District of New Jersey
Press releases recorded for this federal judicial district.
Union County, New Jersey, Man Sentenced to 20 Years in Prison for Distributing Images of Child Sexual Abuse over the InternetRead the Press Release
NEWARK, N.J. – A Linden, New Jersey, man was sentenced today to 240 months in prison for emailing multiple videos and pictures of child sexual abuse, U.S. Attorney Paul J. Fishman announced.
John Ellenbacher, 49, previously pleaded guilty before U.S. District Judge Katharine S. Hayden to an information charging him with one count of distributing images of child pornography over the Internet. Judge Hayden imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Ellenbacher admitted that between Aug. 15, 2012, and Aug. 21, 2012, he distributed 90 images and six videos depicting child sexual abuse to others via email. During his plea hearing, Ellenbacher also admitted to possessing more than 600 images and videos of child pornography on computer devices seized by federal law enforcement agents when they executed a search warrant at his home on March 20, 2013.
In addition to the prison term, Judge Hayden sentenced Ellenbacher to lifetime supervised release. As part of his guilty plea, Ellenbacher agreed to forfeit the computers and computer accessories he used to commit the offense. He will also be required to register as a sex offender.
U.S. Attorney Fishman credited special agents of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), under the direction of Special Agent in Charge John P. Woods, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Danielle Alfonzo Walsman of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: Candace Hom Esq., Assistant Federal Public Defender, Newark
Man Responsible for Three-Day Armed Carjacking Spree in Newark, New Jersey, Sentenced to More Than 19 Years in PrisonRead the Press Release
NEWARK, N.J. – A Newark man who committed three armed carjackings in a three-day period was sentenced today to 235 months in prison, U.S. Attorney Paul J. Fishman announced.
Jihad Brown, 29, previously pleaded guilty before U.S. District Judge Katherine S. Hayden to four counts of an indictment charging him with carjacking (Counts One, Three and Five) and using a firearm in furtherance of a crime of violence (Count Two). Judge Hayden imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
On May 5, 2011, Brown carjacked a family at gunpoint as they were picking up their three children at a relative’s home in Newark. During the carjacking, Brown walked up as the woman was securing her infant into the car-seat. Brown physically pressed the barrel of his gun against the woman’s head and shouted for everyone to get out of the car. Afterwards, Brown and his associates fled in the victims’ car.
The following day, on May 6, 2011, Brown carjacked a Newark resident at gunpoint as the man was backing out of his driveway. Brown fled in the victim’s car.
On the third day, May 7, 2011, Brown carjacked four individuals, including two nursing students and a two-year old girl. During the carjacking, Brown jumped onto the hood of the SUV and pointed a revolver at one of the victims through the open sunroof. Brown and his associates fled in the carjacked car.
Less than an hour later, Brown and an associate were in a different car when Newark police officers attempted to conduct a motor-vehicle stop. Brown and his associate fled. The ensuing police chase ended when Brown’s car ran a stop sign and collided with another car. Inside Brown’s car, officers found the revolver that Brown had used during the carjacking.
In addition to the prison term, Judge Hayden sentenced Brown to five years of supervised release.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark; the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Carolyn A. Murray; and the Newark Police Department, under the direction of Director Eugene Venable, with the investigation leading to today’s sentencing.
The government is represented Assistant U.S. Attorney Osmar J. Benvenuto of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: David Holman Esq., Newark
Bergen County, New Jersey, Man Charged with Conspiracy to Provide Material Support to ISILRead the Press Release
NEWARK, N.J. – A Bergen County, New Jersey, man was charged today with conspiracy to provide material support to the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization, U.S. Attorney Paul J. Fishman, Assistant Attorney General for National Security John P. Carlin, and Special Agent in Charge Richard M. Frankel of the FBI’s Newark Division announced.
Samuel Rahamin Topaz, 21, of Fort Lee, New Jersey, was arrested at his home on June 17, 2015, and is charged by complaint with one count of conspiring with others in New Jersey and New York to provide services and personnel to ISIL. He made his initial appearance this afternoon before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court and was remanded without bail.
“Providing fighters and resources to a terrorist organization like ISIL is a threat to our country and its citizens,” U.S. Attorney Fishman said. “We will continue to use all the tools at our disposal to disrupt the efforts of those who are trying to do harm at home and abroad.”
“Samuel Topaz is alleged to have conspired with others to travel abroad to provide material support to ISIL,” Assistant Attorney General Carlin said. “Counterterrorism is the National Security Division’s highest priority. Stemming the flow of foreign fighters abroad and prosecuting those who attempt to provide material support to designated foreign terrorist organizations is key to our national security and public safety.”
"Material support of a terrorist organization is a violation of federal law,” FBI Newark Special Agent in Charge Richard M. Frankel said. “Topaz conspired to provide services and personnel to ISIL. Topaz discussed his desire to travel to Syria to join ISIL. Fortunately, this threat did not materialize due to the indefatigable efforts of the FBI’s Joint Terrorism Task Force. Prevention of terrorism is the FBI’s top priority and I ask the citizens of New Jersey to assist us in this task by remaining vigilant and contacting the FBI or the police if they see or hear anything suspicious.”
According to documents filed in this case and statements made in court:
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) was a resident of Rutherford, New Jersey, until departing the United States on May 5, 2015, to allegedly join ISIL. Conspirator 2 (CC-2) was a resident of Queens, New York, until he was arrested June 13, 2015, in New York on terrorism charges. Conspirator 3 (CC-3) is a resident of New Jersey.
On May 1, 2015, Topaz discussed CC-1’s plan to travel overseas to join ISIL. CC-1 sent Topaz a message stating that he would be leaving in a few days and asked, “[d]id you do what i [sic] advised you to do.” Topaz responded, “I’m saving my money for it bro trust me I got it.” On May 4, 2015, Topaz stated that he had his passport but needed cash to purchase his ticket. CC-2 replied, “My trip is looking months away[.] if u can take a loan out for 5k or even 2.5k then ur [sic] good, they take US dollars in dawla so u can eat and buy stuff, and they provide u with housing when u reach the land of Islam.” Topaz and CC-2 then discussed that they would be reuniting with CC-1 in Turkey before going to the dawla. CC-2 stated that CC-1 would go first, and then they would join him soon thereafter.
On May 21, 2015, Topaz and CC-3 discussed that they needed 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. Topaz also told CC-3 that they need to discuss “hijra” in person. Topaz later told members of the JTTF that he and his conspirators used the term “hijra” (often spelled “hijrah”) to refer to traveling overseas to join ISIL.
On June 13, 2015, CC-2 was arrested by the FBI and charged in a criminal complaint filed with the U.S. District Court of the Eastern District of New York with conspiring to provide material support to ISIL. On June 15, 2015, Topaz wrote to an unidentified individual that CC-2 had not been answering his phone and added, “We gotta leave ASAP.”
The count of conspiracy to provide material support to a designated foreign terrorist organization carries a maximum potential penalty of 15 years in prison and a fine of $250,000.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, and the JTTF, with the investigation leading to the 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 assistance from the Department of Justice’s National Security Division, Counterterrorism Section.
The charge and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Shipping Company Fined $750,000 for Environmental CrimesRead the Press Release
CAMDEN, N.J. – Norbulk Shipping UK LTD, a company based in Glasgow, United Kingdom, and operator of the vessel M/V Murcia Carrier, pleaded guilty today to failing to maintain an accurate oil record book and providing false statements to the U.S. Coast Guard concerning the vessel’s garbage record book, New Jersey U.S. Attorney Paul J. Fishman and the U.S. Department of Justice Environment and Natural Resources Division announced.
Immediately following the guilty plea in Camden federal court, the company was sentenced by U.S. District Judge Joseph H. Rodriguez to pay a criminal penalty of $750,000 and placed on probation for three years.
“Illegal discharges at sea damage our environment and endanger those who work in and enjoy our coastal waters,” U.S. Attorney Fishman said. “As we have shown before, shipping companies that engage in these criminal practices and deliberately discharge oil – and then lie about it to the Coast Guard – will be prosecuted.”
“Our oceans are life giving and life sustaining resources that our country and our world depend upon,” Assistant Attorney General John C. Cruden for the Environment and Natural Resources Division, said. “Ignoring perfectly legal and feasible ways to dispose of waste, the defendants chose instead to dump directly into the ocean. Today the company will pay a price for this inexcusable and criminal act.”
“Marine environmental protection is one of the Coast Guard’s primary missions,” Capt. Benjamin Cooper, the Sector Commander at Coast Guard Sector Delaware Bay, said. “The Coast Guard takes marine pollution seriously and works cohesively with our partner agencies to hold those who violate international law accountable for their actions. We anticipate the results of this case will deter future brazen illegal oil discharges into the sea.”
According to documents filed in this case and statements made in court:
The Act to Prevent Pollution from Ships (APPS) requires vessels like the M/V Murcia Carrier to maintain 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. Vessels like the M/V Murcia Carrier also must maintain a garbage record book that fully and accurately records the discharge of all garbage into the sea from the vessel.
On April 27, 2014, crew members of the M/V Murcia Carrier, at the direction of Chief Mate Valerii Georgiev, dumped overboard several barrels containing hydraulic oil. While Norbulk and Georgiev dispute the number of barrels dumped into the sea, the government believes it was approximately 20 barrels. The dumping occurred in international waters off the coast of Florida while the vessel was in transit from Costa Rica to New Jersey. It was not recorded in either the ship’s oil record book or garbage record book, as required. In an effort to conceal the dumping, crewmembers presented a U.S. Coast Guard boarding team with a false oil record book and garbage record book when the vessel arrived in Gloucester, New Jersey.
On June 15, 2015, Georgiev pleaded guilty to failing to maintain an accurate oil record book in violation of APPS. He is scheduled to be sentenced July 8, 2015.
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:
Georgiev: Michael Twersky Esq., Philadelphia
Norbulk: George Kontakis Esq., New York
Shipping Company Fined $750,000 for Environmental CrimesRead the Press Release
Norbulk Shipping UK Ltd, a company based in Glasgow, United Kingdom, and operator of the M/V Murcia Carrier, pleaded guilty to failing to maintain an accurate oil record book in violation of the Act to Prevent Pollution from Ships (APPS) and providing false statements to the U.S. Coast Guard concerning the vessel’s garbage record book. The company was sentenced to pay a criminal penalty of $750,000 and placed on three years of probation by the Honorable Joseph H. Rodriguez, the Department of Justice Environment and Natural Resources Division and the U.S Attorney’s Office for the District of New Jersey announced today.
“Our oceans are life giving and life sustaining resources that our country and our world depend upon,” said Assistant Attorney General John C. Cruden for the Environment and Natural Resources Division. “Ignoring perfectly legal and feasible ways to dispose of waste, the defendants chose instead to dump directly into the ocean. Today the company will pay a price for this inexcusable and criminal act.”
“Illegal discharges at sea damage our environment and endanger those who work in and enjoy our coastal waters,” said U.S. Attorney Paul J. Fishman for the District of New Jersey. “As we have shown before, shipping companies that engage in these criminal practices and deliberately discharge oil – and then lie about it to the Coast Guard – will be prosecuted.”
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. Additionally, vessels like the M/V Murcia Carrier must maintain a record known as garbage record book that fully and accurately records the discharge of all garbage into the sea from the vessel.
On April 27, 2014, crew members on board the M/V Murcia Carrier dumped overboard several barrels containing hydraulic oil, at the direction of the vessel’s Chief Mate Valerii Georgiev. While Norbulk and Georgiev dispute the number of barrels dumped into the sea, the government believes that approximately 20 barrels 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 either the ship’s oil record book or garbage record book as required. In an effort to conceal the dumping, crewmembers presented a U.S. Coast Guard boarding team with a false oil record book and garbage record book when the vessel arrived in Gloucester, New Jersey.
On June 15, 2015, Georgiev also pleaded guilty to failing to maintain an accurate oil record book in violation of APPS. He is scheduled to be sentenced at a future date.
“Marine environmental protection is one of the Coast Guard's primary missions,” said Captain Benjamin Cooper, the Sector Commander at Coast Guard Sector Delaware Bay. “The Coast Guard takes marine pollution seriously and works cohesively with our partner agencies to hold those who violate international law accountable for their actions. We anticipate the results of this case will deter future brazen illegal oil discharges into the sea.”
The case was investigated by U.S. Coast Guard Sector Delaware Bay and the U.S. Coast Guard Investigative Service. The case was prosecuted by Joel La Bissonniere of the Environmental Crimes Section of the Department of Justice and Assistant U.S. Attorneys Kathleen P. O’Leary and Matthew Smith of the U.S. Attorney’s Office for the District of New Jersey.
Salesman Sentenced to 37 Months in Prison for Role in Bribes-For-Test-Referrals Scheme Involving New Jersey Clinical LabRead the Press Release
NEWARK, N.J. – A Monmouth County, New Jersey, man was sentenced today to 37 months in prison for his role in 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.
Len Rubinstein, 44, of Holmdel, New Jersey, previously pleaded guilty before U.S. District Judge Stanley R. Chesler to an information charging him with one count of conspiracy to commit bribery and one count of money laundering. Judge Chesler imposed the sentence today in Newark federal court.
Including Rubinstein, 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 other cases and statements made in court:
From May 2012 through April 2013, Rubinstein agreed with BLS president David Nicoll, 41, of Mountain Lakes, New Jersey, his brother, Scott Nicoll, 34, of Wayne, New Jersey, and others to pay doctors to refer patients to BLS for testing of blood specimens. Rubinstein paid cash bribes to doctors as part of the conspiracy. Rubinstein admitted he used Delta Consulting Group LLC – an entity he controlled – to hide the money he received from BLS and used to make bribe payments to doctors.
In addition to the prison term, Judge Chesler ordered Rubinstein to serve one year of supervised release, pay a $10,000 fine, and forfeit $250,000.
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: Charles Uliano Esq., West Long Branch, New Jersey
Passaic County, New Jersey, Man Sentenced to Five Years in Prison for Role in $15 Million Mortgage Fraud SchemeRead the Press Release
CAMDEN, N.J. – A Passaic County, New Jersey, man was sentenced today to 60 months in prison for conspiring to launder money as part of a $15 million mortgage fraud scam that used phony documents and “straw buyers” to make illegal profits on overbuilt condos, U.S. Attorney Paul J. Fishman announced.
Nicholas Tarsia, Jr., 67, of Totowa, New Jersey, previously pleaded guilty before U.S. District Judge Jerome B. Simandle to a superseding information charging him with one count of conspiring to commit money laundering. Judge Simandle imposed the sentence today in Camden federal court.
According to the documents filed in this case and statements made in court:
Tarsia was among 13 defendants charged in a series of indictments returned on July 2012 and November 2013 with conspiracy to commit wire fraud and conspiracy to commit money laundering. Tarsia and his conspirator Timothy Ricks of Essex County, New Jersey, caused $15 million in fraudulent mortgage loans to be funded during 2006, 2007, and 2008, to enable unqualified buyers of real estate to purchase real estate properties. Once the funds for these mortgages were deposited into a title company’s escrow account, Tarsia extracted proceeds from the fraud through wire transfers and checks to himself and his conspirators. Tarsia and conspirator Ricks, in turn, transmitted a portion of those proceeds to other conspirators, including Dwayne Onque and Orlando Allen. In addition, conspirator Darryl Henry, in turn, transmitted a portion of those proceeds to conspirators Kinard J. Henson and Willie W. Richardson.
In addition to the prison term, Judge Simandle sentenced Tarsia to serve three years of supervised release. Restitution will be determined at a hearing scheduled for July 9, 2015.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark; and IRS–Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, in Newark, for their roles in the investigation.
The government is represented by Assistant U.S. Attorneys Matthew T. Smith and Jacqueline M. Carle of the U.S. Attorney’s Office Criminal Division in Camden.
Defense counsel: Telesforo Del Valle Jr. Esq., New York
Monmouth County, New Jersey, Man, Sentenced to 21 Months in Prison, in Racketeering Conspiracy/Illegal Online Gambling EnterpriseRead the Press Release
NEWARK, N.J. – A Monmouth County, New Jersey, man was sentenced today to 21 months in prison for his role in a racketeering conspiracy, U.S. Attorney Paul J. Fishman announced.
Michael O’Donnell, 51, Wall Township, previously pleaded guilty before U.S. District Judge Claire C. Cecchi, to an information charging him with conspiracy to violate the Racketeer Influenced and Corrupt Organizations, or RICO, statute by participating in the activities of Beteagle, an overseas Website that facilitated online sports betting. Judge Cecchi imposed the sentence today in Newark federal court.
According to documents filed in this and other cases and statements made in court:
Joseph Graziano, 78, of Springfield, was the principal owner of Beteagle.com, a website located in Costa Rica and used to facilitate illegal online sports betting. Dominick Barone, 45, of Springfield, New Jersey, worked with Graziano in carrying out the daily activities of the website.
O’Donnell was given access to Beteagle and was considered an “agent” of the website. Before the advent of computerized betting, these agents would have been referred to as “bookmakers” or “bookies.” The agents had the ability to track the “sub-agents,” under them and the wagers placed by their bettors. The agent or sub-agent maintained a group of bettors (the “package”) and were responsible for those bettors.
O’Donnell was an agent who assisted in the illegal gambling business conducted through the website. To place bets online, the agent or sub-agent issued the bettor a username and password to access Beteagle. This access was not given online and no money or credits were made or transferred through the website. O’Donnell and his conspirators paid out winnings or collected losses in person. The agent or sub-agent paid a fee to the website for each bettor added to a package. O’Donnell collected money from bettors and then passed a portion of the proceeds to Barone in furtherance of the racketeering scheme.
In addition to the prison term, Judge Cecchi ordered O’Donnell to serve three years of supervised release and pay a $5,000 fine.
Graziano has pleaded guilty to his role in the scheme and is currently scheduled for sentencing on June 25, 2015. Barone was sentenced to 18 months’ imprisonment.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark; the Bayonne Police Department, Special Investigations Unit, under the direction of Chief Drew Niekrasz; IRS-Criminal Investigation under the direction of Special Agent in Charge Jonathan D. Larsen; the N.J. State Police, under the direction of Superintendent Rick Fuentes; and the Monmouth County Prosecutor’s Office, under the direction of Acting Prosecutor Christopher Gramiccioni, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Anthony Moscato of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: Robert L. Galantucci Esq., Hackensack, New Jersey
Millstone, New Jersey, Mortgage Broker Sentenced to One Year in Prison for Extortion ConspiracyRead the Press Release
TRENTON, N.J. – A Millstone, New Jersey, man was sentenced today to 12 months in prison for conspiring to extort victims out of money and property by falsely stating they were the subjects of IRS criminal investigations, U.S. Attorney Paul J. Fishman announced.
Robert G. Cusic Jr., 46, previously pleaded guilty before U.S. District Judge Joel A. Pisano to an information charging him with conspiracy to commit extortion under fear of economic harm. U.S. District Judge Anne E. Thompson imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:
Cusic, Thomas G. Frey, 55, of Edison, New Jersey, and another conspirator (identified only as CC-1), schemed to extort and to defraud four victims, including two police officers, by falsely representing to the victims that they were the subjects of criminal investigations, principally by the IRS, in connection with investment properties some of them owned. Cusic falsely represented that while at a property formerly owned by one of the victims, Cusic encountered two IRS special agents (SA-1 and SA-2) who questioned him extensively about some of the victims.
Frey, a lawyer and certified public accountant, falsely told the victims he had ongoing communications with SA-1 about the purported investigation and had a special relationship with SA-1. Frey told the victims if they paid up to $20,000 each, he would call SA-1 and have the investigation converted from a criminal tax investigation to an IRS “desk audit,” a civil matter. Frey and CC-1 falsely stated that if the victims did not retain his services and pay the fee, the investigation would likely result in the arrest of certain victims.
Cusic admitted the goal of the conspiracy was to obtain approximately $80,000 in fees for Frey and to cause the victims to sell certain of the properties to Frey and others. Cusic stood to receive a portion of any fees paid by the victims, a percentage of the sale price of each of the investment properties sold to Frey and others, and property management fees on any of the properties sold.
In addition to the prison term, Judge Thompson sentenced Cusic to serve three years of supervised release and ordered him to pay a $3,000 fine.
Frey previously pleaded guilty before Judge Pisano to two counts of an indictment charging him with conspiracy to commit extortion under fear of economic harm and conspiracy to commit wire fraud. He was sentenced on April 27, 2015, to 27 months in prison.
Fishman credited special agents of the Treasury Inspector General for Tax Administration, under the direction of Special Agent in Charge Rodney Davis, Washington Field Division, for the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Eric W. Moran of the U.S. Attorney’s Office Special Prosecutions Division in Newark.
Defense Counsel: Peter R. Willis Esq., Jersey City, New JerseyTwo New Jersey Men Sentenced to Prison for Their Roles in Illegal Online Gambling EnterpriseRead the Press Release
NEWARK, N.J. – Two members of a racketeering conspiracy involving the Genovese Crime Family of La Cosa Nostra and an online sports betting operation were sentenced today in federal court, U.S. Attorney Paul J. Fishman announced.
Dominick J. Barone, 45, of Springfield, New Jersey, and Eric Patten, 38, of Bayonne, New Jersey, were sentenced to 18 and 22 months in prison, respectively. Barone and Patten previously pleaded guilty before District Judge Claire C. Cecchi to separate informations charging them with one count of racketeering conspiracy. Judge Cecchi imposed both sentences today in Newark federal court.
According to documents filed in this case and statements made in court:
Joseph Graziano, 78, of Springfield, was the principal owner of Beteagle.com, a website located in Costa Rica and used to facilitate illegal online sports betting. Barone worked with Graziano in carrying out the daily activities of the website and both men conspired with the Genovese Crime Family of La Cosa Nostra in the operation of Beteagle.
Joseph Lascala, 80, of Monroe, New Jersey, was the alleged “capo” and a made member of the Genovese family operating in northern New Jersey. He directed the criminal activities of a smaller group of associates, referred to as a crew, whose activities included illegal gambling and the collection of unlawful debt.
Associates of the crew were given access to Beteagle and were considered “agents.” Before the advent of computerized betting, these agents would have been referred to as “bookmakers” or “bookies.” The agents had the ability to track the “sub-agents,” under them and the wagers placed by their bettors. The agent or sub-agent maintained a group of bettors (the “package”) and were responsible for those bettors. Patten was a one of the sub-agents who assisted in the illegal gambling business conducted through the website.
To place bets online, the agent or sub-agent issued the bettor a username and password to access Beteagle. This access was not given online and no money or credits were made or transferred through the website. Associates of the crew paid out winnings or collected losses in person. If a bettor failed to pay his gambling losses, the crew used their La Cosa Nostra status and threats of violence to collect on these debts.
The agent or sub-agent paid a fee to the website for each bettor added to a package. Barone and others made weekly collections of cash in furtherance of the scheme.
In addition to the prison terms, Judge Cecchi ordered Barone and Patten to each serve three years of supervised release and pay a $5,000 fine. As part of his plea agreement, Barone must forfeit $100,000.
Graziano has pleaded guilty to his role in the scheme and is currently scheduled for sentencing on June 25, 2015.
Charges against Lascala are still pending. The charges and allegations against him are merely accusations and he is presumed innocent unless and until proven guilty.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark; the Bayonne Police Department, Special Investigations Unit, under the direction of Chief Drew Niekrasz; IRS-Criminal Investigation under the direction of Special Agent in Charge Jonathan D. Larsen; the N.J. State Police, under the direction of Superintendent Rick Fuentes; and the Monmouth County Prosecutor’s Office, under the direction of Acting Prosecutor Christopher Gramiccioni, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Anthony Moscato of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel:
Barone: John C. Whipple Esq. Morristown, New Jersey
Patten: Alan Dexter Bowman Esq., Newark
North Jersey Real Estate Developer Charged with Soliciting Bribes for Palisades Park OfficialRead the Press Release
NEWARK, N.J. – A real estate developer and landlord of commercial buildings in Palisades Park, New Jersey, appeared in federal court today to face a criminal complaint charging him with allegedly soliciting a $50,000 bribe payment for a Palisades Park borough official, U.S. Attorney Paul J. Fishman announced.
Chung S. Kho, 68, of Fort Lee, New Jersey, is charged by complaint with one count of using facilities in interstate commerce to promote bribery. Kho appeared this afternoon before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court and was released on $50,000 unsecured bond.
According to the complaint:
Beginning in October 2010, Kho met with an individual (“Individual #1”) who sought to open a karaoke business at a multi-unit commercial building owned by Kho. Kho guaranteed that there would be no problem in obtaining a necessary change of use permit from Palisades Park to operate a karaoke business at the location. Kho bragged about his close relationship with a Palisades Park borough official who had previously assisted him with the development of other large-scale commercial buildings in Palisades Park.
Individual #1 entered into a lease agreement with Kho in October 2010 for the commercial space to open the karaoke business. In December 2010, Kho allegedly told Individual #1 that the official would obtain the necessary approvals for the karaoke business if Individual #1 paid the official a $50,000 bribe. Over the next few days, Individual #1 attempted to negotiate a lower amount, but was eventually told by Kho that the official would accept nothing less than $50,000 in cash. By the time Individual #1 agreed to pay $50,000 to the official, Kho informed Individual #1 that it was too late to make the payment. On Dec. 15, 2010, Individual #1’s application for a change of use was denied by the Palisades Park Planning Board.
The charge of using facilities in interstate commerce to promote bribery with which Kho is charged carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gain or loss from the offense.
U.S. Attorney Fishman credited special agents of the FBI’s Newark Division, Garret Mountain Resident Agency, under the direction of Special Agent in Charge Richard M. Frankel; special agents of the U.S. Department of Housing and Urban Development, Office of the Inspector General, under the direction of Special Agent in Charge Christina Scaringi; and special agents of IRS – Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation.
The government is represented by Assistant U.S. Attorney Jacques S. Pierre of the Special Prosecutions Division in Newark.
The charge and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Defense counsel: Robert C. Scrivo, Esq., Morristown, New Jersey
New Jersey Tax Preparer Convicted of Tax FraudRead the Press Release
TRENTON, N.J. – A Union County, New Jersey, tax preparer was today convicted of tax fraud for getting unearned tax refunds for his clients to make extra money for himself, U.S. Attorney Paul J. Fishman announced.
Courtney Johnson, 45, of Union Township, New Jersey, was convicted of six counts of aiding and assisting in the preparation of false federal income tax returns following a two week trial before U.S. District Judge Anne E. Thompson in Trenton federal court. The jury deliberated four hours before delivering the verdicts.
According to documents filed in this case and the evidence at trial:
Johnson prepared and filed federal individual income tax returns that were false and fraudulent as to material matters. The returns attached schedules for fictitious businesses that the taxpayers did not own or operate, inflated charitable contributions, fabricated itemized deductions – all to generate fraudulently inflated refunds.
His wife, Carol Johnson, 44, who ran the business with him, previously pleaded guilty to misprision of a felony and is awaiting sentencing. The Johnsons operated tax preparation businesses in South Orange and Jersey City, New Jersey.
Each false tax return count carries a maximum potential penalty of three years in prison and a $250,000 fine. Sentencing for Courtney Johnson is scheduled for Sept. 25, 2015.
U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s guilty verdict.
The government is represented by Assistant U.S. Attorneys Jane H. Yoon and Jillian J. Reyes of the Criminal Division in Newark.
Defense counsel: Thomas R. Ashley Esq., NewarkFormer Chief Executive Officer of Oil Services Company Pleads Guilty to Foreign Bribery ChargeRead the Press Release
WASHINGTON – The former co-chief executive officer (CEO) of PetroTiger Ltd. – a British Virgin Islands oil and gas company with operations in Colombia and formerly with an office in New Jersey – pleaded guilty today to conspiring to pay bribes to a foreign government official in violation of the Foreign Corrupt Practices Act (FCPA).
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Paul J. Fishman of the District of New Jersey, and Special Agent in Charge Richard M. Frankel of the FBI’s Newark Division made the announcement.
Joseph Sigelman, 43, of Miami and the Philippines, pleaded guilty today in the District of New Jersey to Count One of a superseding indictment charging him with conspiracy to violate the FCPA. His trial had commenced on June 1, 2015. Sigelman will be sentenced June 16, 2015.
At his plea hearing, Sigelman admitted to conspiring with co-CEO Knut Hammarskjold, PetroTiger’s former general counsel Gregory Weisman, and others to make illegal payments of $333,500 to David Duran, an employee of the Colombian national oil company, Ecopetrol. Sigelman admitted to making the payments in exchange for Duran’s assistance in securing a $45 million oil services contract for PetroTiger.
Sigelman is the third former PetroTiger executive to plead guilty in the case. On Nov. 8, 2013, Weisman pleaded guilty to conspiracy to violate the FCPA and to commit wire fraud. On Feb. 18, 2014, Hammarskjold pleaded guilty to conspiracy to violate the FCPA and to commit wire fraud.
The case was brought to the attention of the department through a voluntary disclosure by PetroTiger, which fully cooperated with the department’s investigation. Based on PetroTiger’s voluntary disclosure, cooperation, and remediation, among other factors, the department declined to prosecute PetroTiger.
The department has worked closely with, and has received significant assistance from, its law enforcement counterparts in the Republic of Colombia, which announced in March of this year the arrests of Duran, his wife, a former employee of PetroTiger, and several other officials from Ecopetrol. Those charges are pending, and a defendant is presumed innocent unless and until proven guilty.
The department also received significant assistance from Ecopetrol, the National Hydrocarbons Agency, the Office of the Secretary of Transparency of the Republic of Colombia, the Office of the Attorney General of the Republic of Colombia and other agencies within the Colombian government. The department also appreciates the assistance of the Republic of the Philippines, including the Bureau of Immigration and the Republic of Panama. The department would also like to thank the United Kingdom’s Metropolitan Police International Assistance Unit for their assistance.
The case is being investigated by the FBI’s Newark Division. The case is being prosecuted by Deputy Chief Patrick Stokes and Assistant Chief Tarek Helou, with support from Assistant Chief Daniel Kahn, of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Zach Intrater and Glenn Moramarco of the District of New Jersey. The Criminal Division’s Office of International Affairs also provided significant assistance.
Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.
Defense counsel: Matthew I. Menschel, William A. Burck, Juan Pablo Morillo Esqs., Washington; Patrick J. Egan Esq., Philadelphia
Philadelphia Man Sentenced to Five Years in Prison for Robbing Five Banks Across Two StatesRead the Press Release
CAMDEN, N.J. - A Philadelphia man was sentenced today to 60 months in prison for robbing five banks in New Jersey and Pennsylvania over four months, U.S. Attorney Paul J. Fishman announced today.
Nathaniel Stroud, 34, previously pleaded guilty before U.S. District Judge Joseph E. Irenas in Camden federal court to an information charging him with two counts of bank robbery. Judge Irenas imposed the sentence today in Camden federal court.
According to documents filed in the case and statements made in court:
Stroud admitted robbing the following banks:
Date
Bank
Location
Sept. 27, 2013
PNC Bank
2401 Welsh Road, Philadelphia
Nov. 8, 2013
Roma Bank
80 Hartford Road, Delran, New Jersey
Nov. 15, 2013
TD Bank
13 Levitt Parkway, Willingboro, New Jersey
Dec. 19, 2013
TD Bank
2231 Cottman Avenue, Philadelphia
Jan. 9, 2014
1st Constitution Bank
140 Mercer Street, Hightstown, New Jersey
Stroud admitted that at each robbery, he handed the teller a note demanding cash and threatening the use of a gun.
In addition to the prison term, Judge Irenas sentenced Stroud to serve three years of supervised release and ordered him to pay restitution of $21,640.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel, in Newark; the Burlington County Prosecutor’s Office, under the direction of Prosecutor Robert D. Bernardi: and the Mercer County Prosecutor’s Office, under the direction of Acting Prosecutor Angelo J. Onofri, with the investigation. He also thanked the Delran, Willingboro and Hightstown police departments for their assistance.
The government is represented by Assistant U.S. Attorney Matthew J. Skahill of the U.S. Attorney's Office Special Prosecutions Division in Camden.
Defense counsel: Maggie Moy Esq., Assistant Federal Public Defender, Camden
Ft. Dix Man Arrested for Alleged Sexual AssaultRead the Press Release
TRENTON, N.J. – A Ft. Dix, New Jersey, man was arrested by the Naval Criminal Investigative Service at a U.S. Marine training facility in Pensacola, Florida, on charges that he allegedly sexually assaulted two young women at Joint Base McGuire-Dix-Lakehurst, New Jersey, U.S. Attorney Paul J. Fishman announced today.
Michael C. Taylor, 19, of Fort Dix, New Jersey, is charged by indictment with three counts of aggravated sexual abuse by force and two counts of abusive sexual contact. He had his initial court appearance this morning before U.S. Magistrate Judge Charles J. Kahn Jr. in Pensacola, Florida, federal court. He will have an initial appearance and arraignment in Trenton federal court at a date to be determined.
According to the indictment:
On March 15, 2014, Taylor caused two individuals to engage in sexual acts by the use of force, and also caused one of the individuals to engage in sexual contact by the use of force. At the time of the alleged offenses, Taylor, who is now a member of the U.S. Marine Corps, was living in military housing at Joint Base McGuire-Dix-Lakehurst as a military dependent.
The three counts of sexual assault each carry a maximum potential penalty of life in prison and a $250,000 fine. The two counts of abusive sexual contact each carry a maximum potential penalty of 10 years in prison and a $250,000 fine.
U.S. Attorney Fishman credited special agents of the U.S. Air Force Office of Special Investigations, under the leadership of Detachment Commander Matthew J. Sarkissian, with the investigation leading to the indictment.
The government is represented by Assistant U.S. Attorney Molly Lorber of the U.S. attorney’s Office Criminal Division in Trenton.
The charges and allegations contained in the indictment are merely accusations and the defendant is considered innocent unless and until proven guilty.
Franklinville, New Jersey, Man Admits Using Fraudulent Invoices to Steal More Than $600,000 from Elementary Schools Across the U.S.Read the Press Release
CAMDEN, N.J. – A Franklinville, New Jersey, man today admitted mailing fraudulent invoices for non-existent workbooks to more than 73,000 schools throughout the United States, U.S. Attorney Paul J. Fishman announced.
Robert S. Armstrong, 44, pleaded guilty before U.S. District Judge Noel L. Hillman in Camden federal court to Count One of a superseding indictment charging him with mail fraud.
According to documents filed in this case and statements made in court:
Armstrong admitted that from July 2014 through September 2014, he sent more than 73,000 fraudulent invoices to schools throughout the United States seeking payment for non-existent workbooks. Armstrong opened mail boxes in Sewell, New Jersey, and Las Vegas, Nevada, under the name of his business, Scholastic School Supply LLC. Armstrong then drafted fraudulent invoices typically seeking payments of $647.50 for batches of math or language workbooks that the schools never ordered or received. In order to make the invoices appear legitimate, Armstrong included phony International Standard Book Numbers (ISBN), which are unique identifying numbers assigned to each book published in the United States.
Armstrong used a bulk mailing company to mail the phony invoices to more than 73,000 schools. Each invoice included a payment envelope preaddressed to Scholastic School Supply’s Sewell or Las Vegas address.
In response to the phony invoices, hundreds of schools throughout the United States sent payments to Scholastic School Supply. Armstrong deposited the checks from the victim schools into at least seven accounts that he had opened at various banks in the name of Scholastic School Supply. As of March 12, 2015, 938 schools sent checks to Scholastic School Supplies totaling $612,774.
Under terms of the plea agreement, Armstrong has agreed to serve a sentence of 44 months in prison followed by three years of supervised release. According to the Federal Rules of Criminal Procedure, when the parties agree to a stipulated sentence, the judge has the opportunity to accept or reject the plea agreement. Judge Hillman said he will reserve his decision on accepting plea agreement until he reviews a pre-sentence report from the U.S. Probation Office, which typically takes 60 to 90 days to prepare. Contingent upon the acceptance of his guilty plea by Judge Hillman, Armstrong’s sentencing is scheduled for Sept. 25, 2015.
U.S. Attorney Fishman credited law enforcement officers of the U.S. Postal Inspection Service, under the direction of Inspector in Charge David Bosch in Philadelphia; the Gloucester County Prosecutor’s Office, under the direction of Prosecutor Sean F. Dalton; the Gloucester County Office of Consumer Protection, under the direction of Harold Spence, Director of Consumer Affairs; the Washington Township Police Department, under the direction of Raphael Muniz, Chief of Police; and the Franklin Township Police Department, under the direction of Mike Rock, Chief of Police.
The government is represented by Assistant U.S. Attorney Diana Carrig of the U.S. Attorney’s Office Criminal Division in Camden and Assistant U.S. Attorney Meredith Williams of the U.S. Attorney’s Office Criminal Division in Newark.
Union County, New Jersey, Man Admits Smuggling $65 Million in Sensitive Electronic Components to Russia’s Ministry of Defense, Federal Security ServiceRead the Press Release
Played Key Role in Illegal International Procurement Network
NEWARK, N.J. – A Mountainside, New Jersey, man today admitted his role in an international procurement network that obtained and smuggled more than $65 million worth of electronics from the United States to Russia in violation of export control laws, U.S. Attorney Paul J. Fishman announced.
Alexander Brazhnikov Jr., 36, a naturalized United States citizen born in Moscow, pleaded guilty before U.S. District Judge William J. Martini in Newark federal court to an information charging him with one count of conspiracy to commit money laundering, one count of conspiracy to smuggle electronics from the United States, and one count of conspiracy to violate the International Emergency Economic Powers Act (IEEPA).
“As he admitted in court, Brazhnikov was responsible for nearly 2,000 illegal shipments of regulated, sensitive electronics components, many of which wound up in the hands of Russian military and security forces,” U.S. Attorney Fishman said. “He also admitted going to extraordinary lengths to conceal the nature and destination of the shipments, as well to hide the tens of millions of dollars in illegal proceeds generated by the scheme. Shutting down schemes like this keep all of us safer.”
“Alexander Brazhnikov Jr. significantly undermined the national security of the U.S. by procuring sophisticated, high-tech electronic components and smuggling them into Russia, thereby enhancing the capabilities of the Russian Intelligence Service, and contributing to the modernization of both the Russian Military Service and the Russian Nuclear Weapons Program,” Richard M. Frankel, FBI Special Agent in Charge, Newark, said. “Now, Brazhnikov must face the consequences of his actions and the full power of U.S. jurisprudence.”
Brazhnikov Jr. was arrested at his home on June 26, 2014, following a joint investigation by the FBI, the U.S. Department of Commerce (DOC), and the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). From January 2008 through June 2014, he was the owner, chief executive officer, and principal operator of four New Jersey microelectronics export companies, each of which were used in the various conspiracies uncovered by the investigation. Following his arrest, special agents seized $4,075,237 in proceeds related to the charged offenses, as well as real property and other assets valued at more than $600,000.
“Today's plea represents a collaborative effort among law enforcement agencies,” Sidney Simon, Special Agent in Charge of the U.S. Department of Commerce, Bureau of Industry and Security, Office of Export Enforcement, New York Field Office, said. “I commend our colleagues at the FBI and Homeland Security Investigations for their efforts. The Office of Export Enforcement will continue to pursue violators of our export control laws by leveraging our unique authorities to protect national security.”
“HSI will use all the resources at its disposal to prevent sensitive and restricted technology from being exported illegally,” Acting Special Agent in Charge Kevin Kelly, HIS, Newark, said. “HSI will do all in its power as the principal enforcer of export controls to ensure that sensitive technology doesn’t fall into the wrong hands.”
According to documents filed in this case and statements made in court:
Brazhnikov Jr. and his companies are part of a sophisticated procurement network that has surreptitiously acquired large quantities of license-controlled electronic components from American manufacturers and vendors and exported those items to Russia on behalf of Russian business entities that were authorized to supply them to the Ministry of Defense of the Russian Federation, the Federal Security Service of the Russian Federation (the FSB), and Russian entities involved in the design of nuclear warheads, weapons, and tactical platforms.
The defendant conspired with his father, Alexander Brazhnikov Sr., owner of a Moscow-based procurement firm whose agents helped initiate the purchase of electronics components from United States vendors and manufacturers on behalf of the conspirators’ clients in Russia. Brazhnikov Jr. finalized the purchase and acquisition of the requested components from the various distributors, then repackaged and shipped them to Moscow. He routinely falsified the true identity of the end-user of the components and the true value of the components in order to avoid filling out required export control forms. Brazhnikov Jr. purposefully concealed the true destination of the parts that were exported by directing that the shipments be sent to various “shell” addresses in Russia – some of which have been identified as vacant storefronts and apartments – which were established and controlled by the Moscow-based network. All shipments initially directed to the shell addresses were redirected to a central warehouse controlled by the conspirators’ Moscow-based network.
The funds for the network’s illicit transactions were obtained from the various Russian purchases and initially deposited into one of the conspirators’ primary Russia-based accounts. Disbursements for purchases were made from that primary Russian account through one or more foreign accounts held by shell corporations in the British Virgin Islands, Latvia, Marshall Islands, Panama, Ireland, England, United Arab Emirates, and Belize, and ultimately into one of the defendant’s U.S.-based accounts. The network’s creation and use of dozens of bank accounts and shell companies abroad was intended to conceal the true sources of funds in Russia, as well as the identities of the various Russian defense contracting firms receiving U.S. electronics components.
The money laundering conspiracy charge to which Brazhnikov Jr. pleaded guilty carries a maximum potential penalty of 20 years in prison and a $500,000 fine. The smuggling and IEEPA conspiracy charges carry a maximum potential penalty, per count, of five years in prison and a $250,000 fine. Sentencing is scheduled for Sept. 15, 2015. Brazhnikov Jr. also agreed to the entry of a forfeiture money judgment of $65 million.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Frankel in Newark; the U.S. Department of Commerce, under the direction of Special Agent in Charge Simon, New York Field Office; special agents of HSI, under the direction of Acting Special Agent in Charge Kelly. He also thanked officers from the Union County Police Department, under the direction of Captain Chris Debbie; and officers of the Mountainside Police Department, under the direction of Police Chief Allan Attanasio, for their important contributions to the investigation. The U.S. Justice Department’s Office of International Affairs provided assistance with this case.
The government is represented by Assistant U.S. Attorneys Dennis C. Carletta of the U.S. Attorney’s Office National Security Unit, and Peter Gaeta of the office’s Asset Forfeiture and Money Laundering Unit in Newark.
Defense counsel: Jack Arseneault Esq., Chatham, New Jersey
Rochelle Park, New Jersey, Man Admits Selling Bogus Construction Safety Certification CardsRead the Press Release
CAMDEN, N.J. – A Rochelle Park, New Jersey, man today admitted selling Occupational Safety and Health Administration (OSHA) certifications to New Jersey carpenters who never completed the required training, U.S. Attorney Paul J. Fishman announced.
George Bello, 44, pleaded guilty before U.S. District Judge Joseph H. Rodriguez in Camden federal court to an information charging him with making false statements in the creation and sale of construction industry certification forms, known as “OSHA 30” cards.
According to documents filed in this case and statements made in court:
The OSHA 30 training program provides construction workers with foundational knowledge and skills in occupational safety. Frederick Prinz, 38, of Marmora, New Jersey, was certified by OSHA’s Outreach Training Program (OTP) at the Rocky Mountain Education Center, in Red Rocks, Colorado, to issue workers OSHA 30 cards after they passed a 30-hour OTP training course. For a fee of $150 to $250 per card, Bello, Prinz and others sold false OSHA 30 certifications to carpenters who never completed the required training. The fees were split between Bello, Prinze and others who promoted the fraudulent cards at various work sites.
The charge to which Bello pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for Sept. 21, 2015. Prinz previously pleaded guilty to his role and was sentenced to two years of probation on Jan. 29, 2015.
U.S. Attorney Fishman credited special agents of the Department of Labor-Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, under the direction of Special Agent in Charge Cheryl Garcia, with the investigation leading to today’s guilty plea. He also thanked OSHA for its assistance.
The government is represented by V. Grady O’Malley, Senior Litigation Counsel of the U.S. Attorney’s Office Organized Crime/Gangs Unit in Newark.
Defense counsel: Raymond F. Flood Esq., Hackensack, New Jersey
New Jersey Man Admits Smuggling $65 Million in Sensitive Electronic Components to Russia’s Ministry of Defense, Federal Security ServiceRead the Press Release
A Mountainside, New Jersey, man today admitted his role in an international procurement network that obtained and smuggled more than $65 million worth of electronics from the United States to Russia in violation of export control laws, U.S. Attorney Paul J. Fishman of the District of New Jersey announced.
Alexander Brazhnikov Jr., 36, a naturalized U.S. citizen born in Moscow, pleaded guilty before U.S. District Court Judge William J. Martini of the District of New Jersey, to an information charging him with one count of conspiracy to commit money laundering, one count of conspiracy to smuggle electronics from the United States and one count of conspiracy to violate the International Emergency Economic Powers Act (IEEPA).
“As he admitted in court, Brazhnikov was responsible for nearly 2,000 illegal shipments of regulated, sensitive electronics components, many of which wound up in the hands of Russian military and security forces,” said U.S. Attorney Fishman. “He also admitted going to extraordinary lengths to conceal the nature and destination of the shipments, as well to hide the tens of millions of dollars in illegal proceeds generated by the scheme. Shutting down schemes like this keep all of us safer.”
“Alexander Brazhnikov Jr. significantly undermined the national security of the U.S. by procuring sophisticated, high-tech electronic components and smuggling them into Russia, thereby enhancing the capabilities of the Russian Intelligence Service and contributing to the modernization of both the Russian Military Service and the Russian Nuclear Weapons Program,” said Special Agent in Charge Richard M. Frankel of the FBI’s Newark Division. “Now, Brazhnikov must face the consequences of his actions and the full power of U.S. jurisprudence.”
Brazhnikov Jr. was arrested at his home on June 26, 2014, following a joint investigation by the FBI, the U.S. Department of Commerce (DOC) and the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI). From January 2008 through June 2014, he was the owner, chief executive officer and principal operator of four New Jersey microelectronics export companies, each of which were used in the various conspiracies uncovered by the investigation. Following his arrest, special agents seized $4,075,237 in proceeds related to the charged offenses, as well as real property and other assets valued at more than $600,000.
“Today's plea represents a collaborative effort among law enforcement agencies,” said Special Agent in Charge Sidney Simon of the DOC, Bureau of Industry and Security, Office of Export Enforcement’s New York Field Office. “I commend our colleagues at the FBI and Homeland Security Investigations for their efforts. The Office of Export Enforcement will continue to pursue violators of our export control laws by leveraging our unique authorities to protect national security.”
“HSI will use all the resources at its disposal to prevent sensitive and restricted technology from being exported illegally,” said Acting Special Agent in Charge Kevin Kelly of HSI’s Newark Field Office. “HSI will do all in its power as the principal enforcer of export controls to ensure that sensitive technology doesn’t fall into the wrong hands.”
According to documents filed in this case and statements made in court: Brazhnikov Jr. and his companies are part of a sophisticated procurement network that has surreptitiously acquired large quantities of license-controlled electronic components from American manufacturers and vendors and exported those items to Russia on behalf of Russian business entities that were authorized to supply them to the Ministry of Defense of the Russian Federation, the Federal Security Service of the Russian Federation (FSB) and Russian entities involved in the design of nuclear warheads, weapons and tactical platforms.
The defendant conspired with his father, Alexander Brazhnikov Sr., owner of a Moscow-based procurement firm whose agents helped initiate the purchase of electronics components from United States vendors and manufacturers on behalf of the conspirators’ clients in Russia. Brazhnikov Jr. finalized the purchase and acquisition of the requested components from the various distributors, then repackaged and shipped them to Moscow. He routinely falsified the true identity of the end-user of the components and the true value of the components in order to avoid filling out required export control forms. Brazhnikov Jr. purposefully concealed the true destination of the parts that were exported by directing that the shipments be sent to various “shell” addresses in Russia – some of which have been identified as vacant storefronts and apartments – which were established and controlled by the Moscow-based network. All shipments initially directed to the shell addresses were redirected to a central warehouse controlled by the conspirators’ Moscow-based network.
The funds for the network’s illicit transactions were obtained from the various Russian purchases and initially deposited into one of the conspirators’ primary Russia-based accounts. Disbursements for purchases were made from that primary Russian account through one or more foreign accounts held by shell corporations in the British Virgin Islands, Latvia, Marshall Islands, Panama, Ireland, England, United Arab Emirates and Belize and ultimately into one of the defendant’s U.S.-based accounts. The network’s creation and use of dozens of bank accounts and shell companies abroad was intended to conceal the true sources of funds in Russia, as well as the identities of the various Russian defense contracting firms receiving U.S. electronics components.
The money laundering conspiracy charge to which Brazhnikov Jr. pleaded guilty carries a maximum potential penalty of 20 years in prison and a $500,000 fine. The smuggling and IEEPA conspiracy charges carry a maximum potential penalty, per count, of five years in prison and a $250,000 fine. Sentencing is scheduled for Sept. 15, 2015. Brazhnikov Jr. also agreed to the entry of a forfeiture money judgment of $65 million.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Frankel in Newark; the DOC, under the direction of Special Agent in Charge Simon, New York Field Office; special agents of ICE-HSI, under the direction of Acting Special Agent in Charge Kelly. He also thanked officers from the Union County, New Jersey, Police Department, under the direction of Captain Chris Debbie; and officers of the Mountainside Police Department, under the direction of Police Chief Allan Attanasio, for their important contributions to the investigation. The U.S. Justice Department’s Office of International Affairs provided assistance with this case.
The government is represented by Assistant U.S. Attorneys Dennis C. Carletta of the U.S. Attorney’s Office National Security Unit, and Peter Gaeta of the office’s Asset Forfeiture and Money Laundering Unit in Newark.
Hudson County, New Jersey, Woman Sentenced to Seven Years in Prison for Bank Robbery SpreeRead the Press Release
NEWARK, N.J. - A Harrison, New Jersey, woman was sentenced today to 84 months in prison for robbing three banks over a three week span in Newark and Harrison – including one on Valentine’s Day, U.S. Attorney Paul J. Fishman announced.
Valeria Parziale, 36, previously pleaded guilty before U.S. District Judge Faith S. Hochberg to an information charging her with one count of bank robbery. U.S. District Judge Claire C. Cecchi imposed the sentence today in Newark federal court.
According to the documents filed in this case and statements made in court:
Parziale admitted robbing a Valley National Bank in Harrison on Jan. 30, 2014 and a Wells Fargo bank in Newark on Feb. 14, 2014. She also admitted attempting to rob a Popular Community Bank in Newark on Feb. 20, 2014. At each robbery, Parziale handed the teller a note demanding cash and threatening the use of a gun. On one occasion, she wore a wig to disguise her identity.
In addition to the prison term, Judge Cecchi ordered Parziale 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, Kearny and Harrison police departments for their assistance.
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: Assistant Federal Public Defender John Yauch Esq., Newark
Owner of New Jersey Hedge Fund Charged for Defrauding Investors of $4 MillionRead the Press Release
NEWARK, N.J. – The owner and manager of a New Jersey hedge fund was arrested today and charged with allegedly orchestrating an advance fee scheme that defrauded investors of $4 million, U.S. Attorney Paul J. Fishman announced.
Nicholas Lattanzio, 58, of Montclair, New Jersey, is charged by complaint with three counts of wire fraud and two counts of securities fraud. FBI agents arrested Lattanzio at a residence in West Orange, New Jersey, this morning. He is scheduled to appear this afternoon before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court.
According to the complaint unsealed today:
From June 2013 through November 2014, Lattanzio allegedly orchestrated a large-scale advance fee scheme through which he, his hedge fund, the Black Diamond Capital Appreciation Fund L.P. (BD Fund), and several other related entities collected millions of dollars in upfront fees from unsuspecting investors in exchange for the promise of future loans or investment opportunities that did not materialize. Instead of investing the victims’ money and providing the loans as promised, Lattanzio allegedly stole the majority of the funds and used them for personal expenses, including the purchase of a $1 million home, a luxury vehicle, expensive jewelry and the payment of thousands of dollars in credit card debt that he incurred for other personal expenses. The credit card expenditures included more than $24,000 for a family trip to Hawaii, more than $50,000 for tickets to the New York Yankees, and thousands of dollars in clothes, restaurants, jewelry and furniture. Lattanzio did not disclose this spending to his victims, but instead mislead them into believing that their investments were safe.
In June 2013, a company engaged in the business of oil and gas operations, production, development and acquisition (Company A) began seeking external funding to develop its existing assets and acquire new assets. Company A was introduced to an individual (Individual 1) affiliated with International Lending Services, an entity that purported to market financing opportunities, including those allegedly provided by the related Black Diamond entities. Company A was told that it had to deposit $2 million with the Black Diamond entities as a prerequisite for a $20 million lending facility through a third party lender.
Prior to any exchange of funds, Lattanzio and others acting at his direction made numerous misrepresentations to Company A to induce it to transfer the $2 million deposit to the Black Diamond entities, including telling the company that the financing was all but guaranteed, but that if it failed to close within 120 days, Company A’s $2 million could be returned; the $2 million deposit would be invested with the Black Diamond entities and would entitle Company A to a limited partnership interest in the BD Fund, a successful hedge fund managed by Lattanzio; and that Company A would be one of many investors in the BD Fund, which had a five-year track record of steady earnings.
Based on these misrepresentations, on Dec. 20, 2013, Company A caused $2 million to be wired to an account controlled by Lattanzio. The funds were not held as an escrowed deposit/investment in the BD Fund. Rather, Lattanzio allegedly converted the majority of the funds to his own use. He wired approximately $124,000 to the bank account of a Land Rover dealership for the purpose of purchasing a luxury car and spent $102,185 at a luxury jewelry store in Hackensack, New Jersey, to purchase a platinum and diamond ring that included a bezel set with three separate brilliant cut diamonds that each weighed over one carat. Over the next several months, Lattanzio continued to mislead Company A it into believing that its money was secure and that the financing was still imminent. Ultimately, when it became clear that the financing would not be provided, Company A requested the return of its $2 million per the terms of its agreement with Lattanzio. To date, however, Company A has not received any of its $2 million deposit or interest earned in connection with the deposit. Bank records confirm that Lattanzio converted the majority of Company A’s $2 million to his own benefit, including using the funds to pay private school tuition fees, golf club membership dues, credit card bills, and to purchase a luxury vehicle.
In 2014, a second company (Company B) was seeking financing to develop a hotel project in Georgia. Company B was introduced to Lattanzio and Individual A and presented with a financing package and structure similar to that presented to Company A, including a requirement that Company B deposit a substantial amount of money with the Black Diamond entities and representations that the deposit could be returned if the financing did not close. Company B wired $1.95 million to an account controlled by Lattanzio and the BD Fund as a deposit purportedly required to secure close to $10 million in financing by a third party. Lattanzio immediately converted the funds to his own use, including by purchasing a home in Montclair for more than $1 million.
Over subsequent months following Company B’s deposit, Lattanzio employed a number of delay tactics and made additional misrepresentations to Company B to conceal his actions with respect to its deposit funds. When it became apparent to Company B that there was no funding forthcoming, it demanded the return of its escrow deposit, which Lattanzio refused.
The wire and securities fraud counts with which Lattanzio is charged each carry a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gain or loss from the offense. The complaint also seeks forfeiture of the home Lattanzio purchased in Montclair, New Jersey, a 2013 BMW 650 and various pieces of jewelry.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, for the investigation leading to today’s arrest. He also thanked the U.S. Securities and Exchange Commission’s New York Regional Office, under the direction of Andrew Calamari, and the N.J. Bureau of Securities, within the State Attorney General’s Division of Consumer Affairs, under the direction of Acting Attorney General John J. Hoffman.
The government is represented by Assistant U.S. Attorney Nicholas P. Grippo of the Economic Crimes Unit, and Assistant U.S. Attorney Peter Gaeta of the Office’s Asset Forfeiture and Money Laundering Unit.
The charges and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Florida Man Charged with Using Bogus Transportation Company to Defraud New Jersey Factoring Business Out of $220,000Read the Press Release
NEWARK, N.J. - A Seminole, Florida, man was arrested at his home by FBI agents this morning for allegedly using phony invoices from his transportation company to obtain $220,000 from a New Jersey-based factoring business, U.S. Attorney Paul J. Fishman announced.
Karl Stehlin, a/k/a “Mark Sawyer,” 60, was charged by indictment with five counts of wire fraud. He is scheduled to appear this afternoon before U.S. Magistrate Judge Thomas B. McCoun III in Tampa, Florida, federal court.
According to the indictment:
From June 2014 through September 2014, Stehlin allegedly defrauded a Bergen County, New Jersey, factoring business that purchased accounts receivable in return for short term financing. Stehlin created a bogus Idaho-based company, Sawyer Express Transportation Inc., and emailed accounts receivable invoices to the factoring company for transportation services that were never provided. As a result, Stehlin was able to defraud the factoring company out of $220,000 in advance payment on those invoices.
The charge 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 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 special agents of the FBI Tampa Division, under the direction of Special Agent in Charge Paul Wysopal, for their assistance.
The charges in the indictment are merely accusations, and the defendant is considered innocent unless and until proven guilty.
The government is represented by Assistant U.S. Attorneys Lakshmi Herman and Andrew Kogan of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
Wildwood, New Jersey, Man Admits Role as ‘Straw Buyer’ in Scheme to Fraudulently Obtain $445,141 MortgageRead the Press Release
CAMDEN, N.J. – A Wildwood, New Jersey, man today admitted defrauding a financial institution as part of a mortgage fraud scam that used phony documents and “straw buyers” to make illegal profits on over-developed condominiums in the Wildwood area, U.S. Attorney Paul J. Fishman announced.
Daniel Cardillo, 51, pleaded guilty before U.S. District Judge Jerome B. Simandle in Camden federal court to a superseding information charging him with one count of conspiracy to commit wire fraud.
According to documents filed in this case and statements made in court:
John Leadbeater, 58, of Kearny, New Jersey, and others identified homes in Wildwood and Wildwood Crest, New Jersey. Leadbeater and others would then recruit straw buyers, including Cardillo, to purchase those properties at inflated rates. The straw buyers had good credit scores but lacked the financial resources to qualify for mortgage loans.
Cardillo and others were able to deceive a bank into providing Cardillo a $445,141.61 loan for the purchase of 620 West Burk Avenue, Unit 102, in Wildwood. Cardillo submitted a fraudulent loan application prepared by other conspirators that contained false information about his income, assets and intended use of the property.
The conspiracy charge to which Cardillo pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine. Cardillo’s sentencing is scheduled for Sept. 14, 2015.
Leadbeater pleaded guilty to a superseding indictment charging him with conspiracy to commit wire fraud on March 9, 2015. His sentencing is scheduled for Sept. 14, 2015.
U.S. Attorney Fishman credited special agents from the FBI”s Atlantic City Resident Agency, under the direction of Special Agent in Charge Richard M. Frankel in Newark; and special agents of IRS - Criminal Investigation in Mays Landing, under the direction of Special Agent in Charge Jonathan Larsen in Newark, for the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Jacqueline M. Carle and Matthew T. Smith of the U.S. Attorney’s Office Criminal Division in Camden.
Defense counsel: Justin T. Loughry, Camden
U.S. Attorney’s Office Reaches Settlement with Day Camp to Ensure Equal Access for Disabled ChildrenRead the Press Release
NEWARK, N.J. – The U.S. Attorney’s Office has reached an Americans with Disabilities Act (ADA) settlement with Winnewald Day Camp (Winnewald) in Lebanon, New Jersey, to resolve allegations that Winnewald refused to accommodate a child in its summer camp in 2014 because the child had diabetes, U.S. Attorney Paul J. Fishman announced today.
This matter stems from a complaint from the parent of an 11-year-old boy with Type I diabetes. Title III of the ADA prohibits discrimination on the basis of disability, including diabetes, by places of public accommodation.
According to the complaint:
Winnewald expelled the boy from its summer camp because the boy had diabetes and the camp refused to provide proper diabetes care management.
Under the settlement agreement, Winnewald has agreed to implement policies and procedures to ensure that children with disabilities are afforded full and equal opportunities to participate in and benefit from its summer camp program. Winnewald also agreed publish on its website a statement of its policy on the prohibition of disability discrimination and provide mandatory training on the ADA and its prohibition of disability discrimination to all of its employees who work in the summer camp. Winnewald will also pay a $5,000 civil penalty to the U.S. Treasury.
Under the ADA, summer camps, both private and those run by municipalities, must make reasonable modifications to enable campers with disabilities to participate fully in all camp programs and activities. This generally means that children with disabilities, including diabetes, are entitled to attend any camp or activity that non-disabled children attend, that camps must evaluate each child on an individual basis, and that camps must train their staff in the requirements of the ADA. Camps are also obligated to pay for the cost of any reasonable modifications necessary for disabled children to participate in camp activities, and parents should not be charged any additional fee beyond standard camp enrollment costs.
Individuals who believe they may have been victims of discrimination may file a complaint with the U.S Attorney’s Office at http://www.justice.gov/usao-nj/civil-rights-enforcement/complaint. Additional information about the ADA can be found at www.ada.gov, or by calling the Department of Justice’s toll-free information line at (800) 514-0301 and (800) 514-0383 (TDD).
The government is represented by Assistant U.S. Attorney Michael E. Campion of the U.S. Attorney’s Office Civil Division in Newark.
Supplier of Heroin to Drug Trafficking Organization IndictedRead the Press Release
NEWARK, N.J. – A federal grand jury returned an indictment today against a supplier of narcotics to a large-scale drug trafficking organization for conspiring to distribute heroin and cocaine in Ocean and Monmouth Counties and elsewhere in New Jersey, U.S. Attorney Paul J. Fishman announced.
Thomas Shannon, a/k/a “Cuzzo,” 36, of Jersey City, New Jersey, is charged in a five-count indictment with one count of conspiracy to distribute cocaine and more than a kilogram of heroin, one count of possession with intent to distribute heroin and cocaine, one count of unlawful possession of a firearm, one count of possession of a firearm in furtherance of a drug trafficking crime, and one count of engaging in a monetary transaction in criminally derived property.
In March 2014, 20 other individuals, including numerous alleged members of the drug trafficking organization to which Shannon allegedly supplied narcotics, were charged in two separate criminal complaints with conspiring to distribute heroin and other related offenses. The complaint referred to the drug trafficking organization as the “Britt-Young DTO,” after its leaders, Robert Britt, a/k/a “True,” and Rufus Young, a/k/a “Equan,” a/k/a “E-Money,” a/k/a “Kintock.” Of the individuals charged, 15 have pleaded guilty.
According to documents filed in this case:
Between October 2013 and March 2014, Shannon conspired with others to distribute heroin and cocaine in Ocean and Monmouth counties, including to the Britt-Young DTO. Shannon obtained some of his narcotics from conspirators in California, who shipped packages containing large quantities of heroin and cocaine from California to Shannon in New Jersey. The packages were sent to a residence in Perth Amboy, New Jersey, and received by another conspirator, who then gave the packages to Shannon. Shannon then transported the narcotics to stash house locations that he controlled in Asbury Park and Long Branch, New Jersey, where he packaged the heroin and cocaine and prepared it for distribution to other dealers. Shannon packaged some of the heroin in small plastic bags that were “stamped” with brand names or markings to distinguish it from other narcotics sold in or around the Monmouth County area.
To pay for the drug shipments, Shannon and others acting at his direction deposited cash into numerous third-party bank accounts provided by the conspirators in California, who then withdrew the cash at bank branch locations in California.
Shannon used numerous cellular telephones to communicate with his conspirators, including through text messages, and he and his conspirators often spoke in code to disguise the illegal nature of their communications. For example, Shannon and a leader of the Britt-Young DTO referred to cocaine as “Kristine.” Shannon also acquired and possessed firearms, including a Smith and Wesson .38 caliber revolver and a Sturm, Ruger & Co. Inc. .40 caliber handgun.
Shannon was initially charged by criminal complaint on March 20, 2014, and was arrested that day.
The conspiracy count with which Shannon is charged carries a minimum potential penalty of 10 years in prison, a maximum of life in prison, and a $10 million fine. The possession of controlled substances count with which Shannon is charged carries a minimum potential penalty of five years in prison, a maximum of 40 years in prison, and a $5 million fine. The unlawful possession of a firearm count carries a maximum potential penalty of 10 years in prison and a $250,000 fine, and the possession of a firearm in furtherance of a drug trafficking offense count carries a minimum potential penalty of five years in prison and a maximum of life in prison, which must be served consecutive to any sentence imposed in connection with the underlying drug trafficking offenses. The engaging in a monetary transaction in criminally derived property count carries a maximum potential penalty of 10 years in prison and a $250,000 fine.
U.S. Attorney Fishman credited special agents of the FBI, Red Bank Resident Office, under the direction of Special Agent in Charge Richard M. Frankel, with the investigation leading to today’s indictment.
The government is represented by Assistant U.S. Attorney Nicholas Grippo of the U.S. Attorney’s Office Criminal Division in Newark.
Defense Counsel: Edward Bertuccio Esq., Toms River, New Jersey
Monmouth County, New Jersey, Man Sentenced to 79 Months in Prison for Operating $20 Million Ponzi SchemeRead the Press Release
Sentence to be Served Consecutively to 41-Month Sentence for Florida Bank Robbery
TRENTON, N.J. – A Colts Neck, New Jersey, man who defrauded dozens of investors was sentenced today to 79 months in prison for operating a $20 million Ponzi scheme out of his Fair Haven, New Jersey office and Miami residence, U.S. Attorney Paul J. Fishman announced.
Louis J. Spina, 58, previously pleaded guilty before U.S. District Judge Anne E. Thompson to an information charging him with one count of wire fraud. Judge Thompson imposed the sentence today in Trenton federal court.
In August 2014, Spina pleaded guilty to robbing a bank in Coral Gables, Florida, in May 2014, while on pre-trial release on the New Jersey fraud charge. On Oct. 22, 2014, he was sentenced to 41 months in prison for that offense. His New Jersey sentence will be served consecutively.
According to documents filed in this case and statements made in court:
Between August 2010 and November 2013, Spina collected $20 million from 42 investors and deposited the funds into the LJS bank account. Spina admitted he solicited victims to invest through his business, LJS Trading LLC. After receiving the funds, Spina provided each investor with a note specifying a guaranteed monthly rate of return, typically ranging from nine to 14 percent.
Over the course of the scheme, Spina only transferred $9.5 million of the investor funds into a trading account. He used the remaining $10.5 million to pay the investors’ monthly interest payments, return portions of some investors’ principals, and to pay for his own personal expenses, including car purchases, luxury apartment rental payments, and a $400,000 donation to a private university.
Spina admitted he lied to investors about the status of their funds, telling them they were making large gains despite the fact he lost all of the $9.5 million that was actually invested. When certain investors became suspicious, he reassured them by sending misleading screen shots of their account balances that reflected only temporary gains, not the total daily losses. In addition, Spina was able to defraud his investors out of an additional $1.7 million by fabricating a story about a wealthy individual planning to buy LJS, which he told them would result in a 14 to 30 percent return on their investment. Altogether, Spina’s scheme cost investors a total of $12.7 million.
In addition to the prison term, Judge Thompson sentenced Spina to three years of supervised release, ordered him to forfeit $818,000 in seized assets and ordered him to pay $12.7 million in restitution to the victims.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, New Jersey; and the U.S. Secret Service, under the direction of Special Agent in Charge Carl Agnelli in Newark, with investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Sarah M. Wolfe of the U.S. Attorney’s Office Criminal Division in Trenton.
Defense counsel: Brian P. Reilly Esq., Assistant Federal Public Defender, Trenton
Dealer for Atlantic City “Dirty Block” Gang Sentenced to 54 Months in Prison in Heroin Trafficking ConspiracyRead the Press Release
CAMDEN, N.J. - An Atlantic City, N.J., man was sentenced today to 54 months in prison for engaging in a conspiracy to distribute heroin with several members of the “Dirty Block” criminal street gang – several of whom were convicted after a six-week jury trial in January – which used threats, intimidation and violence to maintain control of the illegal drug trade in Atlantic City, U.S. Attorney Paul J. Fishman announced.
Ronald Davis, a/k/a “Black,” 29, previously pleaded guilty before U.S. District Judge Joseph E. Irenas to a superseding information charging him with one count of conspiracy to distribute and to possess with intent to distribute, and to distribute and to possess with intent to distribute within 1,000 feet of public housing, 100 grams or more of heroin. Judge Irenas imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
Davis acted as a dealer, helping Dirty Block to distribute heroin in and around the public housing apartment complexes of Stanley Holmes, Carver Hall, Schoolhouse, Adams Court and Cedar Court, in Atlantic City. Davis was arrested on March 26, 2013.
In addition to the prison term, Judge Irenas sentenced Davis to six years of supervised release.
U.S. Attorney Fishman credited special agents of the FBI’s Newark Division, Atlantic City Resident Agency, under the direction of Special Agent in Charge Richard M. Frankel; the Atlantic County Prosecutor’s Office, under the direction of Prosecutor James P. McClain; the Atlantic City Police Department, under the direction of Chief Henry White; and the South Jersey Safe Streets Violent Incident and Gang (Safe Streets) Task Force, with the investigation leading to today’s guilty plea.
He also thanked the N.J. State Police; the Atlantic County Sheriff’s Office; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Northfield Police Department; the Vineland Police Department; the Brigantine Police Department; the Millville Police Department; the Mullica Township Police Department; the South Jersey Transportation Authority; and the U.S. Secret Service for their contributions.
The government is represented by Assistant U.S. Attorneys Patrick C. Askin and Justin Danilewitz of the U.S. Attorney’s Office in Camden and Special Assistant U.S. Attorney Edmund Burgos of the Atlantic County Prosecutor’s Office.
Defense counsel: Stanley O. King Esq., Woodbury, New Jersey
President of New Jersey-Based Financial Services Firm Sentenced to 10 Years in Prison for Multimillion-Dollar Securities FraudRead the Press Release
The president of an investment and financial services firm was sentenced today to 120 months in prison for evading taxes and defrauding dozens of investors in New Jersey, Pennsylvania, Texas and elsewhere of $5 million, announced by U.S. Attorney Paul J. Fishman for the District of New Jersey.
Everett C. Miller, 45, of Marlton, New Jersey, previously pleaded guilty before U.S. District Judge Renee Marie Bumb to information charging him with one count of securities fraud and one count of tax evasion. Judge Bumb imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court: Miller was the founder, chief executive officer, president, principal and sole owner of Carr Miller Capital LLC (CMC), an investment and financial services firm based in Marlton, New Jersey. Miller and others solicited investments through the firm from individuals located in New Jersey, Pennsylvania, North Carolina, Arkansas, Texas and elsewhere. CMC had more than 30 affiliates and related entities and more than 75 related bank accounts. Miller controlled the firm’s finances and established himself as synonymous with CMC. Prior to founding CMC in June 2006, Miller was a registered financial advisor at several financial institutions.
Miller admitted that from June 2006 through December 2010, he and others issued promissory notes to more than 190 investors across the United States and Miller and CMC received $41.2 million from these investors. The notes were provided as “securities,” but Miller and CMC never registered the notes as securities with any federal or state agency, nor were the notes exempt from such registration requirements. The notes had a term of nine months and promised the investors returns of seven to 20 percent per year and a return of the principal investment at the end of the nine-month period.
Miller and others falsely represented to the investors that their money would be invested in certain ways, but the investors were not provided with material information about their investments or were misled about the risks of their investments. Miller commingled and pooled the investors’ monies into one of CMC’s 75 related bank accounts. Unbeknown to the investors, Miller used some of the monies in the following ways: to repay prior investors, most in Ponzi scheme fashion, to pay CMC and its related entities’ payrolls and operating expenses and to support Miller’s lifestyle. Miller’s purchases included luxury automobiles; home furnishings and electronic equipment; tickets to entertainment and sporting events; travel, lodging and vacations; meals, entertainment, retail shopping; and groceries.
On Aug. 11, 2009, the Arkansas Securities Department (ASD) initiated an investigation of Miller, CMC and others for selling unregistered securities to investors in the form of the promissory notes. Following the investigation, the ASD issued a cease-and-desist order against Miller, CMC and others from selling the notes.
From August 2009 through December 2010, despite knowing about the ASD’s investigation of the promissory notes and CMC’s inability to pay either the interest or the principal on them, Miller and others continued to sell the notes as unregistered securities to investors. They issued notes to approximately 50 new investors, but never returned any of the principal to the new investors.
Miller admitted that for calendar years 2007, 2008 and 2009, he intentionally failed to provide the Internal Revenue Service (IRS) with any information regarding the proceeds that he personally received in connection with his fraudulent scheme. Miller failed to disclose $218,770, $244,879 and $199,507 for 2007, 2008 and 2009, respectively. In total, Miller admitted failing to report $663,156 in taxable income to the IRS, resulting in a tax loss to the government of $47,342.
At the plea proceeding, Judge Bumb entered a consent judgment and order of forfeiture in the amount of $4,999,400, which constitutes the proceeds Miller obtained as a result of the securities fraud.
In addition to the prison term, Judge Bumb sentenced Miller to three years of supervised release and ordered him to pay restitution of $22.34 million.
U.S. Attorney Fishman credited special agents with the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, New Jersey; IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larson; and the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, for the investigation leading to today’s sentencing. He also thanked the Financial Industry Regulatory Authority – Criminal Prosecution Assistance Group and the U.S. Securities and Exchange Commission’s Philadelphia Office for its assistance with this investigation. In addition, he thanked the New Jersey Securities Fraud Prosecution Section, the Arkansas Securities Department and the Texas State Securities Board for their roles in the investigation.
The government is represented by Assistant U.S. Attorney Shirley U. Emehelu of the Economic Crimes Unit in Newark, New Jersey.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.
President of New Jersey-Based Financial Services Firm Sentenced to 10 Years in Prison for Multimillion-Dollar Securities FraudRead the Press Release
Targeted Dozens of Investors Across the Country
CAMDEN, N.J. – The president of an investment and financial services firm was sentenced today to 120 months in prison for evading taxes and defrauding dozens of investors in New Jersey, Pennsylvania, Texas and elsewhere of $5 million, U.S. Attorney Paul J. Fishman announced.
Everett C. Miller, 45, of Marlton, New Jersey, previously pleaded guilty before U.S. District Judge Renee Marie Bumb to an information charging him with one count of securities fraud and one count of tax evasion. Judge Bumb imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
Miller was the founder, chief executive officer, president, principal and sole owner of Carr Miller Capital LLC (CMC), an investment and financial services firm based in Marlton. Miller and others solicited investments through the firm from individuals located in New Jersey, Pennsylvania, North Carolina, Arkansas, Texas and elsewhere. CMC had more than 30 affiliates and related entities, and more than 75 related bank accounts. Miller controlled the firm’s finances and established himself as synonymous with CMC. Prior to founding CMC in June 2006, Miller was a registered financial advisor at several financial institutions.
Miller admitted that from June 2006 through December 2010, he and others issued promissory notes to more than 190 investors across the United States, and Miller and CMC received $41.2 million from these investors. The notes were provided as “securities,” but Miller and CMC never registered the notes as securities with any federal or state agency, nor were the notes exempt from such registration requirements. The notes had a term of nine months and promised the investors returns of 7 to 20 percent per year, and a return of the principal investment at the end of the nine-month period.
Miller and others falsely represented to the investors that their money would be invested in certain ways, but the investors were not provided with material information about their investments or were misled about the risks of their investments. Miller commingled and pooled the investors’ monies into one of CMC’s 75 related bank accounts. Unbeknown to the investors, Miller used some of the monies in the following ways: (1) to repay prior investors, most in Ponzi scheme fashion, (2) to pay CMC and its related entities’ payrolls and operating expenses, and (3) to support Miller’s lifestyle. Miller’s purchases included luxury automobiles; home furnishings and electronic equipment; tickets to entertainment and sporting events; travel, lodging, and vacations; meals, entertainment, retail shopping; and groceries.
On Aug. 11, 2009, the Arkansas Securities Department (ASD) initiated an investigation of Miller, CMC, and others for selling unregistered securities to investors in the form of the promissory notes. Following the investigation, the ASD issued a cease-and-desist order against Miller, CMC, and others from selling the notes.
From August 2009 through December 2010, despite knowing about the ASD’s investigation of the promissory notes and CMC’s inability to pay either the interest or the principal on them, Miller and others continued to sell the notes as unregistered securities to investors. They issued notes to approximately 50 new investors, but never returned any of the principal to the new investors.
Miller admitted that for calendar years 2007, 2008, and 2009, he intentionally failed to provide the IRS with any information regarding the proceeds that he personally received in connection with his fraudulent scheme. Miller failed to disclose $218,770, $244,879 and $199,507 for 2007, 2008 and 2009, respectively. In total, Miller admitted failing to report $663,156 in taxable income to the IRS, resulting in a tax loss to the government of $47,342.
At the plea proceeding, Judge Bumb entered a consent judgment and order of forfeiture in the amount of $4,999,400, which constitutes the proceeds Miller obtained as a result of the securities fraud.
In addition to the prison term, Judge Bumb sentenced Miller to three years of supervised release and ordered him to pay restitution of $22.34 million.
U.S. Attorney Fishman credited special agents with the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark; IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larson; and the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, for the investigation leading to today’s sentencing. He also thanked the Financial Industry Regulatory Authority – Criminal Prosecution Assistance Group, and the U.S. Securities and Exchange Commission’s Philadelphia Office for its assistance with this investigation. In addition, he thanked the N.J. Securities Fraud Prosecution Section, the Arkansas Securities Department and the Texas State Securities Board for their roles in the investigation.
The government is represented by Assistant U.S. Attorney Shirley U. Emehelu of the Economic Crimes Unit in Newark.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.
Defense counsel: John A. Azzarello Esq., Chatham, N.J
New Jersey Attorney Sentenced to One Year in Prison for His Role in Large Scale Mortgage Fraud SchemeRead the Press Release
NEWARK N.J. – A Westfield, New Jersey, man was sentenced today to 12 months in prison for his role in a large-scale mortgage fraud scheme in which he obtained more than $1 million in illegitimate proceeds, U.S. Attorney Paul J. Fishman announced.
Amedeo Gaglioti, 60, previously pleaded guilty before U.S. District Judge Susan D. Wigenton to an information charging him with wire fraud affecting a financial institution and money laundering. Judge Wigenton imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
From December 2007 through August 2010, Gaglioti engaged in a scheme to swindle mortgage lenders by causing fake “short sale” transactions and fraudulently obtaining mortgage loans relating to properties primarily located in northern New Jersey. Gaglioti was the closing attorney for these transactions. As part of the scheme, Gaglioti would prepare two sets of false and misleading closing documents, including HUD-1s, for short sale flip transactions. Through the preparation of these documents, as well as other acts, lenders accepted proceeds of purported short sales in full satisfaction of an existing mortgage. Gaglioti also caused lenders to fund mortgages based upon false and misleading information and documentation. Gaglioti obtained more than $1 million in illegitimate proceeds as a result of the scheme.
In addition to the prison term, Judge Wigenton sentenced Gaglioti to serve three years of supervised release, ordered him to pay restitution of $2,001,245.89 and entered a forfeiture judgment of $1 million.
U .S. Attorney Fishman credited law enforcement agents of the FBI Newark Mortgage Fraud Task Force, under the direction of Special Agent in Charge Richard M. Frankel; postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates; special agents of the U.S. Department of Housing and Urban Development, Office of Inspector General, under the direction of Special Agent in Charge Christina Scaringi; special agents of the Federal Housing Finance Agency, Office of Inspector General, under the direction of Special Agent in Charge Steven Perez; special agents of the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), under the direction of Special Inspector General Christy Romero; special agents of IRS–Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; and the Hudson County Prosecutor’s Office, under the direction of Acting Prosecutor Gaetano Gregory, for their roles in the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorneys Lakshmi Srinivasan Herman and Andrew Kogan of the U.S. Attorney’s Office Economic Crimes Unit in Newark, as well as Barbara Ward, Acting Chief of the office’s Asset Forfeiture and Money Laundering Unit.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.
Defense counsel: Angelo Servidio Esq., Nutley, New Jersey
Burlington, New Jersey, Woman Admits to Stealing More Than $150,000 in Social Security Benefits for Her Deceased MotherRead the Press Release
CAMDEN, N.J. - A Burlington, New Jersey, woman admitted today to stealing more than $150,000 in Social Security benefits that were paid to an account in her deceased mother’s name, U.S. Attorney Paul J. Fishman announced.
Jean Marshall, 69, pleaded guilty before Senior U.S. District Judge Joseph E. Irenas in Camden federal court to an information charging her with one count of theft of government funds.
According to documents filed in this case and statements made in court.
Marshall’s mother was entitled to Survivor’s Benefits from the Social Security Administration (SSA). Her mother’s benefits were paid by direct deposit into her bank account, which she held jointly with Marshall.
Marshall admitted that she failed to notify the SSA of her mother’s death in May 2003. As a result, SSA continued to make payments into their joint account. From May 2003 through May 2013, Marshall accessed her deceased mother’s bank account in order to make personal use of the Social Security funds. Altogether, Marshall obtained $151, 789 in benefits to which she was not entitled.
The charge to which Marshall pleaded guilty carries a maximum potential penalty of 10 years in prison and a $250,000 fine. Sentencing is scheduled for Sept. 9, 2015.
U.S. Attorney Fishman credited special agents of the Social Security Administration, Office of Inspector General, under the direction of Inspector General Patrick P. O’Carroll Jr., with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Justin C. Danilewitz of the U.S. Attorney’s Office in Camden.
Defense counsel: Christopher O’Malley Esq., Assistant Federal Public Defender, Camden
Lawyer with Jersey City, New Jersey, Practice Charged with Structuring Cash DepositsRead the Press Release
NEWARK, N.J. – A lawyer who practiced in Jersey City, New Jersey, appeared in federal court today to face charges that he structured approximately $800,000 in cash to avoid reporting the income to the IRS, U.S. Attorney Paul J. Fishman announced.
Magdy Fouad Anise, a/k/a “Michael Anise,” 51, of Aberdeen, New Jersey, is charged in an indictment with one count of structuring cash transactions to avoid reporting requirements and one count of structuring more than $100,000. He appeared this morning before U.S. District Judge William H. Walls in Newark federal court.
According to the indictment:
Anise was an attorney at Anise & Anise, Attorneys at Law, located in Jersey City. From 2009 through 2011, Anise allegedly received cash kickbacks from doctors and others in exchange for personal-injury client referrals. In lieu of cash, Anise asked a doctor who gave him kickbacks to pay him with gold bars, give money to Anise’s church and pay Anise’s mortgage.
From 2009 through 2012, Anise accumulated approximately $800,000 in cash, including cash from the kickback scheme. During that time, Anise allegedly made cash deposits into five different bank accounts that he controlled in amounts less than $10,000, the amount that would have triggered the filing of a currency transaction report (CTR) with the IRS.
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 not to file CTRs in order to avoid detection of the movement of large amounts of U.S. currency. These steps are referred to as “structuring” and involve making multiple cash deposits or withdrawals in amounts of $10,000 or less on the same day or consecutive days in order to avoid CTR filings.
The charge of structuring cash transactions to avoid reporting requirements carries a maximum potential penalty of five years in prison and a $250,000 fine. The charge of structuring more than $100,000 carries a maximum potential penalty of 10 years in prison and a $250,000 fine.
U.S. Attorney Fishman credited special agents of Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Newark Division, under the direction of Acting Special Agent in Charge Kevin Kelly, for the investigation leading to the charges.
The government is represented by Assistant U.S. Attorney Lakshmi Srinivasan Herman of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
The charges and allegations contained in the indictment are merely accusations, and the defendant is considered innocent unless and until proven guilty.
Defense Counsel: Assistant Federal Public Defender Lisa Mack, Esq., Newark
Four People Arrested and Charged in Cross-Country Insider Trading SchemeRead the Press Release
The owner and operator of a stock trading operation and three of his associates were arrested today on charges arising from their alleged participation in a multi-year insider trading scheme that netted more than $3.2 million in illicit profits, announced today by U.S. Attorney Paul J. Fishman for the District of New Jersey.
Steven Fishoff, 58, of Westlake Village, California, Ronald Chernin, 66, of Oak Park, California, Steven Costantin aka Steven Constantin, 54, of Farmingdale, New Jersey, and Paul Petrello, 53, of Boca Raton, Florida, are each charged by complaint with one count of conspiracy to commit securities fraud. Fishoff is charged with four substantive counts of securities fraud, Chernin and Petrello are each charged with two counts of securities fraud and Costantin is charged with one count of securities fraud.
The defendants were arrested by FBI agents this morning at their respective residences. Costantin is scheduled to appear this afternoon before U.S. Magistrate Judge Joseph A. Dickson in Newark, New Jersey, federal court. Fishoff is scheduled to appear before U.S. Magistrate Judge Kenly Kiya Kato in Riverside, California, federal court, Chernin is scheduled to appear before U.S. Magistrate Judge Carla Woehrle in Los Angeles, Californina, federal court, and Petrello is expected to appear before U.S. Magistrate Judge Dave Lee Brannon in West Palm Beach, Florida, federal court.
“The defendants and their associates were entrusted with confidential, nonpublic information about companies and time and time again, they allegedly violated that trust by illegally trading the companies’ stock for substantial profits,” said U.S. Attorney Fishman. “They allegedly rigged the game so they would always win, and their profits came at the expense of legitimate investors, who were not privy to this inside information.”
“Insider trading is an investigative priority of the FBI,” said Special Agent in Charge Richard M. Frankel for the FBI in Newark, New Jersey. “The FBI is committed to stopping insider trading and will hold those who perpetrate these schemes accountable because their illegal activities undermine the integrity of the U.S. financial markets and weaken investor confidence.”
“We allege an insider trading scheme based on a short-selling business model designed to systematically profit on confidential information obtained under false pretenses,” said Senior Associate Director Sanjay Wadhwa for Enforcement in the SEC’s Regional Office in New York. “But the defendants’ short selling proved to be short-sighted as they overlooked the fact that their trading patterns would be detected and they would be caught by law enforcement.”
According to the complaint unsealed today, Fishoff, Chernin, Costantin, Petrello and others, acting individually and through their associated trading entities, engaged in an insider trading scheme in which they netted more than $3.2 million in illicit profits over three years by executing illegal trades through trading entities that they controlled.
Fishoff is the president and sole owner of Featherwood Capital Inc. (Featherwood), a trading entity that he operates out of his home. Featherwood maintained numerous stock trading accounts in its own name and in various additional names under which Featherwood did business (DBAs), including Gold Coast Total Return Inc. (Gold Coast), Seaside Capital Inc. (Seaside) and Data Complete Inc. (Data Complete).
Chernin, an attorney who was disbarred in California for misappropriation of client assets, is a friend and longtime business associate of Fishoff. Corporate documents list Chernin as the president of Gold Coast and Fishoff as an officer. Chernin is president of the trading entity Cedar Lane Enterprises Inc. (Cedar Lane) and an officer of Data Complete.
Costantin, a former pipefitter by trade, is Fishoff’s brother-in-law and a friend and business associate of Chernin. Corporate documents list Costanstin as president of Seaside. In brokerage account documents, Fishoff identifies himself as Seaside’s owner. Costanstin is also the vice president and secretary of Cedar Lane.
Petrello is the president and owner of two trading entities, Brielle Properties Inc. and Oceanview Property Management LLC and a friend and longtime business associate of Fishoff.
On numerous occasions, the conspirators obtained material, nonpublic information related to publicly traded companies and traded on that information before it became public. Between June 2010 and July 2013, Fishoff, Chernin, Costantin and a business associate referred to in the complaint as “Trader A” expressed interest in participating in at least 14 stock offerings by publicly traded companies. Before providing these individuals with confidential information concerning the companies or the terms of the proposed sales, the investment bankers first required that Fishoff, Chernin, Costantin, Trader A and their associated trading entities, agree to be “brought over the wall,” or “wall-crossed,” standard industry terms which meant that they were required to keep the information disclosed to them confidential and could not buy or sell the stock based on the information.
Fishoff, Chernin, Costantin and Trader A agreed to these disclosure and trading restrictions and then flagrantly breached the agreements. In instances where Fishoff was not personally wall-crossed in an offering, Chernin and Costantin tipped Fishoff telephonically or by email about the offering prior to the public announcement. Even where Fishoff ostensibly was a party to the confidentiality agreement, through his affiliation with the wall-crossed trading entity, Fishoff himself breached the agreement by trading on the confidential information and by providing the information to Petrello so that Petrello could engage in parallel trading. There were also instances where Chernin and Costantin violated the terms of the confidentiality agreements by trading themselves before the offering. The conspirators traded through the accounts of the trading entities or through related accounts that they controlled. The conspirators shared the proceeds of the insider trading scheme, with Fishoff wiring money to Chernin and Costantin for their services and Fishoff receiving compensation from Petrello for the offering-related tips that Fishoff provided to him.
The conspiracy count with which each defendant is charged carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the aggregate loss to victims or gain to the defendants. Each of the substantive securities fraud charges carry a maximum penalty of 20 years in prison and a $5 million fine.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Frankel, for the investigation leading to today’s arrests and complaint. He also thanked the U.S. Securities and Exchange Commission’s New York Regional Office under the direction of Andrew Calamari. He also thanked special agents of the FBI, Los Angeles (Ventura Resident Agency and Riverside Resident Agency) and FBI, Miami (West Palm Beach Resident Agency) for their assistance.
The government is represented by Assistant U.S. Attorneys Shirley U. Emehelu of the Economic Crimes Unit of the U.S. Attorney’s Office in Newark, New Jersey and Acting Chief Barbara Ward for the of the Office’s Asset Forfeiture and Money Laundering Unit.
The charges and allegations contained in the complaint are merely accusations and the defendants are presumed innocent unless and until proven guilty.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov
Four People Arrested and Charged in Cross-Country Insider Trading SchemeRead the Press Release
Illegally Traded on Inside Information in Violation of Confidentiality Agreements, Netting More Than $3.2 Million During Three-Year Scheme
NEWARK, N.J. - The owner and operator of a stock trading operation and three of his associates were arrested today on charges arising from their alleged participation in a multi-year insider trading scheme that netted more than $3.2 million in illicit profits, New Jersey U.S. Attorney Paul J. Fishman announced.
Steven Fishoff, 58, of Westlake Village, California; Ronald Chernin, 66, of Oak Park, California; Steven Costantin (a/k/a Steven Constantin), 54, of Farmingdale, New Jersey; and Paul Petrello, 53; of Boca Raton, Florida, are each charged by complaint with one count of conspiracy to commit securities fraud. Fishoff is charged with four substantive counts of securities fraud, Chernin and Petrello are each charged with two counts of securities fraud, and Costantin is charged with one count of securities fraud.
The defendants were arrested by FBI agents this morning at their respective residences. Costantin is scheduled to appear this afternoon before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court. Fishoff is scheduled to appear before U.S. Magistrate Judge Kenly Kiya Kato in Riverside, California, federal court; Chernin is scheduled to appear before U.S. Magistrate Judge Carla Woehrle in Los Angeles federal court, and Petrello is expected to appear before U.S. Magistrate Judge Dave Lee Brannon in West Palm Beach, Florida, federal court.
“The defendants and their associates were entrusted with confidential, nonpublic information about companies, and, time and time again, they allegedly violated that trust by illegally trading the companies’ stock for substantial profits,” U.S. Attorney Fishman said. “They allegedly rigged the game so they would always win, and their profits came at the expense of legitimate investors, who were not privy to this inside information.”
FBI Special Agent in Charge, Newark, Richard M. Frankel stated: “Insider trading is an investigative priority of the FBI. The FBI is committed to stopping insider trading and will hold those who perpetrate these schemes accountable because their illegal activities undermine the integrity of the U.S. financial markets and weaken investor confidence.”
“We allege an insider trading scheme based on a short-selling business model designed to systematically profit on confidential information obtained under false pretenses,” said Sanjay Wadhwa, Senior Associate Director for Enforcement in the SEC’s New York Regional Office. “But the defendants’ short selling proved to be short-sighted as they overlooked the fact that their trading patterns would be detected and they would be caught by law enforcement.”
According to the complaint unsealed today:
Fishoff, Chernin, Costantin, Petrello, and others, acting individually and through their associated trading entities, engaged in an insider trading scheme in which they netted more than $3.2 million in illicit profits over three years by executing illegal trades through trading entities that they controlled.
Fishoff is the president and sole owner of Featherwood Capital Inc. (Featherwood), a trading entity that he operates out of his home. Featherwood maintained numerous stock trading accounts in its own name and in various additional names under which Featherwood did business (DBAs), including Gold Coast Total Return Inc. (Gold Coast), Seaside Capital Inc. (Seaside), and Data Complete Inc. (Data Complete).
Chernin, an attorney who was disbarred in California for misappropriation of client assets, is a friend and longtime business associate of Fishoff. Corporate documents list Chernin as the president of Gold Coast and Fishoff as an officer. Chernin is president of the trading entity Cedar Lane Enterprises Inc. (Cedar Lane) and an officer of Data Complete.
Costantin, a former pipefitter by trade, is Fishoff’s brother-in-law and a friend and business associate of Chernin. Corporate documents list Costanstin as president of Seaside. In brokerage account documents, Fishoff identifies himself as Seaside’s owner. Costanstin is also the vice president and secretary of Cedar Lane.
Petrello is the president and owner of two trading entities: Brielle Properties Inc. and Oceanview Property Management LLC, and a friend and longtime business associate of Fishoff.
On numerous occasions, the conspirators obtained material, nonpublic information related to publicly traded companies and traded on that information before it became public. Between June 2010 and July 2013, Fishoff, Chernin, Costantin, and a business associate referred to in the complaint as “Trader A” expressed interest in participating in at least 14 stock offerings by publicly traded companies. Before providing these individuals with confidential information concerning the companies or the terms of the proposed sales, the investment bankers first required that Fishoff, Chernin, Costantin, Trader A, and their associated trading entities, agree to be “brought over the wall,” or “wall-crossed,” standard industry terms which meant that they were required to keep the information disclosed to them confidential and could not buy or sell the stock based on the information.
Fishoff, Chernin, Costantin, and Trader A agreed to these disclosure and trading restrictions and then flagrantly breached the agreements. In instances where Fishoff was not personally wall-crossed in an offering, Chernin and Costantin tipped Fishoff telephonically or by email about the offering prior to the public announcement. Even where Fishoff ostensibly was a party to the confidentiality agreement, through his affiliation with the wall-crossed trading entity, Fishoff himself breached the agreement by trading on the confidential information and by providing the information to Petrello so that Petrello could engage in parallel trading. There were also instances where Chernin and Costantin violated the terms of the confidentiality agreements by trading themselves before the offering. The conspirators traded through the accounts of the trading entities or through related accounts that they controlled. The conspirators shared the proceeds of the insider trading scheme, with Fishoff wiring money to Chernin and Costantin for their services, and Fishoff receiving compensation from Petrello for the offering-related tips that Fishoff provided to him.
The conspiracy count with which each defendant is charged carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the aggregate loss to victims or gain to the defendants. Each of the substantive securities fraud charges carry a maximum penalty of 20 years in prison and a $5 million fine.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, for the investigation leading to today’s arrests and complaint. He also thanked the U.S. Securities and Exchange Commission’s New York Regional Office under the direction of Andrew Calamari. He also thanked special agents of the FBI, Los Angeles (Ventura Resident Agency and Riverside Resident Agency) and FBI, Miami (West Palm Beach Resident Agency) for their assistance.
The government is represented by Assistant U.S. Attorneys Shirley U. Emehelu of the Economic Crimes Unit of the U.S. Attorney’s Office in Newark, Sarah Devlin of the Office’s Asset Forfeiture and Money Laundering Unit and Barbara Ward, Acting Chief of the of the Office’s Asset Forfeiture and Money Laundering Unit.
The charges and allegations contained in the complaint are merely accusations and the defendants are presumed innocent unless and until proven guilty.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.
Two New York Doctors Sentenced to Prison for Taking Bribes in Test-Referrals Scheme with New Jersey Clinical LabRead the Press Release
NEWARK, N.J. – Two doctors with a practice in New York were each sentenced today to 20 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.
Richard Goldberg, 65, of Weston, Connecticut, and Gary Leeds, 61, of Greenwich, Connecticut, previously pleaded guilty before U.S. District Judge Stanley R. Chesler to one count of accepting bribes. Judge Chesler imposed both sentences today in Newark federal court.
Including Goldberg and Leeds, 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:
Goldberg and Leeds admitted to accepting thousands of dollars per month in cash between September 2010 and April 2013 in return for referring patient blood specimens to BLS. The pair acknowledged they each accepted more than $100,000 in cash from BLS in exchange for referring at least a combined $1.8 million in lab business from their joint practice, Family Medical Group of Manhattan.
In addition to the prison terms, Judge Chesler sentenced Goldberg to serve three years of supervised release and ordered him to pay a $5,000 fine. Leeds was also sentenced to one year of supervised release and ordered to pay a $15,000 fine. Goldberg and Leeds must each forfeit $108,000.
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:
Goldberg: Aidan P. O’Connor Esq., Hackensack, New Jersey.
Leeds: E. Scott Morvillo Esq., New York
Three People Sentenced Prison for Their Roles in $15 Million Mortgage Fraud SchemeRead the Press Release
CAMDEN, N.J. – A brother and sister and one other person were sentenced today for their respective roles in conspiring to defraud financial institutions as part of a $15 million mortgage fraud scam that used phony documents and “straw buyers” to make illegal profits on overbuilt condos, U.S. Attorney Paul J. Fishman announced.
Nancy Wolf-Fels, 58, of Toms River, New Jersey, was sentenced to 42 months in prison; Dwayne Onque, 47, of Belleville, New Jersey, was sentenced to 63 months in prison; and Mashon Onque, 44, of East Orange, New Jersey, as sentenced to 30 months in prison. All three had been convicted in a four-week trial in October 2014 before U.S. District Judge Jerome B. Simandle, who imposed the sentences today in Camden federal court.
The defendants were each convicted of one count of conspiracy to commit wire fraud. Dwayne Onque was also convicted of one count of conspiracy to commit money laundering.
According to the documents filed in this case and the evidence at trial:
The defendants and their conspirators schemed to defraud financial institutions by locating oceanfront condominiums overbuilt by financially distressed developers and negotiating a buyout price with the sellers. They then caused the sales prices for the properties – located in Wildwood Crest and North Wildwood, New Jersey, other locations in New Jersey and in Naples, Florida – to be much higher than the buyout price to ensure large proceeds. Other defendants helped conceal the true sales prices of certain properties through inflated sales contracts and finder’s fee agreements.
From 2007 through mid-2008, Wolf-Fels served as a loan officer at the Forked River Branch of the mortgage company, Mortgage Now. She and her conspirators originated six loan applications for unqualified buyers that contained false and fraudulent information. Working with her conspirators – including one who manufactured fake bank statements, retirement account statements and pay stubs to support the false loan applications – Wolf-Fels assembled the loan applications and sent them to victim financial institutions, which lent the unqualified buyers mortgage funds.
From late 2006 through mid-2007, Dwayne Onque served as a “straw buyer” of five properties in Middletown, New Jersey, and Wildwood, New Jersey. For each of the five properties, he signed false and fraudulent loan applications and closing documents that resulted in the release of more than $2 million of mortgage funds.
During 2006 and 2008, Mashon Onque served as a title agent at Tri-State Title Agency in Montclair, New Jersey. She acted as the closing agent for fraudulent mortgage loans orchestrated by her conspirators, including her brother, Dwayne Onque. The conspirators put together buyers and sellers in real estate transactions, and then filed false and fraudulent loan applications containing inflated income figures for the borrowers. After the mortgage lenders approved the loans, Mashon Onque prepared and signed fraudulent settlement statements that falsely claimed that the borrowers had made down payments to close the loans.
In addition to the prison terms, Judge Simandle sentenced each of the three defendants to three years of supervised release. Restitution will be determined at a hearing on July 9, 2015.
U.S. Attorney Fishman credited special agents of the FBI’s Newark Division, Atlantic City Resident Agency, under the direction of Special Agent in Charge Richard M. Frankel, and special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s convictions.
The government is represented by Assistant U.S. Attorneys Matthew T. Smith and Jacqueline M. Carle of the U.S. Attorney’s Office Criminal Division in Camden.
Defense counsel:
Wolf-Fels: Paul Urbania Esq., Shrewsbury, N.J.
Dwayne Onque: Peter Levin Esq., Philadelphia
Mashon Onque: Anne Singer Esq., Haddonfield, N.J.
South Jersey Woman Admits Role in Conspiracy to Traffic Guns from North Carolina to New JerseyRead the Press Release
CAMDEN, N.J. – A Camden woman today admitted buying five firearms in North Carolina so her cousin could sell them in New Jersey, U.S. Attorney Paul J. Fishman announced.
Johanna Betty Young, 25, pleaded guilty before U.S. District Judge Renée Marie Bumb in Camden federal court to an information charging her with one count of conspiring to deal firearms without a license.
According to documents filed in this case and statements made in court:
In January 2012, Young’s cousin, Wendelle Ford, 41, also of Camden, gave Young money to apply for firearms purchase permits in North Carolina, where Young lived at the time. Young admitted she knew that neither she nor Ford were federally licensed firearms dealers. She also knew that Ford had a prior felony conviction and therefore could not legally purchase or possess firearms.
Once Young obtained the purchase permits, Ford traveled to North Carolina and he and Young visited gun shops. After Ford told her which firearms to buy, Young lied on the purchase paperwork, stating that she was the actual buyer. Young bought five handguns and gave them to Ford knowing that he was going to bring them to New Jersey and sell them. Later, Ford gave Young $200 for each firearm.
The conspiracy charge to which Young pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for Sept. 7, 2015.
The case against Ford is still pending. The charges and allegations against him are merely accusations and he is considered innocent unless and until proven guilty.
U.S. Attorney Fishman credited special agents of the ATF, under the direction of Special Agent in Charge George P. Belsky in Newark, New Jersey, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Howard Wiener of the U.S. Attorney’s Office in Camden.
Defense counsel: Jose Luis Ongay Esq., Camden
Ringleader of $2.6 Million Tax Refund Check Scam Sentenced to 27 Months in PrisonRead the Press Release
NEWARK, N.J. - The ringleader of a conspiracy that stole $2.6 million in income tax refund checks issued by the United States was sentenced today to 27 months in prison, U.S. Attorney Paul J. Fishman announced.
Raymundo Hernandez, 36, of Bronx, New York, previously pleaded guilty before U.S. District Judge Madeline C. Arleo to an information charging him with conspiracy to steal government funds. Judge Arleo imposed the sentence today in Newark federal court.
According to the documents filed in this case and statements made in court:
Stolen Identity Refund Fraud (SIRF) is a common type of fraud committed against the United States government that results in more than $2 billion in losses annually. SIRF schemes generally share a number of hallmarks. Perpetrators obtain personal identifying information, including Social Security numbers and dates of birth, from unwitting individuals, who often reside in the Commonwealth of Puerto Rico. They complete IRS-1040 tax return forms using the fraudulently obtained information and falsifying wages earned, taxes withheld and other data, always ensuring that fraudulent tax return generates a refund. The perpetrators then direct the U.S. Treasury Department to mail the refund checks to locations they control or can access. In some cases, they bribe mail carriers to remove the refund checks from their mail routes. With the fraudulently obtained refund checks in hand, the perpetrators generate cash proceeds by depositing the checks into bank accounts they control.
Hernandez admitted he knew the checks had been generated by conspirators filing false and fraudulent income tax returns with the IRS in order to obtain refunds to which he was not entitled. He admitted that from November 2010 through October 2012 he recruited and maintained a network of conspirators in the Newark and Bronx areas and distributed fraudulent treasury checks to that network in exchange for payment. Hernandez obtained at least 44 such checks from Luis Pena, 32, of Bronx, who pleaded guilty to his role in the conspiracy in March 2014. Pena had arranged for the fraudulent checks to be sent to a postal route and intercepted by the mail carriers on that route: Gloria Rivera 40, of Bronx, and Lourdes Ortiz, 42, of Bronx, Rivera and Ortiz also entered guilty pleas in March 2014 to their respective roles in the conspiracy.
Hernandez admitted that once he distributed the fraudulent checks, he and his conspirators deposited them into bank accounts, primarily in the names of businesses they controlled and then withdrew large amounts of the proceeds in cash. They used some of the money to purchase cars and gamble at Atlantic City casinos.
The fraudulently cashed checks totaled approximately $2,659,718. Of these deposits, $171,589 was deposited into three bank accounts under Hernandez’ direct control.
In addition to the prison term, Judge Arleo sentenced Hernandez to serve three years of supervised release. Hernandez must pay restitution of $2,659,717.82.
Pena was sentenced to 30 months in prison on Oct. 16, 2014. Rivera was sentenced to six months in prison on Jan. 7, 2015. Ortiz was sentenced to three years of probabtion on Jan. 7, 2015.
U.S. Attorney Fishman credited special agents of 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. Secret Service, under the direction of Special Agent in Charge Carl Agnelli; and special agents of the U.S. Postal Service - Office of Inspector General, under the direction of Special Agent in Charge Rafael A. Medina, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Sara F. Merin of the U.S. Attorney’s Office General Crimes Unit in Newark.
Defense counsel: Roy Greenman Esq., Union, New Jersey
Morris County, New Jersey, Man Sentenced to Five Years in Prison for Receiving Images of Child Sexual AbuseRead the Press Release
NEWARK, N.J. – A Boonton, New Jersey, man was sentenced today to 60 months in prison for using his home computer to download hundreds of images of child sexual abuse, U.S. Attorney Paul J. Fishman announced.
Lucas J. Reinmann, 36, previously pleaded guilty before U.S. District Judge Susan D. Wigenton to an information charging him with one count of knowingly receiving images of child pornography over the internet. Judge Wigenton imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Reinmann admitted that he downloaded images and videos of child sexual abuse from the internet to his computer using a peer-to-peer file sharing network. He also admitted possessing more than 600 images of child sexual abuse on his computers and USB drives, which were seized from his residence in July 2013.
In addition to the prison term, Judge Wigenton sentenced Reinmann to serve 10 years of supervised release.
U.S. Attorney Fishman credited special agents of Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Newark Division, under the direction of Acting Special Agent in Charge Kevin Kelly; the Morris County Prosecutor’s Office, under the direction of Prosecutor Fredric M. Knapp; and the Boonton Township Police Department, under the direction of Chief Paul C. Fortunato with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Sara F. Merin of the U.S. Attorney’s Office OCDETF Unit in Newark.
Defense counsel: Edward V. Sapone Esq., New York
Member of Decavalcante Crime Family Admits Distributing CocaineRead the Press Release
NEWARK, N.J. – An associate of the DeCavalcante organized crime family of La Cosa Nostra today admitted his role in distributing more than 500 grams of cocaine, U.S. Attorney Paul J. Fishman announced.
Nicholas DeGidio, 37, of Union, New Jersey, pleaded guilty before U.S. District Judge William H. Walls, to an information charging him with one count of distribution of more than 500 grams of cocaine.
According to documents filed in this case and statements made in court:
DeGidio was arrested and charged by complaint in March 2015, along with nine other members of the DeCavalcante crime family. Between December 2014 and March 2015, in conjunction with other family associates, DeGidio sold more than one-half a kilo of cocaine to an undercover FBI agent for at least $78,000.
The drug distribution count to which DeGidio pleaded guilty carries a maximum potential penalty of 40 years in prison and a $5 million fine. Sentencing is scheduled for Sept. 29, 2015.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark; the N.J. State Commission of Investigation, under the direction of Executive Director Philip James Degnan; the Waterfront Commission of New York Harbor, under the direction of Executive Director Walter M. Arsenault; and the Union County Prosecutor’s Office, under the direction of Acting Union County Prosecutor Grace H. Park.
The government is represented by Senior Litigation Counsel V. Grady O’Malley Sr. and Assistant U.S. Attorney James Donnelly of the U.S. Attorney’s Office’s Organized Crime/Gangs Unit.
Defense counsel: Ted Romankow Esq., Springfield, New Jersey
Somerset County, New Jersey, Man Sentenced to 34 Years in Prison for Production and Transportation of Images of Child Sexual AbuseRead the Press Release
NEWARK, N.J. – A Watchung, New Jersey, man was sentenced today to 408 months in prison for producing and transporting sexually explicit videos of children, U.S. Attorney Paul J. Fishman announced.
Patrick T. Deck, 54, previously pleaded guilty before U.S. District Judge Esther Salas to an information charging him with two counts of transportation of child pornography. Judge Salas imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
On Aug. 12, 2012, Deck was arrested at the Land of Make Believe amusement park in Hope, New Jersey, by the N.J. State Police for allegedly filming children, without their or their parents’ knowledge, in the men’s restroom. The following day, law enforcement officers executed a search warrant at Deck’s home in Watchung and discovered multiple videos and images containing child sexual abuse on Deck’s computers and other electronic devices.
Deck also admitted that between 1997 and 2010, he transported two minors, beginning when they were approximately 11 years old, to locations across the country, including New Jersey, New York, Pennsylvania, Colorado and Montana for the purpose of filming the minors in sexually explicit conduct. Deck produced the videos and images of child pornography and then transported those images back to his home in Watchung. In 1988, Deck was convicted in N.J. Superior Court, Burlington County, of two counts of endangering the welfare of a child. Those convictions arose out of prior incidents where Deck photographed or filmed minors engaged in prohibited sexual acts.
As part of his guilty plea, Deck agreed to forfeit the video cameras and other devices that he used to commit the offense. He will also be required to register as a sex offender.
In addition to the prison term, Judge Salas sentenced Deck to serve a lifetime of supervised release.
U.S. Attorney Fishman credited special agents of the Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Newark Division, under the direction of Acting Special Agent in Charge Kevin Kelly; the N.J. State Police, under the direction of Col. Rick Fuentes; and the Warren County Prosecutor’s Office, under the direction of Prosecutor Richard T. Burke, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Francisco J. Navarro of the U.S. Attorney’s Office General Crimes Unit in Newark.
Defense counsel: James Wronko Esq., Somerville, New Jersey
Essex County, New Jersey, Man Admits Taking Cellphone Pictures While Sexually Abusing Two ChildrenRead the Press Release
NEWARK, N.J. – A Newark, New Jersey, man today admitted sexually abusing two girls and recording the conduct on his cellphone, U.S. Attorney Paul J. Fishman announced.
Justin Kinney, 26, pleaded guilty before U.S. District Judge Stanley R. Chesler in Newark federal court to an indictment charging him with two counts of producing child pornography. Kinney was previously arrested and charged by federal complaint on April 20, 2014, and is currently in state custody on related charges.
According to the papers filed in the case and statements made in court:
On Oct. 25, 2012, law enforcement executed a search warrant on Kinney’s laptop computer and cellphone, which revealed several files of child pornography that appeared to be taken with Kinney’s cellphone. Kinney admitted that two of the images, dated Aug. 19, 2012 and Oct. 10, 2012, were taken by him while he sexually abused two girls.
On each count of the production of child pornography, Kinney faces a mandatory minimum penalty of 15 years in prison, a maximum potential penalty of 30 years in prison and a $250,000 fine. Kinney will be required to register as a sex offender. Sentencing is currently scheduled for Sept. 9, 2015.
U.S. Attorney Fishman credited special agents of Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Newark Division, under the direction of Acting Special Agent in Charge Kevin Kelly and the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Carolyn A. Murray, with the investigation leading to today’s plea.
The government is represented by Assistant U.S. Attorneys Danielle M. Corcione and Danielle Alfonzo Walsman of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark.
Defense counsel: Assistant Federal Public Defender John Yauch Esq., Newark
Two New Jersey Men Convicted on Drug Distributions ChargesRead the Press Release
TRENTON, N.J. – Two New Jersey men were convicted today for their roles in a drug-dealing business involving the sale of cocaine, marijuana, ecstasy and methylone, U.S. Attorney Paul J. Fishman announced.
Luke Atwell, 34, of Hamilton, New Jersey, and Christopher Castelluzzo, 30, of Bayonne, New Jersey, were convicted of conspiracy to distribute or possess with intent to distribute methylone, cocaine, MDMA, and marijuana following a two-week trial before U.S. District Judge Freda L. Wolfson. The jury deliberated for two hours before returning the guilty verdicts.
According to documents filed in this case and the evidence at trial:
Atwell and Castelluzzo were partners in a drug dealing conspiracy that spanned 29 months. In March 2013, the Drug Enforcement Administration (DEA) conducted an investigation resulting in the seizure of more than six kilograms of methylone at a drug mill in East Orange, New Jersey, that was tied to Atwell and Castelluzzo. About a month later, in April 2013, agents of U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), seized 2.9 kilograms of methylone that Atwell intended to pick up at the Manville, New Jersey, Post Office. Agents replaced the package with a dummy package, which Atwell picked up and placed in the car he occupied with Castelluzzo. Following the arrest of both defendants outside the Manville Post Office, agents searched various electronic devices of the defendants and uncovered email communications establishing a drug distribution conspiracy dating back to 2010.
The drug charges on which Atwell and Castelluzzo were convicted carry a maximum potential penalty of 20 years in prison. Sentencing for both defendants is scheduled for Sept. 3, 2015.
U.S. Attorney Fishman credited special agents of HSI, under the direction of Acting Special Agent in Charge Kevin Kelly; and special agents of the DEA, under the direction of Special Agent in Charge Carl J. Kotowski, for the investigation leading to today’s verdict.
The government is represented by Assistant U.S. Attorneys Courtney A. Howard and Thomas S. Kearney of the Criminal Division in Newark.
Defense counsel:
Castelluzzo: Dawn M. Florio Esq., New York
Atwell: Pasquale F. Giannetta Esq., WayneThree Members of ‘Dirty Block’ Atlantic City, New Jersey, Gang Admit Roles in Drug Distribution and Money Laundering ConspiraciesRead the Press Release
TRENTON, N.J. – Two Atlantic City, New Jersey, men and a Millville, New Jersey, woman today admitted their roles in a criminal street gang that used threats, intimidation and violence to maintain control of the illegal drug trade in Atlantic City, U.S. Attorney Paul J. Fishman announced.
Franklin Simms, a/k/a “Fat Boy,” 31, pleaded guilty to a superseding information charging him with one count of conspiring to distribute, and to possess with intent to distribute, 100 grams or more of heroin. Rayshell Strong, a/k/a “Big Truck,” 34, pleaded guilty to a superseding information charging him with one count of conspiring to distribute a detectable amount of heroin. Latasha Cherry, a/k/a “Tasha,” 31, pleaded guilty to a superseding information charging her with one count of conspiring to engage in money laundering. All three defendants entered their pleas today before U.S. District Judge Anne E. Thompson in Trenton federal court.
All three were members of a gang known as “Dirty Block,” a/k/a “Crime Fam,” “3.6.6.12,” or “3.6,” which operated in a geographic area of Atlantic City that includes the public housing apartment complexes of Stanley Holmes Village and Schoolhouse Apartments. To date, 23 of the 34 defendants charged in this matter have been convicted, either through guilty pleas or following trial.
According to documents filed in this case and statements made in court:
Simms and Strong admitted distributing heroin on behalf of one of the gang’s alleged leaders, Tyrone Ellis, a/k/a “Rome,” 33, of Galloway, New Jersey, who was among the 34 defendants charged in May 2013. Simms and Strong admitted that from October 2012 through March 2013, they conspired to distribute between 400 and 700 grams of heroin. Cherry admitted she conspired with Ellis and others to launder the proceeds by transferring cash onto reloadable prepaid debit cards.
The charges against Ellis are merely allegations, and he is considered innocent unless and until proven guilty.
The drug conspiracy charge to which Simms pleaded guilty carries a maximum potential penalty of 40 years in prison and a $5 million fine. The drug distribution conspiracy charge to which Strong pleaded guilty carries a maximum potential penalty of 20 years in prison and a $1 million fine. The money laundering charge to which Cherry pleaded guilty carries a maximum potential penalty of 20 years in prison and a $500,000 fine. Sentencing for all three defendants is scheduled for Sept. 21, 2015.
U.S. Attorney Fishman credited special agents of the FBI’s Newark Division, Atlantic City Resident Agency, under the direction of Special Agent in Charge Richard M. Frankel; the Atlantic County Prosecutor’s Office, under the direction of Prosecutor James P. McClain; the Atlantic City Police Department, under the direction of Chief Henry White; and the South Jersey Safe Streets Violent Incident and Gang (Safe Streets) Task Force, with the investigation leading to today’s sentencing.
He also thanked the N.J. State Police; the Atlantic County Sheriff’s Office; the Northfield Police Department; the Vineland Police Department; the Brigantine Police Department; and the Millville Police Department for their contributions.
The government is represented by Assistant U.S. Attorneys Patrick Askin and Justin Danilewitz of the U.S. Attorney’s Office in Camden and Special Assistant U.S. Attorney Edmund Burgos of the Atlantic County Prosecutor’s Office.
Defense counsel:
Simms: Troy A. Archie Esq., Cinnaminson, New Jersey
Strong: J. Michael Farrell Esq., Philadelphia
Cherry: Richard Sparaco Esq., Cherry Hill, New JerseyTwo Canadian Men Admit Roles in $17 Million Microcap Stock Manipulation SchemeRead the Press Release
NEWARK, N.J. – Two Canadian men have admitted their roles in a stock market scheme that artificially inflated the stock price of two publicly traded companies through manipulative trading and other fraudulent means, U.S. Attorney Paul J. Fishman announced.
Michael Taxon, 52, of Toronto, Ontario, Canada, and Itamar Cohen, 52, of Thornhill, Ontario, Canada, each pleaded guilty before U.S. District Judge Jose Linares to separate informations charging them with conspiracy to commit securities fraud. Taxon entered his plea today and Cohen entered his plea on May 27, 2015.
According to the documents filed in these cases and statements made in court:
From April 2007 through June 2008, Taxon, Cohen and others engaged in an extensive “pump-and-dump” stock manipulation scheme, fraudulently inflating the prices of shares of certain companies in order to later sell those shares at artificially higher prices. The scheme targeted two public companies: Raven Gold Corporation (RVNG) and Kentucky USA Energy Inc. (KYUS). Taxon, Cohen and their conspirators first obtained control over large blocks of the free trading shares of the target companies. They then “pumped” the price of those shares by engaging in manipulative trading of the stocks and disseminating misleading promotional materials touting the stocks and encouraging others to purchase them. After pumping the stocks, Taxon, Cohen or their conspirators “dumped” them, selling large volumes of the stocks to victim-investors. The target companies’ stock price would then drop, resulting in losses to the victims.
In April 2007, Taxon, Cohen and a conspirator (CC2) received large blocks of unrestricted RVNG shares and then engaged in a pattern of manipulative trading designed to create the false appearance of liquidity and market depth for RVNG. The manipulative trading included trades of RVNG stock in which CC2 or others acting in concert were on both the “buy” and “sell” side of the same trades. Throughout June 2007, CC2’s trading in various brokerage accounts that CC2, Taxon or Cohen controlled accounted for a substantial portion of RVNG’s daily trading volume. In addition to the manipulative trading, Taxon, Cohen and their conspirators created and disseminated to potential investors an eight-page, glossy promotional mailer that touted RVNG’s stock. The promotional mailer was materially false in numerous ways. It was misleadingly titled, “Stock Trend Report,” and claimed to be a July 2007 “Special Edition For Premium Members.” Stock Trend Report was a fictional name that was created specifically for the scheme. The manipulative conduct had a substantial impact on RVNG’s stock price, which went from a low of $.61 per share in the early phase of the scheme to a high of $1.73 per share at its peak.
Taxon and Cohen engaged in similar fraudulent conduct to artificially inflate the value of KYUS’s stock. In May 2008, Taxon assisted CC2 in manipulating KYUS’ stock by placing a number of manipulative trades using overseas trading accounts. Taxon placed and then canceled a series of successfully higher “buy” orders for KYUS stock at different brokers in order to maximize the false appearance of liquidity, depth and interest in the stock, and to “walk up” the price of KYUS stock. Toward the end of the KYUS manipulation, after the stock had been manipulated from a low price of approximately $.60 per share to a high of $3.97 per share at the peak of the promotion, CC2 and other conspirators “dumped” their shares at the artificially inflated prices to unsuspected victim-investors.
The stock manipulation scheme generated approximately $17.2 million in illegal proceeds, of which Taxon and Cohen received approximately $2.4 million.
The conspiracy counts to which Taxon and Cohen pleaded guilty each carry 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 Taxon and Cohen is scheduled for Sept. 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 Taxon’s and Cohen’s guilty pleas. He also thanked the U.S. Securities and Exchange Commission’s New York Regional Office, under the direction of Regional Director 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:
Taxon: Andrew Goodman Esq., New York
Cohen: Anne Hilton Esq., New York
Garden State Cardiovascular Specialists P.C. Agrees to Pay $3.6 Million for Allegedly Submitting False Claims to Federal Health Care ProgramsRead the Press Release
Garden State Cardiovascular Specialists P.C. (Garden State), a cardiology practice which owns and operates several facilities in New Jersey under the name NJ MedCare/NJ Heart, has agreed to pay more than $3.6 million to resolve allegations that its facilities falsely billed federal health care programs for tests that were not medically necessary, announced today by U.S. Attorney Paul J. Fishman for the District of New Jersey.
The settlement announced today resolves allegations that Garden State and its principals, Jasjit Walia M.D. and Preet Randhawa M.D., submitted claims to Medicare for various cardiology diagnostic tests and procedures, including stress tests, cardiac catheterizations and external counterpulsation, which were not medically necessary.
The allegations resolved by today’s settlement were raised in a lawsuit filed under the qui tam, or whistleblower provisions of the False Claims Act. The act allows private citizens with knowledge of fraud to bring civil actions on behalf of the government and to share in any recovery. The whistleblower, Cheryl Mazurek, will receive more than $648,000 as part of today’s settlement.
The settlement is the culmination of an investigation conducted by special agents of the U.S. Department of Health and Human Services Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert.
The government is represented by Assistant U.S. Attorneys Bernard J. Cooney and Kristin L. Vassallo of the U.S. Attorney’s Office for the District of New Jersey in Newark and Trial Attorney Arthur Di Dio of the Justice Department’s Civil Division.
U.S. Attorney Fishman reorganized the health care fraud practice at the U.S. Attorney’s Office in New Jersey shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $635 million in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.
The claims settled by this agreement are allegations only, and there has been no determination of liability. The qui tam case is captioned United States ex rel. Cheryl Mazurek v. Garden State Cardiovascular Specialists, P.C. et al., Civil Action No. 10-4734 (D.N.J.).
Garden State Cardiovascular Specialists P.C. Agrees to Pay $3.6 Million for Allegedly Submitting False Claims to Federal Health Care ProgramsRead the Press Release
NEWARK, N.J. – Garden State Cardiovascular Specialists P.C. (Garden State), a cardiology practice which owns and operates several facilities in New Jersey under the name NJ MedCare/NJ Heart, has agreed to pay more than $3.6 million to resolve allegations that its facilities falsely billed federal health care programs for tests that were not medically necessary, U.S. Attorney Paul J. Fishman announced today.
The settlement announced today resolves allegations that Garden State and its principals, Jasjit Walia M.D. and Preet Randhawa M.D., submitted claims to Medicare for various cardiology diagnostic tests and procedures, including stress tests, cardiac catheterizations, and external counterpulsation, which were not medically necessary.
The allegations resolved by today’s settlement were raised in a lawsuit filed under the qui tam, or whistleblower, provisions of the False Claims Act. The Act allows private citizens with knowledge of fraud to bring civil actions on behalf of the government and to share in any recovery. The whistleblower, Cheryl Mazurek, will receive more than $648,000 as part of today’s settlement.
The settlement is the culmination of an investigation conducted by special agents of the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert.
The government is represented by Assistant U.S. Attorneys Bernard J. Cooney and Kristin L. Vassallo of the U.S. Attorney’s Office in Newark and Trial Attorney Arthur Di Dio of the Justice Department’s Civil Division, Commercial Litigation 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.
The claims settled by this agreement are allegations only, and there has been no determination of liability. The qui tam case is captioned United States ex rel. Cheryl Mazurek v. Garden State Cardiovascular Specialists, P.C. et al., Civil Action No. 10-4734 (D.N.J.).
Defense counsel for Garden State and Doctors Walia and Randhawa:
Bruce A. Levy Esq., Newark
Counsel for Relator:
Ross Begelman Esq., Cherry Hill, New Jersey
Former Loan Officer Admits Role in $6 Million Mortgage Fraud SchemeRead the Press Release
NEWARK N.J. – A Jackson, New Jersey, man today admitted his role in a large-scale mortgage fraud scheme that used phony documents and straw buyers to acquire over $6 million in loans, U.S. Attorney Paul J. Fishman announced.
Joseph DiValli, 46, pleaded guilty before U.S. District Judge Susan D. Wigenton in Newark federal court to a superseding information charging him with one count of conspiracy to commit wire fraud, one count of wire fraud and one count of tax evasion.
According to documents filed in this case and statements made in court:
From March 2011 through November 2012, DiValli and other conspirators agreed to fraudulently obtain mortgage loans for properties located in North Jersey. After recruiting “straw buyers” to purchase the properties, DiValli and others submitted false and fraudulent loan applications and supporting documents so the straw buyers could qualify for the loans. DiValli and others also used another conspirator, who worked at a bank, to create misleading certifications showing certain bank accounts held more money than they actually had. Divalli and other conspirators also submitted false appraisal reports, back-dated deeds and used unlicensed title agents to close transactions and disburse the mortgage proceeds.
As a loan officer for a North Jersey mortgage lender, DiValli facilitated some of these fraudulent transactions, including a $244,855.26 mortgage on a property located on Smith Street in Elizabeth, New Jersey. Overall, the scheme induced lenders to issue more than $6 million in loans, resulting in several defaults and exposing lenders and the Federal Housing Administration (FHA) to more than $2 million in potential losses.
DiValli also admitted using a separate scheme to modify the mortgage on his personal residence. From March 2011 through June 2012, Divalli used false payroll ledgers and earnings statements to deceive a loan officer into believing that his net earnings were lower than his actual income level.
DiValli also admitted receiving income of more than $450,000 in 2012. In order to avoid taxes of $79,000, DiValli failed to file taxes for 2012 and cashed his paychecks at a check-cashing facility to conceal his income.
The wire fraud and conspiracy counts to which DiValli pleaded guilty are each punishable by a maximum potential penalty of 30 years in prison and a $1,000,000 fine. The tax evasion count is punishable by a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for Sept. 9, 2015.
U .S. Attorney Fishman credited law enforcement agents of the FBI Newark Mortgage Fraud Task Force, under the direction of Special Agent in Charge Richard M. Frankel; postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates; special agents of the U.S. Department of Housing and Urban Development, Office of Inspector General, under the direction of Special Agent in Charge Christina Scaringi; special agents of the Federal Housing Finance Agency, Office of Inspector General, under the direction of Special Agent in Charge Steven Perez; special agents of the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), under the direction of Special Inspector General Christy Romero; special agents of IRS–Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; and the Hudson County Prosecutor’s Office, under the direction of Acting Prosecutor Gaetano Gregory, for their roles in the investigation leading to today’s plea.
The government is represented by Assistant U.S. Attorneys Lakshmi Srinivasan Herman and Andrew Kogan of the U.S. Attorney’s Office Economic Crimes Unit in Newark, as well as Barbara Ward, Acting Chief of the office’s Asset Forfeiture and Money Laundering Unit.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov
Defense counsel: Michael A. Koribanics Esq. Clifton, New Jersey
Distributor and Enforcer for Atlantic City ‘Dirty Block’ Gang Sentenced to 10 Years in Prison for Heroin Trafficking Conspiracy and Firearms OffenseRead the Press Release
CAMDEN, N.J. - An Atlantic City, New Jersey, man was sentenced today to 120 months in prison for engaging in a conspiracy to distribute heroin on behalf of the “Dirty Block” criminal street gang that used threats, intimidation and violence to maintain control of the illegal drug trade in Atlantic City, U.S. Attorney Paul J Fishman announced.
Kamal Allen, a/k/a “Geez,” a/k/a “Maly Geez,” 27, previously pleaded guilty before U.S. District Judge Joseph E. Irenas to a superseding information charging him with one count of conspiracy to distribute and to possess with intent to distribute one kilogram or more of heroin and one count of possessing a firearm and ammunition while being a previously convicted felon. Judge Irenas imposed the sentence today in Camden federal court.
According to documents filed in this and other cases and statements made in court:
Allen acted as a distributor and enforcer on behalf of one of the gang’s leaders, Mykal Derry, 32, of Atlantic City. Allen helped Dirty Block distribute heroin in and around the public housing apartment complexes of Stanley Holmes, Carver Hall, Schoolhouse, Adams Court and Cedar Court, in Atlantic City. Allen was arrested on March 26, 2013. Allen said in court that he and others travelled with Derry to a shooting range in Lakewood, New Jersey, on Jan. 20, 2013, where Allen – a previously convicted felon – used, possessed, and discharged a firearm. Allen and other members of the group also participated in a violent altercation with rival drug traffickers at an Atlantic City casino in December 2012.
In addition to the prison term, Judge Irenas sentenced Allen to serve 10 years of supervised release.
The charges against Derry are merely allegations, and he is considered innocent unless and until proven guilty.
U.S. Attorney Fishman credited special agents of the FBI’s Newark Division, Atlantic City Resident Agency, under the direction of Acting Special Agent in Charge Richard M. Frankel; the Atlantic County Prosecutor’s Office, under the direction of Prosecutor James P. McClain; the Atlantic City Police Department, under the direction of Chief Henry White; and the South Jersey Safe Streets Violent Incident and Gang (Safe Streets) Task Force, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorneys Patrick C. Askin and Justin C. Danilewitz, and Special Assistant U.S. Attorney Edmond Malqui-Burgos of the Atlantic County Prosecutor’s Office.
Defense counsel: Jerome A. Ballarotto Esq., Trenton, New JerseyEssex County, New Jersey, Man Admits Role in $80,000 Phony Check Cashing SchemeRead the Press Release
NEWARK, N.J. – A Newark, New Jersey, man today admitted making counterfeit checks as part of a scheme that caused bank losses of approximately $80,000, U.S. Attorney Paul J. Fishman announced.
Laronn Moultrie, 30, pleaded guilty before U.S. District Judge William H. Walls to an information charging him with one count of conspiracy to commit bank fraud.
According to documents filed in this case and statements made in court:
From October 2010 through May 2012, Moultrie used check-writing software to create hundreds of counterfeit checks, most of which were in amounts of less than $5,000. In furtherance of the scheme, Moultrie recruited numerous individuals to open new accounts at Bank of America, Sovereign Bank (now Banco Santander) and TD Bank by promising a share of the proceeds.
After obtaining the cooperation of an account holder, Moultrie or another conspirator would deposit one of the counterfeit checks into a new account. Before the bank realized that the deposited check was counterfeit, Moultrie would arrange to withdraw the funds within a day or two of the deposit. Moultrie also arranged for some account holders to cash counterfeit checks directly against their accounts. Moultrie admitted obtaining around $80,000 in cash through this scheme.
Moultrie faces a statutory maximum potential penalty of 30 years in prison and $1 million fine. Sentencing is scheduled for Sept. 23, 2015.
U.S. Attorney Fishman credited special agents of the U.S. Secret Service, under the direction of Special Agent in Charge Carl Agnelli; special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel; investigators at the Union County Prosecutor’s Office, under the direction of Acting Prosecutor Grace H. Park; and investigators at the Morris County Prosecutor’s Office, under the direction of Prosecutor Fredric M. Knapp, for their roles in the investigation leading to today’s plea.
The government is represented by Assistant U.S. Attorney David W. Feder of the U.S. Attorney’s Office General Crimes Unit.
Defense counsel: Jean Barrett Esq., Montclair, New Jersey