District of New Jersey
Press releases recorded for this federal judicial district.
Doctor Sentenced to 21 Months in Prison for Taking Bribes as Part of Test-Referral Scheme with New Jersey Clinical LabRead the Press Release
NEWARK, N.J. – A Middlesex County doctor with practices in Jersey City, New Jersey, was sentenced today to 21 months in prison for accepting bribes in exchange for test referrals as part of a long-running and elaborate scheme operated by Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, New Jersey, its president and numerous associates, U.S. Attorney Paul J. Fishman announced.
Anthony DelPiano, 55, of Monmouth Junction, New Jersey, previously pleaded guilty before U.S. District Judge Stanley R. Chesler to an information charging him with one count of accepting bribes. Judge Chesler imposed the sentence today in Newark federal court.
Including DelPiano, 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. The investigation has to date recovered more than $11 million through forfeiture.
According to documents filed in this and related cases and statements made in court:
DelPiano admitted that from October 2005 through March 2013, he accepted bribes in return for referring patient blood specimens to BLS and was paid approximately $2,300 per month. In return for a total of $189,175 in bribes, DelPiano’s referrals generated at least $1,752,603.24 in lab business for BLS.
In addition to the prison term, Judge Chesler sentenced DelPiano to one year of supervised release and fined him $10,000. DelPiano must also forfeit $207,500 as part of his plea agreement.
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; IRS–Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, and the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, with the ongoing investigation leading to today’s sentencing.
The government is represented by Senior Litigation Counsel Andrew Leven; Assistant U.S. Attorney Joseph N. Minish; Jacob T. Elberg, Chief of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark; and Assistant U.S. Attorney Barbara Ward, 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: Wick Sollers Esq., Washington, D.C.
Woman from Dominican Republic Sentenced to Three Years in Prison for Using Phony Passport to Re-Enter United StatesRead the Press Release
NEWARK, N.J. – A citizen of the Dominican Republic was sentenced today to 36 months in prison for several crimes related to her effort to re-enter the United States with a phony passport, U.S. Attorney Paul J. Fishman announced.
Angela De Jesus-Concepcion, 36, of Bergenfield, New Jersey, was previously convicted of all three counts of the indictment against her: false claim of U.S. citizenship, use of a U.S. passport obtained by false statement and aggravated identity theft. She was convicted following a one week trial before U.S. District Judge William Walls, who imposed the sentence today in Newark federal court.
According to documents filed in this case and the evidence at trial:
On March 17, 2012, De Jesus-Concepcion attempted to enter the United States at Newark Airport from the Dominican Republic. At CBP passenger processing she presented a United States passport bearing the name of an identity theft victim and De Jesus-Concepcion’s photograph. She also filled out a customs declaration using the victim’s name and the number of the passport that she was carrying. Customs and Border Protection conducted a secondary inspection and found a New Jersey driver’s license bearing the victim’s name and De Jesus-Concepcion’s photograph along with a Visa debit card in De Jesus-Concepcion’s own name. At trial, it was proven that the passport being carried by De Jesus-Concepcion had been obtained using an earlier version of the New Jersey driver’s license bearing the victim’s name and De Jesus-Concepcion’s photograph and a replacement naturalization certificate, also bearing the victim’s name and De Jesus-Concepcion’s photograph.
In addition to the prison term, Judge Walls sentenced De Jesus-Concepcion to serve three years of supervised release.
U.S. Attorney Fishman credited enforcement officers of U.S. Customs and Border Protection, under the leadership of Robert E. Perez, director of New York Field Operations, for the investigation leading to today’s sentencing. He also thanked the Department of State, Diplomatic Security Service, for its investigation.
The government is represented Assistant U.S. Attorneys Sara F. Merin of the General Crimes Unit and Shirley U. Emehelu of the Economic Crimes Unit in Newark.
Defense counsel: Kathleen Theurer Esq., Jersey City, New Jersey.
Ringleader of Large-Scale Stolen Identity Refund Fraud Scheme Sentenced to Seven Years in PrisonRead the Press Release
NEWARK, N.J. – The leader of an extensive scheme to obtain millions of dollars through fraudulently obtained tax refund checks issued by the U.S. Treasury was sentenced today to 84 months in prison, U.S. Attorney Paul J. Fishman announced.
Julio C. Concepcion, 50, of Passaic, New Jersey, previously pleaded guilty before U.S. District Judge Kevin McNulty to an information charging him with one count of conspiracy to steal government funds and one count of theft of government funds. Concepcion also pleaded guilty to a separate information charging him with one count of conspiracy to commit wire fraud in connection with his involvement in a separate mortgage fraud scheme. Judge McNulty imposed the sentence today in Newark federal court.
Concerning the Stolen Identity Refund Fraud (SIRF) scheme, according to documents filed in this case and statements made in court:
Members of the conspiracy, from at least October 2009 through May 2013, obtained the personal identifying information, including the names and Social Security numbers, of other individuals, including residents of Puerto Rico. Conspirators filed with the IRS false and fraudulent income tax returns using the stolen identity information, which generated income tax refund checks to which the members of the conspiracy were not entitled. The funds from these refund checks were then routinely transferred between bank accounts controlled by members of the conspiracy. The SIRF scheme resulted in more than $2.5 million in losses to the U.S. Treasury.
Julio C. Concepcion admitted to obtaining these fraudulent refund checks and recruiting others to open bank accounts and deposit the checks, sometimes providing them with false identification in order to do so. Concepcion’s two sons, Angel Concepcion-Vasquez, 31, and Julio Concepcion-Vasquez, 32, both of Passaic, and two other defendants, Jose Zapata, 67, of Passaic, and Romy Quezada, 24, of Paterson, New Jersey, each admitted to opening bank accounts into which these fraudulently obtained refund checks were deposited. Reyes Flores-Perez, 33, of Passaic, provided fraudulent identification documents to members of the scheme to further the conspiracy.
Angel Concepcion-Vasquez and Julio Concepcion-Vasquez were each sentenced to 16 months in prison on June 24, 2015. Zapata and Quezada were sentenced to three and two years of probation, respectively, on June 25, 2015. Flores-Perez was sentenced to 26 months in prison on June 29, 2015.
Concerning the mortgage fraud information, according to filed documents and statement made in court:
From January 2008 through March 2010, Concepcion conspired with others to commit wire fraud, specifically mortgage fraud. Once a conspirator purchased properties in New Jersey. Concepcion and others caused people to purchase the homes and receive mortgages for the homes either by using false identification documents or without the intent to live in the homes or pay off the mortgages.
Concepcion and others were able to cause parties to issue mortgages for the properties in reliance on fraudulent documents and material misrepresentations. The Federal Housing Administration (FHA) insured some of these mortgages.
As a result of these actions, the FHA and parties who approved the mortgages have lost more than $2.5 million.
In addition to the prison term, Judge McNulty ordered Concepcion to serve three years of supervised release and pay restitution of $5,643,695.46.
U.S. Attorney Fishman credited special agents of the IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; 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 U.S. Secret Service, under the direction of Special Agent in Charge Carl Agnelli; and the Passaic County Prosecutor’s Office, under the direction of Prosecutor Camelia M. Valdes, with the investigations leading to today’s sentencing.
The government is represented by Assistant U.S. Attorneys Andrew Kogan of the Economic Crimes Unit and Cari Fais and Melissa Wangenheim of the General Crimes Unit.
Defense counsel: Genesis Peduto Esq. North Bergen, North Jersey.
Staten Island, New York, Man Sentenced to 54 Months in Prison for Multimillion-Dollar Organized Retail Crime ConspiracyRead the Press Release
NEWARK, N.J. – A Staten Island, New York, man was sentenced today to 54 months in prison for his role in a large-scale, organized, retail crime scheme involving the theft of tens of millions of dollars’ worth of over-the-counter (OTC) pharmaceuticals and health and beauty aid (HBA) products, U.S. Attorney Paul J. Fishman announced.
Mohammed Abuteer, 27, previously pleaded guilty before U.S. District Judge Kevin McNulty to an information charging him with one count of conspiracy to transport stolen goods interstate. Judge McNulty imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
From 2008 through May 2013, Abuteer participated in an elaborate scheme to steal and resell HBA and OTC, such as Claritin, Zantac, Mucinex, Prilosec, and Crest White Strips. The items were stolen from retail stores including Target, Wal-Mart, and CVS, and military commissaries, some of which were located in New Jersey.
Conspirators known as “boosters” stole HBA and OTC products and sold them to low-level “fences” at a fraction of the retail value. For example, a package of 30-count Crest White Strips, which retailed for approximately $50, would be sold for $11. The fences resold the items to mid-level distributors – including Abuteer, and his brother, Salim Abutair, who was previously charged by complaint with participating in the conspiracy and is now a fugitive in Jordan. The distributors resold the items to higher-level distributors, who then sold the stolen goods to retailers or directly to consumers.
Abuteer maintained an inventory of his stolen product in a large storage unit in Staten Island, where he and others “cleaned” the items by removing security packaging and other labels that identified the retail stores from which the products were stolen. He used the storage unit to arrange for deliveries of merchandise to other conspirators. Abuteer and his brother also maintained several bank accounts from which they paid for the stolen merchandise and where they held their profits. Over the course of Abuteer’s involvement in the conspiracy, he and his brother purchased tens of millions of dollars of stolen HBA and OTC merchandise. Abuteer was arrested in May 2013 while attempting to travel to Jordan. At the time of his arrest, he was carrying $10,000 in cash, and federal agents seized approximately $300,000 worth of stolen items from his storage unit.
In addition to the prison term, Judge McNulty sentenced Abuteer to two years of supervised release and entered a money judgment of $1,301,500, representing the proceeds of the scheme. He also forfeited certain assets previously seized by the government, including approximately $66,000 and a property in Staten Island. Abuteer, an illegal alien, has been out on bail on home detention for the majority of time since his arrest.
U.S. Attorney Fishman credited special agents with the New York field office of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), under the direction of Special Agent in Charge Raymond Parmar Jr.; agents of the U.S. Department of Defense, Defense Criminal Investigative Service, under the direction of Special Agent in Charge Craig Rupert; postal inspectors of the U.S. Postal Inspection Service, under the direction of Postal Inspector in Charge Maria L. Kelokates; agents of the U.S. Department of Agriculture, Office of Inspector General, under the direction of Special Agent in Charge William G. Squires Jr.; and agents of the U.S. Air Force, Office of Special Investigations, under the direction of Detachment Commander Matthew Sarkissian, with the investigation leading to today’s sentence.
The government is represented by Assistant U.S. Attorney Joseph B. Shumofsky of the Economic Crimes Unit.
Today’s sentencing is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov
Defense counsel: Michael Chazen Esq., Freehold, New Jersey
Lancaster County, Pennsylvania, Man Pleads Guilty to Interstate Burglary SchemeRead the Press Release
TRENTON, N.J. – A Lancaster County, Pennsylvania, man today admitted his role in transporting goods stolen through a string of commercial burglaries throughout northern and southern New Jersey, U.S. Attorney Paul J. Fishman announced.
Eliezer Medina, 37, pleaded guilty before U.S. District Judge Mary L. Cooper in Trenton federal court to an information charging him with one count of conspiracy to transport stolen goods in interstate commerce.
According to documents filed in this case and statements made in court:
From November 2013 through August 2014, Medina conspired with his brother, Jose Medina, 38, to steal money by burglarizing stores in New Jersey, New York, Pennsylvania, and elsewhere, and then transport the stolen money across state lines. He admitted burglarizing at least three stores in Paramus, New Jersey, and Pennsauken, New Jersey, and to stealing approximately $625,000. The burglaries followed the same general pattern, including advance surveillance, disabling of the alarm systems and the use of pry-bars and vertical cuts to gain access to the stores’ safes.
The conspiracy charge to which Medina pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine. As part of his plea agreement, Medina must pay $625,000 in restitution. Sentencing is scheduled for Oct. 22, 2015.
U.S. Attorney Fishman credited special agents of the FBI in Newark, under the direction of Special Agent in Charge Richard M. Frankel, and special agents of the FBI in Philadelphia Branch, under the direction of Special Agent in Charge Edward J. Hanko, with the investigation leading to today’s guilty plea. He also thanked the Paramus, New Jersey; Wayne, New Jersey; and Pennsauken Township, New Jersey, police departments; the N.J. State Police; and the Lancaster City, Pennsylvania; East Lampert, Pennsylvania; Manor Township, Pennsylvania; Manheim Township, Pennsylvania; and East Hempfield, Pennsylvania, police departments for their work on the case.
The government is represented by Assistant U.S. Attorney Melissa Wangenheim of the General Crimes Unit in Newark.
Jose Medina remains charged by complaint with conspiracy to transport stolen goods in interstate commerce. The charges and allegations in the complaint are merely accusations, and the defendant remains innocent unless and until proven guilty.
Defense counsel: John Yauch Esq., Assistant Federal Public Defender, Newark
South Carolina Man Indicted for Illegally Storing Hazardous Waste at Camden, New Jersey, Chemical Company and Making False Statements to the EPARead the Press Release
NEWARK, N.J. – A federal grand jury returned a three-count indictment today against the former president and CEO of Concord Chemical Co. Inc. (Concord) for illegally storing hazardous waste and making false statements to the U.S. Environmental Protection Agency (EPA), U.S Attorney Paul J. Fishman announced.
Miguel Castillo, 61, of Hilton Head, South Carolina, was charged with one count of storing hazardous waste at Concord’s Camden, New Jersey, facility in violation of the Resource Conservation and Recovery Act (RCRA) and two counts of making false statements to the EPA.
According to the indictment:
RCRA was enacted in 1976 to address a growing nationwide problem with industrial and municipal waste. RCRA was designed to protect human health and the environment by prohibiting the treatment, storage or disposal of any hazardous waste without a permit. The Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) authorizes the EPA to remove hazardous waste from industrial sites and hold responsible parties liable for the costs.
Concord manufactured, repackaged and distributed a wide variety of chemical products, including cresylic acid, soaps, waxes, pipe lubricants and emulsions. Some of Concord’s products and the raw materials used to make them were hazardous. Castillo was Concord’s president or CEO from 2003 through August 2011. He also served as the president and director of another company, KW Inc., which repackaged and distributed commercial laundry products while leasing space from Concord’s Camden facility from May 2008 through the fall of 2009. Neither Concord nor KW had a permit to store hazardous waste at the Camden facility.
While Castillo was in charge of Concord, drums containing hazardous waste were stored in the Camden facility basement. In 2004 and 2005, Concord employees attempted to remove those drums but allegedly never finished due to claims by Castillo that Concord could not afford to remove additional drums.
By March 2010, Concord and KW had ceased operations at Concord’s Camden facility. In August 2010, the EPA conducted a site visit and discovered that the facility was devoid of employees, left in a deteriorated condition and filled with drums containing corrosive and ignitable hazardous waste. From October 2010 through March 2011, the EPA removed the hazardous substances from the facility.
On Sept. 1, 2011, the EPA requested information from Castillo in order to identify the parties responsible for EPA’s removal costs. When Castillo responded to the EPA’s requests, he failed to identify himself as Concord’s president and CEO or KW’s president and director.
The illegal storage of hazardous waste charge and each of the false statements charges carry a maximum penalty of five years in prison and a $250,000 fine, or twice the gain or loss caused by the offense.
U.S. Attorney Fishman credited special agents of the EPA, under the direction Special Agent in Charge Vernesa Jones-Allen, with the investigation leading to today’s charges.
The government is represented by Assistant U.S. Attorney Kathleen P. O'Leary of the U.S. Attorney's Office Health Care and Government Fraud Unit in Newark.
The charges and allegations against Castillo are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Louis Berger International Resolves Foreign Bribery ChargesRead the Press Release
Two Former Company Executives Plead Guilty to Participating In Bribery Scheme
NEWARK, N.J. – Louis Berger International Inc. (LBI), a New Jersey-based construction management company, admitted to violations of the Foreign Corrupt Practices Act (FCPA) and agreed to pay a $17.1 million criminal penalty to resolve charges that it bribed foreign officials in India, Indonesia, Vietnam and Kuwait to secure government construction management contracts. Two of the company’s former executives also pleaded guilty today to conspiracy and FCPA charges in connection with the scheme.
U.S. Attorney Paul J. Fishman of the District of New Jersey, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, and Special Agent in Charge Richard M. Frankel of the FBI’s Newark Division made the announcement.
LBI entered into a deferred prosecution agreement (DPA) today and admitted its criminal conduct, including its conspiracy to violate the anti-bribery provisions of the FCPA. LBI has agreed to pay a $17.1 million criminal penalty, to implement rigorous internal controls, to continue to cooperate fully with the department and to retain a compliance monitor for at least three years.
Richard Hirsch, 61, of Manila, Philippines, and James McClung, 59, of Dubai, United Arab Emirates, each pleaded guilty to one count of conspiracy to violate the FCPA and one substantive count of violating the FCPA.Hirsch previously served as the senior vice president responsible for the company’s operations in Indonesia, Thailand, the Philippines and Vietnam.McClung previously served as the senior vice president responsible for the company’s operations in India and, subsequent to Hirsch, in Vietnam.The sentencing hearings for Hirsch and McClung are scheduled for Nov. 5, 2015.
According to admissions in the DPA and statements in the charging documents:
From 1998 through 2010, the company and its employees, including Hirsch and McClung, orchestrated $3.9 million in bribe payments to foreign officials in various countries in order to secure government contracts.To conceal the payments, the conspirators made payments under the guise of “commitment fees,” “counterpart per diems,” and other payments to third-party vendors.In reality, the payments were intended to fund bribes to foreign officials who had awarded contracts to LBI or who supervised LBI’s work on contracts.
Among other factors, in entering into a DPA in this case, the government considered: (1) LBI’s self-reporting of the misconduct; (2) the company’s cooperation, including voluntarily making both U.S. and foreign employees available for interviews, and collecting, analyzing and organizing evidence and information for federal investigators; (3) the company’s extensive remediation, including terminating the officers and employees responsible for the corrupt payments; and (4) the company’s demonstrated commitment to improving its compliance program and internal controls.
This case was investigated by the FBI’s Newark Division and criminal investigators with the U.S. Attorney’s Office, District of New Jersey. The government is represented by Assistant U.S. Attorneys Thomas J. Eicher and Scott B. McBride of the District of New Jersey and Trial Attorney John W. Borchert of the Criminal Division’s Fraud Section.The Criminal Division’s Office of International Affairs also provided assistance.
Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa .
Pennsylvania Man Sentenced to Six Months in Prison for Defrauding Computer Equipment Companies for $2.5 MillionRead the Press Release
TRENTON, N.J. – A Gladwyne, Pennsylvania, man was sentenced today to six months in prison and six months of home confinement for using phony documents and “straw buyers” to fraudulently secure millions of dollars in discounted computer equipment from Hewlett-Packard Co. (HP) and Cisco Systems Inc. (Cisco), U.S. Attorney Paul J. Fishman announced.
Andrew Silverman, 52, previously pleaded guilty before U.S. District Judge Michael A. Shipp to an information charging him with one count of wire fraud. Judge Shipp imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:
From January 2008 through May 2012, Silverman exploited HP and Cisco discount programs that provided reduced prices on products used locally within a certain country and were not resold. As the president and owner of DataQ Internet Equipment Corp., which sold computer hardware and software, Silverman was not eligible to receive these discounts.
Silverman admitted that he recruited business owners to pose as buyers interested in securing a large volume of computing products. He directed these straw buyers to falsely tell HP and Cisco that the procured products would be used internally by those individuals’ businesses and not resold. Once negotiations were complete and the straw buyers fraudulently secured the discounts, Silverman sent funds via international wire transfers to the straw buyers to cover the purchase cost. He then had the discounted equipment shipped to destinations other than the straw buyer’s businesses, including to New Jersey and other locations in the United States.
Silverman also admitted he sent multiple emails to HP representatives posing as an individual named “P.B,” regarding the purchase of deeply discounted HP equipment. Silverman created a company called Integrated Data Centers to conduct negotiations with an HP representative so he could fraudulently obtain discounted HP products.
The estimated combined losses to HP and Cisco are $2.5 million.
In addition to the prison term, Judge Shipp ordered Silverman to serve three years of supervised release, pay a $75,000 fine and forfeit $2.5 million in restitution.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark; and inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Lakshmi Srinivasan Herman of the U.S. Attorney’s Economic Crimes Unit in Newark.
Defense counsel: William Winning and Megan Scheib Esqs., Conshohocken, Pa., and Gerald Krovatin Esq., Newark
Essex County, New Jersey, Man Sentenced to 14 Years in Prison for Convenience Store Robbery SpreeRead the Press Release
NEWARK, N.J. – A Newark man was sentenced today to 168 months in prison for committing six armed robberies of Newark convenience stores – including the same grocery store twice within a week, U.S. Attorney Paul J. Fishman announced.
Larry McRae, 28, previously pleaded guilty before U.S. District Judge Kevin McNulty to an information charging him with six counts of Hobbs Act robbery and one count of discharging a firearm in furtherance of a crime of violence. Judge McNulty imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
From June 30, 2012, through Sept. 15, 2012, McRae entered convenience stores in Newark on six different occasions and robbed the store clerks at gunpoint. During the spree, he robbed the same P & T Grocery on Sept. 5, 2012 that he robbed on Sept. 1, 2012. Also, during the Sept. 15, 2012, robbery, he discharged one round from a .357 Magnum handgun as he exited the store. He was apprehended by the Newark Police Department later that morning.
In addition to the prison term, Judge McNulty sentenced McRae to serve three years of supervised release.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel, with the investigation leading to today’s sentencing. He also thanked the Newark Police Department, under the direction of Police Director Eugene Venable and Chief Anthony Campos, for their work in this case.
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: Donna R. Newman Esq., New York
Hudson County, New Jersey, Man Sentenced to 10 Years in Prison for Illegally Selling 33 FirearmsRead the Press Release
NEWARK, N.J. – A Jersey City, New Jersey, man was sentenced today to 120 months in prison for selling 33 firearms to a confidential informant, U.S. Attorney Paul J. Fishman announced.
Bernardo Guzman, 26, previously pleaded guilty before U.S. District Judge Madeline Cox Arleo to an information charging him with one count of possessing firearms while being a previously convicted felon. Judge Arleo imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Guzman admitted that on Nov. 14, 2013, he met with an individual in the parking lot of a grocery store in Fort Lee, New Jersey, to illegally sell three handguns. Guzman also admitted that from June 2013 through February 2014, he sold approximately 33 firearms and hundreds of rounds of ammunition to a confidential informant. The firearms sold by Guzman consisted of semiautomatic weapons, sawed-off shotguns, assault-style rifles and firearms with high-capacity magazines. Some of the firearms had obliterated serial numbers. All of the weapons and ammunition are now in the custody of law enforcement.
In addition to the prison term, Judge Arleo sentenced Guzman to serve three years of supervised release.
The government is represented by Assistant U.S. Attorney Elizabeth M. Harris of the Organized Crime/Gangs Unit of the Criminal Division in Newark.
U.S. Attorney Fishman credited special agents of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, under the direction of Special Agent in Charge George P. Belsky; special agents of Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Newark Division, under the direction of Acting Special Agent in Charge Kevin Kelly; and the Jersey City Police Department with the investigation leading to today’s plea.
Defense counsel: Julian Wilsey Esq., Livingston, New Jersey
Canadian Man Admits Role in Microcap Stock Manipulation SchemeRead the Press Release
Newark, N.J. – A Canadian stock promoter today admitted his role in a scheme to artificially inflate the stock price of a publicly traded company through manipulative trading and other fraudulent means, U.S. Attorney Paul J. Fishman announced.
Mitchell G. Adam, 47, of Vancouver, Canada, pleaded guilty before U.S. District Judge Jose Linares to an information charging him with conspiracy to commit securities and mail fraud. Adam was initially charged by criminal complaint and arrested on May 20, 2015 at the George Bush Intercontinental Airport in Houston.
According to documents filed in this case and statements made in court:
Between July 2013 and November 2013, Adam conspired with Adam S. Gottbetter, 26, of New York, Kenneth David Stevenson, 55, of Vancouver, and others to manipulate the stock of HBP Energy Corp. (HBPE), a developmental stage company based in Houston. Adam and his conspirators obtained and concealed control of a significant portion of free-trading shares of HBPE stock and agreed to fraudulently inflate the price and trading volume of the stocks through a variety of means, including disseminating false or misleading promotional materials to the investing public and engaging in manipulative trading of the stocks to create the appearance of market interest. Afterwards, they planned to sell the stocks at the fraudulently inflated prices or use the fraudulently inflated value of the companies to solicit private investments, thereby profiting at the expense of the investing public.
Adam and the other conspirators recruited a stock promoter and trader who owned a broker-dealer in New York and who claimed to have experience in various manipulative and fraudulent trading strategies. Unbeknownst to Adam and his co-conspirators, however, this individual was cooperating with law enforcement (the “CW”).
During the scheme, the CW informed Adam, Gottbetter and Stevenson that he had developed an algorithmic trading system, or black box, for the purpose of manipulating the price of stocks. The CW explained that he controlled approximately 32 online brokerage accounts that were opened in the names of foreign nominees and that a computer program that he created could trade between those accounts to create the appearance of massive volume in any stock. Adam, Gottbetter and Stevenson directed the CW to use the black box in connection with the HBPE scheme. In addition to using the CW to manipulate HBPE’s stock, Adam, Gottbetter and Stevenson planned an elaborate promotional campaign that would take place after HBPE’s stock was manipulated to a certain level, including international “call rooms,” listing HBPE’s stock on foreign exchanges, a “road show” and other activities. Law enforcement intervened before the HBPE promotion could take place.
The conspiracy count to which Adam pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gain or loss from the offense. Sentencing is scheduled for Oct. 27, 2015.
Gottbetter and Stevenson both pleaded guilty for their roles in the scheme. Gottbetter was sentenced to 18 months in prison on May 26, 2015. Stevenson was sentenced to one year of probation on May 28, 2015.
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 plea. He also thanked the U.S. Securities and Exchange Commission’s New York Regional Office under the direction of Andrew Calamari.
The government is represented by Gurbir S. Grewal, Chief of the U.S. Attorney’s Office Economic Crimes Unit and Assistant U.S. Attorney Nicholas P. Grippo of the Economic Crimes Unit.
Defense Counsel: Frank A. Rubino, Esq. Coral Gables, Florida
Atlantic County, New Jersey, Man Sentenced to More Than Nine Years in Prison for Role in Heroin ConspiracyRead the Press Release
CAMDEN, N.J. – A Pleasantville, New Jersey, man was sentenced today to 110 months in prison for his involvement in a scheme to distribute heroin in around Atlantic County, New Jersey, U.S. Attorney Paul J. Fishman announced.
Nassaun Hines, a/k/a “Bubbles,” a/k/a “Nay,” 30, previously pleaded guilty before U.S. District Judge Joseph H. Rodriguez to a superseding information charging him with knowingly and intentionally conspiring to distribute 100 to 400 grams of heroin, and possession of a firearm by a previously convicted felon. Judge Rodriguez imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
From late 2009 and through May 2010, law enforcement officers identified a large-scale, criminal organization that distributed more than one kilogram of heroin throughout the southern New Jersey area. Jamal Reid, 30, of Mays Landing, New Jersey, was the organizer and leader of the ring.
Hines admitted that from January 2009 through May 2010, he sold quantities of heroin in Atlantic County and conspired with others in connection with his drug trafficking activity. Hines admitted that after Reid “fronted” him bulk amounts of heroin, Hines gave the drugs to other members of the conspiracy for distribution and collected payment on Reid’s behalf. In addition, Hines, who is a previously convicted felon, also admitted that he knowingly possessed a firearm on May 15, 2010.
In addition to the prison term, Judge Rodriguez sentenced Hines to serve five years of supervised release.
Reid previously pleaded guilty to Count 1 and Count 2 of a superseding indictment charging him with conspiracy to distribute one kilogram or more of heroin and possessing a firearm as a previously convicted felon. He was sentenced to 154 months in prison on May 28, 2015.
U.S. Attorney Fishman credited special agents of the FBI’s Atlantic City Resident Agency Safe Streets Task Force, under the direction of Special Agent in Charge Richard M. Frankel, which consisted of officers from Atlantic County Prosecutor's Office, Atlantic City Police Department, Northfield Police Department and Pleasantville Police Department; and special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge George P. Belsky, for the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Jason M. Richardson of the U.S. Attorney's Office Criminal Division in Camden.
Defense counsel: John F. Renner Esq., Marlton, New Jersey
New York Woman Charged in Real Estate Investment SchemeRead the Press Release
NEWARK, N.J. – A New York woman was charged today with running a real estate investment scheme that defrauded victims of hundreds of thousands of dollars, U.S. Attorney Paul J. Fishman announced.
Alisa Adler, 54, of New York, is charged by complaint with one count of wire fraud. Adler made her initial appearance this afternoon before U.S. Magistrate Judge Steven C. Mannion in Newark federal court. She was released on unsecured $100,000 bond.
According to the criminal complaint:
From January 2009 through December 2011, Adler took loans and investments from multiple victims and told them that their money would be used to purchase and develop real estate projects through her company, ASG Real Estate Services Group Inc. To induce potential victim investors to give her money, Adler provided them with promotional materials and other documents, and told them that their money would be repaid within a certain amount of time.
Instead, Adler allegedly perpetrated a Ponzi scheme in which she used new investor money to fund principal and interest payments to existing investors and to pay for her own personal expenses. For instance, in May 2010, after soliciting a victim to invest $500,000 to fund a real estate acquisition in or around of Kerkonkson, New York, Adler instead used most of the money to pay other investors and to pay her household bills, transportation costs, meals and entertainment.
The wire fraud count carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the amount of the loss caused by the offense.
U.S. Attorney Fishman credited special agents with the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, with the investigation leading to the charge.
The government is represented by Special Assistant U.S. Attorney Andrew R. Tyler of the U.S. Attorney’s Office Criminal Division in Newark.
The charge and allegations contained in the complaint are merely accusations, and the defendant is considered innocent unless and until proven guilty.
Defense counsel: Jacob Laufer Esq., New York
Mercer County, New Jersey, Woman Sentenced to 37 Months in Prison for Paying $671,000 in Bribes to Fraudulently Obtain Government Construction ContractsRead the Press Release
TRENTON, N.J. – A Hopewell, New Jersey, woman was sentenced today to 37 months in prison for bribing a former Department of Veterans Affairs (VA) supervisory engineer at the VA’s campus in East Orange, New Jersey, in order to fraudulently obtain $6 million in construction contracts, including those reserved for service-disabled, veteran owned small businesses, U.S. Attorney Paul J. Fishman announced.
Donna Doremus, 47, previously pleaded guilty before U.S. District Judge Mary L. Cooper to three counts of a four-count information charging her with one count of bribing a public official, one count of conspiracy to defraud the United States and two counts of making and subscribing to false federal tax returns. Judge Cooper imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:
The bribes were paid in connection with VA contracts awarded to companies Doremus owned. She also admitted to a conspiracy to defraud the United States by falsely representing that one of her companies was owned and controlled by a service-disabled veteran.
From 2007 to July 2012, Doremus paid approximately $671,000 in bribes to a former VA official, Jarod Machinga, 45, also of Hopewell, in connection with VA contracts awarded to three companies she owned and controlled. In his position as a supervisory engineer, Machinga had the authority and influence to direct certain VA construction contracts to particular companies. Machinga directed more than $6 million of VA construction projects to Doremus’ companies.
One of Doremus’s companies, Tyro General Construction (Tyro), entered into a service-disabled, veteran-owned small business contract with the VA. Congress has established a program whereby certain VA contracts are reserved for small businesses that are owned and controlled by service-disabled veterans. Doremus conspired with Machinga to falsely represent to the VA that Tyro was a service-disabled, veteran-owned small business so that Tyro could improperly obtain a lucrative construction contract from the VA. Machinga then used his official position and influence at the VA to award such a contract to Tyro. In total, Tyro was paid more than $3 million by the VA in connection with this service-disabled veteran-owned contract.
For tax years 2009 and 2010, Doremus falsely reported that certain bribe payments she made to Machinga, as well some personal expenditures, were her companies’ business expenses. As a result, she failed to pay $250,374 in federal income taxes that she owed the IRS.
In addition to the prison term, Judge Cooper ordered Doremus to serve one year of supervised release. Restitution will be determined at a hearing on Aug. 26, 2015. As part of her plea, she agreed to a forfeiture money judgment of $671,975.
On Sept.18, 2013, Machinga pleaded guilty before Judge Cooper in connection with his accepting kickbacks from Doremus and engaging in a scheme to defraud the VA. He was sentenced to 46 months in prison on June 30, 2015.
U.S. Attorney Fishman credited special agents of the Department of Veterans Affairs, Office of Inspector General, under the direction of Special Agent in Charge Jeffrey Hughes; the FBI, under the direction of Special Agent in Charge Richard M. Frankel; and IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorneys Vikas Khanna of the U.S. Attorney’s Office Special Prosecutions Division and Peter Gaeta of the U.S. Attorney’s Office Asset Forfeiture and Money Laundering Unit in Newark.
Defense counsel: Michael A. Caudo Esq., Philadelphia
ACPD Sergeant Charged with Structuring and Making False Statements to the FBIRead the Press Release
CAMDEN, N.J. – An Atlantic City Police Department Sergeant was arrested by special agents of the FBI this morning for allegedly structuring financial transactions to avoid the filing of currency transaction reports and making false statements to federal agents, U.S. Attorney Paul J. Fishman announced.
Kiyia M. Harris, 39, of Egg Harbor Township, is charged by complaint with one count of structuring and one count of making false statements to FBI agents during two interviews in December 2014. She is scheduled to make her initial appearance later today before U.S. Magistrate Judge Karen M. Williams in Camden federal court.
According to documents filed in this case and statements made in court:
Harris was engaged in a personal relationship with a convicted drug dealer, D.W., who was on federal probation. In June 2012, Harris purchased a 1969 Camaro for D.W. in her name and structured the payments for the car in such a manner as to avoid the filing of a Currency Transaction Report (CTR) by the car dealership, and also to obscure D.W.’s involvement in the purchase. Harris caused $17,825 in cash to be deposited in amounts less than $10,000. On June 8, 2012, Harris paid $9,999 to the dealership. By check dated June 11, 2012, which was drawn on one of her personal accounts at TD Bank, Harris paid the balance due on the Camaro.
Some of the monies Harris used to pay for the Camaro were deposited into that same TD bank account on two separate dates at two different TD Bank branches. On June 11, 2012, Harris deposited at the TD Bank branch in Atlantic City $9,926: $3,926 in cash and a $6,000 check dated June 10, 2012 bearing the notation “loan for auto” from J.E., a friend of D.W. who loaned D.W. some of the monies to purchase the Camaro. The following day Harris deposited an additional $3,900 in cash into the same TD Bank account at the bank branch in English Creek, New Jersey.
CTR forms require disclosure of the identity of the individual who conducted the transaction and the individual or organization for whom the transaction was completed. Many individuals involved in illegal activities are aware of these reporting requirements and take active steps to cause financial institutions, including car dealerships, not to file CTRs in order to avoid detection of the movement of large amounts of U.S. currency or currency obtained from illegal activities, including drug trafficking. These steps are referred to as “structuring” and involve making multiple cash payments, deposits or withdrawals in amounts of $10,000 or less on the same day or consecutive days in order to avoid CTR filings.
Harris was interviewed by special agents from the FBI on two occasions in December 2014 about her relationship with D.W. and suspicious financial transactions. Harris made false statements to agents which were material to an ongoing federal drug trafficking and money laundering investigation. She falsely told FBI agents that she had never deposited cash into her bank accounts when, in actuality, from January 8, 2007 through November 26, 2014, Harris had deposited more than $120,000 in cash into her accounts. Harris repeatedly denied having engaged in financial transactions with D.W., when in actuality, Harris had conducted numerous transactions with D.W., including helping him with the purchase of the 1969 Camaro and also paying a $6,500 deposit on a 2012 Harley Davidson motorcycle for D.W. by a check drawn on one of Harris’ personal accounts at T.D. Bank.
Both charges carry a maximum potential penalty of five years in prison and a $250,000 fine on each count.
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 DEA’s Newark Division, under the direction of Special Agent in Charge Carl J. Kotowski; the Atlantic County Prosecutor’s Office, under the direction of Prosecutor James P. McClain; and the Atlantic City Police Department, under the direction of Police Chief Henry White, with the investigation leading to today’s arrest.
He also thanked the N.J. State Police; the Atlantic County Sheriff’s Office; the Bureau of Alcohol, Tobacco and Firearms; U.S. Immigration and Customs Enforcement (ICE)-Homeland Security Investigation (HSI); Cumberland County Sheriff’s Office and the Ventnor, Northfield and Millville police departments for their assistance.
The government is represented by Assistant U.S. Attorney Diana V. Carrig of the U.S. Attorney’s Office Criminal Division in Camden.
The charges and allegations contained in the complaint are merely accusations, and the defendant is considered innocent unless and until proven guilty.
Defense counsel:. James J. Leonard Jr. Esq. of Atlantic City
Owner of New Jersey Aircraft Parts Brokerage Company Indicted for Laundering Scrapped Jet Engine Parts, Filing False Tax ReturnsRead the Press Release
NEWARK, N.J. – A federal grand jury returned a 23-count indictment today against the owner of a Ridgefield, New Jersey, aircraft parts brokering company for his role in a 19-year conspiracy to launder scrapped jet engine parts and for avoiding taxes related to his aircraft parts business, U.S. Attorney Paul J. Fishman announced.
Gideon Vaisman, 75, of Edgewater, New Jersey, was charged with one count of conspiracy to commit mail and wire fraud, nine counts of mail fraud, four counts of wire fraud, one count of conspiracy to commit fraud involving aircraft parts and eight counts of filing false tax returns. Vaisman was previously arrested on May 13, 2013 and charged by complaint with one count of conspiracy to commit wire fraud.
According to the indictment:
Vaisman owned Integrated Technology Corp. from 1989 through 1998, and Tara Technology Corp. from 1998 onward. Both businesses were located in Ridgefield and bought and sold aircraft parts. From 1990 through 2009, Vaisman orchestrated a scheme to defraud Federal Aviation Administration (FAA) repair stations, aircraft parts brokers, aircraft parts end-users and others by using phony documents to resell jet engine parts obtained from scrap metal dealers.
Vaisman, on behalf of Integrated Technology, and later Tara Technology, directly and indirectly purchased vital jet engine parts called “blades” and “vanes” from scrap metal dealers. Afterwards, Vaisman instructed Tara Technology’s general manager, Carmine Coviello, 63, to use his Suffern, New York-based aircraft parts broker and seller company, Shelby Enterprises, to sand and file the parts in order to conceal that they had been scrapped and, on occasion, rejected for repair by an FAA repair station. FAA regulations mandate that only FAA-certified repair stations or certified airframe and power plant mechanics may perform such work on aircraft parts.
Vaisman, Coviello and others also conducted sham sales of the illegally altered blades and vanes to Integrated Technology and Tara Aviation Ltd., an aircraft parts broker and seller incorporated in Tortola, British Virgin Islands, and located in Guernsey, United Kingdom. Despite being listed under a different owner, Tara Aviation was in fact completely controlled and financed by Vaisman. The sole purpose of these sales, which occurred only on paper, was to generate fraudulent trace paperwork for the parts. Trace paperwork documents the history of an aircraft part and includes information such as the part’s manufacturer, the aircraft on which the part was used and how it was used. The paperwork is also employed in determining whether an aircraft or aircraft part has been subject to severe stress or heat as would occur during a major engine failure, accident or fire. Under Vaisman’s direction and without any knowledge of the history of the scrapped parts, Coviello prepared fraudulent trace paperwork certifying that the parts had not been subjected to excessive stress and heat or deemed unsuitable by an FAA repair station.
Vaisman, Coviello and another conspirator stored the blades and vanes in Tara Technology’s warehouse inventory, ultimately selling them to aircraft brokers, airlines and others on behalf of Tara Aviation using the fraudulent trace paperwork.
The indictment also alleges that although Tara Technology and Tara Aviation acted as a single entity and that Vaisman controlled all of Tara Aviation’s operations, provided financing and had complete authority over its inventory and cash flows, he failed to report $14,236,000 in net income from Tara Aviation on his personal tax returns and those of Tara Technology.
The mail and wire fraud conspiracy and substantive charges each carry a maximum term of 20 years in prison and $250,000 fine, or twice the loss caused by the offense. The conspiracy to commit fraud involving aircraft parts carries a maximum term of 15 years in prison and a $500,000 fine, or twice the gross gain or loss caused by the offense. The tax charges each carry a maximum term of three years in prison and a $250,000 fine or twice the loss caused by the offense.
Coviello previously pleaded guilty to an information charging him with conspiracy to commit wire fraud in relation to the scheme. His sentencing is scheduled for Sept.10, 2015.
U.S. Attorney Fishman credited special agents of the U.S. Department of Transportation, Office of Inspector General, under the direction of Special Agent in Charge Douglas Shoemaker, and IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s charges.
The case is being prosecuted by Deputy Chief Scott B. McBride of the U.S. Attorney’s Office’s Economic Crimes Unit in Newark.
The charge and allegations against Vaisman are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Defense counsel: Gerald Krovatin, Esq., Newark
Heroin Supplier and Crack-Cocaine Distributor for the Grape Street Crips Gang Both Plead GuiltyRead the Press Release
NEWARK, N.J. – Two drug suppliers for the Grape Street Crips street gang today admitted distributing large quantities of heroin and crack-cocaine in and around Newark, New Jersey, U.S. Attorney Paul J. Fishman announced today.
Toma Williams, a/k/a “T-Dubbs,” 38, and Jihad Coles, a/k/a “Half Dead,” 30, both of Newark, pleaded guilty before U.S. District Judges Madeline Cox Arleo and Esther Salas, respectively, in Newark federal court. Williams pleaded guilty today to an information charging him with one count of conspiracy to distribute one kilogram or more of heroin and one count of using a firearm in furtherance of a drug-trafficking crime. Coles pleaded guilty on July 8, 2015 to a separate information charging him with one count of conspiracy to distribute 280 grams or more of crack-cocaine.
In May 2015, over the course of three weeks, 50 alleged members and associates of the Grape Street Crips were charged in criminal complaints that alleged drug-trafficking, physical assaults, and witness intimidation. The charges were the result of a long-running investigation led by the Drug Enforcement Administration (DEA) and the FBI, in conjunction with the Essex County Prosecutor’s Office, the Newark Police Department and Essex County Sheriff’s Office Bureau of Narcotics. Over the course of the entire investigation, 71 defendants have been charged with federal and state charges.
According to documents filed in this case and statements made in court:
Williams admitted that, between March 2014 and Oct. 3, 2014, he conspired with others to distribute kilogram quantities of heroin to members and associates of the Grape Street Crips. During the course of a wiretap investigation of Williams, the DEA learned that Williams was a supplier of heroin to members of the Grape Street Crips operating in and around the area of North 5th Avenue and 6th Street in Newark. In addition, Williams ran a drug-trafficking organization that supplied heroin to other individuals in and around Newark and Jersey City, New Jersey. Following Williams’ arrest, DEA agents discovered a sophisticated secret compartment inside Williams’ car. Inside that secret compartment, Williams had approximately two kilograms of heroin and a loaded semi-automatic firearm, which Williams admitted today he used to protect his supply of heroin and his drug profits.
Coles admitted that, between March 2012 and August 2012, he conspired with others to distribute hundreds of grams of crack-cocaine at the Mildred Terrell Homes public-housing complex located on Riverview Terrace in Newark, New Jersey. As a long-time member of the Grape Street Crips, Coles admitted today that he served as an organizer and leader of the crack-cocaine distribution conspiracy.
The heroin conspiracy charge to which Williams pleaded guilty carries a mandatory minimum sentence of 10 years in prison, a maximum sentence of life in prison, and a fine of up to $10 million. The firearms charge carries a mandatory minimum sentence of five years in prison—which must run consecutive to the sentence imposed for the heroin conspiracy—a maximum sentence of life in prison, and a fine of up to $250,000. The crack-cocaine conspiracy charge to which Coles pleaded guilty carries a mandatory minimum sentence of 10 years in prison, a maximum sentence of life in prison, and a fine of up to $10 million. Williams and Coles are scheduled to be sentenced on Oct 19, 2015 and Nov. 9, 2015, respectively.
U.S. Attorney Fishman credited special agents of the DEA, under the direction of Special Agent in Charge Carl Kotowski, and special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel, for the investigation leading to the charges. Fishman also thanked prosecutors and detectives of the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Carolyn A. Murray; police officers and detectives of the Newark Police Department, under the direction of Director Eugene Venable and Chief Anthony Campos; and the Essex County Sheriff’s Office under the direction of Sheriff Armando B. Fontoura, for their work on the investigation.
The government is represented by Assistant U.S. Attorneys Osmar J. Benvenuto, Elizabeth M. Harris, and Barry A. Kamar of the Criminal Division in Newark.
This case was conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF) and the FBI’s Safe Streets Task Force, a partnership between federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
Defense counsel:
Toma Williams: Linda Foster, Esq., Newark
Jihad Coles: David A. Ruhnke, Esq., Montclair, New Jersey
New Jersey Couple Convicted on Federal Child Abuse ChargesRead the Press Release
NEWARK, N.J. – A former U.S. Army major and his wife were convicted today on federal charges that they abused their adopted children, who all were less than 4 years old and developmentally delayed, through neglectful and cruel acts, including by breaking their bones, denying them medical attention, withholding water and force-feeding them hot sauce, U.S. Attorney Paul J. Fishman announced.
Carolyn Jackson, 37, and John E. Jackson, 40, formerly a Major in the Army at the Picatinny Arsenal Installation in Morris County, New Jersey, who was discharged from the Army in May 2015, were each found guilty of one count of conspiracy to endanger the welfare of a child; Carolyn Jackson was found guilty of 11 substantive counts of endangering the welfare of a child and John Jackson was found guilty of nine substantive counts of endangering the welfare of a child following four months of trial before U.S. District Judge Katharine S. Hayden in Newark federal court. The jury deliberated four days before delivering the guilty verdicts.
The case falls under federal jurisdiction because the crimes were committed on a military base.
According to documents filed in this case and the evidence at trial:
From August 2005 until April 23, 2010, Carolyn and John Jackson conspired to engage in a constant course of neglect and cruelty towards three children they fostered and then adopted. The Jacksons told their biological children not to report the physical assaults to others, saying that the punishments and disciplinary techniques were justified, as they were “training” the adopted children how to behave.
After John Jackson was informed by a family friend that the oldest biological child had revealed the abuse in the Jackson household, John Jackson reported the breach to Carolyn Jackson, who retaliated against that biological child by beating the child 30 times with a belt.
As part of the conspiracy, the Jacksons physically assaulted their adopted children with various objects, causing two children to sustain fractured bones (including a fractured spine, fractured skull and fractured upper arms); failed to seek prompt medical attention for their injuries; withheld sufficient nourishment and food from their adopted children; withheld adequate water from two of their children and, at times, prohibited them from drinking water altogether; forced two of the children to consume foods intended to cause them pain and suffering, such as red pepper flakes and hot sauce, and caused one child to ingest excessive sodium or sodium-laden substances while being deprived of water, leading to a life-threatening condition on two separate occasions in two states. The Jacksons even punished one adopted child, who had to resort to sneaking food and drinking from the toilet, by hitting the child, making the child ingest hot sauce, and forcing the child to eat a raw onion like an apple.
None of the children, adoptive and biological, remain in the custody of the defendants.
Carolyn and John Jackson each face a maximum potential penalty of 10 years in prison on each of the counts on which they were convicted, as well as a maximum $250,000 fine for each count. Sentencing is scheduled for Oct. 13, 2015.
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 convictions. He also thanked the U.S. Army Criminal Investigation Command, under the command of Major General David E. Quantock, and the Morris County Prosecutor’s Office, under the direction of Prosecutor Fredric M. Knapp.
The government is represented by Assistant U.S. Attorneys Melissa L. Jampol and Joseph B. Shumofsky of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel:
Carolyn Jackson: Rubin Sinins and Herbert Waldman Esqs., Springfield
John Jackson: David Holman and Carol Gillen Esqs., Assistant Federal Public Defenders, Newark
New Jersey Brothers Convicted of Shipping $1 Million Worth of Stolen CarsRead the Press Release
CAMDEN, N.J. – Two New Jersey men were convicted today for their roles in a large-scale conspiracy to ship stolen luxury cars to Hong Kong and elsewhere, U.S. Attorney Paul J. Fishman announced.
Andrew Clarke, 44 of Irvington, New Jersey, and Llewellyn Clarke, 42 of North Plainfield, New Jersey, were convicted on all four counts of a superseding indictment charging them each with one count of conspiracy to transport stolen motor vehicles and three counts of transportation of stolen motor vehicles in interstate and foreign commerce. They were convicted following a three-week trial before U.S. District Judge Robert B. Kugler in Camden federal court. The jury deliberated for about three hours before returning the guilty verdicts.
According to documents filed in in this case and evidence presented at trial:
The stolen car exportation ring was investigated by a multi-agency task force led by Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). The investigation revealed that the Clarkes were purchasing stolen luxury cars from thieves operating in northern New Jersey and New York. The Clarke brothers then recruited other conspirators to “re-tag” those cars, or have fraudulent vehicle identification numbers placed on the cars to mask the fact that they were stolen, and then had false title documents produced for those cars in New Jersey and Georgia. After the fake documents were created, the Clarkes shipped several of those stolen cars, valued at nearly $1 million, from New Jersey to Hong Kong, while other cars were shipped to Georgia, Maryland and elsewhere. Once overseas or out-of-state, the stolen cars were then re-sold, some to unsuspecting buyers who later learned that their vehicles were in fact stolen.
Both defendants were detained pending their sentencing, which is scheduled for Oct.15, 2015. Both defendants face up to 35 years in prison as a result of their convictions.
U.S. Attorney Fishman credited special agents of ICE HSI, under the leadership of Executive Associate Director Peter Edge and Acting Special Agent in Charge Kevin Kelly, and the N.J. State Police, under the direction of Superintendent Col. Rick Fuentes, for the investigation leading to today’s convictions. He also thanked U.S. Customs and Border Protection; the Waterfront Commission of New York Harbor; Essex County Prosecutor Carolyn Murray, Middlesex County Prosecutor Andrew Carey, Hudson County Prosecutor Esther Suarez, and Union County Acting Prosecutor Grace H. Park, the Essex and Hudson County Sheriff’s Departments, the Newark Police Department, the U.S. Coast Guard Investigative Service, the Port Authority of New York and New Jersey, the New Jersey Motor Vehicle Commission, the Georgia Department of Revenue, and the Maryland State Police for their roles.
The government is represented by Assistant U.S. Attorney José R. Almonte and James M. Donnelly of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel:
Andrew Clarke: Brian O’Malley Esq., Haddon Heights, New Jersey
Llewellyn Clarke: Paul Sarmousakis Esq., Avalon, New Jersey
Doctor Sentenced to 63 Months in Prison for Accepting $1.8 Million in Bribes for Test ReferralsRead the Press Release
A Morris County, New Jersey, doctor was sentenced today to 63 months in prison for accepting $1.8 million in bribes to refer millions of dollars in business to Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, New Jersey, as part of a long-running scheme operated by the lab, its president and numerous associates, U.S. Attorney Paul J. Fishman for the District of New Jersey announced.
Frank Santangelo, 45, of Boonton, New Jersey, previously pleaded guilty before U.S. District Judge Stanley R. Chesler to an information charging him with violating the Travel Act, money laundering and failing to file tax returns. Judge Chesler imposed the sentence today in Newark federal court.
“Santangelo admitted he violated the trust of his patients, who should be able to count on their doctors’ prescribing only tests that are necessary and recommending providers based solely on their qualifications,” U.S. Attorney Fishman said. “This type of fraud compromises patient care and drives up the cost of health care.”
“Today’s sentencing of Frank Santangelo is the result of a long-term, multi-agency investigation into a complex health care fraud scheme which involved millions of dollars,” said Special Agent in Charge Richard M. Frankel of the Newark Division for the FBI. “Santangelo’s arrest and sentencing send the message the FBI and its law enforcement partners will continue to zealously investigate these fraud and abuse schemes, which divert critical resources from of our already overburdened health care system and contribute exponentially to the rising cost of health care.”
Including Santangelo, 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.
According to documents filed in this and other cases and statements made in court: Santangelo, who has offices in Montville, New Jersey, and Wayne, New Jersey, received more than $1.8 million in bribe payments from BLS for referrals for which the lab was paid more than $6 million by Medicare and various insurance companies. After receiving more than $800,000 from BLS through sham lease agreements and sham service agreements between 2006 and 2010, Santangelo began receiving bribes from BLS through a third party – often tens of thousands of dollars a month – totaling more than $1 million between 2010 and his arrest in April 2013.
Santangelo acknowledged the authenticity of text messages between himself and BLS president and part owner David Nicoll, 41, of Mountain Lakes, New Jersey in which Santangelo referred to ordering unnecessary tests to increase referrals to BLS in exchange for bribes. In one text message conversation, Santangelo said he and another doctor had “put our heads together and added a significant amount of testing….The testing is 90 percent legit.” Santangelo detailed his plan to send $1 million per month in blood testing referrals to BLS by increasing the number of blood tests being ordered, including medically unnecessary tests.
In another text message conversation, Nicoll wrote to Santangelo about the status of their referral agreement, stating that BLS “really can’t afford the 40-50,000 [dollars] a month if the girls aren’t going to be drawing any blood,” to which Santangelo responded by stating, “U no u can count on me!” and “I never let u down!”
He also pleaded guilty to money laundering, admitting that he used another individual in an attempt to hide the bribes from BLS, and to failing to file tax returns from 2009-2011 and pay taxes owed during that time period.
On April 9, 2013, federal agents arrested David Nicoll; Scott Nicoll, 34, of Wayne, New Jersey, a senior BLS employee and David Nicoll’s brother; and Craig Nordman, 36, of Whippany, New Jersey, a BLS employee and the CEO of Advantech Sales LLC – an entity used by BLS to make illegal payments. They were charged by federal complaint with the bribery conspiracy, along with the BLS company and Santangelo. David and Scott Nicoll and Nordman are awaiting sentencing.
“Physicians who accept kickbacks in exchange for patient referrals and ordering medically unnecessary blood tests undermine the public’s faith in the medical profession and the financial stability of Medicare,” said Special Agent in Charge Scott J. Lampert for the Department of Health and Human Services Office of Inspector General (OIG). “OIG will continue to protect both taxpayers and patients by holding physicians accountable for such wrongdoing.”
In addition to the prison term, Judge Chesler sentenced Santangelo to three years of supervised release and fined him $6,250. Santangelo must also forfeit more than $1.8 million as part of his plea agreement. The investigation has so far recovered more than $11.5 million through forfeiture.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Frankel; Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Lampert; IRS–Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, and the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, with the ongoing investigation leading to today’s sentencing.
The government is represented by Senior Litigation Counsel Andrew Leven, Assistant U.S. Attorney Joseph Minish and Chief Jacob T. Elberg of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark, as well as Assistant U.S. Attorney Barbara Ward of the office’s Asset Forfeiture and Money Laundering Unit.
U.S. Attorney Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $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.
Doctor Sentenced to 63 Months in Prison for Accepting $1.8 Million in Bribes for Test ReferralsRead the Press Release
NEWARK, N.J. – A Morris County, New Jersey, doctor was sentenced today to 63 months in prison for accepting $1.8 million in bribes to refer millions of dollars in business to Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, New Jersey, as part of a long-running scheme operated by the lab, its president, and numerous associates, U.S. Attorney Paul J. Fishman announced.
Frank Santangelo, 45, of Boonton, New Jersey, previously pleaded guilty before U.S. District Judge Stanley R. Chesler to an information charging him with violating the Travel Act, money laundering and failing to file tax returns. Judge Chesler imposed the sentence today in Newark federal court.
“Santangelo admitted he violated the trust of his patients, who should be able to count on their doctors’ prescribing only tests that are necessary and recommending providers based solely on their qualifications,” U.S. Attorney Fishman said. “This type of fraud compromises patient care and drives up the cost of health care.”
“Today’s sentencing of Frank Santangelo is the result of a long-term, multi-agency investigation into a complex health care fraud scheme which involved millions of dollars,” Richard M. Frankel, FBI Special Agent in Charge, Newark Division, said. “Santangelo’s arrest and sentencing send the message the FBI and its law enforcement partners will continue to zealously investigate these fraud and abuse schemes, which divert critical resources from of our already overburdened health care system and contribute exponentially to the rising cost of health care.”
Including Santangelo, 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.
According to documents filed in this and other cases and statements made in court:
Santangelo, who has offices in Montville, New Jersey, and Wayne, New Jersey, received more than $1.8 million in bribe payments from BLS for referrals for which the lab was paid more than $6 million by Medicare and various insurance companies. After receiving more than $800,000 from BLS through sham lease agreements and sham service agreements between 2006 and 2010, Santangelo began receiving bribes from BLS through a third party – often tens of thousands of dollars a month – totaling more than $1 million between 2010 and his arrest in April 2013.
Santangelo acknowledged the authenticity of text messages between himself and BLS president and part owner David Nicoll in which Santangelo referred to ordering unnecessary tests to increase referrals to BLS in exchange for bribes. In one text message conversation, Santangelo said he and another doctor had “put our heads together and added a significant amount of testing…. The testing is 90 percent legit.” Santangelo detailed his plan to send $1 million per month in blood testing referrals to BLS by increasing the number of blood tests being ordered, including medically unnecessary tests.
In another text message conversation, David Nicoll wrote to Santangelo about the status of their referral agreement, stating that BLS “really can’t afford the 40-50,000 [dollars] a month if the girls aren’t going to be drawing any blood,” to which Santangelo responded by stating, “U no u can count on me!” and “I never let u down!”
He also pleaded guilty to money laundering, admitting that he used another individual in an attempt to hide the bribes from BLS, and to failing to file tax returns from 2009-2011 and pay taxes owed during that time period.
On April 9, 2013, federal agents arrested David Nicoll, 41, of Mountain Lakes, New Jersey; Scott Nicoll, 34, of Wayne, New Jersey, a senior BLS employee and David Nicoll’s brother; and Craig Nordman, 36, of Whippany, New Jersey, a BLS employee and the CEO of Advantech Sales LLC – an entity used by BLS to make illegal payments. They were charged by federal complaint with the bribery conspiracy, along with the BLS company and Santangelo. David and Scott Nicoll and Nordman are awaiting sentencing.
“Physicians who accept kickbacks in exchange for patient referrals and ordering medically unnecessary blood tests undermine the public’s faith in the medical profession and the financial stability of Medicare,” said Special Agent in Charge Scott J. Lampert, U.S. Department of Health and Human Services Office of Inspector General. “OIG will continue to protect both taxpayers and patients by holding physicians accountable for such wrongdoing.”
In addition to the prison term, Judge Chesler sentenced Santangelo to three years of supervised release and fined him $6,250. Santangelo must also forfeit more than $1.8 million as part of his plea agreement. The investigation has so far recovered more than $11.5 million through forfeiture.
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; IRS–Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, and the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, with the ongoing investigation leading to today’s sentencing.
The government is represented by Senior Litigation Counsel Andrew Leven, Assistant U.S. Attorney Joseph Minish, and Jacob T. Elberg, Chief of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark, as well as Assistant U.S. Attorney Barbara Ward 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: Thomas Ambrosio Esq., Lyndhurst, New Jersey
Cargo Ship Officer Sentenced to Three Months in Prison for Failing to Report Oil He Ordered Dumped into OceanRead the Press Release
CAMDEN, N.J. –The former chief mate of the ocean cargo vessel M/V Murcia Carrier was sentenced today to three months in prison for failing to report the hydraulic oil he ordered dumped into the ocean, New Jersey U.S. Attorney Paul J. Fishman and Assistant Attorney General John C. Cruden for the U.S. Department of Justice Environment and Natural Resources Division announced.
Valerii Georgiev, 42, a Russian citizen, previously pleaded guilty before U.S. District Judge Joseph H. Rodriguez to an information charging him with one count of failing to maintain an accurate oil record book in violation of the Act to Prevent Pollution from Ships (APPS). Judge Rodriguez imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
APPS requires vessels like the M/V Murcia Carrier to maintain a record known as an oil record book in which all transfers and disposals of oil-contaminated waste, including the discharge overboard of such waste, must be fully and accurately recorded.
On April 27, 2014, at the direction of Georgiev, M/V Murcia Carrier crew members dumped several barrels containing hydraulic oil overboard. While Georgiev disputes the number of barrels dumped into the sea, the government believes that approximately 20 barrels of hydraulic oil were dumped overboard. The dumping occurred in international waters off the coast of Florida while the vessel was in transit from Costa Rica to New Jersey. The dumping was not recorded in the ship’s oil record book. When the Coast Guard boarded the vessel, Georgiev denied that the dumping occurred and instructed crew members to do the same.
On June 17, 2015, Norbulk Shipping UK Ltd, a company in Glasgow, United Kingdom, and operator of the M/V Murcia Carrier pleaded guilty to failing to maintain an accurate oil record book and providing false statements with respect to the vessel’s garbage record book. The company was sentenced to pay a fine of $750,000 and placed on probation for three years.
The case was investigated by U.S. Coast Guard Sector Delaware Bay and the U.S. Coast Guard Investigative Service. The government is represented by Assistant U.S. Attorneys Kathleen P. O’Leary and Matthew Smith of the U.S. Attorney’s Office, District of New Jersey, and Joel La Bissonniere of the Environmental Crimes Section of the Department of Justice.
Defense counsel: Michael Keith Twersky Esq., Atlantic City, New Jersey.
Bergen County, New Jersey, Man Convicted of Failing to Register as A Sex OffenderRead the Press Release
NEWARK, N.J. – A Teaneck, New Jersey, man was convicted today of failing to register as a sex offender when he moved to New Jersey in the fall of 2013, U.S. Attorney Paul J. Fishman announced.
Richard Joseph, a/k/a “Richard Beltre,” a/k/a “Joseph Richards,” a/k/a “Aaron Joseph,” 42, of Teaneck, New Jersey, who is classified as a Tier III sex offender in New York, was convicted after a bench trial before U.S. District Judge Susan D. Wigenton in Newark federal court of one count of failing to register or update a registration as required by the Sex Offender Registration and Notification Act (“SORNA”).
SORNA requires that all sex offenders who, among other things, travel in interstate or foreign commerce, must register as a sex offender and keep that registration current in each jurisdiction where the sex offender resides.
According to documents filed in this case and the factual stipulations presented at trial:
Joseph was required to register as a sex offender due to his 2002 conviction in New York for rape in the third degree. He first registered as a sex offender in New York using the alias “Richard J. Beltre” in 2006 and knew that he was required to register as a sex offender every time he changed his address. However, when Joseph was released from the custody of the N.Y. State Department Correctional Services in 2013, he failed to report as directed by the N.Y. State Division of Parole and a warrant was issued for his arrest. He was eventually arrested on Oct. 11, 2013, having lived in Bergen County since Sept. 7, 2013. During that time, Joseph failed to register as a sex offender in New Jersey.
Joseph faces a maximum potential sentence of 10 years in prison and a $250,000 fine. Sentencing is scheduled for Oct. 29, 2015.
U.S. Attorney Fishman credited the U.S. Marshals Service, under the direction of U.S. Marshal Juan Mattos, Jr., and the U.S. Marshals Service New York/New Jersey Regional Fugitive Task Force with the investigation leading to today’s conviction.
The government is represented by Assistant U.S. Attorneys Sara F. Merin and Jane H. Yoon of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: Timothy Donohue Esq., West Orange, New Jersey
Ringleader of $5 Million ATM Skimming Scheme Sentenced to More Than 10 Years in PrisonRead the Press Release
NEWARK, N.J. – A native of Romania who was arrested in Sweden and extradited to the United States was sentenced today to 121 months in prison for directing a large-scale scheme that stole bank account information through a process commonly referred to as “ATM skimming,” in which conspirators secretly installed card-reading devices on ATMs throughout New Jersey, New York, Connecticut, Florida, and elsewhere, U.S. Attorney Paul J. Fishman announced.
Marius Vintila, a/k/a “Dan Girneata,” 32, previously pleaded guilty before U.S. District Judge William J. Martini to Count One of a superseding indictment, conspiracy to commit bank fraud, and Count Two, aggravated identity theft. Judge Martini imposed the sentence today in Newark federal court.
In July 2013, as federal agents in New Jersey arrested various members of his large-scale ATM skimming scheme, Vintila fled the United States. On Sept. 24, 2013, he was apprehended in Sweden and subsequently extradited to the United States. Vintila has been held without bail since his arrival in the United States in February 2014.
According to documents filed in this and other cases and statements made in court:
Vintila was the ringleader of an extensive ATM skimming scheme that targeted thousands of bank customers and defrauded Citibank, TD Bank, Wells Fargo, and multiple other financial institutions out of at least $5 million.
Vintila and his conspirators constructed sophisticated card-reader devices capable of reading and storing customers’ bank account information as the customers performed routine bank transactions at ATMs. Vintila and his conspirators also concealed pinhole cameras in panels designed to match existing ATM components. Vintila then taught and directed several conspirators to install the devices on ATMs. Once installed, the card-reader devices secretly read identity and account information contained on the magnetic strip of customer ATM cards. The pinhole cameras recorded customer keystrokes as they entered their personal identification numbers.
After the account information was stolen, Vintila and his conspirators used the stolen data to create thousands of fraudulent ATM cards, which they used to withdraw millions of dollars from customers’ bank accounts. Vintila also used an alias, “Dan Girneata,” to open bank accounts, rent vehicles and rent multiple self-storage units where he stored skimming devices, pinhole cameras, super glue, tape, SD cards, batteries, computers, molds, fraudulent ATM cards, and cash proceeds. Vintila also provided other conspirators with fake passports and aliases to use in furtherance of the scheme.
In addition to the prison term, Judge Martini ordered Vintila to serve two years of supervised release and pay restitution of $7,447,270.50. Of the 16 people charged in this scheme, 13 have been convicted.
U.S. Attorney Fishman credited special agents of the U.S. Secret Service, under the direction of Special Agent in Charge Carl Agnelli, along with special agents of Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Newark Division, under the direction of Acting Special Agent in Charge Kevin Kelly, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorneys Rahul Agarwal of the Special Prosecutions Division and David M. Eskew of the Criminal Division, Economic Crimes Unit, in Newark.
Defense Counsel: Brian Neary Esq., Hackensack, New Jersey
Monmouth County, New Jersey, Nursery School Teacher and Camp Counselor Charged with Receiving Images of Child Sexual AbuseRead the Press Release
TRENTON, N.J. – A Monmouth County, New Jersey man was arrested this morning on charges that he received images of child sexual abuse on his home computer, U.S. Attorney Paul J. Fishman announced.
James Paroline, 26, of Red Bank, New Jersey, an assistant at a nursery school (School 1) and as a summer camp counselor at a private school (School 2), both located in Monmouth County, New Jersey, is charged by complaint with two counts of receiving images of child pornography over the Internet. He appeared this afternoon before U.S. Magistrate Judge Douglas E. Arpert in Trenton federal court and was detained pending a bail hearing scheduled for July 9, 2015.
According to the criminal complaint and statements made in court:
On March 1, 2015, and March 2, 2015, Paroline downloaded videos and images depicting child sexual abuse from “Website A,” an online bulletin board and website dedicated to the advertisement and distribution of child pornography. Law enforcement officers discovered the images and videos downloaded from the website, and the recipient’s username and IP address were traced back to Paroline’s residence. His home was searched today and numerous images and videos containing child pornography were found on computer equipment belonging to Paroline.
Each count of receiving child pornography over the Internet carries a minimum penalty of five years in prison and a maximum potential penalty of 20 years in prison and a $250,000 fine.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, with the investigation leading to today’s arrest. He also thanked the Red Bank Police Department, under the direction of Chief of Police Darren McConnell, for its assistance in the 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: Andrea Bergman Esq., Assistant Federal Public Defender, Trenton
Bulgarian Citizen Admits Role in $6 Million Tax Refund SchemeRead the Press Release
NEWARK, N.J. – A citizen of the Republic of Bulgaria today admitted his involvement in a $6 million fraudulent tax return scheme that used personal identifying information stolen from multiple accounting firm networks, U.S. Attorney Paul J. Fishman announced.
Vanyo Minkov, 32, pleaded guilty before U.S. District Judge Jose L. Linares in Newark federal court to a superseding information charging him with one count of conspiring to file false and fraudulent tax returns.
According to documents filed in this case and statements made in court:
In late 2012, Minkov and his conspirators hacked into the networks of at least four accounting firms and stole the 2011 tax filings for over 1,000 of the firms’ clients. Minkov and others then used the stolen information to file fraudulent tax returns in the clients’ names for the 2012 tax year or sold the information to others for the same purpose. To date, the IRS has identified over $6 million in fraudulent claims made in connection with the scheme.
The charge to which Minkov pleaded guilty carries a maximum potential penalty of 10 years in prison and a $250,000 fine or twice the gross gain or loss from the offense. Sentencing is scheduled for Oct. 13, 2015.
U.S. Attorney Fishman credited special agents of the U.S. Secret Service, Newark Field Office, under the direction of Special Agent in Charge Carl Agnelli, and special agents of the IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, for the investigation leading to today’s plea. U.S. Attorney Fishman also thanked the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, the Justice Department’s Office of International Affairs in Washington, as well as the Supreme Cassation Prosecutor’s Office of the Republic of Bulgaria and its law enforcement partners, for their extraordinary support.
The government is represented by Assistant U.S. Attorney Andrew S. Pak of the Computer Hacking and Intellectual Property Section of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
Defense counsel: Jack Arseneault Esq., Chatham, New Jersey.
Owners of Popular Ocean City, New Jersey, Pizza Restaurants Admit Tax Evasion, Structuring Crimes and Making False StatementsRead the Press Release
CAMDEN, N.J. – The owners of popular Ocean City, New Jersey, restaurant chain Manco & Manco Pizza today admitted evading taxes, structuring cash payments to avoid reporting requirements and lying to IRS special agents, U.S. Attorney Paul J. Fishman announced.
Charles Bangle, 55, of Somers Point, New Jersey, pleaded guilty before U.S. District Judge Robert B. Kugler in Camden federal court to Count 5 of an indictment charging him with evading taxes with respect to his 2010 personal tax returns and Count 30 charging him with structuring financial transactions in 2011 to avoid reporting requirements. Mary Bangle, 54, also of Somers Point, pleaded guilty to Count 7 of the same indictment, which charges her with knowingly making materially false statements to IRS special agents.
According to the documents filed in this case and statements made in court:
Manco & Manco Pizza – formerly Mack & Manco – is an iconic restaurant located in the heart of Ocean City’s Boardwalk and maintains three stores on the Boardwalk and one store in Somers Point. Charles and Mary Bangle were employees of Mack & Manco Pizza until they purchased a controlling interest in 2011. Charles Bangle handled the day-to-day operations of the business and Mary Bangle was responsible for handling cash and payroll.
Charles Bangle admitted to substantially underreporting his income on his 2010 U.S. individual income tax return, specifically, failing to report additional taxable income that he deposited in cash into his bank account during that year. According to the indictment, by only reporting $127,955 in 2010 and omitting an additional $263,113 in taxable income, Charles Bangle avoided $91,577 in taxes. Charles Bangle also admitted to making cash deposits into his TD Bank account in February of 2011 in increments of less than $10,000 in order to prevent TD Bank from filing a Currency Transaction Report with the U.S. Department of Treasury.
Mary Bangle admitted that she was interviewed by IRS special agents on May 30, 2012 at which time she was asked questions about her personal bank account. Mary Bangle falsely stated that, when cash receipts came into the business, she only retained enough to pay that week’s payroll and some bills, when in fact she retained cash receipts for her personal use. Mary Bangle also lied to agents about the amount of cash deposited into her personal banking account, which was substantially more that the net pay listed on her W-2 forms issued by Manco and Manco Pizza.
The tax evasion count to which Charles Bangle pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gain or loss arising out of the offense. The structuring count to which Charles Bangle pleaded guilty carries a maximum potential penalty of ten years in prison and a $250,000 fine or twice the gain or loss from the offense.
The false statements charge to which Mary Bangle pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gain or loss from the offense. Sentencing for both defendants is scheduled for Oct. 8, 2015.
U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s plea.
The government is represented by Assistant U.S. Attorneys Jason M. Richardson and Matthew T. Smith of the U.S. Attorney's Office Criminal Division in Camden.
Defense counsel:
Charles Bangle: Vincent Sarubbi Esq., Haddonfield, New Jersey; Laurence S. Shtasel Esq., Philadelphia
Mary Bangle: Rocco Cipparone Esq., Haddon Heights, New Jersey
New York Man Sentenced to 10 Years in Prison for Cross-Country Drug Distribution ConspiracyRead the Press Release
NEWARK, N.J. – A Long Island City, New York, man was sentenced today to 120 months in prison for his role in a scheme to transport more than 20 kilograms of cocaine from California to New Jersey, U.S. Attorney Paul J. Fishman announced.
Robert Crawford, 40, previously pleaded guilty before U.S. District Judge Kevin McNulty to Count One of an indictment charging him with conspiracy to possess with the intent to distribute five kilograms or more of cocaine. Judge McNulty imposed the sentence today in Newark federal court.
According to the documents filed in this case and statements made in court:
Crawford, Melvin Feliz, 48, of Englewood Cliffs, New Jersey, and Irving Olivero-Pena, 42, of Edgewater, New Jersey admitted that from January 2011 through March 2014, they conspired to purchase narcotics for distribution in New Jersey. On Oct. 22, 2012, they met a courier in Bergen County. They admitted that they gave the courier $549,950 in currency to transport to California via tractor trailer, where it would be used to purchase approximately 20 kilograms of cocaine. Afterwards, the courier would transport the cocaine to New Jersey for distribution. The currency was ultimately seized by law enforcement officers in California.
In addition to the prison term, Judge McNulty sentenced Crawford to serve five of supervised release. Feliz and Olivero-Pena also pleaded guilty to their roles in the scheme and await sentencing.
U.S. Attorney Fishman credited special agents from the Drug Enforcement Administration (DEA), Newark Division, under direction of Special Agent in Charge Carl J. Kotowski; and special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, New Jersey, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Brian L. Urbano of the U.S. Attorney’s Office Criminal Division and Assistant U.S. Attorney David L. Foster of the U.S. Attorney’s Office, Special Prosecution’s Division in Newark.
Defense counsel: Rubin Sinins Esq., Springfield, New Jersey
Pennsylvania Man Charged with Robbing the Same Atlantic City, New Jersey, Bank He Robbed in 2010Read the Press Release
CAMDEN, N.J. - A Philadelphia man will appear in federal court today to face charges that while on supervised release, he robbed the same Cape Bank in Atlantic City, New Jersey, that he admitted robbing in 2010, U.S. Attorney Paul J. Fishman announced.
Keith Ney, 54, is charged by complaint with one count of bank robbery. He is currently in state custody on related charges. He will appear this afternoon before U.S. Magistrate Judge Joel Schneider in Camden federal court.
According to the complaint:
Ney was previously convicted of two counts of bank robbery on Sept. 16, 2011, and later sentenced to a term of 57 months in prison. During his plea hearing, he admitted robbing the Cape Bank at 1501 Pacific Avenue in Atlantic City and the Citizens Bank at 1234 Market Street in Philadelphia in 2010.
On April 23, 2015, Ney, who had recently finished his prison term and was on supervised release, allegedly entered the same Cape Bank in Atlantic City, approached a teller and produced a demand note that read, “I have a gun give money no one will get shot.” Ney, who was not wearing a mask or disguise, was allegedly captured on the bank’s surveillance system.
After taking the cash, Ney fled the bank on foot. A bank employee exited the bank, approached an Atlantic City police officer who was working a traffic detail and told the officer that the bank had just been robbed. Nay was immediately spotted and taken into custody. After being apprehended, Ney allegedly admitted his involvement in the April 23, 2015 Cape Bank robbery.
The bank robbery count with which Ney is charged carries a maximum potential penalty of 20 years in prison and a $250,000 fine. Ney also faces two additional years in prison as a result of violating the terms of his supervised release.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Edward W. Hanko in Philadelphia; the Atlantic City Police Department under the direction of Chief Henry White; and the Atlantic County Prosecutor’s Office under the direction of Prosecutor James P. McClain with the investigation leading to the charges.
The charge in the complaint is merely an accusation, and Ney is considered innocent unless and until proven guilty.
The government is represented by Assistant U.S. Attorney Matthew J. Skahill of the U.S. Attorney=s Office Criminal Division in Camden.
Defense counsel: Edward F. Borden Jr. Esq., Cherry Hill, New Jersey
New Jersey U.S. Attorney’s Office Seeks Forfeiture of Taxidermied Tiger Imported into the United StatesRead the Press Release
NEWARK, N.J. – The New Jersey U.S. Attorney’s Office today announced the filing of a civil asset forfeiture action seeking the forfeiture of a full mount taxidermied female tiger (panthera tigris), which the government alleges was imported into the United States in violation of the Endangered Species Act and without a valid importation permit, U.S. Attorney Paul J. Fishman announced.
The tiger — according to the forfeiture complaint, a captive-bred female, born on Sept. 26, 2000 — was seized at the Port of Newark by wildlife inspectors with the United States Fish and Wildlife Service (“USFWS”) when its owner attempted to import the tiger into the United States as part of a household move from France.
According to the complaint filed in Newark federal court:
Tigers (panthera tigris), the largest wild cat in the world, are carnivorous mammals of prehistoric origin characterized by their coat of reddish-orange fur, which is marked by dark stripes. Trophy hunting (until it was banned), and a market for tiger rugs and coats, threatened tigers’ survival. Today, habitat destruction, human population growth, and a demand for tiger parts threaten their survival. For over 27 years, all species of tigers have been classified as endangered under U.S law and the Convention on International Trade in Endangered Species of Wild Fauna and Flora (“CITES”). This classification represents the most highly protected species of wildlife, and includes those species that are threatened with extinction or whose survival is or may be affected by trade.
The importation or exportation of endangered species (alive or dead) for any purpose — including non-commercial shipment — is authorized only in exceptional circumstances, and requires an export permit from the originating country and an import permit from USFWS, one of the federal agencies responsible for enforcing the Endangered Species Act.
On Nov. 24, 2014, the tiger was included in a cargo shipment of household goods exported from the Port of Le Havre, in France. The shipment arrived in the United States at the Port of Newark on or about Dec. 3, 2014. The customs broker filed the USFWS declaration form required for the international shipment of wildlife to or from the United States and included a CITES certificate issued by the European Union. The CITES certificate, however, permitted the tiger to be transported only within the European Union and specifically stated that it was “not for use outside the European Community.”
Import and export permits for endangered species of wildlife can be obtained only if the CITES Scientific Authority of the importing country has made a determination that trade in this specimen will not be detrimental to the survival of the species and that the imported wildlife will not be used for commercial purposes. In the United States, the agency authorized to grant or deny a certificate authorizing the import of such wildlife is the USFWS’s Division of Management Authority.
The Endangered Species Act authorizes USFWS to seize any specimen that is illegally imported or exported. On Jan. 2, 2015, USFWS formally refused the shipment of the tiger. On Jan. 9, 2015, the USFWS sent notice of the seizure and its intent to forfeit the tiger to its owner, who now resides in New York City. On April 1, 2015, the owner filed a claim with USFWS contesting the forfeiture. The filing of the claim triggered the government’s obligation to either release the property or bring the forfeiture action in court, where the owner may contest it.
Civil forfeiture cases are “in rem” proceedings — or proceedings against things. In this case, the complaint is brought against the taxidermied tiger, not its owner or any other person.
U.S. Attorney Fishman credited the wildlife inspectors of the U.S. Department of the Interior’s Fish and Wildlife Service for initiating the investigation and detention of the tiger at the Port of Newark.
The government is represented by Special Assistant U.S. Attorney Sarah Devlin of the U.S. Attorney’s Office’s Asset Forfeiture and Money Laundering Unit and Assistant U.S. Attorney Kathleen P. O’Leary of the office’s Healthcare and Government Fraud Unit in Newark.
Four Individuals Charged for Importing and Trafficking Counterfeit Apple and Sony Technology into the United StatesRead the Press Release
NEWARK, N.J. – Four people were charged today for allegedly smuggling counterfeit Apple iPhones, iPads and iPods, and Sony camcorders, from China for sale in the United States, U.S. Attorney Paul Fishman of the District of New Jersey, Assistant Attorney General Leslie Caldwell of the Justice Department’s Criminal Division, Special Agent in Charge Kevin Kelly of Homeland Security Investigations (HSI) in Newark and Bergen County Prosecutor John Molinelli announced.
The eight-count indictment charges Andreina Becerra, 30, a Venezuelan national, and Roberto Volpe, 33, an Italian national, both of Miami; Jianhua Li, 40, a Chinese national and resident of Guangzhou, China; and Rosario La Marca, 52, an Italian national and resident of Naples, Italy, with importing and trafficking fake iPhones, iPads and iPods bearing counterfeit Apple trademarks, and fake camcorders bearing counterfeit Sony trademarks, as well as smuggling, structuring and international money laundering.
The defendants were arrested last week in a coordinated, multi-district effort by HSI in Los Angeles, Miami and Newark. The defendants were arraigned this afternoon before U.S. District Court Judge Kevin McNulty Newark federal court.
According to the indictment:
From July 2009 through February 2014 the defendants allegedly conspired to smuggle into the United States from China more than 40,000 electronic devices and accessories. The estimated manufacturer’s suggested retail prices for an equivalent number of genuine items would have exceeded $15 million. The devices were often shipped separately from the labels bearing counterfeit trademarks in order avoid detection by Customs and Border Protection. The devices were then labeled and packaged after they passed through customs.
The defendants then allegedly re-shipped the devices to conspirators all over the United States. Proceeds from the sales of the devices were funneled back to the defendants’ accounts in Florida and New Jersey via structured cash deposits – broken into multiple deposits of less than $10,000 each to avoid bank reporting requirements – and a portion of the proceeds was then transferred to conspirators in Italy, further disguising the source of the funds.
According to the indictment, the defendants made more than 100 illegal wire transfers totaling more than $1.1 million to Li’s Hong Kong accounts to facilitate their criminal activity.
This case was jointly investigated by the HSI Newark Seaport Investigations Group and the Bergen County Prosecutor’s Office White Collar Crimes Squad, with significant assistance from Europol and Italy’s Guardia di Finanza.
The government is represented by Assistant U.S. Attorneys Leslie Schwartz and Sarah Devlin of the District of New Jersey, Senior Counsel Evan Williams and Rudy Orjales of the Criminal Division’s Computer Crime and Intellectual Property Section.
The enforcement action announced today is one of many efforts being undertaken by the Department of Justice Task Force on Intellectual Property (IP Task Force). The IP Task Force was created to combat the growing number of domestic and international intellectual property crimes, protect the health and safety of American consumers, and safeguard the nation’s economic security against those who seek to profit illegally from American creativity, innovation, and hard work. The IP Task Force seeks to strengthen intellectual property rights protection through heightened criminal and civil enforcement, greater coordination among federal, state, and local law enforcement partners, and increased focus on international enforcement efforts, including reinforcing relationships with key foreign partners and U.S. industry leaders. To learn more about the IP Task Force, go to: www.justice.gov/dag/iptaskforce/.
The charges and allegations contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Pennsylvania Contractors Sentenced for Roles in Employee Extortion Scheme, Vehicular Assault of A Site Manager and Paying Bribes to Get Federal ContractsRead the Press Release
CAMDEN, N.J. – Two principals of a Pennsylvania construction company working on a project at the Ft. Dix military base in Burlington County, New Jersey, were sentenced today for separate charges concerning employee extortion, the hired assault of a site manager and bribes to secure federally subsidized construction projects, U.S. Attorney Paul J. Fishman announced.
Leonard Santos, 68, of Yardley, Pennsylvania, owner of Sands Mechanical Inc. of Bristol, Pennsylvania, was sentenced to 85 months in prison. Santos previously pleaded guilty before U.S. District Judge Joseph H. Rodriguez to Count One of an indictment charging him with conspiracy to obtain kickbacks from public works employees and Count Three, charging him with causing persons to travel in interstate commerce to commit a crime of violence.
Alex Rabinovich, 59, of Richboro, Pennsylvania, Sands Mechanical’s general manager, was sentenced to three years’ probation, including four months of home confinement. Rabinovich previously pleaded guilty before Judge Rodriguez to Count Four of the indictment, which charged a conspiracy to make payoffs to a contractor’s representative for receiving favorable treatment when bidding on federal construction projects. Judge Rodriguez imposed both sentences today in Camden federal court.
According to documents filed in this case and statements made in court:
Between November 2009 and September 2010, Santos operated Sands Mechanical Inc. as a subcontractor on the restoration and rehabilitation of the Marine Corps Reserve Training Center at Joint Base-McGuire-Dix-Lakehurst in Burlington County. Sands provided HVAC and plumbing services. The general contractor was a company headquartered in Marriotsville, Maryland. In order to increase the profitability of the project, Santos, with the aid of his son-in-law Richard Cottone, 40, of Windsor, Pennsylvania, and Michael Featherston, 45, of Bridgeton, New Jersey, demanded that certain employees kickback a percentage of their weekly paychecks or face termination.
In February 2010, the U.S. Department of Labor’s Wage and Hour Division (WHD) was tipped off that the Sands employees were being forced to kickback portions of their salary and were not being paid the prevailing wage for Burlington County. Santos conceded that Sands failed to pay the proper prevailing wage to its employees and agreed to repay $80,000 to those deprived employees. Santos cut settlement checks to those employees who were owed back wages. However, Cottone and Featherston warned those employees not to cash their settlement checks. Instead, Cottone and Featherston took the employees to a nearby check cashing business, where they endorsed their checks over to Cottone, who cashed them and returned the funds to Santos.
In addition, the general contractor’s site manager was routinely critical of the work performance of Sands’ employees, which, at times, necessitated that work be done over. As a result, the site manager was targeted by Santos, Cottone and others by having his truck torched in front of his residence at 4 a.m. on May 17, 2010. This tactic failed to warn off the site manager. Santos admitted that he later condoned physically incapacitating the site manager so that he could no longer supervise the work site and offered $5,000 to whomever Cottone recruited to carry out the attack. On June 10, 2010, an assailant recruited by Cottone opted instead to hit the site manager with his car and called Cottone for permission to carry out the deed. After Cottone gave the “go-ahead” the assailant and two friends ran down the site manager while he was riding his bike. The victim sustained multiple serious injuries.
Also, from November 2009 through January 2013, Rabinovich and others paid a Philadelphia contractor’s representative to get “last looks” at other competitors’ bids for federally subsidized projects. This allowed Sands Mechanical to successfully underbid other subcontractors. A total of $46,200 in bribes/kickbacks was owed for 10 subcontracts awarded to Sands Mechanical. By the summer of 2012, approximately $15,000 was still outstanding for the last two contracts. On two occasions, in November and December 2012, Rabinovich was caught on videotape giving a total of $4,156 in cash to the contractor’s representative to pay down the amounts still due and owing.
In addition to the prison term, Judge Rodriguez ordered Santos to serve three years of supervised release and pay restitution of $10,000.
Cottone and Featherston have both pleaded guilty to their roles in the scheme and were sentenced to 33 months and 12 months in prison, respectively.
U.S. Attorney Fishman credited special agents of the U.S. Department of Labor Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, under the direction of Special Agent in Charge Cheryl Garcia; the Department of Labor-Wage and Hour Division, under the direction of Acting Regional Administrator Mark Watson Jr.; the Naval Criminal Investigative Service, under the direction of Special Agent in Charge Leo S. Lamont, Northeast field office; and the Air Force Office of Special Investigations, under the direction of Special Agent Seth Neville, detachment commander, Joint Base McGuire-Dix-Lakehurst.
The government is represented by Senior Litigation Counsel V. Grady O’Malley and Assistant U.S. Attorney Andrew Bruck of the U.S. Attorney’s Office Organized Crime-Gangs Unit in Newark.
Defense counsel: Guillermo R. Arango Jr. Esq., New Brunswick, New Jersey
Owner of North Jersey High-End Car Dealership Charged with Fraudulently Obtaining $1.7 Million in LoansRead the Press Release
NEWARK, N.J. - A Newark federal grand jury returned an indictment today charging the owner of a Ramsey, New Jersey, car dealership with defrauding customers and banks out of $1.7 million, U.S. Attorney Paul Fishman announced.
Afzal Khan, a/k/a “Bobby Khan,” 32, of Egg Harbor Township, New Jersey, is charged with five counts of wire fraud. Khan, who was initially charged by complaint on Dec. 23, 2014, is still at large.
According to the indictment filed today:
From December 2013 through September 2014, Khan, through his car dealership,
Emporio Motor Group of Ramsey, engaged in a number of fraudulent transactions involving Rolls Royce, Lamborghini, Porsche and other vehicles. As part of his scheme, Khan obtained loans from the auto finance division of a large bank for cars that he never delivered, but for which the purchaser was still responsible. Khan also obtained loans for cars that neither he nor Emporio had the title. As a result, the purchasers of these cars were still liable for the loan, but could not register them. In addition, Khan offered to sell cars for individuals on consignment but thereafter did not return the cars or provide any money to the purchaser from the sale.
Altogether, Kahn fraudulently obtained 21 loans totaling more than $1.7 million.
Each count of wire fraud is punishable by a maximum potential penalty of 20 years in prison and a fine of $250,000, or twice the gross gain or loss from the offense.
U.S. Attorney Fishman credited law enforcement officers of the FBI under the direction of Special Agent in Charge Richard M. Frankel in Newark; the Bergen County Prosecutor’s Office under the direction of Prosecutor John L. Molinelli; and the Borough of Ramsey Police Department under the direction of Chief of Police Bryan H. Gurney, with the investigation leading to the charges.
The government is represented by Assistant U.S. Attorney Andrew Kogan of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
Jersey City, New Jersey, Man Admits Trafficking Threatened TurtlesRead the Press Release
NEWARK, N.J. – A Jersey City, New Jersey, man today admitted conspiring to traffic turtle species designated as threatened under New Jersey state law, U.S. Attorney Paul J. Fishman announced.
Patrick Elfers, 48, pleaded guilty before U.S. District Judge Stanley R. Chesler in Newark federal court to an information charging him with one count of conspiracy to violate the Lacey Act, which prohibits the interstate sale of wildlife with a market value of more $350 that has been taken or possessed in violation of any state law or regulation. He was released on $50,000 unsecured bond.
According to documents filed in this case and statements made in court:
New Jersey’s Endangered and Nongame Species Act prohibits the taking, possession, transportation, exportation or sale of spotted turtles, North American wood turtles and Eastern box turtles, among other species. New Jersey has designated the North American wood turtle as threatened because it is a vulnerable species that could become endangered. The spotted turtle and Eastern box turtle are listed as species of special concern.
Elfers admitted that, from December 2011 through March 2014, he possessed various turtle species, including spotted turtles, North American wood turtles, and Eastern box turtles, at his home in Jersey City without the required permits under New Jersey State law. He advertised the turtles on wildlife trade websites to prospective purchasers in New Jersey and elsewhere. Elfers also shipped turtles to purchasers in New York State by tying them in tube socks to restrict their movement and packing them in boxes that were neither designed nor appropriate for the shipment of live animals.
The charge to which Elfers pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for Sept. 29, 2015.
As part of his plea agreement, Elfers must forfeit more than 40 turtles and pay a fine of $30,450 to the U.S. Fish and Wildlife Service Lacey Act Reward Fund. He must also relinquish 10 Eastern box turtles and any additional turtles or tortoises in his possession, including three Gulf Coast box turtles, one African spur thigh tortoise, and one elongated tortoise.
U.S. Attorney Fishman credited special agents of the U.S. Fish and Wildlife Service, Office of Law Enforcement, under the direction Resident Special Agent in Charge Preston Fant, with the investigation leading to today’s plea.
The Government is represented by Assistant United States Attorney Kathleen P. O'Leary of the U.S. Attorney's Office Health Care and Government Fraud Unit in Newark.
Defense counsel: James R. Lisa Esq., Newark
Jersey City Contractor Admits Conspiring to Rig Contractor Selection Process for Union City Community Development Agency ProjectsRead the Press Release
NEWARK, N.J. – A Hudson County, New Jersey, contractor today admitted conspiring to rig the process for the selection of contractors for projects run by the Union City Community Development Agency, causing losses of at least $40,000, U.S. Attorney Paul J. Fishman announced.
Stanley Parzych, 62, of Jersey City, New Jersey, pleaded guilty to an information charging him with one count of conspiring with agents of a local government agency to obtain by fraud funds provided by Union City. Parzych entered his guilty plea before U.S. District Judge William H. Walls in Newark federal court.
According to documents in this case and statements made in court:
Between June 2007 and November 2010, Parzych owned American Construction, a company located in Jersey City. During that same time period, there was another contractor named Joseph Lado (Lado) who owned a construction company in Union City called Lado Construction LLC. There was also an individual who was an inspector (Inspector 1) at the Union City Community Development Agency (UCCDA), which was a government agency that received funds from the U.S. Department of Housing and Urban Development (HUD) under a federal block grant that provided funding for, among other things, home improvement projects and sidewalk replacement projects.
Parzych conspired with Lado and Inspector 1 to rig the competitive process to perform sidewalk replacement projects and residential rehabilitation projects in favor of certain contractors, including Lado Construction, by submitting false and materially misleading proposals. On many occasions Parzych provided Lado with phony proposals from American Construction that were higher than Lado’s proposals. Sometimes he provided Lado with blank proposal forms from American Construction, which Lado later completed listing amounts that were higher than Lado Construction’s proposals for the same work. Under both of those scenarios, Lado would then submit American Construction’s phony higher-priced proposals and Lado’s own proposals to the UCCDA in order to obtain projects, and ultimately, HUD grant funds, from the UCCDA for the completion of the projects.
The conspiracy charge to which Parzych pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine. Parzych is scheduled to be sentenced on Oct. 7, 2015.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel; and special agents of the U.S. Department of Housing and Urban Development, Office of Inspector General, under the direction of Special Agent In Charge Christina Scaringi, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Barbara R. Llanes of the U.S. Attorney’s Office Special Prosecutions Division in Newark.
Defense counsel: Daniel J. Welsh, Jersey City, New Jersey
Heroin Supplier to the Grape Street Crips Street Gang Admits to Conspiring to Sell Heroin in Newark, New JerseyRead the Press Release
NEWARK, N.J. – A heroin supplier to the Grape Street Crips street gang today admitted conspiring to distribute hundreds of grams of heroin in and around Newark, U.S. Attorney Paul J. Fishman announced today.
Gabriel Henderson, 35, of Newark, pleaded guilty before the U.S. District Judge Esther Salas in Newark federal court to an information charging him with one count of conspiring to distribute heroin.
In May 2015, over the course of three weeks, 50 alleged members and associates of the Grape Street Crips were charged in criminal complaints that alleged drug-trafficking, physical assaults, and witness intimidation. The charges were the result of a long-running investigation led by the DEA and FBI, in conjunction with the Essex County Prosecutor’s Office, the Newark Police Department and Essex County Sheriff’s Office Bureau of Narcotics. During the investigation, 71 defendants were charged with federal and state charges.
In addition to controlling drug-trafficking across large swaths of Newark, the Grape Street Crips routinely engaged in acts of violence – including murder, shootings, aggravated assaults, and witness intimidation. A federal grand jury has returned a second superseding indictment charging two of the defendants – Kwasi Mack, a/k/a “Welchs,” 26, of Belleville, New Jersey, and Corey Batts, a/k/a “C-Murder,” a/k/a “Cee,” 30, of Newark, two leaders of the Grape Street Crips – with numerous violent crimes in aid of racketeering, including attempted murder and conspiracy to commit murder.
According to documents filed in this case and statements made in court:
Henderson admitted that between December 2014 and May 2015, he conspired with others to distribute brick quantities of heroin to members and associates of the Grape Street Crips. Henderson and his conspirators sold heroin in and around the Pennington Court public-housing complex located on Pennington Street and the John W. Hyatt public-housing complex located on Hawkins Street, both in Newark.
U.S. Attorney Fishman credited special agents of the DEA, under the direction of Special Agent in Charge Carl Kotowski in Newark, and special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, for the investigation leading to the charges. He also thanked prosecutors and detectives of the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Carolyn A. Murray; police officers and detectives of the Newark Police Department, under the direction of Director Eugene Venable and Chief Anthony Campos; and the Essex County Sheriff’s Office, under the direction of Sheriff Armando B. Fontoura, for their work on the investigation.
The drug conspiracy count to which Henderson pleaded guilty carries a maximum potential sentence of 40 years in prison. Sentencing is scheduled for Oct. 19, 2015.
The government is represented by Assistant U.S. Attorneys Osmar J. Benvenuto, Elizabeth M. Harris, and Barry Kamar of the Criminal Division in Newark.
This case was conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF) and the FBI’s Safe Streets Task Force, a partnership, a partnership between federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
The charges and allegations contained in the federal criminal complaints and indictment are merely accusations, and the remaining defendants are presumed innocent unless and until proven guilty.
Defense counsel: Howard B. Brownstein, Union City, New Jersey
Former Department of Veterans Affairs Official Sentenced to 46 Months in Prison for Taking $1.2 Million in KickbacksRead the Press Release
TRENTON, N.J. – A former Department of Veterans Affairs (VA) employee who worked as a supervisory engineer at the VA’s campus in East Orange, New Jersey, was sentenced today to 46 months in prison for accepting more than $1.2 million in kickback payments in connection with VA contracts awarded to companies with which he had relationships, and to engaging in a scheme to defraud the VA by claiming one of those companies was owned by a service-disabled veteran when it was not, U.S. Attorney Paul J. Fishman announced.
Jarod Machinga, 45, of Hopewell, New Jersey, previously pleaded guilty before U.S. District Judge Mary L. Cooper to an information charging him with one count of honest services wire fraud, one count of wire fraud and one count of engaging in a monetary transaction in criminally derived property. Judge Cooper imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:
As a supervisory engineer, Machinga had the authority and influence to direct certain VA construction contracts to particular companies. Machinga partnered with a person – identified in the information as “Individual 1” – to set up three companies that could be used to obtain VA work. He then directed more than $6 million worth of VA construction projects to those companies. Machinga admitted he accepted $1,277,205 in kickbacks in exchange for his official action and influence between 2007 and July 2012.
Congress has established a program through which certain VA contracts are reserved for small businesses that are owned and controlled by service-disabled veterans. One of Individual 1’s companies entered into such a contract with the VA after Machinga falsely represented to the VA that it was a service-disabled veteran-owned small business – even though Individual 1 was not a veteran. Machinga then used his official position and influence at the VA to award such a contract to Company 1. The company was paid more than $3 million by the VA in connection with the contract.
Machinga also admitted that for many of the projects awarded to Individual 1’s companies, he recruited other contractors to perform the work so the companies were able to keep the money paid to them without having to incur the expense of actually completing the projects.
In addition to the prison term, Judge Cooper sentenced Machinga to serve one year of supervised release.
U.S. Attorney Fishman credited special agents of the Department of Veterans Affairs, Office of Inspector General, under the direction of Special Agent in Charge Jeffrey Hughes; the FBI, under the direction of Special Agent in Charge Richard M. Frankel; and IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorneys Vikas Khanna of the U.S. Attorney’s Office Special Prosecutions Division and Peter Gaeta of the U.S. Attorney’s Office Asset Forfeiture and Money Laundering Unit in Newark.
Defense counsel: Fortunato N. Perri Jr. Esq., Philadelphia
Contractor Admits Attempting to Bribe West New York, New Jersey, Official to Eliminate More Than $8.7 Million in Fire Code ViolationsRead the Press Release
NEWARK, N.J. – A North Bergen, New Jersey, man today admitted paying cash bribes to a West New York, New Jersey, fire official to eliminate millions of dollars in outstanding fines and penalties on buildings with fire code violations, U.S. Attorney Paul J. Fishman announced.
Victor Coca, 48, pleaded guilty before U.S. District Judge Esther Salas to Count One and Count Two of an indictment charging him with paying bribes to a local government employee.
According to documents filed in this case and statements made in court:
Coca was the owner and president of a general contracting company in West New York. Two buildings in West New York had outstanding fines for fire code violations. The first building, located on Bergenline Avenue and owned by a friend of his, had approximately $14,500 in fines and penalties for outstanding fire code violations. Coca agreed to pay a fire official for the West New York Bureau of Fire Prevention, a witness who was voluntarily cooperating with federal authorities, a $2,000 cash bribe to eliminate the outstanding fire code fines and penalties. On March 27, 2014, Coca handed the fire official a $2,000 cash bribe.
The second building, located on Hudson Avenue and partly-owned by Coca, had more than $8.7 million in fines and penalties for outstanding fire code violations. Coca paid a $5,000 cash bribe to the fire official in return for the fire official purportedly reducing the amount due to the West New York Bureau of Fire Prevention to the initial fine amount of $5,000.
The two bribery counts to which Coca pleaded guilty each carry a maximum potential penalty of 10 years in prison and a $250,000 fine, or twice the gain or loss from the offense. Sentencing is scheduled for Oct. 20, 2015.
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.
The government is represented by Assistant U.S. Attorney Rahul Agarwal of the U.S. Attorney’s Office Special Prosecutions Division in Newark.
Defense counsel:
Howard Brownstein Esq., Union City, New Jersey
Nelson Gonzalez Esq., Dover, New JerseyToms River, New Jersey, Sports Medicine Doctor Admits Accepting $60,000 in Cash Bribes for Prescription Referrals, Health Care FraudRead the Press Release
CAMDEN, N.J. – A sports medicine doctor with a practice in Toms River, New Jersey, today admitted accepting more than $60,000 in cash bribes in return for referring pain cream prescriptions and falsifying health records on behalf of Prescriptions R Us (PRU), a compound pharmacy in Lakewood, New Jersey, U.S. Attorney Paul J. Fishman announced.
James Morales, 45, of Toms River, pleaded guilty before U.S. District Judge Joseph H. Rodriguez in Camden federal court to an information charging him with conspiracy to accept kickbacks and commit health care fraud.
According to documents filed in this case and statements made in court:
Prescriptions R Us (PRU) was owned and operated by Vladimir Kleyman, 44, of Lakewood, New Jersey. As a compounding pharmacy, PRU prepared medication using different types and dosages of drugs in order to provide more personalized medications for patients. PRU supplied a topical cream for pain treatment that was made from ketamine (a Schedule III non-narcotic), lidocaine, diclofenac and other ingredients.
Morales operated Shore Sports Medicine, a medical practice in Toms River. Morales admitted that from February 2013 through December 2013, he accepted at least $60,000 in cash bribes from PRU in exchange for referring pain cream prescriptions.
Morales also admitted that on Dec. 19, 2013, Kleyman told Morales that the quantity of pain cream that Morales had prescribed was too high to get reimbursed by Horizon, a private health insurance plan. Kleyman asked Morales to start omitting quantity information on his prescriptions for the compounded pain cream. Morales admitted that he agreed to omit quantity information on prescriptions for patients enrolled in Horizon in order to help PRU obtain reimbursements.
The conspiracy charge to which Morales pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for Oct. 5, 2015.
Kleyman previously pleaded guilty to conspiring to pay kickbacks in exchange for prescription referrals and committing health care fraud. His sentencing is scheduled for July 7, 2015.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel; and U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert, with the ongoing investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Jane H. Yoon and Senior Litigation Counsel Andrew Leven of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark.
U.S. Attorney Paul J. Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $635 million in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.
Defense counsel: A. Ross Pearlson Esq., Matthew E. Beck Esq., William Finizio Esq., West Orange, New Jersey
Philadelphia Man Admits Trying to Distribute 1.7 Kilograms of Pure MethamphetamineRead the Press Release
NEWARK, N.J. – A Philadelphia man today admitted trying to deliver 1.7 kilograms of pure methamphetamine in Elizabeth, New Jersey, U.S. Attorney Paul J. Fishman announced.
Aaron Vega-Castelo, 28, pleaded guilty before U.S. District Judge Madeline Cox Arleo in Newark federal court to an indictment charging him with one count of distribution and possession with intent to distribute 50 grams or more of methamphetamine.
According to documents filed in this case and statements made in court:
On Dec. 11, 2013, Vega-Castelo was stopped while driving a blue Jeep on the New Jersey Turnpike in Elizabeth. Law enforcement found four plastic food storage-style containers of methamphetamine hydrochloride and two shoeboxes containing approximately $110,000 in cash in the back seat area of his vehicle. Vega-Castelo admitted that at the time he was stopped by law enforcement, he was on his way to deliver the drugs and cash to other individuals near an Ikea in Elizabeth.
DEA testing of the seized methamphetamine revealed that it had a net weight of 1.79 kilograms and substance purity of 95.1 percent, which results in 1.7 kilograms of pure methamphetamine hydrochloride.
The charged offense carries a minimum penalty of ten years in prison, a maximum potential penalty of life in prison and a $10 million fine. Sentencing is scheduled for Oct. 15, 2015.
U.S. Attorney Fishman credited special agents of the Drug Enforcement Administration, Newark Division, under the direction of Special Agent in Charge Carl J. Kotowski, with the investigation.
The government is represented by Assistant U.S. Attorney Sara F. Merin of the Narcotics and Organized Crime Drug Enforcement Task Force Unit in Newark.
Defense counsel: Eric M. Mark Esq., Newark, New Jersey
New York Attorney Convicted of Defrauding ADP Inc., Broadridge Financial Solutions, Out of Hundreds of Thousands of DollarsRead the Press Release
NEWARK, N.J. – A New York attorney was convicted of mail fraud today for his role in an alleged scheme to defraud two international companies out of hundreds of thousands of dollars by fraudulently billing them for services that were never provided, U.S. Attorney Paul J. Fishman announced.
Marijan Cvjeticanin, 50, of St. James, N.Y., was convicted of nine counts of mail fraud following a one-week trial before U.S. District Judge Michael Shipp in Trenton federal court. The jury deliberated two hours before returning the guilty verdicts.
According to the documents filed in this case and the evidence at trial:
From September 1996 to September 2012, Cvjeticanin worked for Wildes & Weinberg P.C., a New York law firm specializing in immigration law, first as a paralegal and then as an attorney. Among other clients, the firm represented Automatic Data Processing Inc. (ADP) and Broadridge Financial Solutions Inc. (Broadridge) in connection with various immigration law matters. Cvjeticanin was the case manager handling day-to-day tasks, such as preparing Department of Labor certifications and applications for permanent residency for certain foreign workers of those companies employed in the United States on a temporary basis.
The application process required ADP and Broadridge to place job advertisements in the geographic location where the relevant position was located, to demonstrate that there were no minimally qualified United States citizens available to fill that position. Wildes & Weinberg arranged for an independent advertising agency to contract with ADP and Broadridge to place the advertisements. At some point prior to 2010, Cvjeticanin caused ADP and Broadridge to replace the independent advertising agency with Flowerson Holdings Inc., a/k/a Flowerson Advertising (Flowerson). Unbeknownst to Wildes & Weinberg, ADP, or Broadridge, Cvjeticanin was the owner and principal of Flowerson. From that point until September 2012, Flowerson purportedly handled all of the certification advertisement obligations for ADP and Broadridge. In reality, Cvjeticanin did not place the majority of the advertisements as required and instead pocketed the monies paid to him by ADP and Broadridge.
In September 2012, Wildes & Weinberg learned through a routine audit of employee email accounts that Cvjeticanin owned and controlled Flowerson and fired him. The subsequent investigation revealed that between 2010 and September 2012, ADP and Broadridge collectively paid Flowerson approximately $579,000 for advertisements relating to permanent residency applications. Virtually all of the invoices that Flowerson submitted to ADP and Broadridge included charges for advertisements purportedly placed in Computer World magazine as well as advertisements placed in newspapers such as The New York Times, The Boston Globe, The Star-Ledger, The Seattle Times, and others. However, Cvjeticanin never placed the majority of advertisements. Instead, he kept the money for his personal benefit.
The investigation also revealed that from time to time the government would conduct audits of labor certifications submitted on behalf of ADP and Broadridge and request additional information from the filer, including copies of the print advertisements that had been placed. Cvjeticanin was responsible for gathering the print advertisements responsive to the government audit requests. Because Cvjeticanin had not placed most of the print advertisements, he was unable to provide the copies. Cvjeticanin took out advertisements after he received notice of the audit. Cvjeticanin then fraudulently superimposed those advertisements on a newspaper from another date and made a photocopy, which he submitted to the government. The photocopied submissions purported to show that the relevant advertisements had been placed on the appropriate dates.
Cvjeticanin faces a maximum potential penalty of 20 years in prison and a $250,000 fine on each of the counts on which he was convicted. The government is seeking the forfeiture of all funds fraudulently obtained by Cvjeticanin as a result of the scheme. Sentencing is scheduled for Aug. 25, 2015.
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, Newark Field Office, and the U.S. Department of State Diplomatic Security Service, New York Field Office, under the direction of Special Agent in Charge David Schnorbus, with the investigation leading to today’s verdict.
The government is represented by Assistant U.S. Attorneys Francisco J. Navarro and Dennis C. Carletta of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: Lorraine Gauli-Rufo Esq., Verona, New Jersey; Thomas Ambrosio Esq., Lyndhurst, New Jersey
New Jersey Man Charged with Conspiracy to Provide Material Support to ISIL and Witness TamperingRead the Press Release
NEWARK, N.J. – A Hudson County, New Jersey, man was arrested at his home this morning for allegedly conspiring to provide material support to the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization, U.S. Attorney Paul J. Fishman 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.
Alaa Saadeh, 23, of West New York, New Jersey, is charged by complaint with conspiring with other individuals in New Jersey and New York to provide services and personnel to ISIL, aiding and abetting an attempt to provide services and personnel to ISIL, and attempting to persuade a witness to lie to the FBI. 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 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. Conspirator 1 (CC-1) lived in Rutherford, New Jersey, until leaving the country on May 5, 2015, allegedly to join ISIL. Conspirator 2 (CC-2) was a Queens, New York, resident until he was arrested in New York on June 13, 2015, on terrorism charges. Samuel Rahamin Topaz was a Fort Lee, New Jersey, resident until he was arrested in New Jersey on June 17, 2015, and charged with conspiring to provide services and personnel to ISIL.
When CC-1 attempted to travel to the Middle East via John F. Kennedy International Airport (JFK), allegedly in order to join ISIL, he was accompanied by Saadeh and CC-2. On the way to the airport, CC-1 allegedly stated that he, Saadeh, CC-2, and Topaz had plans to reunite overseas within a few weeks.
After CC-1’s departure, and despite learning from CC-1’s family that he had been arrested in Jordan on suspicion of supporting ISIL, Saadeh, CC-2, and Topaz allegedly continued to discuss their plan to travel overseas to join ISIL. Electronic communications later recovered from Topaz’s phone corroborated their plans. On May 21, 2015, Saadeh and Topaz discussed the need to “lay low” and refrain from taking action in furtherance of the conspiracy to provide material support to ISIL that might be detected by law enforcement. Saadeh and Topaz also allegedly discussed needing to meet in person to discuss “hijra,” which Topaz later told members of the JTTF that referred to traveling overseas to join ISIL. The next day, Saadeh allegedly told another individual that he suspected that CC-2 or Topaz had “snitched” on CC-1 and caused his arrest overseas, and, if that was true, Saadeh thought he would have to “kill someone.”
In recorded conversations with an informant, Saadeh revealed his support for ISIL, including its use of beheadings and mass killings to impose its violent agenda. He said he planned to travel overseas with CC-2 “at some point.” Saadeh allegedly said he knew CC-1 planned to travel to join ISIL before CC-1 departed the United States and that he bought CC-1’s airline ticket despite knowing this. The investigation also revealed that Saadeh provided CC-1 transportation and removed a SIM card from CC-1’s phone in an apparent effort to hide incriminating communications and other data.
In June, after becoming aware that he was under FBI surveillance, Saadeh allegedly directed an individual in New Jersey not to tell the FBI about CC-1’s support for ISIL or CC-1’s plans to travel to Syria and Iraq to join ISIL. Saadeh instructed the individual to “play dumb” and be “honest up to a point,” but to be sure not to tell the FBI anything about ISIL.
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.
Former Otismed CEO Sentenced to Two Years in Prison for Selling Unapproved Surgical DevicesRead the Press Release
Corporation Previously Paid More Than $80 million to Resolve Criminal and Civil Investigations
NEWARK, N.J. – The former president and CEO of OtisMed Corp. was sentenced today to serve 24 months in prison for intentionally distributing a medical device used in knee replacement surgery after its application for marketing clearance had been rejected by the Food and Drug Administration (FDA), the Justice Department announced.
Charlie Chi, 46, of San Francisco, pleaded guilty before U.S. District Judge Claire C. Cecchi in December 2014 to three counts of distributing adulterated medical devices in interstate commerce in violation of the federal Food, Drug, and Cosmetic Act (FDCA) after having been told by the FDA, legal counsel and his own board of directors not to do so. Judge Cecchi imposed the sentence today in Newark federal court. In September 2014, Judge Cecchi sentenced OtisMed Corporation, now a subsidiary of Stryker Corporation, to a criminal fine of $34.4 million and ordered the company to pay $5.16 million in criminal forfeiture. Stryker acquired the company after the criminal conduct for which Chi was sentenced. In a related civil settlement, OtisMed agreed to pay approximately $41.2 million, including interest, to resolve its civil liability for submitting false claims to the Medicare, TRICARE, Federal Employees Health Benefits and Medicaid programs.
“The defendant betrayed the trust of patients whose doctors were using his unapproved surgical device for a serious medical procedure,” U.S. Attorney Fishman said. “With everything else people have to deal with when they are facing surgery, they shouldn’t have to worry whether their doctor is using equipment that has been approved for use. The punishment meted out to Chi and his company is appropriate.”
“Today’s sentencing of OtisMed’s CEO ought to send a clear message to others in positions of authority within the medical device and pharmaceutical industries: the Department of Justice will vigorously prosecute not only corporations, but also the individuals at their helm who are responsible for endangering public health and safety in pursuit of profit,” Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division, said.
According to documents filed in this case and statements made in court:
In August 2005, Chi was among the founders of OtisMed, and conceived of the OtisKnee orthopedic cutting guide, its primary product. Chi acted as OtisMed’s president, CEO and chairman of its board of directors until OtisMed was acquired by Stryker in November 2009. The OtisKnee was used by surgeons during total knee arthroplasty (TKA), commonly known as knee replacement surgery. The surgical procedure requires a surgeon to remove the ends of the leg bones and to reshape the remaining bone to accommodate the implantation of an artificial knee prosthesis. The cuts to the bone must be made at precise angles because they are critical to the clinical result; failure to achieve the correct angle in TKA procedures can result in failure of the bones and/or the implanted prosthetic joint.
OtisMed marketed the OtisKnee cutting guide as a tool to assist surgeons in making bone cuts specific to individual patients’ anatomy based on MRIs performed prior to surgery. None of OtisMed’s claims regarding the OtisKnee device were evaluated by the FDA before the company used them in advertisements and promotional material.
Between May 2006 and September 2009, OtisMed sold more than 18,000 OtisKnee devices, generating revenue of approximately $27.1 million.
On Oct. 2, 2008, OtisMed submitted a pre-market notification to the FDA seeking clearance to market the OtisKnee. The company had not previously sought the FDA’s clearance or approval and had been falsely representing to physicians and other potential purchasers that the product was exempt from such pre-market requirements.
On Sept. 2, 2009, the FDA sent OtisMed a notice that its submission had been denied, noting that the company had failed to demonstrate that the OtisKnee was as safe and effective as other legally marketed devices. The letter warned OtisMed that distribution of the OtisKnee prior to approval would be an FDCA violation, and indicated the FDA viewed the product as a “significant risk device system,” which is defined as presenting a potential for serious risk to the health, safety or welfare of a subject. Chi and others at OtisMed received advice from legal and regulatory counsel confirming it would be unlawful for OtisMed to continue distributing the OtisKnee.
Though the board of directors unanimously decided to stop further shipments of the devices, Chi was concerned that inconveniencing surgeons planning to use the OtisKnee in scheduled surgeries would exacerbate the negative impact of the FDA letter on the reputation of OtisMed and the device. Chi directed OtisMed employees to organize a mass shipment of all OtisKnee devices that had been manufactured but had not yet been shipped and suggested ways for the employees to hide the shipments from FDA regulators.
At Chi’s direction, OtisMed shipped approximately 218 OtisKnee guides from California to surgeons throughout the United States, including 16 to surgeons in New Jersey, a week after the FDA expressly denied OtisMed’s request for clearance.
“With more than 600,000 knee replacements performed each year, patients rely on FDA to help ensure that the devices are safe and work as intended,” Director George M. Karavetsos of the FDA’s Office of Criminal Investigations said. “When manufacturers ignore FDA requirements, they risk endangering patients’ health and quality of life. We will continue to protect the public health by bringing to justice those who disregard FDA regulations.”
Chi’s sentence marks the culmination of a long-term investigation conducted jointly by the FDA’s Office of Criminal Investigations, under the direction of Special Agent in Charge Antoinette V. Henry, and the Department of Health and Human Services’ Office of Inspector General (HHS-OIG), under the direction of Special Agent in Charge Scott J. Lampert. Counsel to the HHS-OIG and FDA’s Office of Chief Counsel to the FDA also assisted. The National Association of Medicaid Fraud Control Units, along with the Medicaid Fraud Control Unit of the Massachusetts Attorney General’s Office, assisted in coordinating the settlements with the various states.
In addition to the prison term, Judge Cecchi sentenced Chi to one year of supervised release and fined him $75,000.
The government is represented by Chief Jacob T. Elberg of the U.S. Attorney’s Office of the District of New Jersey Health Care and Government Fraud Unit and Trial Attorney Ross S. Goldstein of the Civil Division’s Consumer Protection Branch.
U.S. Attorney Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $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.
Charlie Chi: Peter Harvey Esq., New York
OtisMed: Brien O’Connor Esq.; Joshua Levy Esq., Boston
Counsel for Relator Richard Adrian: Joseph Callow Esq., Cincinnati, Ohio; Joel Hesch Esq., Lynchburg, Virginia
Atlantic County, New Jersey, Man Sentenced to 27 Years in Prison for $3 Million Time-Share Mortgage Fraud SchemeRead the Press Release
CAMDEN, N.J. – An Atlantic County, New Jersey, man was sentenced today to 324 months in prison for his role in a $3 million conspiracy to scam customers by offering phony consulting services to owners of timeshares through the New Jersey-based Vacation Ownership Group LLC, U.S. Attorney Paul J. Fishman announced.
Adam Lacerda, 31, of Egg Harbor Township, New Jersey, was convicted in September 2013 of one count of conspiracy to commit mail and wire fraud, nine counts of mail fraud and three counts of wire fraud flowing a seven-week trial before U.S. District Judge Noel L. Hillman in Camden federal court.
According to documents filed in this case and the evidence presented at trial:
Lacerda and his codefendants schemed to defraud hundreds of timeshare owners by offering fraudulent consulting services through their company, the Vacation Ownership Group (now VO Financial). Lacerda, the company founder, president and chief executive officer, devised the company’s fraudulent sales pitches. He directed his sales force to tell numerous lies to VO customers, including that VO worked with the banks holding the customers’ loans, would use money sent by customers to pay off the customers’ loans on their timeshares, and could cancel customers’ timeshares with money back.
Three codefendants were convicted with Lacerda at the same trial: his wife, Ashley Lacerda, 35, the company vice president and chief operating officer, sent fraudulent contracts to customers and managed the office. Ian Resnick, 40, of Absecon, New Jersey, a convicted bank robber, started as a salesman giving the fraudulent sales pitch but became Adam Lacerda’s enforcer, with the title “director of compliance.” Genevieve Manzoni, 49, of Lake Worth, Fla. was a top VO sales representative who falsely told one victim she worked with a bank, another victim that she worked with a timeshare developer. They are all awaiting sentencing.
The 14 victims who testified at trial – including business executives, veterans, senior citizens, a lawyer and a professor – were defrauded out of a total of tens of thousands of dollars by the defendants’ sophisticated scheme.
In addition to the prison term, Judge Hillman sentenced Adam Lacerda to three years of supervised release.
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 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:
Adam Lacerda: Mark E. Cedrone Esq., Philadelphia
Ashley Lacerda: Charles Nugent Esq., Marlton, New Jersey
Ian Resnick: Michael E. Reilly Esq., Philadelphia
Genevieve Manzoni: Ralph A. Jacobs Esq., Philadelphia
Two New York Men Sentenced to Prison for Armed Robberies of Electronics Stores in New JerseyRead the Press Release
TRENTON, N.J. – Two New York men were sentenced to prison today for participating in armed robberies of electronics stores in New Jersey, including armed robberies in Linden, Paramus, and Woodbridge, U.S. Attorney Paul J. Fishman announced.
Eric Williams, 34, and Sulayman Graham, 32, both of Brooklyn, New York, were sentenced to 151 and 63 months in prison, respectively. Williams and Graham previously pleaded guilty before U.S. District Judge Joel A. Pisano to separate informations charging them with one count of conspiracy to commit Hobbs Act robberies. U.S. District Judge Anne E. Thompson imposed both sentences today in Trenton federal court.
According to documents filed in this case and statements made in court:
On Sept. 20, 2012, Carl Williams, 31, of Brooklyn, and Leonard Arrington, 28, of Roslyn Heights, New York, walked into a T-Mobile store in Linden brandishing a firearm, while Eric Williams and other conspirators – including Kajaun Crawley, 28, and Terrell McQueen, 31, both of Brooklyn – served as lookouts and get-away drivers. Carl Williams and Arrington then tied up the employees in the back of the store, stole 50 to 60 cell phones and fled in a Land Rover. Eric Williams and other conspirators then delivered the stolen phones to a cell phone store in Brooklyn.
On Oct. 2, 2012, Arrington entered a T-Mobile store in Woodbridge, brandishing a firearm, along with another man, while Graham and McQueen waited outside as lookouts and get-away drivers. After locking the front door, the men took the employees to the back of the store and tied them up, then stole approximately 40 cell phones. One of the robbers then called Graham, who drove them away in a Land Rover. Eric Williams and others delivered the stolen phones to the same Brooklyn store.
Eric Williams participated in the planning of a subsequent robbery of an electronics store in Paramus, which took place on Jan. 16, 2013. Unique Randolph, 28, of Brooklyn, and another individual entered an electronics store and, after forcing employees and a customer into the back of the store, Randolph tied them up using zip-ties, while his conspirator held them at gunpoint. As Randolph and his conspirator were looting the store of cell phones, a UPS employee walked into the backroom. Randolph forced him onto the ground and used zip-ties to restrain him. Randolph and his conspirator then fled, along with Carl Williams who was waiting outside as a lookout.
In addition to the prison terms, Judge Thompson sentenced Williams and Graham to each serve three years of supervised release.
U.S. Attorney Fishman praised 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.
Defense counsel:
Eric Williams: Michael A. Armstrong Esq., Willingboro, New Jersey
Sulayman Graham: Alyssa A. Cimino Esq., Fairfield, New JerseyThree Somerset County, New Jersey, Men Charged with Armed Bank RobberyRead the Press Release
NEWARK, N.J. – Three Somerset County, New Jersey, men were charged today with the armed bank robbery of the Somerset Savings Bank in Somerville, New Jersey, U.S. Attorney Paul J. Fishman announced.
Luis Castaneda, 38, of Bound Brook, New Jersey; Carmelo Soto Jr., 24, of Manville, New Jersey; and Jamie Lee Ayuso Jr., 38, of Hillsborough, New Jersey, were each charged by complaint with one count of bank robbery. Castaneda and Soto were also charged with one count each of using a firearm during the commission of crime of violence. All three men are scheduled to make their initial appearances this afternoon before U.S. Magistrate Judge James B. Clark III in Newark federal court.
According to documents filed in this case and statements court:
On June 12, 2015, Castaneda and Soto entered the Somerset Savings Bank while Ayuso stayed behind in the getaway vehicle. Castaneda drew a handgun while Soto jumped over the teller counter and demanded money from the bank tellers. After leaving the bank with the stolen money, Castaneda and Soto got in the getaway vehicle. Law enforcement officers immediately pulled over the getaway vehicle and arrested all three men.
The bank robbery count carries a maximum potential penalty of up to 20 years in prison and a fine of up to $250,000. The brandishing a firearm during the bank robbery count carries a mandatory minimum sentence of seven years in prison and a maximum sentence of life in prison, which must be served consecutive to the other count.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark; the Somerset County Prosecutor’s Office, under the direction of Geoffrey D. Soriano; the Middlesex County Prosecutor’s Office, under the direction of Prosecutor Andrew C. Carey; and the Hunterdon County Prosecutor’s Office, under the direction of Prosecutor Anthony P. Kearns III, with the investigation leading to the charges. He also thanked the Somerville, Manville, Middlesex Boro, Piscataway, Readington, Bridgewater, Clinton Township and Bound Brook police departments for their work on the case.
The government is represented by Assistant U.S. Attorney Josh Hafetz of the U.S. Attorney’s Office in Newark.
Somerset County, New Jersey, Man Charged with Defrauding Investors of $1.5 MillionRead the Press Release
NEWARK, N.J. – A Somerset County, New Jersey, man is expected to appear in court today on charges of fraud for allegedly soliciting $1.5 million from 16 investors based upon false and fraudulent financial records, U.S. Attorney Paul J. Fishman announced.
Rostyslaw Mykytyn, 56, of Skillman, New Jersey, was indicted by a federal grand jury on June 19, 2015, on five counts of wire fraud. His initial appearance and arraignment is scheduled for later today before U.S. Magistrate Judge James B. Clark III.
According to the indictment:
Mykytyn was the owner, president and CEO of RGM Management Co., d/b/a/ Campbell Co. Inc. Campbell was located in Washington State and provided sales representative services to a company that manufactured and distributed power and cooling infrastructures for large computer spaces. Mykytyn solicited various investors for Campbell based upon false and fraudulent financial statements.
Mykytyn allegedly created false commission statements from a client that showed sales in excess of $4 million, of which Campbell was due $472,720, to make Campbell’s income appear greater than it was. Mykytyn also falsely represented Campbell’s assets to investors who, relying on those representations, wire transferred $1.5 million into the company. Mykytyn would then divert a portion of the investment to himself to pay for his personal expenses, without disclosing the diversion to his investors.
Each count of wire fraud carries a maximum penalty of 20 years in prison and a fine of up to the greater of $250,000 or twice the gain or twice the 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, with the investigation leading to these charges.
The government is represented by Special Assistant U.S. Attorney Jillian J. Reyes of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
Passaic County, New Jersey, Doctor Sentenced to 37 Months in Prison for Taking Bribes in Test-Referrals Scheme with New Jersey Clinical LabRead the Press Release
NEWARK, N.J. – A doctor with a practice in Hawthorne, New Jersey, was sentenced today to 37 months in prison for accepting bribes in exchange for test referrals as part of a long-running and elaborate scheme operated by Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, New Jersey, its president and numerous associates, U.S. Attorney Paul J. Fishman announced.
Douglas Bienstock, 48, of Wayne, New Jersey, previously pleaded guilty before U.S. District Judge Stanley R. Chesler to an information charging him with one count of accepting bribes. Judge Chesler imposed the sentence today in Newark federal court.
Including Bienstock, 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. The investigation has so far recovered more than $11 million to date through forfeiture.
According to documents filed in this and related cases and statements made in court:
Bienstock admitted that from February 2008 through October 2009, he was paid more than $2,500 per month under a sham service contract in return for patient blood specimen referrals to BLS. BLS also paid Bienstock $100 in cash for each of a certain type of blood test that he ordered. As a result of Bienstock’s referrals, BLS received approximately $640,000 in lab business.
In addition to the prison term, Judge Chesler ordered Bienstock to serve one year of supervised release, pay a $75,000 fine and forfeit $79, 695.
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 Senior Litigation Counsel Andrew Leven; Assistant U.S. Attorney Joseph N. Minish; Jacob T. Elberg, Chief of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark; and Assistant U.S. Attorney Barbara Ward, 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: Alan Zegas Esq., Chatham, New Jersey
Illegal Firearms Dealer Admits Selling More Than 200 Guns to Drug Dealers and Other Criminals in the Camden AreaRead the Press Release
Guns Originated from Straw and Gun Show Purchases and Straw Purchases in Ohio
CAMDEN, N.J. – A Burlington County, New Jersey, man today admitted selling to a Camden drug dealer and other criminals in the Camden area at least 200 firearms that he purchased with cash from other illicit firearms dealers, U.S. Attorney Paul J. Fishman announced.
Joshua Jackson, 35, a/k/a “Trent,” of Willingboro, New Jersey, pleaded guilty before U.S. District Judge Robert B. Kugler in Camden federal court to an information charging him with one count each of dealing firearms without a license, conspiracy to deal in firearms without a federal firearms license, and possession of firearms by a convicted felon.
According to documents filed in this and related cases and statements made in court:
Jackson admitted that between December 2009 and September 2010, he sold or brokered the sale of at least 200 handguns that he purchased with cash from illegal gun distributors in Ohio and from straw purchases by associates of his from gun stores in Columbus, Ohio.
Jackson sold many of the weapons to Terrance Laboo, 33, of Oaklyn, New Jersey. Laboo previously pleaded guilty before Judge Kugler and admitted that at the time of the firearms purchases from Jackson he was a Camden drug dealer engaged in ongoing sales of PCP. Jackson also sold guns to other criminals in the South Jersey area.
Laboo has acknowledged that at the time he purchased these firearms from Jackson, he was distributing PCP and cocaine from the corner of 4th and Chestnut Streets in Camden. Laboo also previously admitted he sold, directed or brokered the sale of many of the firearms he purchased to other drug dealers in southern New Jersey.
Jackson obtained most of the firearms through purchases at gun shows from unlicensed gun sellers who were not subject to background checks. Some of the firearms also were purchased at Ohio gun stores by straw purchasers working for Jackson, who then transported the handguns to New Jersey from Ohio and resold them to Laboo and others in the Camden area. Laboo previously admitted he knew he was buying guns that came illegally from Ohio and Virginia.
Jackson transported the illegal firearms purchased in the Columbus, Ohio, area back to Camden and the surrounding area using a rental car and by using an associate to transport them in duffel bags on Greyhound buses running between Columbus and the Greyhound bus terminals in Philadelphia and Mount Laurel, New Jersey.
The illegal firearms dealing count and the conspiracy count to which Jackson pleaded guilty each carry a maximum potential penalty of five years in prison and a $250,000 fine. The possession of firearms by a convicted felon count carries a maximum potential penalty of 10 years in prison and a $250,000 fine. Sentencing is scheduled for Oct. 2, 2015.
U.S. Attorney Fishman credited special agents of the ATF, under the direction of Special Agent in Charge George P. Belsky, with the investigation leading to today’s guilty plea. Mr. Fishman also thanked the U.S. Attorney’s Office in the Southern District of Ohio, directed by U.S. Attorney Carter M. Stewart, and agents of the ATF Field Division in Columbus, Ohio, under the direction of Special Agent in Charge Donald Soranno.
The government is represented by Assistant U.S. Attorney Patrick C. Askin of the U.S. Attorney’s Office Criminal Division in Camden.
Defense counsel: Justin Loughry Esq., Philadelphia
Gloucester County, New Jersey Man Admits Operating Mortgage Foreclosure Rescue, Real Estate Ponzi SchemeRead the Press Release
CAMDEN, N.J. – A Woolwich Township, New Jersey, man today admitted scamming distressed homeowners into giving him their houses and then soliciting fake real estate investments from private investors – secured by those same properties – that netted him more than $3 million in illicit profits, U.S. Attorney Paul J. Fishman announced.
Randy Poulson, 44, pleaded guilty before U.S. District Judge Renée Marie Bumb in Camden federal court to Count One of an indictment charging him with mail fraud.
According to documents filed in this case and statements made in court:
Poulson owned and operated Equity Capital Investments, LLC and Poulson Russo LLC and was the former president of the South Jersey Real Estate Investors Association. Paulson gave speeches, seminars, monthly dinners and various private tutorial sessions, purporting to teach real estate investing tips to individuals who paid fees to attend.
Poulson engaged in a two-pronged scheme. First, he promised to pay the mortgages of distressed homeowners facing foreclosure if they sold their homes to him. Using this method, Poulson obtained the deeds to more than 25 distressed homeowners’ residences, causing them to vacate the homes so renters could move in. Afterwards, Poulson then stopped making the monthly mortgage payments, causing those mortgages to go into foreclosure without the distressed homeowners’ knowledge.
In the second part of the scheme, Poulson solicited seminar attendees and other private investors to invest in Equity Capital Investments, which purportedly bought and sold real estate. Poulson told the investors that their money would be used to acquire and rehabilitate a property, which Poulson claimed he would rent out and then sell for a 10 to 20 percent return on the investment.
The properties for which Poulson solicited the investments were those he acquired in the first part of the scheme. Although Poulson claimed that he would use funds to acquire and rehabilitate those properties, Poulson spent the money on personal expenses and to repay other investors. As a result of the scheme, Poulson was able to fraudulently obtain more than $3 million from investors.
The mail fraud count to which with Poulson pleaded guilty carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gain or loss from the offense. Sentencing is scheduled for Oct. 2, 2015.
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 plea.
The government is represented by Attorney in Charge R. Stephen Stigall of the U.S. Attorney’s Office Criminal Division in Camden.
Defense counsel: Gilbert J. Scutti Esq., Somerdale, New Jersey