged with swindling her employer out of more than $1 million by issuing company checks for her own benefit, U.S. Attorney Paul J. Fishman announced.
Tracey Perrigan, 53, of Sparta, Tennessee, is charged by complaint with two counts of wire fraud. FBI agents arrested Perrigan this afternoon at her place of employment in Branchburg, New Jersey. She appeared late this afternoon before U.S. Magistrate Judge Michael A. Hammer in Newark federal court.
According to the complaint:
Perrigan was an employee of a company identified in the complaint as “Company A,” the corporate parent of several subsidiary trucking, rigging, and transportation companies. Company A was headquartered in Oceanside, New York, and had a Branchburg facility. From September 2012 through August 2015, Perrigan allegedly orchestrated a check scheme through which she diverted funds from her employer to Southern Cross Transport Tow and Recovery (“Southern Cross”), a Tennessee corporation owned and operated by Perrigan and her husband.
Company A used the “Comchek” system, which enables clients to authorize and monitor fuel and repair expenditures by drivers in remote locations. As part of her employment duties, Perrigan was responsible for authorizing Comcheks drawn on Company A’s bank account. Before a Comchek can be presented for payment, the user must obtain a 23-digit code that authorizes the expenditure. The first five digits of the code are the unique number assigned to each Comchek customer.
According to the complaint, Perrigan allegedly issued Comcheks with Company A codes directly to Southern Cross. The Comcheks appeared legitimate and were accepted for payment because Perrigan used her position with Company A to generate seemingly valid Company A codes. As a result, Perrigan and Southern Cross received more than $1.2 million in Company A funds even though Company A has no actual business with Southern Cross.
Each wire fraud count is punishable by a maximum potential penalty of 30 years in prison and $1 million fine.
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 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.
Bergen County, New Jersey, Man Admits He Conspired to Provide Material Support to ISILRead the Press Release
NEWARK, N.J. – A Bergen County, New Jersey, man admitted today that he conspired to provide material support to the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization, U.S. Attorney Paul J. Fishman, Assistant Attorney General for National Security John P. Carlin, and Special Agent in Charge Richard M. Frankel of the FBI’s Newark Division announced.
Samuel Rahamin Topaz, 21, of Fort Lee, New Jersey, pleaded guilty before U.S. District Judge Susan D. Wigenton in Newark federal court to an information charging him with one count of conspiring with others to provide services and personnel to ISIL. He remains detained without bail.
“The crimes Samuel Topaz admitted today threatened the safety of Americans here and abroad,” U.S. Attorney Fishman said. “Our efforts to cut off the flow of fighters and resources to known terrorist organizations will not stop with his guilty plea. We have charges pending against his conspirators and remain vigilant against these terrorist operations.”
“Samuel Rahamin Topaz conspired to provide material support to ISIL and sought to travel overseas with others to fight on behalf of the designated foreign terrorist organization,” Assistant Attorney General Carlin said. “Counterterrorism is the National Security Division’s highest priority, and we remain committed to stemming the flow of foreign fighters abroad and bringing to justice those who attempt to provide material support to terrorists.”
“Samuel Topaz admitted to conspiring to provide material support to the Islamic State of Iraq and the Levant (ISIL) today in the U.S. District Court of New Jersey,” Special Agent in Charge Frankel said. “Now Topaz will face up to 20 years in prison rather than take up arms overseas. Disrupting recruitment efforts by terrorist organizations and preventing acts of terror remains the FBI’s number one priority, and due to the unflagging efforts of the Newark FBI’s Joint Terrorism Task Force this threat was eliminated. I ask the citizens of New Jersey to remain vigilant and contact the FBI if they see or hear something suspicious.”
According to documents filed in this and related cases and statements made in court:
Topaz admitted that prior to his arrest by the FBI Joint Terrorism Task Force on June 17, 2015, he planned to travel overseas to join ISIL and had saved up money for that purpose. Topaz discussed plans to join ISIL with Nader Saadeh, Alaa Saadeh, and Munther Omar Saleh, and admitted that at various times each of them indicated that they wanted to join ISIL. Topaz also admitted they all watched ISIL-related videos, some of which depicted the execution of non-Muslims and individuals regarded as apostates from Islam.
On May 5, 2015, Nader Saadeh departed the United States with plans to travel overseas to join ISIL as part of the conspiracy, according to Topaz’s statements in court today. Topaz further admitted that he and others planned to travel overseas separately, meet up with Nader Saadeh, and then travel together to join ISIL. After Nader Saadeh left the United States, Topaz met with Munther Omar Saleh and contacted Alaa Saadeh to discuss those plans.
Topaz admitted knowing that ISIL was a designated terrorist organization and was taking over territory overseas, expelling non-Muslims from their homes, and executing individuals who did not obey ISIL’s commands.
The count of conspiracy to provide material support to a designated foreign terrorist organization carries a maximum potential penalty of 20 years in prison and a fine of $250,000. Sentencing is scheduled for Nov. 18, 2015.
Topaz’ alleged conspirators are being prosecuted and are currently in federal custody. Nader Saadeh and Alaa Saadeh have been charged in separate criminal complaints brought by the U.S. Attorney’s Office for the District of New Jersey with conspiring to provide material support to ISIL, among other charges. Munther Omar Saleh has been indicted on terrorism-related charges brought by the U.S. Attorney’s Office for the Eastern District of New York. The charges and allegations against them are merely accusations, and they are presumed innocent unless and until proven guilty.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Frankel in Newark, and the JTTF, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorneys L. Judson Welle, Dennis C. Carletta, and Francisco J. Navarro of the U.S. Attorney’s Office National Security Unit in Newark, with assistance the assistance of Trial Attorney Robert Sander of the National Security Division’s Counterterrorism Section.
Defense counsel: Ian J. Hirsch Esq., Hackensack, New Jersey
Owner of Freight Shipping Company Sentenced to 41 Months in Prison for Scheme to Defraud Pharmaceutical Company Out of $3 MillionRead the Press Release
NEWARK N.J. – The owner of a Morris County, New Jersey, freight shipping company was sentenced today to 41 months in prison for billing a medical devices and pharmaceutical company more than $3 million for services that were never provided, U.S. Attorney Paul J. Fishman announced.
Courtney P. Shorter, 48, of Roselle, New Jersey, and Memphis, Tennessee, previously pleaded guilty before U.S. District Judge William H. Walls in Newark federal court to an information charging him with one count of mail fraud.
According to the documents filed in this case and statements made in court:
Shorter owned Sam Shorter & Son Delivery Service LLC, a freight shipping and trucking company in Long Valley, New Jersey. Company B manufactured and supplied insulated containers to Company A, a medical devices, pharmaceutical and consumer packaged goods manufacturer headquartered in New Brunswick, New Jersey. Company C was a freight invoice processing company headquartered in Fort Myers, Florida, that Company A used to pay trucking companies.
From 2008 through April 2010, Shorter charged Company A for transporting shipments from Company B to Company A when, in fact, those shipments were never made. Shorter admitted that he and others sent Company C more than 1,725 fraudulent invoices for work that was never actually performed. As a result of the invoices, Shorter received $3,039,840 from Company C, which he later deposited into bank accounts he controlled and used for personal expenses, including more than $120,000 in jewelry.
In addition to the prison term, Judge Walls sentenced Shorter to two years of supervised release and ordered to pay $3,039,840 in restitution.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel, with the investigation leading to the today’s sentencing.
The government is represented by Assistant U.S. Attorney Lakshmi Srinivasan Herman of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
Defense Counsel: Randy P. Davenport Esq. and Steven Brister Esq., Union, New Jersey
New Jersey Transit Employee Sentenced to Three Years in Prison for Extorting Money from VendorsRead the Press Release
NEWARK, N.J. – A New Jersey Transit employee was sentenced today to 36 months in prison for obtaining money from New Jersey Transit vendors to use his official authority and influence to help them get work with New Jersey Transit, U.S. Attorney Paul J. Fishman announced.
William Talerico, 56, of Beachwood, New Jersey, previously pleaded guilty before U.S. District Judge William H. Walls to an information charging one count of affecting commerce by extortion under color of official right. Judge Walls imposed the sentence today in Newark federal court.
According to documents in this case and statements made in court:
From at least around January 2006 to April 2012, Talerico served as a supervisor of stations responsible for overseeing the maintenance and custodial functions for certain New Jersey Transit facilities, including stations on New Jersey Transit’s North Jersey Coast Line and Northeast Corridor.
During this time period, Talerico agreed to accept and accepted corrupt payments in cash from numerous New Jersey Transit vendors. In exchange, Talerico agreed to, and did, exercise official authority and influence to assist the New Jersey Transit vendors with securing work from New Jersey Transit. In addition, Talerico acted as an intermediary through which corrupt payments were given to a New Jersey Transit supervisor. Talerico received more than $70,000, for himself and the supervisor, in corrupt payments of cash and other items of value from these New Jersey Transit vendors.
In addition to the prison term, Judge Walls sentenced Talerico to three years of supervised release and ordered him to pay $54,600 in restitution.
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, for their work in 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 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, and Special Assistant U.S. Attorney Michael A. Monahan, the Chief of the Financial and Computer Crimes Bureau, Division of Criminal Justice, in the N.J. Attorney General’s Office.
Defense counsel: Peter R. Willis Esq., Jersey City, New Jersey
Two Former Executives of Athletic Equipment Company Sentenced for Roles in Extensive Fraud on New Jersey SchoolsRead the Press Release
NEWARK, N.J. – The former chief financial officer and chief executive officer of a leading supplier of athletic equipment and reconditioning services were sentenced today for their roles in a conspiracy to defraud schools in New Jersey and elsewhere, U.S. Attorney Paul J. Fishman announced.
Mitchell Kurlander, 57, of Allentown, Pennsylvania, was sentenced to 41 months in prison and his father-in-law, Alan Abeshaus, 83, of Highland Beach, Florida, was sentenced to three years of probation, including nine months of home confinement. Each defendant previously pleaded guilty before U.S. District Judge William H. Walls to one count of mail and wire fraud conspiracy. Judge Walls imposed the sentences today in Newark federal court.
According to documents filed in the case and statements made in court:
Circle System Group Inc. (Circle) sold and reconditioned athletic equipment, uniforms, and apparel. Although its services were marketed nationally, a large portion of Circle’s business focused on middle schools, high schools, colleges, and youth sports programs in New Jersey. Circle’s business depended primarily on a sales force that attempted to maintain relationships with the school officials—including athletic directors, equipment managers, trainers, and coaches—who were responsible for purchasing athletic equipment and reconditioning services on behalf of the schools. Kurlander was the CFO and Abeshaus was the CEO.
From at least 1997 to June 2007, Circle engaged in a number of business practices aimed at defrauding schools, including keeping duplicate payments by schools that should have been returned or credited back to schools, submitting fake quotes to school officials, and submitting fraudulent invoices to schools.
Circle sent invoices and monthly statements of account to schools. Schools often paid both the invoices and statements, paying twice for the same items or services. At the direction of Kurlander and Abeshaus, Circle improperly retained at least $822,000 in overpayments from various schools in New Jersey and elsewhere and converted these overpayments to the personal use and benefit of Abeshaus.
Circle and its sales staff often would provide multiple price quotes, including some that appeared to come from other companies, to allow schools with requirements to obtain multiple price quotes to justify a contract with Circle. Using quote forms with the letterhead of other companies, Circle administrative staff would prepare fake, higher quotes at the direction of Kurlander and others. Circle submitted numerous such fake quotes to schools in New Jersey and elsewhere during the course of the conspiracy.
As a routine business practice, and to ingratiate Circle with school officials, Kurlander authorized Circle employees to make gifts and donations to schools and school officials, and often would take officials on golf outings and to meals. Kurlander routinely inflated Circle’s invoices for services and goods to those schools to reimburse Circle for these donations and gifts. Gifts provided by Circle to school officials included computers, digital cameras, flat-screen TVs, golf clubs, leather jackets and other personal apparel.
Circle sometimes also submitted bid packages and price quotations for goods and reconditioning services that were lower than the prices that Circle intended to charge schools. After Circle obtained a school’s business, Circle would, at Kurlander’s direction, garner its desired profits by fraudulently inflating the quantity or nature of the reconditioning work or by fraudulently inflating other invoices to those schools for reconditioning services.
In addition to the prison term, Judge Walls sentenced Kurlander to three years of supervised release, fined him $15,000 and ordered him to pay $1,052,942 in restitution. Abeshaus was fined $250,000, ordered to forfeit $300,000, and pay $1 million in restitution.
Three other individuals previously pleaded guilty to their involvement in the conspiracy. On Dec. 22, 2008, former Circle president David Drill pleaded guilty to conspiring to defraud, among other Circle customers, various New Jersey schools. Two school officials—former Long Branch High School Athletic Director Charles Ferrara Jr. and former Elizabeth High School official Robert Firestone—pleaded guilty on Nov. 22, 2010, and Jan. 5, 2011, respectively, to participating in the conspiracy. Ferrara and Firestone admitted, among other things, that they received items from Circle for their personal use and directed Circle to fraudulently bill the cost of those items back to their respective schools. Drill is awaiting sentencing before U.S. District Judge Esther Salas. Ferrara was sentenced by U.S. District Judge Jose L. Linares in June 2014 to one year of probation. Firestone was sentenced by U.S. District Judge Claire C. Cecchi in November 2014 to one year of probation.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark; and U.S. Department of Education, Office of Inspector General, under the direction of Special Agent in Charge Steven Anderson of the Mid-Atlantic Region and Special Agent in Charge Brian Hickey of the Northeastern Region, with the investigation leading to today’s sentences.
The government is represented by Assistant U.S. Attorney Lee M. Cortes Jr. and Senior Litigation Counsel J Fortier Imbert of the U.S. Attorney’s Office Special Prosecutions Division in Newark.
Defense counsel:
Kurlander: William A. DeStefano Esq., Philadelphia
Abeshaus: Kevin H. Marino Esq., Chatham, New Jersey
South Carolina Woman Sentenced to Seven Months in Prison for Trafficking Guns into New JerseyRead the Press Release
CAMDEN, N.J. – A Greeley, South Carolina, woman was sentenced today to seven months in prison for her role in a scheme to traffic multiple firearms into New Jersey, U.S. Attorney Paul J. Fishman announced.
Katelynn Schippnick, 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. 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, Schippnick conspired with Marcus Rutling, 33, of Camden and Saluda, South Carolina, Anthony Gilmore, 26, of Lawnside, New Jersey, Shawn Tribbett, 33, of Camden, Joseph Rutling, 24, of Camden, and others to illegally sell firearms without a license, including handguns, shotguns and an assault rifle. After other conspirators obtained the firearms from pawn shops, gun stores and other sources in South Carolina, Schippnick brokered and arranged the sale of the firearms and brought them to New Jersey, at times using Amtrak trains to transport the guns. Schippnick assisted in the sale of at least five firearms, including handguns and a shotgun, to a witness cooperating with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
In addition to the prison term, Judge Bumb sentenced Schippnick to serve three years of supervised release.
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: Martin Isenberg Esq., Gibbsboro, New Jersey
Former New Jersey Resident Sentenced to 37 Months in Prison for Defrauding U.S. Subsidiary of Foreign Investment Bank of More Than $1.5 MillionRead the Press Release
TRENTON, N.J. - A former New Jersey resident who previously worked for the United States subsidiary of a foreign investment bank was sentenced today to 37 months in prison for orchestrating a scheme to defraud his former employer out of more than $1.5 million, U.S. Attorney Paul J. Fishman announced.
Michael Lieberman, 44, formerly of New Jersey and currently a resident of Huntersville, North Carolina, previously pleaded guilty before U.S. District Judge Mary L. Cooper to an information charging him with one count of wire fraud for executing a scheme over the course of two years, through which he fraudulently transferred more than $1.5 million from accounts of his former employer to bank accounts he controlled. Judge Cooper imposed the sentenced today in Trenton federal court.
According to documents filed in this case and statements made in court:
Lieberman was employed by “Company A,” a United States-based subsidiary of an international investment bank, in its International Settlements Group in Iselin, New Jersey. Company A engaged in and settled cross-border securities transactions and acted as a settlement agent for similar securities transactions entered into by its broker-dealer clients. Company A’s International Settlements Group was responsible for, among other things, wiring funds to settle various securities transactions.
From June 2012 through May 2014, Lieberman devised a scheme to use his position in the International Settlements Group to initiate more than 50 separate fraudulent wire transfers of Company A’s money, directing the proceeds to bank accounts he either owned or controlled. Lieberman then spent Company A’s money for his own purposes, including purchasing a home in North Carolina, making tens of thousands of dollars in credit card payments and spending hundreds of thousands of dollars on hotels, airplane tickets, home furnishings, restaurant tabs and other expenditures.
Lieberman took various steps to conceal his fraudulent activities, including making fictitious entries in Company A’s bookkeeping system and supplying phony documents to others in order to cause them to make false entries in the company’s books and records reflecting fake profits on non-existent transactions.
In addition to the prison term, Judge Cooper sentenced Lieberman to two years of supervised release, ordered him to pay restitution of $1,640,822 and forfeited his house in North Carolina, which he had purchased with embezzled funds.
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. Attorneys Paul Murphy of the U.S. Attorney’s Office’s Economic Crimes Unit, Zach Intrater, Chief of the General Crimes Unit, and Barbara Ward of the Asset Forfeiture and Money Laundering Unit, in Newark.
This arrest is 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.
Defense counsel: Linda Pellegrino Esq., Newton, New Jersey
Two Bergen County, New Jersey, Men Charged with Defrauding Mortgage Lenders Through Illicit Short SalesRead the Press Release
NEWARK, N.J. – A father and son were arrested this morning for engaging in a scheme that used straw buyers and short sales on two Bergen County properties to defraud mortgage lenders out of hundreds of thousands of dollars, U.S. Attorney Paul J. Fishman announced.
George Bussanich Sr., 56, of Park Ridge, New Jersey, and George Bussanich Jr., 35, of Upper Saddle River, New Jersey, are charged by indictment with one count of conspiracy to commit bank fraud and two counts of bank fraud. They are scheduled to appear this afternoon before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court.
According to documents filed in this case and statements made in court:
Between 2009 and 2012, Bussanich Sr. and Bussanich Jr. allegedly conspired to defraud mortgage lenders through the sham short sales of two properties located on Jefferson Avenue in Emerson, New Jersey and Lillian Street in Park Ridge.
Bussanich Sr. controlled various purported medical clinics and surgical centers in New Jersey. He recruited his business partner and an employee from a sleep clinic in Cliffside Park, New Jersey, to pose as legitimate, unrelated buyers of the properties. In order to conceal his involvement, Bussanich Sr. used a business entity he controlled to fund each short sale transaction and the subsequent repurchase of those properties. Bussanich Jr., the record owner of both properties, negotiated the short sales with the lenders using materially false information that misrepresented the circumstances of the short sales, the relationships of the parties and the source of funding for the transactions.
Approximately two years after the fraudulent short sales, Bussanich Sr., bought the properties back from the straw purchasers using money that he owed the aforementioned business partner from a prior business venture.
Each count in the indictment carries a maximum of potential penalty of 30 years in prison and a $1 million fine.
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 arrest.
The government is represented by Assistant U.S. Attorney Nicholas P. Grippo of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
The charges and allegations contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Monroe Township, New Jersey, Man Admits Embezzling $89,000 from North Brunswick Volunteer Fire DepartmentRead the Press Release
NEWARK, N.J. - The former treasurer of the North Brunswick Volunteer Fire Department No. 3 (“NBVFD”) today admitted embezzling at least $89,000, U.S. Attorney Paul J. Fishman announced.
Craig J. Snediker, 40, of Monroe Township, 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 wire fraud.
According to documents filed in this case and statements made is court:
As NBVFD’s treasurer, Snediker had the authority to deposit and withdraw money from NBVFD’s bank account, which held public funds and private donations. Snediker admitted that from March 25, 2014 through May 19, 2015, he used ATM machines at banks in Middlesex County, New Jersey, to access the funds for his personal expenses. He later concealed his actions by misrepresenting the account balance to the Township of North Brunswick. Overall, Snediker admitted that he withdrew between $89,000 and $92,986 without NBVFD’s authorization.
The wire fraud charge to which Snediker 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. Sentencing is scheduled for Dec. 15, 2015.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel, with the investigation leading to today’s plea.
The government is represented by Assistant U.S. Attorney José R. Almonte of the U.S. Attorney’s Office’s Special Prosecutions Division.
Defense counsel: Robert C. Scrivo Esq., Morristown
Former Federal Official Sentenced to 21 Months in Prison for Self-Dealing Federal Grants to New Jersey UniversitiesRead the Press Release
TRENTON, N.J. – The former assistant division administrator of the Federal Highway Administration (FHWA), New Jersey Division, was sentenced today to 21 months in prison for using a straw company to fraudulently obtain grant funds, U.S. Attorney Paul J. Fishman announced.
Lawrence F. Cullari Jr., 43, of Tinton Falls, New Jersey, previously pleaded guilty before U.S. District Judge Peter G. Sheridan to an information charging him with one count of mail fraud. Judge Sheridan imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:
Cullari was the assistant division administrator at the FHWA’s New Jersey Division from 2010 through July 2013 and was able to influence the allocation of U.S. Department of Transportation funding. He also operated a private consulting and engineering company called Dencore Consulting, which was owned by his ex-wife. His former father-in-law owned and operated “Company 1,” an engineering company located in Middletown, New Jersey, that provided mechanical, plumbing and electrical designs for commercial and residential projects.
Cullari admitted that in 2006, he and his father-in-law agreed to use Company 1 as a straw contractor to get FHWA-funded work for Dencore Consulting from Rutgers University’s Center for Advanced Infrastructure and Transportation (Rutgers CAIT) and the N.J. Institute of Technology (NJIT). From May 2006 through June 2013, Cullari prepared bids and work proposals for Company 1 to sign and submit to Rutgers CAIT and NJIT. When Rutgers CAIT or NJIT awarded the projects to Company 1, Cullari arranged for the completion of engineering reports and invoices that fraudulently stated that Company 1 completed the work. After Rutgers CAIT or NJIT paid Company 1, its owner kept a small portion of the payment and wrote a check to Dencore Consulting for the remaining balance.
In addition to the prison term, Judge Sheridan sentenced Cullari to three years of supervised release and fined him $20,000.
U.S. Attorney Fishman credited special agents of the U.S. Department of Transportation, Office of the Inspector General, under the direction of Regional Special Agent in Charge Douglas Shoemaker, and the N.J. Department of Transportation, Office of the Inspector General, for the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Scott B. McBride, Deputy Chief of the U.S. Attorney’s Office’s Economic Crimes Unit.
Defense counsel: Bradley L. Henry Esq., New York
California Man Admits Shipping One Kilogram of Cocaine to New Jersey Drug Trafficking OrganizationRead the Press Release
TRENTON, N.J. – A California man today admitted shipping large quantities of cocaine from California to a drug trafficking organization that operated in Ocean and Monmouth Counties and elsewhere in New Jersey, U.S. Attorney Paul J. Fishman announced.
Marlon Ramos, 31, of Redlands, California, 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 and cocaine.
In March 2014, 21 other alleged members of the drug trafficking organization to which Ramos supplied narcotics were charged by criminal complaint with conspiring to distribute heroin. The complaint referred to the drug trafficking organization as the “Britt-Young DTO,” after its leaders, Robert Britt, a/k/a “True,” and Rufus Young, a/k/a “Equan,” a/k/a “E-Money,” a/k/a “Kintock.” Of those 21 individuals, 18 have pleaded guilty.
According to documents filed in this case and statements made in court:
Between November 2013 and March 2014, Ramos conspired with others, including Thomas Shannon, a/k/a “Cuzzo,” 36, of Jersey City, New Jersey, one of the Britt-Young DTO’s primary heroin suppliers, to ship large quantities of heroin and cocaine from California to New Jersey. Afterwards, New Jersey conspirators re-packaged the narcotics for distribution to others, including members of the Britt-Young DTO, and deposited cash into bank accounts provided by the California suppliers. Ramos admitted today that he used a bank account in his own name to receive payments. He also admitted shipping at least one kilogram of cocaine as part of the conspiracy.
The conspiracy charge to which Ramos pleaded guilty carries a maximum potential penalty of 40 years in prison and a $5 million fine. Sentencing is scheduled for Dec. 17, 2015.
On June 5, 2015, Shannon was charged by indictment with narcotics distribution, illegal possession and use of firearms, and transacting in criminal proceeds. The charges against him are merely accusations and he is considered innocent unless and until proven guilty.
U.S. Attorney Fishman credited special agents of the FBI, Red Bank Resident Agency, under the direction of Special Agent in Charge Richard M. Frankel, with the investigation leading to today’s plea.
The government is represented by Assistant U.S. Attorney Nicholas Grippo of the U.S. Attorney’s Office Criminal Division in Newark.
Defense Counsel: David Bahuriak Esq., Philadelphia
California CPA Admits Defrauding New Jersey Religious Center, California Non-Profit Out of More Than $4 MillionRead the Press Release
NEWARK, N.J. - A California CPA today admitted abusing his positions at a worship center in New Jersey and a non-profit in California to steal more than $4 million, U.S. Attorney Paul J. Fishman announced.
Donald Gridiron, 51, of Pomona, California, pleaded guilty before U.S. District Judge Kevin McNulty in Newark federal court to an information charging him with one count of wire fraud and one count of filing a false tax return.
According to documents filed in the case and statements made in court:
A religious facility located in Rahway, New Jersey, hired Gridiron based, in part, on his connections with individuals in the religious community as well as his standing within that community. The religious facility agreed to pay Gridiron a monthly salary and reimburse him for reasonable expenses related to his work. In addition, Gridiron was the treasurer for a non-profit entity registered in California.
Gridiron used his employment with the worship center and his status with the non-profit to illegally syphon money without their consent or authorization. In total, Gridiron transferred more than $4 million to accounts he controlled. Gridiron then used the funds for his own use, including mortgage payments, luxury car payments and gambling expenses. Gridiron also failed to report this income on his tax returns, including $950,000 he stole during the 2011 tax year.
The charge of wire fraud 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. The charge of filing a false tax return is punishable by a maximum potential penalty of three years in prison and a $250,000 fine. Sentencing is scheduled for Dec. 14, 2015.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, and law enforcement officers 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. Attorney Andrew Kogan of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
Defense counsel: Candace Hom Esq., Newark, New Jersey
Virginia Man Sentenced to Two Years in Prison for Multi-State Scheme to Obtain Driver’s Licenses for Illegal AliensRead the Press Release
NEWARK, N.J. - An Alexandria, Virginia, man was sentenced today to 24 months in prison for his role in a multi-state scheme to unlawfully obtain driver’s licenses for illegal aliens, U.S. Attorney Paul J. Fishman announced.
Ho-Man Lee, 43, previously pleaded guilty before U.S. Magistrate Judge James B. Clark III to Count One of a superseding indictment charging him with conspiring to unlawfully produce identification documents. U.S. District Judge Kevin McNulty imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:Young-Kyu Park, 59, also known as “Oscar,” a former resident of Fort Lee, New Jersey, and later a resident of Los Angeles, was the leader of a criminal enterprise that operated in New Jersey, California, Nevada and Virginia (the “Park Criminal Enterprise”). The Park Criminal Enterprise provided a range of illicit services to individuals who were residing illegally in the United States, including obtaining driver’s licenses. In furtherance of the scheme, Park maintained a network of brokers in various states who helped illegal residents obtain driver’s licenses. Lee was Park’s Virginia broker.
The Park Criminal Enterprise illegally obtained driver’s licenses genuinely issued by New Jersey, New York, Virginia, Nevada, and elsewhere. To do so, it obtained, created and counterfeited a variety of documents and sold them to customers. Conspirators also escorted customers to various state motor vehicle agencies and coached them on obtaining licenses. Customers typically paid the Park Criminal Enterprise $3,000 to $4,500 for the unlawful services.
Park fraudulently obtained and sold genuine I-797 forms used by the federal government B including the U.S. Citizenship and Immigration Services (“USCIS”), a division of the Department of Homeland Security B to communicate with others or convey an immigration benefit. State agencies that issue driver’s licenses rely on the forms to verify the authenticity of an applicant’s foreign passport and to verify the applicant’s lawful presence in the United States.
Park obtained blank I-797 forms from Martin Trejo, 48, of Rialto, California, a former USCIS employee who stole batches of the forms. After obtaining the stolen forms, Park and other conspirators used a computer to print a customer’s information on the form. The Park Criminal Enterprise also altered and counterfeited other immigration documents, including passports, and created and provided fictitious documents to customers B such as fictitious utility bills and bank statements used to establish residency requirements.
Lee worked in northern New Jersey as Park’s Virginia broker. In exchange for cash, Lee met with customers, provided them with the fraudulent documents, including the fraudulent I-797 forms, and then escorted them to Virginia Department of Motor Vehicle offices to obtain licenses. Afterwards, Lee deposited the funds into bank accounts controlled by Park and kept a portion for his services.
In addition to the prison term, Judge McNulty sentenced Lee to three years of supervised release.
Park was sentenced to 72 months in prison on Jan. 8, 2015. Trejo was sentenced to 26 months in prison on Sept. 17, 2014.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel; U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), under the direction of Acting Special Agent in Charge Kevin Kelly; the Department of Homeland Security, Office of Inspector General, Special Agent in Charge Gregory K. Null of the Philadelphia field office; and U.S. Citizenship and Immigration Services, under the direction of New Jersey District Director John E. Thompson, with the investigation leading to today’s sentencing.
U.S. Attorney Fishman noted the work of the N.J. Motor Vehicle Commission, under the direction of Chief Administrator Raymond P. Martinez; the Bergen County Prosecutor=s Office, under the direction of Prosecutor John L. Molinelli; and the N.J. State Police, under the direction of Colonel Joseph R. Fuentes, for their assistance.
He also thanked the FBI field offices in Los Angeles, Las Vegas, New York, Atlanta, and Richmond, Va., as well as U.S. Attorney's Offices for the District of Nevada and the Central District of California for their support.
The government is represented by Assistant U.S. Attorneys Anthony Moscato and David M. Eskew of the U.S. Attorney’s Office Criminal Division in Newark.Defense counsel: Paul Brickfield Esq., River Edge, New Jersey, and Joseph Horn Esq., Ridgefield Park, New Jersey
Bergen County, New Jersey, Man Admits Conspiring with Wife to Defraud Two New York Law Firms Out of More Than $7 MillionRead the Press Release
NEWARK, N.J. – A Englewood Cliffs, New Jersey, man today admitted using bogus litigation support companies to obtain millions from two law firms where his wife was a partner, U.S. Attorney Paul J. Fishman announced.
Melvin Feliz, 48, of Englewood Cliffs, New Jersey, pleaded guilty before U.S. District Judge Kevin McNulty in Newark federal court to an information charging him with one count of conspiracy to commit wire fraud and one count of tax evasion.
According to documents filed in the case and statements made in court:
Feliz’s wife, Keila Ravelo, 49, also of Englewood Cliffs, worked as a partner at Law Firm 1 from July 1, 2005 through October 2010. She then joined Law Firm 2 as a partner and worked there from October 2010 through November 2014. Feliz admitted that during that time, Feliz and Ravelo formed two limited liability companies, Vendor 1 and Vendor 2, that purported to provide litigation support for both firms, but in fact provided no actual services.
Feliz admitted that from 2008 through July 2014, he and Ravelo controlled the Vendor 1 and Vendor 2 bank accounts and submitted invoices to Law Firm 1, Law Firm 2 and a client of both firms for work that was never performed. Ravelo, in her capacity as a partner at the law firms, approved payments to Vendor 1 and Vendor 2 that Ravelo and Feliz later used for personal expenses.
Over the course of the conspiracy, the law firms paid Vendor 1 and Vendor 2 a combined total of approximately $7.8 million. Feliz admitted that he failed to report the income on his tax returns, including nearly $2,360,000 in illicit profits from 2012 alone.
The charge of conspiracy to commit wire fraud 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. The tax evasion charge is punishable by a maximum potential penalty of five years in prison and $250,000 fine. Sentencing is scheduled for Dec. 14, 2015.
Charges against Ravelo are merely accusations and are still pending. She is considered innocent unless and until proven guilty.
U.S. Attorney Fishman credited law enforcement officers of the Drug Enforcement Administration, Newark Division, under the direction of Special Agent in Charge Carl Kotowski, and law enforcement officers 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 Andrew Kogan, Brian Urbano and Ronnell Wilson of the U.S. Attorney’s Office Criminal Division; Barbara Ward, Chief of the office’s Asset Forfeiture and Money Laundering Unit; and Assistant U.S. Attorney David Foster of the U.S. Attorney’s Office Special Prosecution’s Division in Newark.
Defense counsel: Jason Orlando Esq., Jersey City, New JerseyMelvin Feliz
Middlesex County, New Jersey, Man Sentenced to Five Years in Prison for Distributing Child Sex Abuse ImagesRead the Press Release
NEWARK, N.J. - An East Brunswick, New Jersey, man was sentenced today to 60 months in prison for sharing images of child sexual abuse from his home computer, U.S. Attorney Paul J. Fishman announced.
Armia Alber, 29, previously pleaded guilty before U.S. District Judge Stanley R. Chesler to an indictment charging him with distributing images of child pornography over the Internet. Judge Chesler imposed the sentence today in Newark federal court.
According to documents filed in the case and statements made in court:
Alber admitted that between March and July 2013, he was a member of an online peer-to-peer file sharing network and had more than 600 images or videos of children being sexually abused. Alber also admitted he made images and videos of child pornography available for other members to download from his “shared” folder. During this period, a law enforcement agent successfully downloaded multiple images and videos of child sexual abuse from Alber’s computer.
On July 25, 2013, federal law enforcement agents executed a search warrant at Alber’s residence. The agents recovered two computer hard drives, both of which contained numerous images and videos of child pornography.
As part of his guilty plea, Alber agreed to forfeit the computers and computer accessories he used to commit the offense. He is also required to register as a sex offender.
In addition to the prison term, Judge Chesler sentenced Alber to serve five years of supervised release.
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 the sentencing. He also thanked the Middlesex County Prosecutor’s Office and the East Brunswick Police Department for their roles in the search and arrest.
The government is represented by Assistant U.S. Attorney Josh Hafetz of the U.S. Attorney’s Office General Crimes Unit in Newark.
Defense counsel: Assistant Federal Public Defender Carol Gillen Esq., Newark
Associate of Decavalcante Crime Family Admits Distribution of Cocaine, Running A Prostitution Operation & Possessing Weapon as Convicted FelonRead the Press Release
NEWARK, N.J. – An associate of the DeCavalcante crime family of La Cosa Nostra today admitted his role in distributing more than 500 grams of cocaine, running a prostitution operation and possessing a shotgun as a convicted felon, U.S. Attorney Paul J. Fishman announced.
Anthony Stango, 34, of Brick, New Jersey, pleaded guilty before U.S. District Judge William H. Walls in Newark federal court to an information charging him with: the sale of between 500 grams to 1.5 kilos of cocaine; use of the telephone in interstate commerce to conduct a prostitution operation; and possession of a firearm by a convicted felon.
According to documents filed in this case and statements made in court:
Stango was arrested March 12, 2015, as part of a sweep of 10 members of the DeCavalcante crime family, which operated in New Jersey and elsewhere. The crime family engaged in numerous offenses, including fraud, distribution of controlled substances, prostitution, gambling, the sale of stolen and contraband goods, murder, assault, extortion, and other crimes of violence.
Stango admitted conducting a drug operation that, on eight separate occasions from December 2014 to March 2015, sold between 500 grams to 1.5 kilos of cocaine to an undercover law enforcement officer. During that same time period, Stango worked to set up a prostitution operation in New Jersey. Recorded conversations reflected discussions he had with a conspirator (identified as “CS”) who at the time was living in Nevada. Stango advised CS that he had already talked to one or more prostitutes about the details of the operation, their fees and the conditions under which the women would be providing services. Stango also admitted possessing an H&R Pardner 12 gauge pump action shotgun, while being a convicted felon.
The count of sale of 500 grams to 1.5 kilos of cocaine carries a mandatory minimum of five years in prison and a maximum potential penalty of 40 years in prison and a $5 million fine; the count of use of the telephone in interstate commerce to conduct a prostitution operation carries a maximum potential penalty of five years in prison and a $250,000 fine; and the count of possession of a firearm by a convicted felon carries a maximum potential penalty of 10 years in prison and a $250,000 fine. Sentencing is scheduled for Nov. 26, 2015.
U.S. Attorney Fishman credited the members of the FBI’s Organized Crime Task Force under the direction of Special Agent in Charge Richard M. Frankel in Newark; the Waterfront Commission of New York Harbor, under the direction of Executive Director Walter Arsenault; the Bayonne Police Department, under the direction of Chief Drew Niekrasz; and the N.J. State Commission of Investigation, under the direction of Chairman Joseph F. Scancarella, with the investigation leading to today’s guilty plea. He also thanked the FBI’s Las Vegas office and the Union County Prosecutor’s Office for their roles in the investigation.
The government is represented by Senior Litigation Counsel V. Grady O’Malley Sr. and Assistant U.S. Attorney James Donnelly of the Organized Crime/Gangs Strike Force.
Defense counsel: Gary Mizzone Esq., Little Falls, New Jersey
Download Stango Anthony Information
‘Dirty Block’ Gang Leader and His Brother Convicted on Drug Conspiracy and Weapons ChargesRead the Press Release
CAMDEN, N.J. – Two members of a criminal street gang that used threats, intimidation and violence to maintain control of the illegal drug trade in Atlantic City, New Jersey, were convicted at trial today on drug conspiracy and weapons charges, U.S. Attorney Paul J. Fishman announced.
Mykal Derry, a/k/a “Koose,” 35, and his brother Malik Derry, a/k/a “Lik, ” 24, both of Atlantic City, were convicted following a six-week trial before U.S. District Judge Noel L. Hillman in Camden federal court. Mykal Derry was convicted of conspiracy to distribute one kilogram or more of heroin, distributing heroin, maintaining a place for the purposes of storing and distributing heroin, possessing, brandishing and discharging firearms in furtherance of the drug conspiracy and using a communications device in furtherance of a drug trafficking crime. Malik Derry was convicted of conspiracy to distribute one kilogram or more of heroin, possessing and discharging firearms in furtherance of the conspiracy and using a communications device in furtherance of a drug trafficking crime. The jury deliberated approximately seven hours before returning the verdicts.
According to documents filed in this case and the evidence presented at trial:
The men are members of a gang known as “Dirty Block,” a/k/a “Crime Fam,” “3.6.6.12,” or “3.6,” which operated in a geographic area of Atlantic City that includes the public housing apartment complexes of Stanley Holmes Village Public Housing Complex, Renaissance Plaza and Schoolhouse Apartments.
The defendants participated in a violent street-level drug trafficking organization that controlled heroin sales through the possession of dozens of firearms and the use of gun violence, including at least one homicide and several non-fatal, drug-related shootings. Twenty-three loaded firearms were seized from the defendants and dozens of conspirators during the time frame of the indictment and presented in court as evidence.
Mykal Derry, a Dirty Block leader, directed the gang’s drug distribution activities. Malik Derry carried a firearm and acted as a gang “enforcer.” After acquiring heroin from other suppliers, Mykal Derry distributed “bricks” and “bundles” of heroin to gang members for resale to their customers, including other heroin dealers in the Atlantic City area. This heroin was marketed using numerous “stamps” that suppliers, distributors and dealers use to brand their product.
The conspiracy to distribute a kilogram or more of heroin carries a maximum potential penalty of life in prison. The possession and discharge of firearms in furtherance of the conspiracy carries a statutory minimum of 10 years in prison, to be served consecutively to the drug conspiracy charge. Each substantive distribution count carries a maximum potential penalty of 30 years in prison. Maintaining a place to store and distribute heroin carries a maximum potential penalty of 20 years in prison. Sentencing for Mykal Derry is scheduled for Dec. 1, 2015. Sentencing for Malik Derry is Dec. 2, 2015.
U.S. Attorney Fishman credited special agents of the FBI’s Newark Division, Atlantic City Resident Agency, under the direction of Special Agent in Charge Richard M. Frankel; the Atlantic County Prosecutor’s Office, under the direction of Prosecutor James P. McClain; the Atlantic City Police Department, under the direction of Chief Henry White; and the South Jersey Safe Streets Violent Incident and Gang (Safe Streets) Task Force, with the investigation leading to today’s verdict.
He also thanked the N.J. State Police; the Atlantic County Sheriff’s Office; the Northfield Police Department; the Vineland Police Department; the Brigantine Police Department; and the Millville Police Department for their contributions.
The government is represented by Assistant U.S. Attorneys Patrick Askin and Justin Danilewitz of the U.S. Attorney’s Office in Camden and Special Assistant U.S. Attorney Edmund Mallqui-Burgos of the Atlantic County Prosecutor’s Office.
Defense Counsel:
Mykal Derry: Robert E. Madden Esq., Jenkintown, Pennsylvania
Malik Derry: Joshua L. Markowitz Esq., Lawrenceville, New JerseyClifton, New Jersey, Ambulance Provider Charged in 17-Count Indictment with Health Care FraudRead the Press Release
Operator of Medicare Provider was Previously Barred from Medicare Participation for Prior Health Care Fraud Conviction
NEWARK, N.J. – A Passaic County, New Jersey, man was charged today with operating a lucrative ambulance company that received funds from Medicare and Medicaid, despite being barred from doing such business because of a prior health care fraud conviction, U.S. Attorney Paul J. Fishman announced.
Imadeldin Awad Khair, a/k/a “Nadr Khair,” 55, of Clifton, New Jersey, was indicted by a federal grand jury in Newark. The 17-count indictment charges Khair with one count of health care fraud, one count of obstruction of a federal audit, eleven counts of tax evasion and four counts of money laundering.
According to the documents filed in this case and statements made in court:
As a result of his 2003 conviction on a New Jersey state health care charge, Khair was excluded from participating in any capacity in Medicare, Medicaid, or other federal health care program for a minimum of 11 years. Despite this, Khair has since 2005 been an operator and a de facto owner of K & S Invalid Coach, a licensed ambulance and wheelchair transportation service operating out of Clifton. Nearly all of K & S’s patients were Medicare or Medicaid beneficiaries requiring regular transportation to dialysis treatment. Since September 2011, Medicare has paid more than $6.5 million in claims submitted by K & S. Since January 2010, N.J. Medicaid has paid more than $1 million in claims submitted by K & S. In 2014 alone, K & S received more than $2.6 million from Medicare and N.J. Medicaid and was in the top 3 percent of the more than 400 ambulance transport providers in the state of New Jersey, as measured by receipt of payments from Medicare.
Since at least 2005, Khair and others at K & S concealed his involvement in the company from Medicare and N.J. Medicaid, including his substantial control over K & S’s bank accounts and operations, including the authority to hire and terminate employees, determine employee salaries, and enforce company policies. Khair also paid several K&S employees, and nearly all of the employees’ overtime wages, “off the books” and without withholding the necessary payroll taxes. In order to carry out the tax evasion, Khair paid the “off the books” wages via cash or handwritten check and directed K&S employees to underreport to the company’s payroll company the actual number of hours worked.
In response to a U.S. Department of Labor audit of K&S in 2014, Khair held an employee meeting wherein he directed the K&S employees to falsely state to the Department of Labor that they never worked more than 80 hours in a biweekly pay period. Khair also directed K&S employees to alter and falsify K&S timekeeping records to match the false amounts previously reported to the company’s payroll vendor.
The indictment also charges money laundering arising from K&S checks that were written and endorsed by Khair and made payable to “cash” or Khair himself, which were used to pay the “off the books” wages and enrich Khair personally.
The health care count with which Khair is charged carries a maximum potential penalty of
10 years in prison. The obstruction of a federal audit and tax evasion counts each carry a maximum potential penalty of five years in prison. The money laundering counts each carry a maximum potential penalty of 20 years in prison. All the counts also carry a fine of $250,000, or twice the gain or loss from the offense.
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 Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert; and special agents of IRS-Criminal Investigation, under the direction of Jonathan D. Larsen, with the ongoing investigation leading to these charges.
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 in Newark, and Assistant U.S. Attorney Barbara Ward, Acting Chief of the office’s Asset Forfeiture and Money Laundering Unit.
U.S. Attorney Fishman reorganized the health care fraud practice shortly after taking office, creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $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: Harvey Poe Esq., Roseland, New Jersey
Download Khair Imadeldin Awad Indictment
Puerto Rican Woman Sentenced to 30 Months in Prison for Smuggling Cocaine into New JerseyRead the Press Release
NEWARK, N.J. – A woman from Puerto Rico was sentenced today to 30 months in prison for trying to smuggle 2.9 kilograms of cocaine through Newark Liberty International Airport, U.S. Attorney Paul J. Fishman announced.
Kenia Diaz, 24, previously pleaded guilty before U.S. District Judge Susan D. Wigenton to an indictment charging her with one count of possessing cocaine with intent to distribute. Judge Wigenton imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
On May 22, 2013, Diaz arrived at Newark Liberty International Airport on a flight from Puerto Rico. During a routine inspection, a canine detected a controlled substance inside Diaz’s suitcase. After searching the suitcase, agents recovered approximately 2.9 kilograms of cocaine.
In addition to the prison term, Judge Wigenton ordered Diaz to serve three years of supervised release.
U.S. Attorney Fishman praised special agents of the DEA, Newark Division, under the direction of Special Agent in Charge Carl J. Kotowski with the investigation leading to today’s guilty plea.
The government is represented by Special Assistant U.S. Attorney Thomas S. Kearney of the U.S. Attorney’s Office General Crimes Unit in Newark.
Defense counsel: Kevin Carlucci Esq., Newark
North Jersey Pharmacist Admits Stealing Controlled Substances from Hospital PharmaciesRead the Press Release
NEWARK, N.J. – A pharmacist working at two New Jersey hospitals today admitted abusing his position to tamper with and steal hundreds of vials of medication, U.S. Attorney Paul J. Fishman announced.
John Kakowski, 29, of Jersey City, New Jersey, pleaded guilty before U.S. District Judge Esther Salas in Newark federal court to a two-count information charging him with tampering with consumer products and obtaining controlled substances by misrepresentation, fraud, forgery, deception or subterfuge.
According to the documents filed and statements made in court:
Kakowski admitted that, between 2013 and 2014, he tampered with and stole medications from one hospital by taking vials of Morphine Sulfate, Dilaudid and Fentanyl from the Pyxis machine, an automated medication dispensing system that he could access as a pharmacist. During that time, he also stole Morphine Sulfate from a second hospital by removing the vials from a cabinet that he had access to as a pharmacist. In addition, Kakawoski admitted using a needle to extract medication from the vials for his own use and then refilling them with saline solution.
The charge of tampering with a consumer product carries a maximum penalty of up to 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. The charge of obtaining controlled substances by fraud carries a maximum penalty of up to four years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. No sentencing date has been set at this time.
U.S. Attorney Fishman credited special agents of the FDA’s Office of Criminal Investigations, under the direction of Special Agent in Charge Antoinette V. Henry, 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 Danielle M. Corcione of the U.S. Attorney’s Health Care and Government Fraud Unit.
U.S. Attorney Paul J. Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $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: Mark Musella Esq.
Download Kakowski John Information
Nine People Charged in Largest Known Computer Hacking and Securities Fraud SchemeRead the Press Release
More Than 150,000 Press Releases Stolen from Three Major Newswire Companies, Used to Generate Approximately $30 Million in Illegal Trading Profits
NEWARK, N.J. – Nine people were charged in two indictments unsealed today in Brooklyn, New York, and Newark federal court with an international scheme to hack into three business newswires and steal yet-to-be published press releases containing non-public financial information that was then used to make trades that allegedly generated approximately $30 million in illegal profits.
U.S. Attorney Paul J. Fishman, District of New Jersey, and Acting U.S. Attorney Kelly T. Currie, Eastern District of New York, announced the indictments today, along with U.S. Secretary of Homeland Security Jeh Johnson; U.S. Secret Service Director Joseph P. Clancy; FBI Assistant Director-in-Charge Diego Rodriguez, New York Field Office; and U.S. Securities Exchange Commission (SEC) Chair Mary Jo White. The SEC also unsealed a civil complaint today charging the nine indicted defendants and several other individuals and entities.
The indictments unsealed today charge the defendants with hacking into the newswires and stealing confidential information about companies traded on the NASDAQ and NYSE in what is the largest scheme of its kind ever prosecuted. The defendants allegedly stole approximately 150,000 confidential press releases from the servers of the newswire companies. They then traded ahead of more than 800 stolen press releases before their public release, generating millions of dollars in illegal profits.
“The defendants were a well-organized group that allegedly robbed the newswire companies and their clients and cheated the securities markets and the investing public by engaging in an unprecedented hacking and trading scheme,” U.S. Attorney Fishman said. “The defendants launched a series of sophisticated and relentless cyber attacks against three major newswire companies, stole highly confidential information and used to enrich themselves at the expense of public companies and their shareholders.”
“As alleged, the defendants and their co-conspirators formed an alliance of hackers and securities industry professionals to systematically steal valuable inside information and profit by trading ahead of authorized disclosures to the investing public,” stated Acting United States Attorney Currie. “Today’s sweeping indictments are the result of a cutting edge investigation by law enforcement to combat twenty-first century criminal schemes.”
“Today’s announcement is a testament to the countless hours of hard work and dedication by law enforcement and other personnel across government, including the Secret Service investigative team. In today’s day and age, criminals are using computers instead of guns to steal money and threaten the safety and security of our cyber networks,” Secretary Johnson said. “In matters of cybersecurity, the Department of Homeland Security has a major law enforcement role, and our work to counter cyber threats is a critical priority for the Secret Service because of the substantial threat it poses to this nation’s financial infrastructure.”
The 23-count District of New Jersey indictment charges five defendants – Ivan Turchynov, 27; Oleksandr Ieremenko, 24; and Pavel Dubovoy, 32; all of Ukraine, and Arkadiy Dubovoy, 51, and Igor Dubovoy, 28, of Alpharetta, Georgia – with wire fraud conspiracy, securities fraud conspiracy, wire fraud, securities fraud, and money laundering conspiracy. Turchynov and Ieremenko are additionally charged with computer fraud conspiracy, computer fraud, and aggravated identity theft.
The Eastern District of New York indictment charges four defendants: Vitaly Korchevsky, 50, of Glen Mills, Pennsylvania; Vladislav Khalupsky, 45, of Brooklyn, New York; and Odessa, Ukraine; Leonid Momotok, 47, of Suwanee, Georgia; and Alexander Garkusha, 47, of Cummings and Alpharetta, Georgia, with wire fraud conspiracy, securities fraud conspiracy, securities fraud, and money laundering conspiracy.
Earlier today, the government seized 17 bank and brokerage accounts containing more than $6.5 million of alleged criminal proceeds. The government also took steps to restrain 12 properties, a shopping center located in Pennsylvania, an apartment building located in Georgia, and a houseboat, all worth more than $5.5 million.
Five of the nine defendants named above were arrested this morning: Arkadiy Dubovoy, Igor Dubovoy, Momotok, and Garkusha were all arrested at their homes in Georgia, and are scheduled to appear this afternoon before U.S. Magistrate Judge Alan J. Baverman in federal court in Atlanta, Georgia. Korchevsky was arrested at his home in Glenn Mills, Pennsylvania, and is scheduled to appear this afternoon before U.S. Magistrate Judge Linda K. Caracappa in federal court in Philadelphia, Pennsylvania. Turchynov, Ieremenko, Pavel Dubovoy, and Khalupsky remain in Ukraine, and international arrest warrants were issued today for their arrests.
According to the indictments:
Between February 2010 and August 2015, Turchynov and Ieremenko, computer hackers based in Ukraine, gained unauthorized access into the computer networks of Marketwired L.P., PR Newswire Association LLC (PRN), and Business Wire. They used a series of sophisticated cyber attacks to gain access to the computer networks. The hackers moved through the computer networks and stole press releases about upcoming announcements by public companies concerning earnings, gross margins, revenues, and other confidential and material financial information.
At one point, one of the hackers sent an online chat message in Russian to another individual stating, “I’m hacking prnewswire.com.” In another online chat, Ieremenko told Turchynov that he had compromised the log-in credentials of 15 Business Wire employees.
The hackers shared the stolen press releases with traders Arkadiy Dubovoy, Korchevsky, Momotok, Igor Dubovoy, Pavel Dubovoy, Khalupsky, Garkusha, and others, using overseas computer servers that they controlled. In a series of emails, the hackers even shared “instructions” on how to access and use an overseas server where they shared the stolen releases with the traders, and the access credentials and instructions were distributed amongst the traders. In an email sent by one of the traders, the instructions for accessing the overseas server suggested that users conceal their Internet Protocol address when accessing the server as a precaution to avoid detection. The traders created “shopping lists” or “wish lists” for the hackers listing desired upcoming press releases from Marketwired and PRN for publicly traded companies. Trading data obtained over the course of the investigation showed that, after one of the shopping lists or wish lists was sent, the traders and others traded ahead of several of the press releases listed on it.
The traders generally traded ahead of the public distribution of the stolen releases, and their activities shadowed the hackers’ capabilities to exfiltrate stolen press releases. In order to execute their trades before the releases were made public, the traders sometimes had to execute trades in extremely short windows of time between when the hackers illegally accessed and shared information and when the press releases were disseminated to the public by the newswires, usually shortly after the close of the markets. Frequently, all of this activity occurred on the same day. Thus, the trading data often showed a flurry of trading activity around a stolen press release just prior to its public release. The defendants illegal trading resulted in gains of more than $30 million, of which Korchevsky accounted for more than $17 million and Arkadiy Dubovoy accounted for more than $11 million.
The traders traded on stolen press releases containing material nonpublic information about publicly traded companies that included, among hundreds of others: Align Technology Inc.; Caterpillar Inc.; Hewlett Packard; Home Depot; Panera Bread Co.; and Verisign Inc.
The traders paid the hackers for access to the overseas servers based, in part, on a percentage of the money the traders made from their illegal trading activities. The hackers and traders used foreign shell companies to share in the illegal trading profits.
“This is the story of a traditional securities fraud scheme with a twist—one that employed a contemporary approach to a conventional crime. In this case the defendants allegedly traded on nonpublic information, ultimately benefitting from more than $30 million in illegal profits over the course of three years,” Assistant Director-in-Charge Rodriguez said. “But just as criminals continue to develop relationships with one another in order to advance their objectives, the law enforcement community has developed a collaborative approach to fighting these types of crimes.”
“Cyber cases such as this are a vital part of the Secret Service's integrated mission,” Joseph P. Clancy, Director of the U.S. Secret Service, said. “This is yet another example of the successful investigative work being done in coordination with our partners in the global law enforcement community.”
The wire fraud conspiracy and substantive wire fraud counts with which all defendants are charged carry a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gain or loss from the offense. The securities fraud conspiracy count with which all defendants are charged carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gain or loss from the offense. The substantive securities fraud counts with which all defendants are charged carry a maximum potential penalty of 20 years in prison and a $5 million fine, or twice the gain or loss from the offense. The money laundering conspiracy count with which all defendants are charged carries a maximum potential penalty of 20 years in prison and a $500,000 fine, or twice the value of the funds involved in the illegal transfers. The computer fraud counts with which the alleged hackers are charged carry a maximum potential penalty of five years’ imprisonment and a $250,000 fine, or twice the gain or loss from the offense. The aggravated identity theft counts with which the hackers are charged carry a mandatory consecutive term of imprisonment of 24 months.
U.S. Attorney Fishman and Acting U.S. Attorney Currie credited special agents of the U.S. States Secret Service, Criminal Investigations, under the direction of Director Clancy, and the Newark Field Office under the direction of Special Agent in Charge Carl Agnelli; and special agents of the FBI, New York Field Office, under the direction of Assistant Director Diego Rodriguez, for the investigation leading to today’s arrests and indictments. They thanked the U.S. Securities and Exchange Commission, for its significant cooperation and assistance in the investigation and the newswires, which cooperated with law enforcement over the course of the investigation.
In the District of New Jersey, the government is represented by Assistant U.S. Attorneys Andrew S. Pak, Daniel V. Shapiro, and David M. Eskew of the Economic Crimes Unit, Computer Hacking & Intellectual Property Section, Assistant U.S. Attorney Svetlana M. Eisenberg of the Office’s Civil Division, and Special Assistant U.S. Attorney Sarah Devlin of the Asset Forfeiture and Money Laundering Unit.
In the Eastern District of New York, the government’s case is being prosecuted by the Business and Securities Fraud Section and the National Security and Cybercrime Section. Assistant U.S. Attorneys Christopher A. Ott, Christopher L. Nasson, and Richard M. Tucker are in charge of the prosecution. Assistant U.S. Attorneys Brian D. Morris and Tanisha Payne of the Office’s Civil Division are responsible for the forfeiture of assets.
The charges and allegations contained in the indictments are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ Offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
New York Doctor Charged with Taking Bribes in Test-Referral Scheme with New Jersey Clinical LabRead the Press Release
First Doctor Indicted in Case – 38 Defendants Have Pleaded Guilty
NEWARK, N.J. – A doctor with practices in Nassau County, New York, was charged today with accepting bribes in exchange for test referrals as part of a long-running and elaborate scheme operated by Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, New Jersey, its president and numerous associates, U.S. Attorney Paul J. Fishman announced.
Bret Ostrager, 50, of Woodbury, New York, was indicted by a federal grand jury and charged with one count of conspiring to violate the Anti-Kickback Statute and the Federal Travel Act, three substantive violations of the Anti-Kickback Statute, and four substantive violations of the Federal Travel Act. Ostrager is scheduled to be arraigned before Judge Stanley Chesler on Aug. 19, 2015.
Ostrager is the first defendant to be indicted in connection with the BLS bribery scheme. To date, 38 people – 26 of them doctors – have pleaded guilty in connection with the bribery scheme, which its organizers have admitted involved millions of dollars in bribes and resulted in more than $100 million in payments to BLS from Medicare and various private insurance companies. It is believed to be the largest number of medical professionals ever prosecuted in a bribery case. (See chart below.) The investigation has to date recovered more than $11.5 million through forfeiture.
According to the indictment:
Between February 2011 and April 2013, Ostrager received monthly cash bribes of approximately $3,300 from BLS employees and associates. He periodically solicited and received from the BLS employees and associates tickets and meals that cost thousands of dollars. These additional bribes in response to specific requests from Ostrager included tickets to a New York Mets baseball game, a New York Knicks basketball game, a Katy Perry concert, a Justin Bieber concert, and the Broadway show “Newsies.” In exchange, Ostrager referred patient blood samples to BLS. Ostrager’s referrals generated approximately $909,000 in lab business for BLS.
If convicted, Ostrager faces a maximum potential penalty of five years in prison on each of the counts on which he is charged. Each count also carries a maximum $250,000 fine, or twice the gross gain or loss from the offense.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel; the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert; IRS–Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; and inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, with the ongoing investigation.
The government is represented by Assistant U.S. Attorneys Joseph N. Minish and Danielle Alfonzo Walsman, Senior Litigation Counsel Andrew Leven, and Jacob T. Elberg, Chief of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark, as well as Assistant U.S. Attorney Barbara Ward, Acting Chief of the office’s Asset Forfeiture and Money Laundering Unit.
U.S. Attorney Paul J. Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $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: Marc Agnifilo Esq., New York
Defendant
Role
Sentence/ Sentencing Date
David Nicoll
BLS owner
TBD
Scott Nicoll
BLS employee
TBD
Craig Nordman
BLS employee
TBD
Luke Chicco
BLS employee
TBD
Cliff Antell
BLS employee
TBD
Kevin Kerekes
BLS employee
TBD
Doug Hurley
BLS employee
TBD
Peter Breihof
BLS employee
TBD
William Dailey
BLS employee
TBD
Len Rubinstein
BLS employee
37 months
Dave McCann
BLS employee
TBD
Michael Zarelli
BLS employee
8/20/15
Frank Santangelo
Doctor
63 months
Gary Safier
Doctor
TBD
Angelo Calabrese
Doctor
37 months
Dennis Aponte
Doctor
24 months
Dana Fortunato
Doctor
14 months
Claudio Dicovsky
Doctor
12 months’ probation
Paul Ostergaard
Doctor
12 months’ probation
Gary Leeds
Doctor
20 months
Richard Goldberg
Doctor
20 months
Demitrios Gabriel
Doctor
37 months
Surender Gorukanti
Doctor
TBD
Wayne Lajewski
Doctor
14 months
Michelle Martinho
Doctor
TBD
John Vitali
Doctor
10 months’ home conf.
Peter Deplas
Doctor
TBD
Douglas Beinstock
Doctor
37 months
Anthony DeLuca
Doctor
12 months & 1 day
Franz Goyzueta
Doctor
37 months
Eugene DeSimone
Doctor
37 months
Anthony Delpiano
Doctor
21 months
Ralph Messo
Doctor
TBD
Leon Marchetta
Physic. Assist.
9/16/15
Brett Halper
Doctor
8/20/15
Former Loan Officer Sentenced to Three Years in Prison for His Role in $2 Million Mortgage Fraud SchemeRead the Press Release
NEWARK N.J. – A Middlesex County, New Jersey, man was sentenced today to 36 months in prison for his role in a large-scale mortgage fraud scheme that caused millions of dollars in losses, U.S. Attorney Paul J. Fishman announced.
Delio Coutinho, 73, of Woodbridge, New Jersey previously pleaded guilty before U.S. District Judge Susan D. Wigenton to an information charging him with conspiracy to commit wire fraud. Judge Wigenton imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
From March 2008 through June 2012, Coutinho, a loan officer at a northern New Jersey mortgage brokerage company, and others conspired to release liens on encumbered properties via fraudulently arranged short sale transactions. This allowed Coutinho and other conspirators to profit from new fraudulent mortgage loans obtained on the properties from other mortgage lenders. To complete the short sale transactions, Coutinho and others submitted materially false closing and other documents to mortgage lenders. They submitted fraudulent mortgage loan applications to lenders to obtain new loans on multiple properties in Elizabeth, New Jersey. In all, Coutinho and others obtained approximately $2 million in illegal mortgage proceeds.
In addition to the prison terms, Judge Wigenton ordered Coutinho to serve three years of supervised release and pay more than $1.3 million in restitution.
U .S. Attorney Fishman credited law enforcement agents of the FBI Newark Mortgage Fraud Task Force, under the direction of Special Agent in Charge Richard M. Frankel; postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates; special agents of the U.S. Department of Housing and Urban Development, Office of Inspector General, under the direction of Special Agent in Charge Christina Scaringi; special agents of the Federal Housing Finance Agency, Office of Inspector General, under the direction of Special Agent in Charge Steven Perez; special agents of the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), under the direction of Special Inspector General Christy Romero; special agents of IRS–Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; and the Hudson County Prosecutor’s Office, under the direction of Prosecutor Esther Suarez, for their roles in the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Andrew Kogan of the U.S. Attorney’s Office Economic Crimes Unit in Newark, as well as Barbara Ward, Acting Chief of the office’s Asset Forfeiture and Money Laundering Unit.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov
Defense counsel: Michael A. Robbins Esq., West Orange, New Jersey
Former New Jersey Resident Charged with Conspiracy and Attempt to Provide Material Support to ISILRead the Press Release
A former resident of Bergen County, New Jersey, was arrested this morning for allegedly conspiring and attempting to provide material support to the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization.
The announcement was made by Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Paul J. Fishman of the District of New Jersey and Special Agent in Charge Richard M. Frankel of the FBI’s Newark, New Jersey, Division.
Nader Saadeh, 20, a former resident of Rutherford, New Jersey, is charged by complaint with conspiring with other individuals in New Jersey and New York to provide material support to ISIL and with attempting to provide material support to ISIL. He is scheduled to appear at 1:30 p.m. EDT before U.S. Magistrate Judge Cathy L. Waldor of the District of New Jersey.
According to documents filed in this case:
The FBI and the Joint Terrorism Task Force (JTTF) have been investigating a group of individuals from New York and New Jersey who have allegedly conspired to provide material support to ISIL. Nader Saadeh lived in Rutherford until leaving the country on May 5, 2015, allegedly to join ISIL. Nader Saadeh’s brother, Alaa Saadeh, was a resident of West New York, New Jersey, until he was arrested on June 29, 2015, and charged with conspiring to provide material support to ISIL, aiding and abetting an attempt to provide material support to ISIL and witness tampering. Samuel Rahamin Topaz was a resident of Fort Lee, New Jersey, until he was arrested on June 17, 2015, and charged with conspiring to provide material support to ISIL. Conspirator 1 (CC-1) was a Queens, New York, resident until he was arrested in New York on June 13, 2015, on terrorism charges.
Between 2012 and 2013, Nader Saadeh sent CC-1 electronic messages expressing his hatred for the United States and desire to form a small army that would include their friends. On July 1, 2014, the day ISIL’s leader declared an Islamic caliphate in Syria and Iraq, Nader Saadeh posted images of ISIL’s flag and the flag of the Islamic caliphate on his Facebook page.
According to an informant who was close to him for years, by April 2015, Nader Saadeh had become a radicalized supporter of ISIL who was preparing to travel overseas with other individuals. In addition, Nader Saadeh said that ISIL’s execution of a captured Jordanian Air Force pilot by burning him alive and the murders of several staff members of the French satirical magazine Charlie Hebdo in Paris earlier this year were justified.
During the investigation, the FBI obtained computer files showing that Nader Saadeh viewed ISIL propaganda videos and researched the availability of flights to Turkey, which borders Syria, where ISIL claims to control territory. The FBI also obtained electronic messages sent to Nader Saadeh on April 21, 2015, by family members living overseas, including his mother, who pleaded for him not to join ISIL.
On May 5, 2015, Nader Saadeh traveled overseas via John F. Kennedy International Airport, allegedly in order to join ISIL. On his way to the airport, while accompanied by Alaa Saadeh and CC-1, he said that he, Alaa Saadeh, CC-1 and Topaz had plans to reunite overseas within a few weeks.
On the day of his arrest, Topaz told the FBI that he agreed with Nader Saadeh, CC-1 and Alaa Saadeh to travel to join ISIL. In addition, Alaa Saadeh told the FBI in a post-arrest interview that he, Nader Saadeh and Topaz all watched ISIL propaganda videos together and discussed going overseas to join ISIL. Alaa Saadeh also stated that the night before Nader Saadeh left for Jordan, CC-1 provided Nader Saadeh with the name and number of an ISIL contact near the Turkey/Syria border who would facilitate his travel to ISIL-controlled territory.
Each count in the complaint carries a maximum of potential penalty of 20 years in prison and a fine of $250,000.
The case is being investigated by the FBI and JTTF. The case is being prosecuted by Assistant U.S. Attorneys L. Judson Welle, Dennis C. Carletta and Francisco J. Navarro of the District of New Jersey, with the assistance of Trial Attorney Robert Sander of the National Security Division’s Counterterrorism Section.
The charge and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Nader Saadeh Complaint
Former New Jersey Resident Charged with Conspiracy and Attempt to Provide Material Support to ISILRead the Press Release
NEWARK, N.J. – A former resident of Bergen County, New Jersey, was arrested this morning for allegedly conspiring and attempting to provide material support to the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization, U.S. Attorney Paul J. Fishman of the District of New Jersey, Assistant Attorney General for National Security John P. Carlin, and Special Agent in Charge Richard M. Frankel of the FBI’s Newark Division announced.
Nader Saadeh, 20, a former resident of Rutherford, New Jersey, is charged by complaint with conspiring with other individuals in New Jersey and New York to provide services and personnel to ISIL, and with attempting to provide services and personnel to ISIL. He is scheduled to appear this afternoon before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court.
According to documents filed in this and other cases:
The FBI and the Joint Terrorism Task Force (JTTF) have been investigating a group of individuals from New York and New Jersey who have allegedly conspired to provide material support to ISIL. Nader Saadeh lived in Rutherford until leaving the country on May 5, 2015, allegedly to join ISIL. Nader Saadeh’ s brother, Alaa Saadeh, of West New York, New Jersey, was arrested on June 29, 2015, and charged with conspiring to provide services and personnel to ISIL, aiding and abetting an attempt to provide services and personnel to ISIL, and witness tampering. Samuel Rahamin Topaz, of Fort Lee, New Jersey, was arrested on June 17, 2015, and charged with conspiring to provide services and personnel to ISIL. Conspirator 1 (CC-1) a Queens, New York, resident was arrested in New York on June 13, 2015, on terrorism charges.
Between 2012 and 2013, Nader Saadeh sent CC-1 electronic messages expressing his hatred for the United States and desire to form a small army that would include their friends. On July 1, 2014, the day ISIL’s leader declared an Islamic caliphate in Syria and Iraq, Nader Saadeh posted on his Facebook page images of ISIL’s flag and the flag of the Islamic caliphate.
According to an informant who was close to him for years, by April 2015, Nader Saadeh had become radicalized supporter of ISIL who was preparing to travel overseas with other individuals. Nader Saadeh said that ISIL’s execution of a captured Jordanian Air Force pilot by burning him alive and the murders of several staff members of the French satirical magazine Charlie Hebdo in Paris, France, earlier this year were justified.
The FBI obtained computer files showing that Nader Saadeh viewed ISIL propaganda videos and researched the availability of flights to Turkey, which borders Syria, where ISIL claims to control territory. The FBI also obtained electronic messages sent to Nader Saadeh on April 21, 2015, by family members living overseas, including his mother, who pleaded for him not to join ISIL.
On May 5, 2015, Nader Saadeh attempted to travel overseas via John F. Kennedy International Airport (JFK), allegedly in order to join ISIL. On his way to the airport, while accompanied by Alaa Saadeh and CC-1, he and stated that he, Alaa Saadeh, CC-1, and Topaz had plans to reunite overseas within a few weeks.
On the day of his arrest, Topaz told the FBI that he agreed with Nader Saadeh, CC-1, and Alaa Saadeh to travel to join ISIL. Alaa Saadeh told the FBI in a post-arrest interview that he, Nader Saadeh, and Topaz all watched ISIL propaganda videos together and discussed going overseas to join ISIL. Alaa also stated that the night before Nader Saadeh traveled overseas, CC-1 provided Nader Saadeh with the name and number of an ISIL contact near the Turkey/Syria border who would facilitate Nader Saadeh’s travel to ISIL-controlled territory.
Each count in the complaint carries a maximum of potential penalty of 20 years in prison and a fine of $250,000.
U.S. Attorney Fishman credited the FBI and the JTTF, under the direction of Special Agent in Charge Frankel, with the investigation leading to today’s arrest.
The government is represented by Assistant U.S. Attorneys L. Judson Welle, Dennis C. Carletta, and Francisco J. Navarro of the U.S. Attorney’s Office National Security Unit in Newark, with the assistance of Trial Attorney Robert J. Sander of the National Security Division’s Counterterrorism Section.
The charge and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Download Saadeh Nader Complaint
Bergen County, New Jersey, Doctor Admits Billing for Bogus Office Visits, Altering Patient Medical RecordsRead the Press Release
NEWARK, N.J. – A family medicine physician with offices in Cresskill and Little Falls, New Jersey, today admitted defrauding Medicare, Medicaid and private insurance companies out of hundreds of thousands of dollars by billing them for non-existent office visits, U.S. Attorney Paul J. Fishman announced.
Albert Ades, 60, of Englewood, New Jersey, pleaded guilty before U.S. District Judge Esther Salas in Newark federal court to Count One of an indictment charging him with health care fraud.
According to the documents filed and statements made in court:
From 2005 through June 2014, Ades, a licensed family medicine doctor who owns and operates Albert Ades M.D., P.A., fraudulently billed Medicare, Medicaid and various private payors for face-to-face physician office visits that never happened. Ades wrote prescriptions, authorized refills or performed other tasks without ever seeing those patients on the billed dates. Ades admitted today that he also altered patients’ medical charts by inserting fabricated blood pressure readings, other vitals and clinical notes on patients’ charts to make it appear as if they had visited Ades’s office on the billed dates.
Ades admitted that, between 2009 and 2013, his scheme caused a loss of approximately $280,000 to federal health care benefit programs and private insurers.
The charge of health care fraud carries a maximum penalty of 10 years in prison and a $250,000 fine, or twice the gross gain or loss resulting from the offense. Sentencing is scheduled for Nov. 16, 2015.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel; U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert; and investigators with the U.S. Attorney’s Office with the investigation leading to today’s plea.
The government is represented by Assistant U.S. Attorneys Jane H. Yoon and Danielle M. Corcione of the U.S. Attorney’s Health Care and Government Fraud Unit in Newark.
U.S. Attorney Paul J. Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $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: Alexander Spiro Esq., New York
Union County, New Jersey, Man Admits Robbing Multiple New Jersey Banks at GunpointRead the Press Release
NEWARK, N.J. – An Elizabeth, New Jersey, man today admitted robbing seven New Jersey banks at gunpoint and attempting to rob an eighth bank at the time of his arrest on July 30, 2012, U.S. Attorney Paul J. Fishman announced.
Claude Williams, 63, pleaded guilty before U.S. District Judge Kevin McNulty in Newark federal court to Count One, Count Fourteen and Count Fifteen of an indictment charging him with conspiracy to commit bank robbery, bank robbery and using a firearm during a crime of violence.
According to documents filed in this case and statements made in court:
Williams admitted that, between Sept. 26, 2011 and July 30, 2012, he robbed seven banks and attempted to rob an eighth bank, all at gunpoint. He used a similar procedure for each robbery: after entering the bank armed with a handgun and wearing a bandana, hooded sweatshirt or jacket and white gloves, Williams would vault over the counter and demand money from bank tellers at gunpoint.
Williams admitted robbing, or attempting to rob, the following New Jersey banks:
Date
Bank
Location
Sept. 26, 2011
Financial Resources Federal Credit Union
Somerset
Nov. 21, 2011
Somerset Savings Bank
Somerville
Feb. 27, 2012
Provident Bank
Piscataway
April 17, 2012
Provident Bank
Clifton
May 22, 2012
Provident Bank
Piscataway
June 20, 2012
Fulton Bank
Metuchen
July 12, 2012
Unity Bank
Middlesex
July 30, 2012
Unity Bank
North Plainfield
Prior to the July 12, 2012 robbery, an unarmed, off-duty police officer was parked across from the Unity Bank. The officer observed Williams leave the bank, get into the rear of the getaway car and crouch down to hide. After noting the license plate number, the officer followed the car. During today’s hearing, Williams admitted that he exited the getaway car, walked toward the officer’s car and pointed his firearm at the officer, forcing the officer to leave the scene.On July 30, 2012, Williams was arrested after law enforcement observed him driving in the vicinity of the Unity Bank in North Plainfield on July 27, 2012 and July 28, 2012. He admitted today that he planned to rob the bank at gunpoint.
The conspiracy charge carries a maximum potential penalty of 10 years in prison and a $250,000 fine. The armed bank robbery charge carries a maximum potential penalty of 25 years in prison and a $250,000 fine. The charge of using and brandishing a firearm during a crime of violence carries a mandatory minimum sentence of seven years in prison and a maximum sentence of life in prison. Sentencing is scheduled for Nov. 16, 2015.
Andrea Dorsey, 56, of Plainfield New Jersey, who admitted that she served as a lookout and getaway driver for three of the robberies, was sentenced to 87 months in prison on March 13, 2014. Teresa Webb, 45, of Plainfield, who admitted that she was the getaway driver for one of the robberies, was sentenced to 54 months in prison on May 30, 2013.
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 plea. He also thanked the Somerset County Prosecutor’s Office and the Middlesex Borough, Piscataway, Clifton, Metuchen, North Plainfield and Plainfield Police Departments for their roles.
The government is represented by Assistant U.S. Attorneys Osmar J. Benvenuto and Courtney M. Oliva of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: Kenneth W. Kayser Esq., Irvington
Download Williams Claude Indictment
U.S. Attorney’s Office Settles Americans with Disabilities Act Case with Linden, New Jersey-Based Electronics StoreRead the Press Release
NEWARK, N.J. – The U.S. Attorney’s Office today reached an Americans with Disabilities Act (ADA) settlement with a Linden-based electronics store to ensure equal access for individuals with disabilities at its retail store, on the internet, and through telephone orders, U.S. Attorney Paul J. Fishman announced.
The announcement comes as the Department of Justice marks the 25th anniversary of the ADA. The Justice Department, including the nation’s U.S. Attorneys, plays a critical role in enforcing the ADA, ensuring equal opportunity and full participation for persons with disabilities.
The agreement resolves an ADA complaint filed by a deaf individual who alleged that Westpark Electronics LLC, d/b/a Abe’s of Maine, would not do business with her over the telephone using a telecommunications relay service. The U.S. Attorney’s Office determined that Abe’s of Maine refused to accept multiple relay calls from the complainant in violation of the ADA. Since the commencement of the investigation, Abe’s of Maine has worked cooperatively to develop and amend its policies and practices to comply with the ADA and the Department of Justice’s implementing regulations.
Title III of the ADA prohibits discrimination against individuals with disabilities by businesses that serve the public. The ADA requires sales establishments, such as Abe’s of Maine, to take steps to communicate effectively with customers who are disabled. For individuals who are deaf or hard of hearing, the ADA requires business to provide auxiliary aids and services, such as the use of relay services, to ensure effective communication.
The agreement requires Abe’s of Maine to accept relay calls, amend its policies, and provide training to its staff to ensure that disabled individuals receive equal access to Abe’s of Maine’s goods and services. The agreement also requires Abe’s of Maine to post and distribute an announcement to its employees stating its willingness to accept relay calls. Abe’s of Maine has also paid a $1,000 civil penalty to the U.S. Treasury.
Individuals who believe they may have been victims of discrimination may file a complaint with the U.S Attorney’s Office at http://www.justice.gov/usao-nj/civil-rights-enforcement/complaint or call the U.S. Attorney’s Office’s Civil Rights Complaint Hotline at (855) 281-3339. Additional information about the ADA can be found at www.ada.gov, or by calling the Department of Justice’s toll-free information line at (800) 514-0301 and (800) 514-0383 (TDD).
This government is represented by Assistant U.S. Attorney Michael E. Campion of the U.S. Attorney’s Office Civil Division in Newark.
Essex County, New Jersey, Man Sentenced to 92 Months in Prison for Unlawful Possession of A Loaded Semiautomatic HandgunRead the Press Release
NEWARK, N.J. – A previously convicted felon from Irvington, New Jersey, was sentenced today to 92 months in prison for unlawfully possessing a loaded semiautomatic handgun, U.S. Attorney Paul J. Fishman announced.
Terrell Haywood, 26, previously pleaded guilty before U.S. District Judge William J. Martini to an indictment charging him with being a felon in possession of a firearm. Judge Martini imposed the sentence today in Newark federal court.
According to documents filed in the case and statements made in court:
On April 26, 2014, in Newark, Haywood knowingly possessed a loaded Springfield Armory Ultra Compact Semi-Automatic .45 caliber handgun that was loaded with nine rounds of ammunition. As law enforcement officers from the Essex County Prosecutor’s Office observed Haywood crossing a street, they observed a bulge in his jacket pocket that was consistent with the presence of a handgun. Haywood was searched and found with the handgun, as well as various drugs, including marijuana and prescription pills.
In addition to the prison term, Judge Martini sentenced Haywood to three years of supervised release.
U.S. Attorney Fishman credited the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Carolyn A. Murray, with the investigation leading to today’s sentencing. He also thanked the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, for their role in the investigation.
The government is represented by Assistant U.S. Attorney Jonathan W. Romankow of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: Martin Goldman Esq., West Caldwell, New Jersey
Cruise Line Employee Sentenced to 13 Months in Prison for Abusive Sexual Contact of Sleeping Woman on Cruise ShipRead the Press Release
NEWARK, N.J. – A Mauritius man was sentenced today to 13 months in prison for sexually abusing a sleeping woman aboard a cruise ship, U.S. Attorney Paul Fishman announced.
Karan Seechurn, 26, previously pleaded guilty before U.S. District Judge Esther Salas to an information charging him with one count of abusive sexual contact. Judge Salas imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Seechurn was employed by a cruise line and was responsible for restocking the minibars located in passengers’ rooms. In order to conduct this duty, he was provided with a key that gave him access to passengers’ rooms. Seechurn admitted that on Dec. 23, 2014, while he was off-duty, he entered a passenger’s room and encountered a sleeping woman. Seechurn admitted that he touched the passenger’s genitalia while she was asleep.
In addition to the prison term, Judge Salas sentenced Seechurn to one year of supervised release.
The federal government has special maritime jurisdiction over sexual abuse cases, such as those that occur on cruise ships.
U.S. Attorney Fishman credited special agents of the FBI, 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 Meredith Williams of the U.S. Attorney’s Office General Crime Unit in Newark.
Defense counsel: Linda Foster Esq., Assistant Federal Public Defender, Newark
Former Employee of Atlantic County, New Jersey, Timeshare Consulting Firm Sentenced to 30 Months in Prison for Conspiring to Defraud Timeshare OwnersRead the Press Release
CAMDEN, N.J. – A former employee of The Vacation Ownership Group LLC of Pleasantville, New Jersey, was sentenced today to 30 months in prison for conspiring to defraud owners of timeshare properties by offering phony consulting services, U.S. Attorney Paul J. Fishman announced.
Joseph Saxon, 42, of Brigantine, New Jersey, previously pleaded guilty before U.S. District Court Judge Noel L. Hillman to a superseding information charging him with one count of conspiracy to commit mail and wire fraud. Judge Hillman imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
The Vacation Ownership Group, a/k/a VO Group LLC, had offices in Mays Landing, New Jersey, and Egg Harbor Township, New Jersey, and claimed to offer to owners of timeshares consulting services that included cancelling, purchasing and upgrading the timeshares.
In 2010, Saxon started working at the VO Group and was trained by VO Group co-owner Adam Lacerda, 31, of Egg Harbor Township, New Jersey, to call customers using prepared scripts. The defendant called customers and gave them the false impression that he was working for a bank or lending institution. After hearing Saxon’s false representations, some customers sent checks to the VO Group. For example, Saxon falsely told one victim that Saxon was working with the bank that held the victim’s timeshare mortgage and that the bank wanted to settle the loan for a fraction of the price. The victim then mailed a check for $5,925 to the VO Group. Saxon admitted causing more than $120,000 in losses.
In addition to the prison term, Judge Hillman sentenced Saxon to three years of supervised release.
Lacerda, who was previously convicted at trial for his role in the scheme, was sentenced to 27 years in prison on June 25, 2015.
U.S. Attorney Fishman credited special agents of FBI’s Atlantic City Resident Agency, under the direction of Special Agent in Charge Richard M. Frankel in Newark; and special agents from the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, under the direction of Special Agent in Charge Cheryl Garcia, New York Region, for the investigation. He also thanked the N.J. Department of Labor and Workforce Development for its assistance.
The government is represented by Assistant U.S. Attorney R. David Walk Jr. of the U.S. Attorney’s Office Criminal Division in Camden.
Defense counsel: David S. Rudenstein Esq., Philadelphia
Two Texas Men Sentenced to Prison for Roles in Organized Crime Racketeering ConspiracyRead the Press Release
CAMDEN, N.J. – Two Texas men who were convicted along with a member and an associate of the Lucchese organized crime family of La Cosa Nostra (LCN) were sentenced today to prison terms for their respective roles in a racketeering conspiracy and related offenses, U.S. Attorney Paul J. Fishman announced.
William Maxwell, 56, of Houston, Texas, was sentenced to 20 years in prison; his brother, John Maxwell, 63, of Dallas, Texas, was sentenced to 10 years in prison. The Maxwells, along with Nicodemo S. Scarfo, 50, of Galloway, New Jersey, and Salvatore Pelullo, 48, of Philadelphia, were convicted in July 2014 of racketeering conspiracy and related offenses, including securities fraud, wire fraud, mail fraud, bank fraud, extortion, money laundering and obstruction of justice, after a six-month trial before U.S. District Judge Robert B. Kugler, who imposed the sentences today in Camden federal court.
According to documents filed in this case and the evidence presented at trial:
Since 1989, Scarfo has been a member of the Lucchese family. As a member, he was required to earn money and participate in the affairs of the Lucchese family. Pelullo was an associate of the Lucchese family.
In April 2007, Scarfo, Pelullo and others conspired to take control of FirstPlus Financial Group Inc. (FPFG), a publicly held company in Texas, by using threats of economic harm to intimidate and remove FPFG’s management and board of directors, and to replace them with people beholden to Scarfo and Pelullo, including the Maxwell brothers. Once the takeover had occurred, FPFG’s new board of directors named William Maxwell as “special counsel” to FPFG and John Maxwell as the company’s CEO, positions that they used to funnel $12 million to themselves, Scarfo and Pelullo through fraudulent legal services and consulting agreements.
The indictment also named as conspirators Scarfo’s father, Nicodemo D. Scarfo (Scarfo Sr.) the imprisoned former boss of the Philadelphia LCN family; and Vittorio Amuso, the imprisoned boss of the Lucchese LCN family. Five other defendants – Cory Leshner, Howard Drossner, John Parisi, Todd Stark and Scarfo’s wife, Lisa Murray-Scarfo – previously pleaded guilty to various charges related to their roles in the conspiracy.
In addition to the prison term, Judge Kugler sentenced each of the Maxwells to three years of supervised release and ordered them to pay restitution $14 million each. Scarfo and Pelullo were each sentenced to 30 years in prison earlier this week.
U.S. Attorney Fishman credited special agents of the FBI in Newark, under the direction of Special Agent in Charge Richard M. Frankel, with the investigation leading to today’s sentencing. They also thanked the U.S. Department of Labor-Office of Inspector General’s Office of Labor Racketeering and Fraud Investigations New York Region, the FBI’s Philadelphia Division and the Bureau of Alcohol, Tobacco, Firearms and Explosives for their roles in the case.
The government is represented by Assistant U.S. Attorneys Steven D’Aguanno and Howard Wiener of the District of New Jersey and Trial Attorney Adam L. Small of the Criminal Division’s Organized Crime and Gang Section.
Defense counsel:
William Maxwell: Michael N. Huff Esq., Philadelphia
John Maxwell: Mark W. Catanzaro Esq., Mount Holly, New Jersey
Two People Charged in Scheme to Steal 94,000 Debit and Credit Cards from Michaels’ Stores in 19 StatesRead the Press Release
NEWARK, N.J. – Two people were charged today for allegedly participating in a large-scale conspiracy to steal 94,000 credit and debit cards from customers at approximately 80 Michaels’ Stores in 19 states and then use that information to make fraudulent withdrawals from the customers’ bank accounts.
Angel Angulo, 25, of Riverside, California, and Crystal Banuelos, 28, of Bloomington, California, are each charged by indictment with one count of conspiracy to commit bank fraud and one count of aggravated identity theft. Agnulo was arrested in California and was scheduled to appear before U.S. Magistrate Judge David Bristow in Riverside federal court. Banuelos remains at large.
According to the indictment:
Angulo, Banuelos, and others allegedly installed on point of sale (POS) terminals at Michaels devices that acquired customers’ bank account and personal identification number (PIN) information. The stolen account information was used to produce counterfeit bank cards, which were used with the stolen PINs to withdraw funds from the compromised bank accounts.
The conspirators allegedly replaced 88 POS terminals in 80 different stores operated by Michaels across 19 states, including New Jersey, with counterfeit POS devices. Each counterfeit device was equipped with wireless technology, which the conspirators used to retrieve the stolen information. From February 2011 to April 2011, conspirators stole approximately 94,000 debit and credit card account numbers.
From April 2011 to May 2011, Angulo, Banuelos and others obtained counterfeit cards with the corresponding PIN numbers written on them from other conspirators. They used the cards and PIN numbers to withdraw money from automated teller machines (ATMs) from hundreds of bank accounts. On May 14, 2011, Angulo and Banuelos possessed 179 counterfeit cards in New Jersey. They allegedly stole more than $420,000 from financial institutions and attempted to obtain at least $129,000 more.
The charge of conspiracy to commit bank fraud carries a maximum potential penalty of 30 years in prison and a $1 million fine. The charge of aggravated identity theft carries a mandatory penalty of two years in prison served consecutively to any other sentence.
U.S. Attorney Fishman credited special agents of the U.S. Secret Service, under the direction of Special Agent in Charge David Beach in Philadelphia for the investigation leading to today’s arrest.
The government is represented by Assistant U.S. Attorney Daniel Shapiro of the Computer Hacking and Intellectual Property Section of the U.S. Attorney’s Office Economic Crimes Unit.
The charges and allegations in the indictment are merely accusations, and the defendant is considered innocent unless proven guilty.
Hudson County, New Jersey, Man Charged with Sexually Exploiting Girl, Taking Pictures of the AbuseRead the Press Release
NEWARK, N.J. – A Jersey City, New Jersey, man is charged today with coercing a minor family member to engage in sexually explicit conduct while he photographed the abuse, U.S. Attorney Paul J. Fishman announced.
Felix Restitullo, 40, is charged by complaint with one count of sexual exploitation of a child and one count of possession of child pornography. He appeared this afternoon before U.S. Magistrate Steven C. Mannion in Newark federal court and remains in custody.
According to the criminal complaint:
Restitullo resided with his mother, who acted as caregiver to children, including a girl who is a member of Restitullo’s family. On March 13, 2014, as a result of an ongoing investigation into the sexual abuse of minor children, law enforcement officers interviewed the girl. During the interview, she told the officers that Restitullo had engaged her in sexual acts on prior occasions, which he photographed using a camera.
On March 13, 2014, Restitullo was arrested by the Hudson County Prosecutor’s Office for, among other things, aggravated sexual assault and endangering the welfare of the girl. After the arrest, officers lawfully obtained a camera, multiple computers and electronic storage media belonging to Restitullo from his bedroom. Approximately 13 images of child pornography, believed to be images of the girl’s sexual assault, were found on the storage media. Overall, officers found more than 1,500 images and 200 videos of child pornography, including images of child sexual abuse.
The sexual exploitation of children charge carries a maximum potential penalty of 30 years in prison, a mandatory minimum penalty of 15 years in prison and a $250,000 fine. The charge of possession of child pornography carries a maximum potential penalty of 20 years in prison and a $250,000 fine.
U.S. Attorney Fishman credited special agents of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HIS), under the direction of Acting Special Agent in Charge Kevin Kelly, and the Hudson County Prosecutor’s Office, under the direction of Prosecutor Esther Suarez, with the investigation leading to the charges.
The government is represented by Assistant U.S. Attorney Melissa M. Wangenheim of the General Crimes Unit in Newark.
The charge and allegations contained in the complaint are merely accusations, and the defendant is considered innocent unless and until proven guilty.
Defense counsel: Mario Blanch Esq., West New York, New Jersey
Essex County, New Jersey, Man Admits Role in Two Fraud SchemesRead the Press Release
TRENTON, N.J. – An Essex County, New Jersey, man today admitted his involvement in two fraud schemes – one involving a $148,000 scheme to defraud a payroll company and another involving the transfer of fraudulent New Jersey birth certificates, U.S. Attorney Paul J. Fishman announced.
George Wright, 48, of Newark, pleaded guilty before U.S. District Judge Michael Shipp in Trenton federal court to an information charging him with mail fraud, aggravated identity theft and transfer of fraudulent documents.
According to documents filed in this case and statements made in court:
From January 2010 through March 2011, Wright purchased stolen identity information, which he used to create fictitious employees of three different companies. Wright contacted a payroll company, falsely purported to represent these three companies, and created several fraudulent business payroll accounts. Payroll checks totaling over $148,000 were then issued in the names of these fictitious employees and sent to addresses he controlled.
On at least three occasions in August 2013 and September 2013, Wright acquired fraudulent New Jersey birth certificates and sold them for cash.
The mail fraud charge carries a maximum sentence of up to 20 years in prison and a fine of up to $250,000 or twice the gross gain or loss from the offense. The aggravated identity theft charge carries a minimum sentence of two years in prison which must run consecutive to the sentence imposed on the mail fraud and a fine of up to $250,000 or twice the gross gain or loss from the offense. The transfer of fraudulent documents charge carries a maximum sentence of up to 15 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 Nov. 5, 2015.
U.S. Attorney Fishman praised special agents of the U.S. Department of Homeland Security, Homeland Security Investigations (HSI), under the direction of Acting Special Agent in Charge Kevin Kelly, and special agents of the U.S. Secret Service, under the direction of Special Agent in Charge Carl Agnelli, with the investigation leading to the arrest and charges.
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 and Assistant U.S. Attorney J. Jamari Buxton of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: Stacy Biancamano Esq., Chatham, New Jersey
Middle School Music Teacher Charged with Accessing, Possessing Images of Child Sexual AbuseRead the Press Release
TRENTON, N.J. – A Somerset County, New Jersey, man was arrested this morning after FBI agents found sexually explicit images of children on his home computer, U.S. Attorney Paul J. Fishman announced.
Cliff Ramsay, 30, of Raritan, New Jersey, is charged by complaint with one count of accessing images of child sexual abuse and one count of possessing images of child sexual abuse. He appeared this afternoon before U.S. Magistrate Judge Douglas E. Arpert in Trenton federal court and was detained pending a bail hearing.
According to the criminal complaint filed today and statements made in court:
On Feb. 25, 2015, and Feb. 27, 2015, Ramsay, a middle school music teacher who also gave music lessons to minors at his home, accessed a website known to contain images, videos and other material containing child pornography. After a search warrant was executed at Ramsay’s home earlier today, law enforcement agents found numerous videos and images of child sexual abuse on his computer, including material depicting prepubescent minors engaged in sexually explicit conduct.
Each count charged in the complaint carries a maximum penalty of 20 years in prison and a $250,000 fine.
U.S. Attorney Fishman credited special agents of the FBI’s Child Exploitation Task Force, under the direction of Special Agent in Charge Richard M. Frankel in Newark, with the investigation leading to today’s arrest. Fishman also thanked the Somerset County Prosecutor’s Office, under the direction of Geoffrey D. Soriano; the Hunterdon County Prosecutor’s Office, under the direction of Anthony P. Kearns III; the Raritan Police Department, under the direction of Chief Kenneth McCormick; and the Readington Police Department, under the direction of Chief Sebastian Donaruma, for their assistance with this investigation.
The government is represented by Assistant U.S. Attorney J. Brendan Day of the U.S. Attorney’s Office Criminal Division in Trenton.
The charges and allegations contained in the complaint are merely accusations, and the defendant is considered innocent unless and until proven guilty.
Defense counsel: Joshua D. Altman Esq., Trenton, New Jersey
Jersey City, New Jersey, Pediatrician Sentenced to 21 Months in Prison for Billing Medicaid or Bogus TreatmentsRead the Press Release
TRENTON, N.J. – A licensed pediatrician practicing in Jersey City, New Jersey, was sentenced today to 21 months in prison for fraudulently billing Medicaid for more than 1,000 wound repair procedures that were never performed, U.S. Attorney Paul J. Fishman announced.
Badawy M. Badawy, 52, of Bayonne, New Jersey, previously pleaded guilty before U.S. District Judge Anne E. Thompson to Count One of an indictment charging him with health care fraud. Judge Thompson imposed the sentence today in Trenton federal court.
According to documents filed in the case and statements made in court:
Badawy owned and operated Sinai Medical Center of Jersey City LLC, a medical practice focusing on pediatric and family medicine. From January 2004 through December 2008, Badawy submitted thousands of claims to Medicaid for wound repair procedures related to the repair of superficial wounds over 30 centimeters in length on a patient’s face, ears, eyelids, nose or lips as well as the repair of previously closed wounds. Badawy claimed to have performed these treatments on his patients, most of whom were children.
During his plea hearing Badawy admitted that he regularly submitted claims for procedures that were never performed. As a result of his false claims, Badawy received $196,911 in Medicaid payments.
In addition to the prison term, Judge Thompson sentenced Badawy to serve three years of supervised release and fined him $5,000. Badawy must also pay restitution of $196,911.
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 U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert, with the investigation leading to today’s sentencing.
The government is represented by Danielle Alfonzo Walsman and Michael H. Robertson of the U.S. Attorney’s Health Care and Government Fraud Unit.
U.S. Attorney Paul J. Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $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: Peter R. Willis Esq., Jersey City
Associate of Lucchese Organized Crime Family Sentenced to 30 Years in Prison for Racketeering and Other CrimesRead the Press Release
Two More Conspirators to be Sentenced This Week
CAMDEN, N.J. – An associate of the Lucchese organized crime family of La Cosa Nostra (LCN) was sentenced today to 30 years in prison for participating in a racketeering conspiracy and related offenses, U.S. Attorney Paul J. Fishman announced.
Salvatore Pelullo, 48, of Philadelphia, an associate of the Philadelphia and Lucchese LCN families, was sentenced today by U.S. District Judge Robert B. Kugler to 360 months in prison. He was convicted in July 2014, along with Nicodemo S. Scarfo, 50, of Galloway, New Jersey, a member of the Lucchese organized crime family; William Maxwell, 56, of Houston, a Texas attorney; and John Maxwell, 63, of Dallas, of racketeering conspiracy and related offenses, including securities fraud, wire fraud, mail fraud, bank fraud, extortion, money laundering and obstruction of justice, after a six-month trial before Judge Kugler in Camden federal court.
Scarfo was sentenced on July 28, 2015, to 30 years in prison. The Maxwells are scheduled to be sentenced July 30, 2015.
According to documents filed in this case and the evidence presented at trial:
In April 2007, Pelullo, Scarfo and others conspired to take control of FirstPlus Financial Group Inc. (FPFG), a publicly held company in Texas, by using threats of economic harm to intimidate and remove FPFG’s management and board of directors, and to replace them with people beholden to Pelullo and Scarfo, including the Maxwell brothers. Once the takeover had occurred, FPFG’s new board of directors named William Maxwell as “special counsel” to FPFG and John Maxwell as the company’s CEO, positions that they used to funnel $12 million to themselves, Pelullo and Scarfo through fraudulent legal services and consulting agreements. Pelullo and Scarfo used their illicit gains to fund extravagant purchases.
The indictment also named as conspirators Scarfo’s father, Nicodemo D. Scarfo, or Scarfo Sr., the imprisoned former boss of the Philadelphia LCN family; and Vittorio Amuso, the imprisoned boss of the Lucchese LCN family. Five other defendants – Cory Leshner, Howard Drossner, John Parisi, Todd Stark and Nicodemo S. Scarfo’s wife, Lisa Murray-Scarfo – previously pleaded guilty to various charges related to their roles in the conspiracy.
In addition to the prison term, Judge Kugler sentenced Pelullo to five years of supervised release and ordered him to pay restitution of $14 million.
U.S. Attorney Fishman credited special agents of the FBI in Newark, under the direction of Special Agent in Charge Richard M. Frankel, with the investigation leading to today’s sentencing. They also thanked the U.S. Department of Labor-Office of Inspector General’s Office of Labor Racketeering and Fraud Investigations New York Region, the FBI’s Philadelphia Division and the Bureau of Alcohol, Tobacco, Firearms and Explosives for their roles in the case.
The government is represented by Assistant U.S. Attorneys Steven D’Aguanno and Howard Wiener of the District of New Jersey and Trial Attorney Adam L. Small of the Criminal Division’s Organized Crime and Gang Section.
Defense counsel: J. Michael Farrell Esq., Wenonah, New Jersey
Owner of Illegal Online Gambling Website Sentenced to 18 Months in PrisonRead the Press Release
NEWARK, N.J. – A website owner involved in an illegal sports betting conspiracy with the Genovese Crime Family of La Cosa Nostra was sentenced today to 18 months in prison, U.S. Attorney Paul J. Fishman announced.
Joseph Graziano, 78, of Springfield, New Jersey, previously pleaded guilty before 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:
Graziano was the principal owner of Beteagle.com, a website located in Costa Rica and used to facilitate illegal online sports betting. Dominick J. Barone, 45, of Springfield, New Jersey, worked with Graziano in carrying out the daily activities of the website and both men conspired with the Genovese Crime Family of La Cosa Nostra in the operation of Beteagle.
Joseph Lascala, 83, of Monroe, New Jersey, was the alleged “capo” and a made member of the Genovese family operating in northern New Jersey. He directed the criminal activities of a smaller group of associates, referred to as a crew, whose activities included illegal gambling and the collection of unlawful debt.
As part of the conspiracy, associates of the crew were given access to Beteagle and were considered “agents.” 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. Associates of the crew paid out winnings or collected losses in person. If a bettor failed to pay his gambling losses, the crew used their La Cosa Nostra status and threats of violence to collect on these debts.
In addition to the prison term, Judge Cecchi ordered Graziano to serve three years of supervised release and pay a $16,000 fine. As part of his plea agreement, Graziano has forfeited $1 million to the United States.
Barone previously pleaded guilty to his role in the scheme and was sentenced to 18 months in prison on June 16, 2015. Charges against Lascala are still pending. The charges and allegations against him are merely accusations and he is presumed innocent unless and until proven guilty.
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; and the Monmouth County Prosecutor’s Office, under the direction of Acting Prosecutor Christopher Gramiccioni, 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: Lawrence S. Lustberg Esq., Newark
Member of Lucchese Organized Crime Family Sentenced to 30 Years in Prison for Racketeering and Other CrimesRead the Press Release
Three Conspirators to be Sentenced This Week
CAMDEN, N.J. – A member of the Lucchese organized crime family of La Cosa Nostra (LCN) was sentenced today to 30 years in prison for participating in a racketeering conspiracy and related offenses. Three other members of the conspiracy are scheduled to be sentenced later this week.
U.S. Attorney Paul J. Fishman of the District New Jersey and Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and made the announcement.
Nicodemo S. Scarfo, 50, of Galloway, New Jersey was sentenced today by U.S. District Judge Robert B. Kugler to 360 months in prison. Scarfo was convicted in July 2014, along with Salvatore Pelullo, 48, of Philadelphia, an associate of the Philadelphia and Lucchese LCN families; William Maxwell, 56, of Houston, a Texas attorney; and John Maxwell, 63, of Dallas, of racketeering conspiracy and related offenses, including securities fraud, wire fraud, mail fraud, bank fraud, extortion, money laundering and obstruction of justice, after a six-month trial before Judge Kugler in Camden federal court.
“Scarfo and his crew gave new meaning to the term ‘corporate takeover,’ pushing out the legitimate leadersip of a publicly traded company and then looting it,” U.S. Attorney Fishman said. “They used false SEC filings, phony consulting agreements and more traditional mob methods to steal $12 million from the company’s shareholders. That’s a risk that investors should never have to take.”
“Nicodemo Scarfo and his associates tried to take La Cosa Nostra corporate, using traditional, strong-arm mob tactics to take over a publicly traded company and loot it like a personal piggy bank,” Assistant Attorney General Caldwell said. “The Justice Department will fight organized crime wherever it may surface – from back alleys to public board rooms – to ensure that crime does not pay.”
According to documents filed in this case and the evidence presented at trial:
Since 1989, Scarfo has been a member of the Lucchese family. As a member, he was required to earn money and participate in the affairs of the Lucchese family.
In April 2007, Scarfo, Pelullo and others conspired to take control of FirstPlus Financial Group Inc. (FPFG), a publicly held company in Texas, by using threats of economic harm to intimidate and remove FPFG’s management and board of directors, and to replace them with people beholden to Scarfo and Pelullo, including the Maxwell brothers. Once the takeover had occurred, FPFG’s new board of directors named William Maxwell as “special counsel” to FPFG and John Maxwell as the company’s CEO, positions that they used to funnel $12 million to themselves, Scarfo and Pelullo through fraudulent legal services and consulting agreements. Scarfo and Pelullo used their illicit gains to fund extravagant purchases, including an $850,000 yacht, a luxury home, a Bentley automobile and thousands of dollars in jewelry.
The indictment also named as conspirators Scarfo’s father, Nicodemo D. Scarfo, or Scarfo Sr., the imprisoned former boss of the Philadelphia LCN family; and Vittorio Amuso, the imprisoned boss of the Lucchese LCN family. Five other defendants – Cory Leshner, Howard Drossner, John Parisi, Todd Stark and Scarfo’s wife, Lisa Murray-Scarfo – previously pleaded guilty to various charges related to their roles in the conspiracy.
In addition to the prison term, Judge Kugler sentenced Scarfo to five years of supervised release and ordered him to forfeit his interest in certain properties and to pay restitution of $14 million. Pelullo, William Maxwell and John Maxwell are scheduled to be sentenced later this week.
U.S. Attorney Fishman and Assistant Attorney General Caldwell credited special agents of the FBI in Newark, under the direction of Special Agent in Charge Richard M. Frankel, with the investigation leading to today’s sentencing. They also thanked the U.S. Department of Labor-Office of Inspector General’s Office of Labor Racketeering and Fraud Investigations New York Region, the FBI’s Philadelphia Division and the Bureau of Alcohol, Tobacco, Firearms and Explosives for their roles in the case.
The government is represented by Assistant U.S. Attorneys Steven D’Aguanno and Howard Wiener of the District of New Jersey and Trial Attorney Adam L. Small of the Criminal Division’s Organized Crime and Gang Section.
Defense counsel: Michael E. Riley Esq., Mount Holly, New Jersey
New York Man Sentenced to 11 Years in Prison for Armed Robbery of Paramus Electronics StoreRead the Press Release
TRENTON, N.J. – A Brooklyn, New York, man was sentenced today to 132 months in prison for participating in the armed robbery of an electronics store in Paramus, New Jersey, U.S. Attorney Paul J. Fishman announced.
Unique Randolph, 28, previously entered a plea of guilty before U.S. District Judge Joel A. Pisano on May 5, 2014, and his guilty plea was accepted today by U.S. District Judge Anne E. Thompson. Randolph pleaded guilty to Count Six and Count Seven of a superseding indictment charging him with committing a Hobbs Act robbery and using a firearm in furtherance of that robbery. Judge Thompson imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
On Jan. 16, 2013, Randolph and another man entered a T-Mobile store in Paramus brandishing a firearm, while Carl Williams, 31, also of Brooklyn, waited outside as a lookout and get-away driver. While the other man brandished a firearm, Randolph escorted three store employees and a customer into the backroom. Randolph forced them to lie on the floor, while he used zip-ties to bind their arms and legs. While the two men were looting cell phones, a UPS employee walked into the backroom and then tried to leave to store. The robbers stopped him at gunpoint and brought him into the backroom. While the other conspirator aimed his firearm at the UPS employee, Randolph forced him to lie on the floor and bound his arms and legs. The two men then fled with the stolen cell phones.
In addition to the prison term, Judge Thompson sentenced Randolph to serve three years of supervised release. Williams pleaded guilty to his role in the robbery and is currently scheduled for sentencing on Oct. 5, 2015.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel, with the investigation leading to today’s sentencing. He also thanked the Linden, Paramus, and Woodbridge police departments, as well as the New York City and Nassau County police departments and the Kings County District Attorney’s Office in New York for their work in this case.
The government is represented by Assistant U.S. Attorney Osmar J. Benvenuto of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: Damien Conforti Esq., Newark, New Jersey
Former Partner of Freehold, New Jersey, Office Equipment Leasing Company Sentenced to 30 Months in Prison for Stealing More Than $600,000 from His ClientsRead the Press Release
TRENTON, N.J. – A Yardley, Pennsylvania, man was sentenced today to 30 months in prison for using his position at a Freehold, New Jersey, office equipment leasing company to defraud clients out of more than $600,000, U.S. Attorney Paul J. Fishman announced.
Jason Lee Lum, 36, previously pleaded guilty before U.S. District Judge Anne E. Thompson to an information charging him with wire fraud. Judge Thompson imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:
Lee Lum was a partner at Company 1, which provided office equipment leasing services. Due to the high cost of leasing office equipment, Company 1 would obtain loans for its clients through a financing company. After a client agreed to lease office equipment, a Company 1 employee would submit the lease agreement paperwork to the financing company in order to obtain a loan for the client. If the financing company approved the loan, it would send the loan proceeds directly to Company 1’s bank account. The client would then receive the leased office equipment and would directly repay the loan to the financing company.
As a partner at Company 1, Lee Lum was responsible for Company 1’s finances and for submitting client loan documentation. From October 2011 through May 2012, Lee Lum forged signatures of existing company clients on loan documents and then submitted the documents to the financing company. The clients had neither approved nor consented to the loan documents being submitted, nor did they obtain office equipment in connection with the fraudulent loan applications. When the financing company approved the fraudulent loan applications, Lee Lum directed the proceeds to be sent to Company 1’s bank account, which he controlled. Lee Lum used the fraudulently obtained loan proceeds to pay personal expenses, company payroll (including his own salary) and to increase the company’s revenue for accounting purposes. Lee Lum sought to conceal his fraud by making payments on the fraudulently obtained loans. When Lee Lum began to fall behind on those payments, the financing company that issued the loans sought payment directly from the Company 1’s clients, whose names were on the fraudulent loans.
In addition to the prison term, Judge Thompson ordered Lee Lum to serve three years of supervised release and pay restitution of $692,797.15.
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 Fabiana Pierre-Louis of the U.S. Attorney’s Office Criminal Division in Trenton.
Defense counsel: Frederick W. Klepp Esq., Cherry Hill, New Jersey
Essex County, New Jersey, Man Sentenced to Two Years in Prison for His Role in $5 Million Mortgage Fraud SchemeRead the Press Release
NEWARK N.J. – A Nutley, New Jersey, man was sentenced today to 24 months in prison for his role in a massive mortgage fraud scheme involving multiple properties in Elizabeth, New Jersey, U.S. Attorney Paul J. Fishman announced.
Kenneth Sweetman, 34, previously pleaded guilty before U.S. District Judge Susan D. Wigenton to an information charging him with one count of conspiring to commit wire fraud affecting a financial institution. Judge Wigenton imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
From March 2011 through July 2012, Sweetman, Carmine Fusco, 47, of East Hanover, New Jersey, and others conspired to obtain mortgage loans through fraudulent means. For their roles in the scheme, Sweetman and Fusco formed shell limited liability companies with names similar to licensed title companies. They then opened bank accounts in the shell companies’ names to conceal their identity and control the receipt and distribution of fraudulently obtained mortgage loan proceeds. Sweetman and Fusco also conducted real estate closings even though they were neither licensed attorneys nor title agents. In addition, Sweetman, Fusco and other conspirators submitted false and fraudulent loan applications, supporting documents and closing documents to mortgage lenders. Among other things, these documents included and reflected fraudulent gift loans, false appraisals and documents that misrepresented the owner of properties and the intended disposition of loan proceeds.
Using these methods, Sweetman, Fusco, and others conducted 16 fraudulent real estate transactions, including 11 Elizabeth properties, and obtained more than $5 million in illegitimate proceeds.
In addition to the prison terms, Judge Wigenton ordered Sweetman to serve three years of supervised release and pay $2,233,131.55 in restitution.
Fusco previously pleaded guilty before Judge Wigenton to a separate information charging him with conspiring to commit wire fraud affecting a financial institution. He was sentenced on July 13, 2015 to 27 months in prison and ordered to pay $2,233,131.55 in restitution.
U .S. Attorney Fishman credited law enforcement agents of the FBI Newark Mortgage Fraud Task Force, under the direction of Special Agent in Charge Richard M. Frankel; postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates; special agents of the U.S. Department of Housing and Urban Development, Office of Inspector General, under the direction of Special Agent in Charge Christina Scaringi; special agents of the Federal Housing Finance Agency, Office of Inspector General, under the direction of Special Agent in Charge Steven Perez; special agents of the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), under the direction of Special Inspector General Christy Romero; special agents of IRS–Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; and the Hudson County Prosecutor’s Office, under the direction of Prosecutor Esther Suarez, for their roles in the investigation leading to today’s plea.
The government is represented by Assistant U.S. Attorneys Lakshmi Srinivasan Herman and Andrew Kogan of the U.S. Attorney’s Office Economic Crimes Unit in Newark, as well as Barbara Ward, Acting Chief of the office’s Asset Forfeiture and Money Laundering Unit.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov
Defense counsel:
Sweetman: Thomas R. Ashley Esq., Newark, New Jersey
Fusco: Vincent C. Scoca Esq., Union City, New Jersey
One Distributor Admits Role in Conspiracy to Sell Heroin in New Jersey, Another Sentenced to 32 Months in PrisonRead the Press Release
TRENTON, N.J. – One individual pleaded guilty and another was sentenced today 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.
Jason O’Neal, a/k/a “Born,” 42, of Farmingdale, 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. Dawn Rosser, 35, of Lakewood, New Jersey, also appeared before Judge Sheridan today and was sentenced to 32 months in prison. Rosser pleaded guilty on April 21, 2015 to an information charging her 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. Of those 21 individuals, 17 have pleaded guilty.
According to documents filed in this case and statements made in court:
Between September 2013 and March 2014, O’Neal conspired with Rufus Young and others to distribute heroin in Ocean and Monmouth counties as part of the Britt-Young DTO. O’Neal admitted that he served as a supervisor and distributed between 100 and 400 grams of heroin in furtherance of the conspiracy. Rosser admitted that between February 2013 and March 2014, she also participated in the conspiracy and distributed between 100 and 400 grams of heroin.
The distribution conspiracy charge to which O’Neal pleaded guilty carries a maximum potential penalty of 20 years in prison and $1 million fine. Sentencing is scheduled for Oct. 20, 2015.
In addition to the prison term, Judge Sheridan sentenced Rosser to serve three years of supervised release.
U.S. Attorney Fishman credited special agents of the FBI, Red Bank Resident Office, under the direction of Special Agent in Charge Richard M. Frankel, with the investigation.
The government is represented by Assistant U.S. Attorney Nicholas Grippo of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel:
O’Neal: Aidan P. O’Connor Esq., Hackensack, New Jersey
Rosser: Joseph Accardi Esq., Elizabeth, New Jersey
Justice Department Reaches Settlements with Atlantic City, New Jersey, Hotels on Access for People with Mobility ImpairmentsRead the Press Release
NEWARK, N.J. – The U.S. Attorney’s Office for the District of New Jersey and U.S. Department of Justice today announced the results of a four-and-a-half year review of several hotels and casinos in Atlantic City, New Jersey, to determine whether they are being operated in compliance with the Americans with Disabilities Act of 1990 (ADA).
The announcement comes as the Department marks the 25th anniversary of the ADA. The Justice Department, including the nation’s U.S. Attorneys and the Civil Rights Division, play a critical role in enforcing the ADA, ensuring equal opportunity and full participation for persons with disabilities.
Title III of the ADA prohibits discrimination on the basis of disability by private entities that own or operate places of public accommodation. These prohibitions require, among other things, that a public accommodation ensure that its facilities are readily accessible so that people with disabilities have access to its goods and services.
Settlement agreements were reached with five hotel/casinos that were not in compliance with the ADA: Resorts Casino Hotel, Tropicana Casino and Resort, Sheraton Atlantic City Convention Center Hotel, The Rainforest Café at the former Trump Plaza, and Trump Taj Mahal. The agreements require the hotels and casinos to remedy any violations, enabling people with mobility impairments to fully access these facilities. These include ensuring that they may reserve an accessible guest room through the Internet, that parking is accessible (including by providing van-accessible spaces) and that guest rooms and services, such as buffets, restaurants and bars and public restrooms, are ADA compliant. The agreements require each hotel and casino to implement and/or amend its ADA disability rights policies and to provide training to its staff regarding the ADA’s provisions.
Any member of the public who wishes to file a complaint alleging that a hotel or any other place of public accommodation within the District of New Jersey is not accessible to persons with disabilities may use the Civil Rights Complaint Form available on the U.S. Attorney’s Office, District of New Jersey website at www.justice.gov/usao/nj. Those interested in finding out more about the ADA in general may call the Justice Department’s toll-free ADA information line at 800-514-0301 (TDD 800-514-0383) or visit www.ada.gov.
Former Representative of Insurance and Investment Company Admits Stealing More Than $650,000 from the Company’s ClientsRead the Press Release
NEWARK, N.J. – A former registered representative of a broker-dealer offering investment products and services, including variable life insurance and annuities, today admitted using his position to steal more than $650,000 from the company’s clients, U.S. Attorney Paul J. Fishman announced.
Kwen Y. Chun, 58, of Midland Park, New Jersey, pleaded guilty before U.S. District Judge Susan D. Wigenton in Newark federal court to an information charging him with one count of mail fraud.
According to documents filed in this case and statements made in court:
From September 1998 through June 2014, Chun was employed by the company as a registered agent, with authority to assist clients with withdrawing funds from annuities, applying for deferred annuities, and processing loan requests. Chun diverted funds that belonged to at least eight clients to bank accounts under his control and converted those funds to his own use.
Chun opened a bank account in the name of one client, using the client’s identification without the client’s knowledge or permission. Based upon false representations to the company that the client was requesting withdrawals and loans, Chun caused the company to wire monies from the client’s insurance policies and annuity accounts into the phony account. Chun also admitted that he caused the company to mail numerous checks to his Midland Park residence based upon false representations to the company that at least three other clients had requested to take loans on their insurance policies, which he then deposited into accounts under his control.
Chun admitted to causing other clients to obtain loans from company insurance policies, or to provide him with checks and cash, which Chun falsely advised he would use to open investment accounts on behalf of those clients. Instead, Chun deposited those loan proceeds into bank accounts under his control. He admitted that he provided one of the company’s clients with fabricated statements that purported to show the interest and balance in the client’s fictitious investment account. Chun also provided two other clients with paperwork that purported to illustrate the benefits that they would receive for their alleged annuity investment.
The mail fraud charge to which Chun pleaded guilty carries a maximum potential penalty of 20 years in prison and a fine of $250,000. Sentencing is scheduled for Nov. 2, 2015.
U.S. Attorney Fishman praised inspectors of the U.S. Postal Inspection Service, under the direction of Postal Inspector in Charge Maria L. Kelokates; criminal investigators with the U.S. Attorney’s Office in Newark; the N.J. Bureau of Securities, Office of the N.J. Attorney General, under the direction of Acting Attorney General John J. Hoffman; and the Bergen County Prosecutor’s Office, under the direction of Prosecutor John L. Molinelli, for the investigation leading to today’s guilty plea.
The government is represented by Senior Litigation Counsel Leslie Faye Schwartz of the U.S. Attorney’s Office Economic Crimes Unit and Assistant U.S. Attorney Peter Gaeta of the U.S. Attorney’s Office Asset Forfeiture and Money Laundering Unit in Newark.
Defense counsel: Joshua P. Cohn Esq., Saddle Brook, New Jersey