District of New Jersey

NEWARK, N.J. – A former vice president at a South Plainfield, New Jersey, traffic safety equipment business was sentenced today to 33 months in prison for evading income taxes on more than $2 million in withdrawals he made from the business for his own use, U.S. Attorney Paul J. Fishman announced.

Anthony R. Pecoraro, 52, of Colts Neck, New Jersey, previously pleaded guilty before U.S. District Judge William H. Walls to an information charging him with one count of tax evasion. Judge Walls imposed the sentence today in Newark federal court.

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

Pecoraro worked in 2008 and 2009 at Traffic Safety Service LLC, which provided traffic safety equipment and other traffic related services to local and state municipalities and private businesses. In connection with his position as a vice president, he had access to the company’s business account.

During his guilty plea proceeding, Pecoraro admitted he wrote checks for unauthorized cash withdrawals for a total of approximately $2,126,200 between June 2008 and December 2009, which he took for personal use. Pecoraro acknowledged he failed to report this money as taxable income for calendar years 2008 and 2009 in the amounts of $563,800 and $1,562,400, respectively, and that if he had reported the additional cash on his income tax returns he would have owed the government approximately $733,970.

In addition to the prison term, Judge Walls sentenced Pecocaro to serve three years of supervised release and ordered him to pay $1,241,604.91in restitution to the IRS.

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 special agents with IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s sentencing.

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

Defense counsel: John McDonald Esq., Somerville, New Jersey

TRENTON, N.J. – A Brick, New Jersey, member of a large-scale drug trafficking organization was sentenced today to 46 months in prison for distributing heroin in Ocean and Monmouth counties and elsewhere in New Jersey, U.S. Attorney Paul J. Fishman announced.

Richard Durham, 28, previously pleaded guilty before U.S. District Judge Peter G. Sheridan to an information charging him with one count of conspiring to distribute heroin. Judge Sheridan imposed the sentence today in Trenton federal court.  

In March 2014, 19 other alleged members of the drug trafficking organization of which Durham was a member were charged by criminal complaint with conspiring to distribute heroin. The complaint referred to the drug trafficking organization as the “Britt-Young DTO,” after its leaders, Robert Britt, a/k/a “True,” and Rufus Young, a/k/a “Equan,” a/k/a “E-Money,” a/k/a “Kintock.” Of those 19 individuals, 14 have pleaded guilty.

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

From November 2013 through March 2014, Durham conspired with Rufus Young and others to distribute heroin in Ocean and Monmouth counties as part of the Britt-Young DTO. At his plea hearing, Durham admitted he possessed and distributed between 60 and 80 grams of heroin.

In addition to the prison term, Judge Sheridan sentenced Durham to serve three years of supervised release.

U.S. Attorney Fishman credited special agents of the FBI, Red Bank Resident Office, under the direction of Special Agent in Charge Richard M. Frankel, with the investigation leading to today’s sentencing.

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

Defense Counsel: Scott Krasny Esq., West Trenton, New Jersey

NEWARK, N.J. – Upon the joint application of the government and defense counsel, U.S. District Judge Susan D. Wigenton today issued a continuance order in the case of U.S. v. William E. Baroni Jr. and Bridget Anne Kelly.

The order sets a new trial date of Nov. 16, 2015, and sets out a schedule for pretrial motions. The order is attached.

baroni_-_kelly_continuance_order.pdf (106.23 KB)

TRENTON, N.J. – Two Brooklyn, New York, men were convicted today of defrauding Home Depot out of more than $250,000 through an elaborate “double-dipping” scheme that they committed at various Home Depot locations throughout the United States, including New Jersey, U.S. Attorney Paul J. Fishman announced.

Renauld Medard, 74, and Wesly Dieudonne, 30, were convicted on all counts of an indictment charging each defendant with one count of conspiracy to commit wire fraud and four counts of wire fraud. They were convicted following a four-day trial before U.S. District Judge Anne E. Thompson in Trenton federal court. The jury deliberated for four hours before returning the verdict.

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

As part of the scheme, Medard and Dieudonne purchased various items from Home Depot locations in New Jersey, New York, Maryland, Connecticut and Pennsylvania using cash, credit cards or store credit. Medard and Dieudonne also went to Home Depot stores and compiled identical sets of goods as listed in receipts from previous purchases. Under the guise that they had forgotten to purchase an item, usually an inexpensive one, they used receipts from previous purchases to deceive cashiers into believing that the new sets of goods had already been bought.

Medard and Dieudonne also went to Home Depot to return items stolen in the scheme. In some instances, they presented a receipt in order to effectuate the return. In other instances, they obtained a refund for store credit without presenting a receipt. From July 2009 through November 2011, Medard and Dieudonne fraudulently obtained Home Depot store credit and refunds totaling over $250,000.

The counts of wire fraud conspiracy and wire fraud each carry a maximum potential penalty of 20 years in prison and a $250,000 fine. Sentencing for both defendants is scheduled for July 30, 2015.

U.S. Attorney Fishman credited special agents of the U.S. Secret Service, under the direction of Acting Special Agent in Charge Carl Agnelli, for the investigation leading to today’s verdict.

The government is represented by Assistant U.S. Attorneys David M. Eskew and Andrew D. Kogan of the U.S. Attorney’s Office Economic Crimes Unit in Newark.

CAMDEN, N.J. – Two Atlantic City, New Jersey, men were each sentenced to 240 months in prison today for 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.

Lamar Macon, 26, and Dominique Venable, 25, were previously convicted by a federal jury of conspiracy to distribute one kilogram or more of heroin, possession of firearms in furtherance of a drug trafficking crime, brandishing and discharging firearms in furtherance of the conspiracy and using a cellular telephone in furtherance of the conspiracy. Macon, Venable, Kareem Bailey, 21, and Terry Davis, 26, all of Atlantic City, were each convicted following a six-week trial before U.S. District Judge Joseph E. Irenas, who imposed the sentences for Macon and Venable today in Camden federal court.

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

The four men are members of a gang known as “Dirty Block,” a/k/a “Crime Fam,” “3.6.6.12,” or “3.6,” which operated in a geographic area of Atlantic City that includes the public housing apartment complexes of Stanley Holmes Village Public Housing Complex, Renaissance Plaza and Schoolhouse Apartments.

The defendants participated in a violent street-level drug trafficking organization that controlled heroin sales through the possession of dozens of firearms and the use of gun violence, including at least one homicide and several non-fatal, drug-related shootings.

In addition to the prison terms, Judge Irenas sentenced both Macon and Venable to serve 10 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 sentencing.

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 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:

Macon: William Spade Esq., Philadelphia

Venable: James Murphy Esq., Princeton, New Jersey

NEWARK, N.J. – A doctor with a medical practice in Montclair, New Jersey, was sentenced today to 14 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.

Franklin Dana Fortunato, 65, of Montville, New Jersey, previously pleaded guilty before U.S. District Judge Stanley R. Chesler to violating the Federal Travel Act, as well as filing a false tax return. Judge Chesler imposed the sentence today in Newark federal court.

Including Fortunato, 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:

Furtunato admitted he accepted bribes in return for referring patient blood specimens to BLS. Fortunato received more than $100,000 in bribe payments – often more than $5,000 per month – from BLS disguised through sham lease and sham service agreements between 2006 and 2009. BLS made more than $430,000 through testing on blood specimens referred by Fortunato.

Fortunato admitted that he failed to report those bribes as income. From 2004 to 2008, he also failed to disclose and report as income $540,000 in patient co-pays and other monies paid to him by other health care providers. Fortunato failed to pay more than $160,000 in taxes he owed as a result of that unreported income.

In addition to the prison term, Judge Chesler sentenced Fortunato to one year of supervised release and ordered him to pay a fine of $75,000. As part of the plea deal, he must forfeit more than $635,000.

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: Ricardo Solano Esq., Newark

NEWARK, N.J. - A former real estate title agent was sentenced today to 66 months in prison for carrying out a mortgage fraud scheme in which she obtained seven loans, totaling more than $3.7 million, on two properties located in Wood-Ridge, New Jersey and Belvidere, New Jersey, U.S Attorney Paul J. Fishman announced.

Ania Nowak, 48, of Belvidere, previously pleaded guilty before U.S. District Judge Stanley R. Chesler to Count One of the superseding indictment charging her with conspiracy to commit wire fraud. Judge Chesler imposed the sentence today in Newark federal court.

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

Ania Nowak was the owner and operator of A.N. Title Agency LLC and was an agent for Stewart Title Guaranty Company. Nowak had a duty to review a property’s title to determine ownership and the existence of any prior liens and truthfully disclose them in the title insurance documents. She also had a duty to issue title insurance policies to lenders guaranteeing there were no other liens so that they would be first in line to have the property sold if the borrower stopped making mortgage payments. Nowak also acted as a settlement agent and was required to disburse loan money in accordance with lender instructions, pay off any existing liens and record loan documents in the appropriate county clerk’s office.

Nowak admitted her role in obtaining seven mortgage loans through fraudulent means, including: an April 2005 loan for her sham sale of the Wood-Ridge property to her husband, Zbigniew Cichy, 46, of Belvidere; a November 2005 refinancing loan for the Wood-Ridge property; a 2005 construction loan to build a house on the Belvidere property owned by Cichy; an August 2006 loan on the Belvidere property; May 2007 loans for a sham sale of the Belvidere property to another conspirator in the scheme, Kim Salvemini, 60, of Wallington, New Jersey ; Salvemini’s May 2007 refinancing loan on the Belvidere property; and Cichy’s November 2007 refinancing loan on the Belvidere property. Nowak admitted that, for each of the seven loans, she lied on loan documents, failed to pay off prior mortgages at closing, failed to record the mortgages and any deeds and that most of the loans went into default for non-payment.

In addition to the prison term, Judge Chesler sentenced Nowak to serve three years of supervised release and ordered her to pay restitution of $2,050,975.34.

Salvemini previously pleaded guilty to her role and was sentenced to one year of probation and ordered to pay restitution of $881,324.00 on May 6, 2015. Cichy also pleaded guilty to his role in the scheme and was sentenced to four months in prison and ordered to pay $2,050,975.34 in restitution on May 5, 2015.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorney Shirley U. Emehelu and Senior Litigation Counsel Leslie F. Schwartz of the Economic Crimes Unit of the U.S. Attorney’s Office in Newark.

Today’s sentencing is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorney’s offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.

Defense counsel: Peter R. Willis Esq., Jersey City, New Jersey 

NEWARK, N.J. – A Plainfield, New Jersey, man today admitted arranging sexual encounters involving a 15-year-old girl in return for payment, U.S. Attorney Paul J. Fishman announced.

Ronald Garris Jr., 30, pleaded guilty before U.S. District Judge Jose L. Linares in Newark federal court to an information charging him with one count of sex trafficking of a minor.

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

Garris admitted that on June 14, 2013, he met a 15-year-old girl at a Best Western Hotel in South Plainfield, New Jersey, and recruited her to work as a prostitute. On June 18, 2013, Garris posted an advertisement on backpage.com that contained explicit photographs of the girl, including her telephone number and the town in which she was located. Garris admitted arranging “dates” in which the girl was expected to perform sexual acts in exchange for payment. Garris also admitted that on June 21, 2013, the girl went to the Howard Johnson Express Inn in New Brunswick, New Jersey, for sexual encounters that he arranged.

The count of sex trafficking of a minor is punishable by a maximum potential penalty of life in prison and a mandatory minimum of 10 years in prison. It also carries a maximum fine of $250,000. Garris must register as a sex offender. Sentencing is scheduled for Aug. 18, 2015.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel; the New Brunswick Police Department and the Middlesex County Prosecutor’s Office with the investigation leading to today’s plea.

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

Defense counsel: Assistant Federal Public Defender Linda Foster Esq., Newark

garris_ronald_information.pdf (72.37 KB)

NEWARK, N.J. –Two employees of SCM Data Inc. and MMC Systems Inc. were arrested today for their alleged roles in a scheme that fraudulently used the H1-B visa program to reduce skilled labor costs, U.S. Attorney Paul J. Fishman announced.   

Hiral Patel, 32, and Shikha Mohta, 31, both of Jersey City, New Jersey, were each charged by complaint with one count of conspiracy to bring in and harbor aliens and to obstruct justice. They are scheduled to make their initial court appearances this afternoon before U.S. Magistrate Judge Mark Falk in Newark federal court.

According to the complaint:

SCM Data and MMC Systems offered consultants to clients in need of IT support. Both companies recruited foreign nationals, often student visa holders or recent college graduates, and sponsored them for H-1B visas. The H1-B program allows businesses in the United States to temporarily employ foreign workers with specialized or technical expertise in a particular field, such as accounting, engineering or computer science. As part of the H-1B program, the Department of Homeland Security (DHS) and the Department of Labor (DOL) require employers to meet specific labor conditions to ensure that American workers are not adversely impacted, while the DOL’s Wage and Hour Division safeguards the treatment and compensation of H-1B workers. Congress sets a numerical cap for the admission of skilled workers into the United States.

Patel, Mohta and other conspirators recruited foreign workers with purported IT expertise who sought work in the United States. The conspirators then sponsored the foreign workers’ H1-B visas with the stated purpose of working for SCM Data and MMC Systems’ clients throughout the United States. When submitting the visa paperwork to the DHS, the conspirators falsely represented that the foreign workers had full-time positions and were paid an annual salary, as required to secure the H-1B visas. Contrary to these representations and in violation of the H-1B program, Patel, Mohta and others paid the foreign workers only when they were placed at a third-party client who entered into a contract with SCM Data or MMC Systems.

In some instances, Patel, Mohta and others generated false payroll records to create the appearance that the foreign workers were paid full-time wages. On multiple occasions the conspirators required workers to pay SCM Data or MMC Systems their gross wages in cash. In exchange, SCM Data or MMC Systems would subtract taxes and fees and issue payroll checks to the foreign workers in a smaller amount. The conspirators then encouraged the foreign workers to submit the bogus payroll checks to the DHS as proof that the workers were engaged in full-time work despite the fact that they were not working for SCM Data and MMC Systems.

This scheme provided Patel, Mohta and others with a labor pool of inexpensive, skilled foreign workers who could be used on an “as needed” basis. The scheme was profitable because it required minimal overhead, and SCM Data and MMC Systems could charge significant hourly rates for the foreign workers’ services. The conspirators earned a substantial profit margin when a foreign worker was assigned to a project and incurred few costs when a foreign worker was without billable work.

The conspiracy charge with which Patel and Mohta are charged carries a maximum potential penalty of five years in prison and a $250,000 fine.

U.S. Attorney Fishman praised special agents of the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), under the direction of Acting Special Agent in Charge Kevin Kelly, and 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 the charges.

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

The charges and allegations contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

patel_hiral_and_mohta_shikha_complaint.pdf (1.18 MB)

TRENTON, N.J. – A leader of a large-scale drug trafficking organization today admitted conspiring to distribute heroin in Ocean and Monmouth counties and elsewhere in New Jersey, U.S. Attorney Paul J. Fishman announced.

Rufus Young, a/k/a “Equan,” a/k/a “E-Money,” of Asbury Park, New Jersey, pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton federal court to an information charging him with conspiring to distribute 100 grams or more of heroin. 

In March 2014, 19 other alleged members of the drug trafficking organization of which Young was a leader were charged by criminal complaint with conspiring to distribute heroin.  The complaint referred to the drug trafficking organization as the “Britt-Young DTO,” after its leaders, Young and Robert Britt, a/k/a “True.”  Of those 19 individuals, 14 have pleaded guilty.

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

Between February 2013 and March 2014, Young conspired with others to distribute heroin in Ocean and Monmouth counties as part of the Britt-Young DTO. Young was a leader of the organization and was responsible for, among other things, supplying heroin to various sub-dealers who distributed the heroin to others. To carry out Britt-Young DTO’s drug trafficking business, Young maintained several stash house locations that he and his conspirators used to package, store and sell heroin, including a recording studio in Toms River and two apartments in Neptune, New Jersey. Young was responsible for distributing between one and three kilograms of heroin during the conspiracy.      

The narcotics conspiracy charge to which Young pleaded carries a maximum penalty of 40 years in prison and a $5 million fine. Sentencing is scheduled for Aug. 19, 2015.

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; officers of the Brick Township Police Department, under the direction of Chief Nils R. Bergquist: and officers of the Toms River Police Department, under the direction of Chief Mitchell Little, with the investigation. He additionally credited special agents of the Bureau of Alcohol Tobacco Firearms and Explosives, under the direction of Special Agent in Charge George P. Belsky; inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates; officers of the Monmouth County Prosecutor’s Office, under the direction of Acting Prosecutor Christopher J. Gramiccioni; and officers of the Ocean County Prosecutor’s Office, under the direction of Prosecutor Joseph D. Coronato. He also thanked the Monmouth County Sheriff’s Office and the Neptune Township, Asbury Park, Marlboro, Long Branch and Freehold police departments for their roles in the case.

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

Defense counsel: Stacy A. Biancamano Esq., West Orange, New Jersey

young_rufus_information.pdf (712.75 KB)

NEWARK, N.J. – Five Essex County, New Jersey, men were arraigned today on charges they ran an illegal drug mill that distributed at least one kilogram of heroin, U.S. Attorney Paul Fishman announced.

On April 28, 2015, a federal grand jury in Newark indicted each of the following defendants with one count of distributing and possessing with intent to distribute, and one count of conspiring to distribute, one kilogram or more of a mixture and substance containing heroin:

    a.  Lateef Grimsley, 25, of Newark, previously arrested and charged by complaint on Nov. 13, 2013.

    b.  Daquwann Walker, 24, of Newark, previously arrested and charged by complaint on Nov. 15, 2013.

    c.  Rassol China, 33, of Newark, previously arrested and charged by complaint on Nov. 22, 2013.

    d.  Bryant Rudd, 26, of Newark, previously arrested and charged by complaint on Feb. 11, 2014.

    e.  Shakur Billinghurst, 21, of Newark, previously arrested and charged by complaint on April 6, 2015.

The defendants were arraigned today before U.S. District Judge Jose L. Linares in Newark federal court.        

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

During a drug trafficking investigation, special agents of the U.S. Drug Enforcement Administration (DEA) obtained information that the third-floor apartment of a building located in Newark was being used as a heroin mill. DEA special agents seized from the heroin mill more than one kilogram of heroin and a variety of drug paraphernalia and packaging materials.

Each of the two counts with which the defendants are charged carries a mandatory minimum term of 10 years in prison and a maximum term of life, and a $10 million fine.

U.S. Attorney Fishman credited special agents of DEA, under the direction of Special Agent in Charge Special Agent in Charge Carl Kotowski in Newark, with the investigation leading to the charges.

The government is represented by Assistant U.S. Attorney Barry A. Kamar of the U.S. Attorney’s Office General Crimes Unit in Newark.

Defense counsel:

Grimsley: Angelo Servidio Esq., Nutley, N.J.

Walker: David A. Holman AFPD, Newark

China: Peter R. Willis Esq., Jersey City, N.J.

Rudd: Vincent J. Lapaglia Esq., Hoboken, N.J.

Billinghurst: Bruce S. Rosen Esq., Florham Park, N.J.

grimsley_lateef_et_al._indictment.pdf (195.55 KB)

NEWARK, N.J. – A Hazleton, Pennsylvania, man was sentenced today to 24 months in prison for his role in one of the nation’s largest and longest-running stolen identity refund fraud schemes ever prosecuted, U.S. Attorney Paul J. Fishman announced.

Porfirio Paredes, 47, previously pleaded guilty before U.S. District Judge Claire C. Cecchi to an information charging him with one count of conspiracy to commit theft of government funds, one count of theft of government funds and one count of aggravated identity theft. Judge Cecchi imposed the sentence today in Newark federal court.

The conspiracy caused more than 8,000 fraudulent U.S. income tax returns to be filed, which sought more than $65 million in tax refunds and resulted in losses to the United States of more than $12 million.

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

Stolen Identity Refund Fraud (SIRF) is a common type of fraud that results in over $2 billion in losses annually to the U.S. Treasury. SIRF schemes generally share a number of hallmarks:

• SIRF perpetrators obtain personal identifying information, including Social Security numbers and dates of birth, from unwitting individuals, who often reside in the Commonwealth of Puerto Rico;
• SIRF participants complete Individual Income Tax Return 1040 Forms using the fraudulently obtained information and falsifying wages earned, taxes withheld and other data. Perpetrators use data to make it appear that the “taxpayers” listed on the fraudulent 1040 form are entitled to tax refunds – when in fact, the various tax withholdings indicated have not been paid and no refunds are due;
• SIRF perpetrators direct the U.S. Treasury Department to issue the refunds through checks to locations they control or can access, in various ways;
• SIRF perpetrators generate cash proceeds. Some sell the checks at a discount to face value. The buyers then cash the checks at banks or check cashing businesses or deposit them into bank accounts.

Federal law enforcement agencies, recognizing that SIRF was a serious problem, created a multi-agency task force in New Jersey comprised of investigators from the IRS and the U.S. Postal Inspection Service, along with the U.S. Secret Service, and with assistance from the Drug Enforcement Administration (the “New Jersey Task Force”).

An investigation led by the New Jersey Task Force with assistance from U.S. Immigration and Customs Enforcement, Homeland Security Investigations has revealed that starting as early as 2007, dozens of individuals in the New Jersey and New York area have been engaged in a large-scale, long-running SIRF scheme.

Members of the conspiracy obtained personal identifiers, such as dates of birth and Social Security numbers, belonging to Puerto Rican citizens. They used those identifiers to create fake 1040 forms, which falsely reported wages purportedly earned by the “taxpayers” and taxes purportedly withheld, to create the appearance that the “taxpayers” were entitled to tax refunds. The returns were filed electronically. By tracing the specific IP addresses that submitted them, law enforcement officers learned just a handful of IP addresses created many of the fraudulent forms that led to the issuance of tax refund checks.

Paredes and the other members of the conspiracy then gained control of checks, sometimes bribing mail carriers to intercept checks and deliver them to other members of the conspiracy.  Paredes used conspirators in Michigan and North Carolina to negotiate the fraudulently obtained treasury checks that he bought and sold.

During the course of the investigation, members of the task force identified certain “hot spots” of activity and intercepted more than $22 million in fraudulently applied for refund checks before they were delivered to members of the conspiracy.

In addition to the prison term, Judge Cecchi sentenced Paredes to serve two years of supervised release and ordered him to pay restitution of $1,887,912.98.

U.S. Attorney Fishman praised special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates; the U.S. Secret Service, under the direction of Acting Special Agent in Charge Carl Agnelli; and the Drug Enforcement Administration, under the direction of Acting Special Agent in Charge Carl. J. Kotowski, for 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’s Health Care and Government Fraud Unit.

Defense counsel: Alex Jardines Esq., Union City, New Jersey

TRENTON, N.J. – Two members of a large-scale drug trafficking organization today admitted conspiring to distribute heroin in Ocean and Monmouth counties, U.S. Attorney Paul J. Fishman announced.

Robert Ketcham, 28, of Bayville, New Jersey, and Kenneth Greenhow, 41, of Asbury Park, New Jersey, pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton federal court to separate informations charging them each with one count of conspiring to distribute heroin.

In March 2014, 21 alleged members of the “Britt-Young DTO,” a drug trafficking organization named after its leaders, Robert Britt and Rufus Young, were charged by criminal complaint with conspiring to distribute heroin. Of those 21 individuals, 14 have pleaded guilty.

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

Between February 2013 and December 2013, Ketcham conspired with Young and others to distribute heroin in Ocean and Monmouth counties as part of the Britt-Young DTO. From October 2013 through March 2014, Greenhow also conspired with Young and others to distribute heroin on behalf of the Britt-Young DTO. Ketcham and Greenhow were collectively responsible for distributing between 60 and 100 grams of heroin.

The narcotics conspiracy charge to which Ketcham and Greenhow pleaded guilty carries a maximum potential penalty of 20 years in prison and $1 million fine. Sentencing for both defendants is scheduled for Aug. 18, 2015.

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 guilty pleas.

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

Defense Counsel:

Ketcham: Michael A. Armstrong Esq., Willingboro, New Jersey

Greenhow: Mark G. Davis Esq., Hamilton, New Jersey

NEWARK, N.J. – A Union County, New Jersey, man who allegedly robbed one bank and attempted to rob another at gunpoint has been charged federally, U.S. Attorney Paul J. Fishman announced.

Marlon Peek, 39, of Plainfield, New Jersey, is charged by complaint with one count of bank robbery, one count of attempted bank robbery, and one count of using and brandishing a firearm during the commission of the attempted bank robbery. Peek was arrested by the Linden Police Department on May 6, 2015.  The U.S. Attorney’s Office is adopting the case for federal prosecution. Peek will have his initial court appearance in Newark federal court at a date to be determined.

According to the complaint:

On April 21, 2015, Peek allegedly robbed a PNC Bank in South Plainfield, New Jersey, of cash, including certain bills whose serial numbers had been recorded in advance (bait money).  Later that day, at an address associated with Peek, law enforcement observed a vehicle registered to Peek. The defendant exited his vehicle and fled on foot. Law enforcement later found some of the bait money from the PNC Bank robbery as well as Peek’s driver’s license, among other items, in the vehicle.

On May 6, 2015, Peek allegedly attempted to rob a Bank of America in Linden, New Jersey. He allegedly entered the Bank of America, pointed a gun directly at a teller, and demanded money. Due in part to the Bank of America branch having bullet-proof glass in front of the teller station, the teller refused to turn over money to Peek.

Peek fled the bank and allegedly attempted to carjack three cars, all at gunpoint, on or near Route 1 in Linden. After the three unsuccessful attempts to commandeer a car, Peek took a hostage and held a gun to the hostage’s head. Officers of the Linden Police Department, who had by then arrived on the scene, ordered Peek to drop his gun. Peek complied and was taken into custody. A loaded firearm was recovered.

The bank robbery and attempted bank robbery charges each carry a maximum potential penalty of 20 years in prison and a $250,000 fine.  The charge of brandishing a weapon during the attempted robbery of Bank of America carries a mandatory seven-year sentence to be served consecutively with any other sentence.

U.S. Attorney Fishman praised special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel, for the investigation leading to the arrest and charges. He also thanked the Linden, Edison, South Plainfield, Middlesex, Dunellen, and Springfield Police Departments for their excellent work in this case.

The government is represented by Assistant U.S. Attorney Elisa T. Wiygul of the U.S. Attorney’s Office General Crimes Unit in Newark.

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

peek_marlon_complaint.pdf (341.28 KB)

NEWARK, N.J. – With summer approaching, parents are making arrangements to send their children to camps. To help ensure that children with disabilities receive the opportunity to attend summer camp, the U.S. Attorney’s Office announced today that it has sent the attached flyer to hundreds of summer camps located within the District of New Jersey, reminding them of their obligations under the Americans with Disabilities Act (ADA).

“A disability is no reason to deny a child a chance to enjoy the friendships and learning experiences available at summer camps,” U.S. Attorney Fishman said. “Reasonable accommodations are not an option; they are a requirement under the law.”

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 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 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.

Additional information about the ADA is available at www.ada.gov and http://www.justice.gov/usao-nj/civil-rights-enforcement.

camp_ada_flyer.pdf (58.21 KB)

CAMDEN, N.J. – A member of a criminal street gang that used threats, intimidation and violence to maintain control of the illegal drug trade in Atlantic City, New Jersey, was sentenced today to 240 months in prison on drug conspiracy and weapons charges, U.S. Attorney Paul J. Fishman announced.

Terry Davis, 26, of Atlantic City – was convicted in January 2015 of conspiracy to distribute one kilogram or more of heroin, possession of firearms in furtherance of a drug trafficking crime, brandishing and discharging firearms in furtherance of the conspiracy and being a felon in possession of a weapon following a six-week trial before U.S. District Judge Joseph E. Irenas in Camden federal court. The jury deliberated approximately five hours before returning the verdicts.

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

Davis is a member of a gang known as “Dirty Block,” a/k/a “Crime Fam,” “3.6.6.12,” or “3.6,” which operated in a geographic area of Atlantic City that includes the public housing apartment complexes of Stanley Holmes Village Public Housing Complex, Renaissance Plaza and Schoolhouse Apartments. He participated in a violent street-level drug trafficking organization that controlled heroin sales through the possession of dozens of firearms and the use of gun violence, including at least one homicide and several non-fatal, drug-related shootings.

In addition to the prison term, Judge Irenas sentenced Davis to 10 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 convictions.

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 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.

The charges and allegations against the other defendants arrested in this investigation are merely accusations and the defendants are considered innocent unless and until proven guilty.

Defense Counsel: Gina Capuano Esq., Philadelphia

Scheme Involved International Environmental Consulting Contracts, Including Reconstruction Contracts in Afghanistan and Iraq

TRENTON, N.J. – The former president, chief executive officer, and chairman of the board of a New Jersey-based international engineering consulting company was sentenced today to 12 months of home confinement and fined $4.5 million for conspiring to defraud the U.S. Agency for International Development (USAID) with respect to billions of dollars in contracts over a nearly 20-year period, U.S. Attorney Paul J. Fishman announced.

Derish Wolff, 79, of Bernardsville, New Jersey, previously pleaded guilty before U.S. District Judge Anne E. Thompson to a superseding information charging conspiracy to defraud the government with respect to claims. Judge Thompson imposed the sentence today in Trenton federal court.

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

Wolff, the former president and CEO of Morristown, New Jersey-based Louis Berger Group Inc. (LBG), and the former chairman of LBG’s parent company, Berger Group Holdings Inc. (BGH), led a conspiracy to defraud USAID by billing the agency on so-called “cost-reimbursable” contracts – including hundreds of millions of dollars of contracts for reconstructive work in Iraq and Afghanistan – for LBG’s overhead and other indirect costs at falsely inflated rates.

USAID, an independent federal government agency that advances U.S. foreign policy by supporting economic growth, agriculture, trade, global health, democracy, and humanitarian assistance in developing countries, including countries destabilized by violent conflict, awarded LBG hundreds of millions of dollars in reconstruction contracts in Iraq and Afghanistan as well as in other nations. LBG calculated certain overhead rates and charged USAID and other federal agencies these rates on cost-reimbursable contracts, which enabled LBG to pass on their overhead costs to the agency in general proportion to how much labor LBG devoted to the government contracts.

From at least 1990 through July 2009, LBG, through Wolff and other former executives, intentionally overbilled USAID in connection with these cost-reimbursable contracts. The scheme to defraud the government was carried out by numerous LBG employees at the direction of Wolff.

Wolff targeted a particular overhead rate, irrespective of what the actual rate was, and ordered his subordinates to achieve that target rate through a variety of fraudulent means. From at least as early as 1990 through 2000, Wolff ordered LBG’s assistant controller to instruct the accounting department to pad its time sheets with hours ostensibly devoted to federal government projects when it had not actually worked on such projects.     

At an LBG annual meeting in September 2001, Salvatore Pepe, who was then the controller and eventually became chief financial officer (CFO), presented a USAID overhead rate that was significantly below Wolff’s target. In response, Wolff denounced Pepe, called him an “assassin” of the overhead rate and ordered him to target a rate above 140 percent, meaning that for every dollar of labor devoted to a USAID contract, LBG would receive an additional $1.40 in overhead expenses supposedly incurred by LBG. 

In response, Pepe and former controller Precy Pellettieri, with Wolff’s supervision, hatched a fraudulent scheme from 2003 through 2007 to systematically reclassify the work hours of LBG’s corporate employees, including high-ranking executives and employees in the general accounting division, to make it appear as if those employees worked on federal projects when they did not. At his plea hearing on Dec. 12, 2014, Wolff admitted that Pepe and Pellettieri, at Wolff’s direction, reclassified these hours without the employees’ knowledge and without investigating whether the employees had correctly accounted for their time, and at times did so over an employee’s objection. 

In addition to padding employees’ work hours with fake hours supposedly devoted to USAID work, Wolff instructed his subordinates to charge all commonly shared overhead expenses, such as rent, at LBG’s Washington, D.C., office to an account created to capture USAID-related expenses, even though the D.C. office supported many projects unrelated to USAID or other federal government agencies.

On Nov. 5, 2010, Pepe and Pellettieri both pleaded guilty before then-U.S. Magistrate Judge Patty Shwartz to separate informations charging them with conspiring to defraud the government with respect to claims. Also on that date, LBG resolved criminal and civil fraud charges related to Wolff’s and others’ conduct. The components of the settlement included:

•           a Deferred Prosecution Agreement (DPA), pursuant to which the U.S. Attorney’s Office in New Jersey suspended prosecution of a criminal complaint charging LBG with a violation of the Major Fraud Statute; in exchange, LBG agreed, among other things, to pay $18.7 million in related criminal penalties; make full restitution to USAID; adopt effective standards of conduct, internal controls systems, and ethics training programs for employees; and employ an independent monitor who would evaluate and oversee the company’s compliance with the DPA for a two‑year period;

•           a civil settlement that required the company to pay the government $50.6 million to resolve allegations that LBG violated the False Claims Act by charging inflated overhead rates that were used for invoicing on government contracts; and

•           an administrative agreement between LBG and USAID, which was the primary victim of the fraudulent scheme.

In the settlement, the government took into consideration LBG’s cooperation with the investigation and the fact that those responsible for the wrongdoing were no longer associated with the company.

U.S. Attorney Fishman credited special agents of USAID-Office of Inspector General, under the direction of Special Agent in Charge Daniel Altman; the FBI, under the direction of Special Agent in Richard M. Frankel; the U.S. Department of Defense, Defense Criminal Investigative Service, under the direction of Special Agent in Charge Craig W. Rupert; and the former Office of the Special Inspector General for Iraq Reconstruction, under the direction of former Special Inspector General Stuart W. Bowen Jr., for the investigation leading to today’s sentencing. He also thanked the U.S. Attorney’s Office, District of Maryland, and the U.S. Department of Justice Civil Division for their roles in the case. 

The government is represented by Assistant U.S. Attorneys Scott B. McBride, Deputy Chief of the U.S. Attorney’s Office’s Economic Crimes Unit, and Joyce M. Malliet of the U.S. Attorney’s Office National Security Unit. 

Defense counsel: Herbert J. Stern Esq.; Mark W. Rufolo Esq.; Jeffrey Speiser Esq.; Florham Park, New Jersey

Alleges Violation of Employment Rights of Sergeant in Army National Guard

CAMDEN, N.J. – The U.S. Attorney’s Office announced today it has filed a civil complaint against a South Jersey company for failing to re-employ a former employee when she returned from a National Guard deployment, U.S. Attorney for New Jersey Paul J. Fishman announced.

The civil lawsuit, filed in Camden federal court, alleges that Healthcare Commons Inc., of Carneys Point, New Jersey, willfully violated the Uniformed Services Employment and Re-employment Rights Act of 1994 (USERRA). USERRA protects the rights of uniformed servicemembers to retain their civilian employment following absences due to military service obligations and provides that they shall not be discriminated against because of their military obligations.

“The men and women who serve in our armed forces here and abroad do so at great personal sacrifice,” U.S. Attorney Fishman said. “Because of that sacrifice, federal law guarantees that they have the opportunity to resume their careers when they’ve completed their service. When companies seek to skirt their obligations to re-employ our returning veterans, we will hold them accountable.”

“No person should lose their job for serving our country, but according to our complaint that’s exactly what happened to a National Guard member here,” Acting Associate General Stuart F. Delery said. “Today’s filing is one more example of the Department of Justice’s commitment to protecting the men and women who serve in our Armed Forces from discrimination and unlawful actions.”

“The filing of this case reinforces the commitment of the Department of Justice to the vigorously enforce the prohibition of employment discrimination based on military service,” Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division, said.  “I want to thank the Department of Labor for referring this case to the Department of Justice.  I’m hopeful that through the department’s newly created Servicemembers and Veterans Initiative, we will continue to build on our strong ties with federal partners and continue using every tool at our disposal to protect the rights of the men and women who serve in our Armed Forces.”

According to the complaint:

Megan Toliver, 32, of New Castle, Delaware, is a former employee of Healthcare Commons. She joined the U.S. Army National Guard in September 2004 and, most recently, had served as a sergeant, with honorable service as a mental health specialist. When Toliver returned from her military deployment in May 2014, Healthcare Commons willfully violated USERRA by not re-employing her as a mental health screener or in another comparable position.

The case was referred by U.S. Department of Labor following an investigation by the department’s Veterans’ Employment and Training Service.

The plaintiff is represented by Assistant U.S. Attorney Michael E. Campion, U.S. Attorney’s Office, District of New Jersey, and Special Litigation Counsel Andrew Braniff, U.S. Department of Justice, Civil Rights Division, Employment Law Section.

In March 2015, the Attorney General created of the Service Members and Veterans Initiative, which is led by three dedicated career Justice Department attorneys with strong ties to the military community. They will further the Department’s existing efforts by coordinating and expanding enforcement, outreach, and training efforts on behalf of service members, veterans, and their families. The initiative will address the unique challenges that service members face while on active duty, that veterans face upon returning home, and that families face when a loved one is deployed.

Additional information about USERRA can be found on the U.S. Attorney’s Office website at www.justice.gov/usao-nj and the Justice Department’s websites at www.usdoj.gov/crt/emp and www.servicemembers.gov, as well as on the Labor Department’s website at www.dol.gov/vets/programs/userra/main.htm.

 

TRENTON, N.J. – A Perth Amboy, New Jersey, man was sentenced today to 60 months in prison for conspiring to distribute hundreds of grams of heroin throughout Monmouth and Ocean counties, U.S. Attorney Paul J. Fishman announced.

Rashawn Ramos, 38, previously pleaded guilty before U.S. District Judge Peter G. Sheridan to an information charging him with one count of conspiring to distribute 100 grams or more of heroin and 500 grams or more of cocaine. Judge Sheridan imposed the sentence today in Trenton federal court.

In March 2014, 21 alleged members of the “Britt-Young DTO,” a drug trafficking organization named after its leaders Robert Britt and Rufus Young, were charged by criminal complaint with conspiring to distribute heroin. Of those 21 individuals, 12 have pleaded guilty.

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

Ramos admitted that from November 2013 through March 2014, he received numerous packages of heroin and cocaine at his residence in Perth Amboy. The packages were sent from California via the U.S. Mail. Ramos later transferred the packages to another conspirator, who distributed the narcotics to others in New Jersey, including members of the Britt-Young DTO. Altogether, Ramos received at least 1,000 grams of heroin and 1,500 grams of cocaine.    

In addition to the prison term, Judge Sheridan sentenced Ramos to serve four years of supervised release.

U.S. Attorney Fishman credited special agents of the FBI, Red Bank Resident Office, under the direction of Special Agent in Charge Richard M. Frankel, with the investigation leading to today’s sentencing.

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

Defense Counsel:  Ramos: Anthony Simonetti Esq., Hightstown, New Jersey

CAMDEN, N.J. - A West Wildwood, New Jersey man today admitted possessing images and videos of child sexual abuse, U.S. Attorney Paul J. Fishman announced.

Jeffrey Spicer, 44, pleaded guilty today before U.S. District Judge Joseph E. Irenas in Camden federal court to an information charging him with one count of knowingly possessing child pornography.

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

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

As a previously convicted sex offender in New Jersey and Delaware, Spicer faces a mandatory minimum penalty of 10 years in prison, a maximum penalty of 20 years in prison, up to a lifetime of supervised release, and a $250,000 fine. Sentencing is scheduled for Aug. 11, 2015.

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

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

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

Defense counsel: Lisa Evans Lewis Esq., Camden

CAMDEN, N.J. – A Ventress, Alabama, man was sentenced today to 210 months in prison for conspiring to defraud financial institutions and launder stolen funds 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.

Kinard Henson, 43, previously pleaded guilty before U.S. District Judge Jerome B. Simandle to a second superseding indictment charging him with one count of conspiracy to commit wire fraud, one count of conspiracy to commit money laundering and one count of attempted murder of a witness in a federal case. Judge Simandle imposed the sentence today in Camden federal court.

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

Henson was among 11 defendants charged in July 2012 with conspiracy to commit wire fraud and conspiracy to commit money laundering. Henson’s conspirators located oceanfront condominiums overbuilt by financially distressed developers and negotiated 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 sale and finder’s fee agreements.

Henson and others recruited straw buyers to purchase certain properties at the inflated rates. The straw buyers had good credit scores but lacked the financial resources to qualify for mortgage loans. The conspirators created false documents, such as fake W-2 forms, pay stubs, bank statements and investment statements, to make the straw buyers appear more creditworthy than they actually were in order to induce the lenders to make the loans.

Henson’s conspirators also caused fraudulent mortgage loan applications in the name of the straw buyers, including the supporting documents, to be submitted to mortgage brokers that the brokers knew were false. Once the loans were approved and the mortgage lenders sent the loan proceeds in connection with real estate closings, Henson received a portion of the proceeds after his conspirators had funds wired or checks deposited into various accounts they controlled.

Henson learned of a subpoena seeking documents in connection with a straw buyer’s purchases of real estate properties shortly after it was served by federal law enforcement agents on a mortgage brokerage firm. Henson, who had recruited the straw buyer, contacted another individual to kill the straw buyer. They then lured the straw buyer to a wooded area in Mobile, Alabama. At Henson’s direction and using Henson’s firearm, the other individual shot the straw buyer multiple times.

In addition to the prison term, Judge Simandle sentenced Henson to serve 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; and IRS–Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, in Newark, with the investigation leading to today’s sentencing.

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: Stanley King Esq., Woodbury, New Jersey

NEWARK, N.J. – Two doctors were sentenced to prison today 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.

Eugene DeSimone, 60, of Eatontown, New Jersey, who practiced in Secaucus, and Franz Goyzueta, 67, of New York, who practiced in New York, were each sentenced to 37 months in prison. DeSimone and Goyzueta previously pleaded guilty before U.S. District Judge Stanley R. Chesler to separate informations charging them each with one count of accepting bribes. Judge Chesler imposed both sentences today in Newark federal court.

Including DeSimone and Goyzueta, 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 $10.5 million to date through forfeiture.

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

DeSimone accepted $1,500 in cash per month between August 2010 and March 2013 in return for referring patient blood specimens to BLS, for which BLS received $980,000. Goyzueta accepted as much as $3,000 per month from BLS between December 2013 and March 2013 in return for patient blood specimen referrals, for which BLS received approximately $713,249.

In addition to the prison terms, Judge Chesler sentenced both DeSimone and Goyzueta to serve one year of supervised release; he fined Goyzueta $75,000 and DeSimone $5,000. As part of their guilty pleas, DeSimone must forfeit $260,500 and Goyzueta must forfeit $72,000.

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 Assistant U.S. Attorney Joseph N. Minish, Senior Litigation Counsel Andrew Leven, and Jacob T. Elberg, Chief of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark, as well as Assistant U.S. Attorney Barbara Ward 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.

                                                         

CAMDEN, N.J. - A former Richard Stockton College of New Jersey police officer was sentenced today to 31 months in prison for selling oxycodone-based pills to an undercover officer and a witness who was cooperating with law enforcement officers, U.S. Attorney Paul J. Fishman announced.

Marcus Taylor, 41, of Sicklerville, New Jersey, previously pleaded guilty before U.S. District Judge Renee Marie Bumb to an information charging him with distributing and possessing with intent to distribute oxycodone. Judge Bumb imposed the sentence today in Camden federal court.

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

Between November 2012 and January 2013, Taylor sold 537 oxycodone-based prescription pills to either an undercover Drug Enforcement Administration task force officer or the cooperating witness over five meetings, each of which occurred in Clementon, New Jersey. Taylor arranged the meetings with the undercover officer through a series of text messages. Taylor discussed the price of the pills and his hope of fostering a long-term drug distribution relationship. At the Nov. 28, 2012, meeting, Taylor told the undercover officer that the 30-milligram oxycodone pills he sold the officer were obtained through a prescription issued by a doctor, and “if you gonna be a good customer for me and buy these every 28 days for 15 bucks, I won’t give these to nobody.”

None of the transactions involved students or took place at the Stockton College campus, nor was Taylor ever in uniform when the drug sales were made. He resigned in April 2014.    

In addition to the prison term, Judge Bumb sentenced Taylor to serve three years of supervised release and ordered him to forfeit $8,775.

U.S. Attorney Fishman credited special agents and officers assigned to the Camden High Intensity Drug Trafficking Area team, under the direction of the DEA Special Agent in Charge Carl J. Kotowski, for the investigation. He also thanked U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI); the Camden County Prosecutor’s Office; the Westampton Township, Camden, Burlington City and Richard Stockton College police departments; the Delaware River Port Authority; and the N.J. Division of Criminal Justice for their work on the case.   

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

 

CAMDEN, N.J. – An Atlantic City, New Jersey, man was sentenced today to 241 months in prison for his role 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.

Kareem Bailey, 21 was previously convicted by a federal jury of conspiracy to distribute one kilogram or more of heroin, possession of firearms in furtherance of a drug trafficking crime, brandishing and discharging firearms in furtherance of the conspiracy and using a cellular telephone in furtherance of the conspiracy. Bailey, Terry Davis, 26, Lamar Macon, 26, and Dominique Venable, 25, all of Atlantic City, were each convicted following a six-week trial before U.S. District Judge Joseph E. Irenas, who imposed Bailey’s sentence today in Camden federal court.

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

The four men 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.

The defendants participated in a violent street-level drug trafficking organization that controlled heroin sales through the possession of firearms and the use of gun violence, including at least one homicide and several non-fatal, drug-related shootings.

In addition to the prison term, Judge Irenas ordered Bailey to serve 10 years of supervised release. Davis, Macon, and Venable still await sentencing.

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 sentence.

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 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: John Holliday Esq., Hamilton, New Jersey

TRENTON, N.J. – The former mayor of Manalapan, New Jersey, was sentenced today to 60 months in prison for defrauding an investment client of $250,000 and submitting a falsified loan application in order to purchase farmland in Monmouth County, New Jersey, U.S. Attorney Paul J. Fishman announced.

Andrew Lucas, 37, was previously convicted by a federal jury on all 11 counts of an indictment charging him with wire fraud, an illegal monetary transaction, loan application fraud, false statements to the IRS, aggravated identity theft, obstruction of a grand jury investigation and falsification of records in a federal investigation. Lucas was convicted following a two-week trial before U.S. District Judge Freda L. Wolfson, who imposed the sentence today in Trenton federal court.

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

On Dec.15, 2009, Lucas submitted a loan application to a New Jersey bank requesting $525,000 to finance his purchase of the Burke Farm property in Manalapan. Lucas provided the bank with falsified versions of his 2007 and 2008 tax returns, as well as a falsified version of a 2007 tax return for a relative whose name was also on the loan application. Lucas also falsely reported that he had a total of $210,000 in cash.

Lucas owned and operated Lucas Capital Advisors LLC (Lucas Capital), through which he served as an investment advisor and manager to multiple individuals. To obtain the $250,000 down payment for the property, Lucas approached Bobby Janowski, who was a client of Lucas Capital, to pitch an investment in an entity called VLM Investments LLC (VLM). On Feb. 15, 2010, Lucas presented a written note to Janowski, which stated that the $250,000 investment was to be secured by “…interest in the equipment, fixtures, inventory and accounts receivable” of VLM. However, Lucas failed to inform Janowski that at the time the note was signed, VLM did not exist. Lucas also failed to disclose to Janowski that Lucas intended to make personal use of the funds. It was not until three days later, on Feb. 18, 2010, that Lucas created VLM by registering it with the State of New Jersey and the IRS, using the name and Social Security number of Lucas’ out-of-state relative, Thomas Littlefield, without his knowledge or permission.

On Feb. 22, 2010, Lucas authorized the wiring of $250,000 from Janowski’s Lucas Capital investment account to a VLM bank account that had Lucas as the only authorized signer. On March 1, 2010, Lucas withdrew this money in the form of a bank check, which he provided the next day to the closing attorney for the purchase of the Burke Farm property.

Lucas also filed tax returns for VLM for tax years 2011 and 2012, both times listing Littlefield’s name and Social Security number without Littlefield’s knowledge or permission.

Federal investigators served Lucas with subpoenas on Feb. 7, 2013, for the records of VLM and Lucas Capital Advisors. In response, Lucas provided federal authorities with a fabricated and back-dated letter purporting to be from Littlefield concerning a transaction for the purchase of the Burke Farm property.

In addition to the prison term, Judge Wolfson sentenced Lucas to serve three years of supervised release and forfeit Burke Farm.

U.S. Attorney Fishman credited special agents of the FBI Red Bank Office, under the direction of Special Agent in Charge Richard M. Frankel; special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; and investigators with the U.S. Attorney’s Office, for the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorneys Matthew Skahill in Camden and Rahul Agarwal in Newark, both of the U.S. Attorney’s Special Prosecutions Division.

Defense counsel: Mario F. Gallucci Esq., and Michael DeSantis Esq., of Staten Island, New York

Allegedly Misused Government Property to Punish Fort Lee Mayor for Not Endorsing Gov. Christie’s Re-election

Second Former Port Authority Official Pleads Guilty in Connection with His Role in Scheme

NEWARK, N.J. – A former top official of the Port Authority of New York and New Jersey and a former member of Gov. Christopher J. Christie’s senior staff have been charged with a scheme to misuse Port Authority resources to facilitate and conceal the causing of traffic problems in Fort Lee, New Jersey, to punish the borough’s mayor for not endorsing the Governor’s re-election.

The charges were announced today by U.S. Attorney Paul J. Fishman, along with Inspector General Michael Nestor of the Port Authority, Office of Inspector General, and FBI Special Agent in Charge Richard M. Frankel, Newark Division.

William E. Baroni Jr., former deputy executive director of the Port Authority, and Bridget Anne Kelly, former deputy chief of staff to Gov. Christie, were each charged by a federal grand jury in a nine-count indictment unsealed today. David Wildstein, the former director of Interstate Capital Projects at the Port Authority, pleaded guilty today before U.S. District Judge Susan D. Wigenton in Newark federal court to a separate information charging him with two counts of conspiracy for his role in the scheme.

“Public officials must use government resources for proper government purposes,” U.S. Attorney Fishman said. “The indictment alleges, and Wildstein admitted, that the three defendants used Port Authority resources to exact political retribution against a public official who would not endorse the Governor for re-election, and concocted and promoted a bogus cover story to execute their plan and to cover their tracks.”

“William Baroni, Bridget Anne Kelly, and David Wildstein were held to a high standard of conduct due to the power they were entrusted with by the public,” Special Agent in Charge Frankel said. “These individuals breached that trust and as a consequence should be held accountable.”

“These high level government officials misused the Port Authority, its employees, and their public positions for political purposes with total disregard of the negative consequences it would have on the public and Port Authority,” Inspector General Nestor said. “This case should serve as a wake-up call and warning to those public servants who might consider abusing their official positions for their personal benefit, or the benefit of others.”

Baroni and Kelly are each charged with conspiring to misuse, and actually misusing, property of an organization receiving federal benefits; conspiring to commit, and actually committing, wire fraud; conspiring to injure and oppress certain individuals’ civil rights, and acting under color of law to deprive certain individuals of their civil rights. All of the charges relate to the defendants’ alleged scheme to manufacture traffic problems in Fort Lee by, without public warning, reducing from three to one the number of local access lanes, located in Fort Lee, to the upper level of the George Washington Bridge, and the toll booths servicing those lanes. It is alleged this was done to punish Mayor Sokolich for not endorsing Gov. Christie’s re-election bid. Wildstein pleaded guilty to conspiring to misuse the property of an organization receiving federal benefits and conspiring to injure and oppress certain individuals’ civil rights in connection with his role in causing traffic problems to punish Mayor Sokolich.

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

In August 2013, after Kelly confirmed that Mayor Sokolich would not be endorsing Gov. Christie for re-election in November 2013, Baroni, Kelly, and Wildstein decided to punish the mayor by deliberately causing significant traffic problems in Fort Lee under the false pretense of a traffic study.

From the morning of Sept. 9, 2013, to Sept. 13, 2013, the conspirators allegedly caused the local access lanes to be reduced so that only one toll booth, instead of the usual three, was accessible to the approach to the bridge for local traffic traveling through Fort Lee. To maximize the congestion and the punitive impact on Mayor Sokolich, the conspirators caused these lane and toll booth reductions to start on the first day of the school year without any advance notice to Mayor Sokolich, the Fort Lee chief of police or borough residents. The lane and toll booth reductions resulted in significant traffic in Fort Lee, for motorists intending to access the George Washington Bridge from local lanes and for residents, whose streets were choked with traffic.

The conspirators allegedly agreed to disregard any inquiries from Mayor Sokolich and other Fort Lee officials about the lane and toll booth reductions. They purposely ignored communications from Mayor Sokolich, including his pleas for help, requests for information, and repeated warnings about the increased risks to public safety. On Sept. 9, 2013, after Baroni received an email that Mayor Sokolich had called about an urgent matter of public safety, Wildstein sent an email to Baroni reiterating that Baroni should maintain “radio silence” toward the mayor. When Kelly was made aware of Mayor Sokolich’s communication regarding an urgent matter of public safety, she thanked Wildstein for confirming that Baroni had maintained “[r]adio silence” toward Mayor Sokolich. As alleged in the indictment, on Sept. 12, 2013, Baroni instructed a Port Authority employee through coded language that the employee should not contact Mayor Sokolich.

The conspirators concocted and promoted a sham story that the lane reductions were for a traffic study. They created and advanced this cover story so they could use Port Authority property, including the time and services of unwitting Port Authority personnel and other resources, to implement the lane and toll booth reductions and conceal their true punitive purpose.

On Nov. 25, 2013, with Kelly’s and Wildstein’s knowledge, Baroni provided false and misleading testimony about the lane and toll booth reductions to the N.J. Assembly Transportation, Public Works, and Independent Authorities Committee. Baroni knowingly and intentionally made misleading statements and false representations, including: (1) communications between members of the Port Authority Police Department and Wildstein triggered the lane and toll booth reductions; (2) the lane and toll booth reductions were part of a one-week traffic study; and (3) the failure to communicate with Fort Lee and the executive director of the Port Authority was simply the result of communication breakdowns at the Port Authority.

On the count of conspiracy to misuse property of an organization receiving federal benefits, the defendants and Wildstein each face a maximum potential penalty of five years in prison and a fine of $250,000. On the count of misusing property of an organization receiving federal benefits, the defendants each face a maximum potential penalty of 10 years in prison and a fine of $250,000. On each of the wire fraud conspiracy and wire fraud counts, the defendants face a maximum potential penalty of 20 years in prison and a fine of $250,000 per count. On the count of conspiring to injure and oppress certain individuals’ civil rights, the defendants and Wildstein each face a maximum potential penalty of 10 years in prison and a fine of $250,000. On the count of acting under color of law to deprive certain individuals of their civil rights, the defendants face a maximum potential penalty of one year in prison and a fine of $250,000.

U.S. Attorney Fishman credited criminal investigators of the Port Authority, Office of Inspector General, under the direction of Inspector General Nestor; special agents of the FBI, under the direction of Special Agent in Charge Frankel; and criminal investigators of the U.S. Attorney’s Office, for the investigation leading to today’s charges and guilty plea.

The government is represented by Assistant U.S. Attorneys Lee M. Cortes Jr., Vikas Khanna, and Senior Litigation Counsel J Fortier Imbert of the U.S. Attorney’s Office Special Prosecutions Division, and Assistant U.S. Attorneys Paul Murphy and David W. Feder of the Criminal Division.

The charges and allegations contained in the indictment are merely accusations and the defendants are considered innocent unless and until proven guilty.

Defense counsel:

William E. Baroni: Michael Baldassare Esq., Newark

Bridget Anne Kelly: Michael Critchley Sr. Esq., Roseland, New Jersey

David Wildstein: Alan L. Zegas Esq., Chatham, New Jersey

NEWARK, N.J. – A woman from Puerto Rico today admitted trying to smuggle 2.9 kilograms of cocaine through Newark Liberty International Airport, U.S. Attorney Paul J. Fishman announced.

Kenia Diaz, 24, pleaded guilty before U.S. District Judge Susan D. Wigenton in Newark federal court to an indictment charging her with one count of possessing cocaine with intent to distribute. 

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

On May 22, 2013, Diaz arrived at Newark Liberty International Airport on a flight from Puerto Rico. During a routine inspection, a canine detected a controlled substance inside Diaz’s suitcase. After searching the suitcase, agents recovered approximately 2.9 kilograms of cocaine.

The narcotics charge to which Diaz pleaded guilty carries a maximum potential penalty of 20 years in prison and a $1 million fine. Sentencing is scheduled for Aug. 11, 2015.

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

The government is represented by Special Assistant U.S. Attorney Thomas S. Kearney of the U.S. Attorney’s Office General Crimes Unit in Newark.

Defense counsel: Kevin Carlucci Esq., Newark

diaz_kenia_plea_indictment.pdf

CAMDEN, N.J. – A Toms River, New Jersey, man today admitted his role in a conspiracy to smuggle more than $200,000 worth of firearms parts out of the United States, U.S. Attorney Paul J. Fishman announced.

Abelardo Delmundo, 53, pleaded guilty before U.S. District Judge Noel L. Hillman in Camden federal court to an information charging him with one count of conspiracy to violate the Arms Export Control Act and U.S. anti-smuggling laws.

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

Delmundo admitted that from 2008 through October 2013, he and other conspirators he met through an internet forum agreed to ship firearms and firearms parts from the United States to the Philippines. Kirby Santos, 38, of the Republic of the Philippines and others allegedly used credit cards and other forms of payment to purchase firearms parts from suppliers in the United States. Knowing that they would not ship to the Philippines, Santos and others arranged for the suppliers to send the firearms parts to Delmundo’s Toms River address in order to make it appear as if it were a domestic sale.

Delmundo also admitted that after receiving the firearms parts, he falsely labeled the contents of the package as food or other home goods and exported the firearms parts to the Philippines for ultimate delivery to the other conspirators. To disguise his role in the conspiracy, Delmundo used the alias “Teng Flores”when sending the packages containing prohibited items. Upon receiving the firearms parts, Delmundo was paid through cash payments and wire transfers to Delmundo’s relatives in the Philippines.

During the course of the nearly five-year long conspiracy, Delmundo and others purchased and directed the unlawful exportation of more than $200,000 worth of defense articles from the United States to the Philippines without the required export license.

Santos is charged by criminal complaint with one count of conspiracy to violate the Arms Export Control Act and U.S. anti-smuggling laws. He made his initial appearance in Camden federal court on April 22, 2015 and was detained. The charges and allegations against Santos are merely accusations, and the defendant is considered innocent unless and until proven guilty.

The conspiracy charge to which Delmundo pleaded guilty is punishable by a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for Aug. 7, 2015.

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

U.S. Attorney Fishman credited special agents of the U.S. Department of Homeland Security-Homeland Security Investigations (DHS-HSI), under the direction of Acting Special Agent in Charge Kevin Kelly, and special agents of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), under the direction of Special Agent in Charge George P. Belsky Jr., with the investigation leading to today’s plea.

The government is represented by Assistant U.S. Attorney Matthew T. Smith of the U.S. Attorney’s Office Criminal Division in Camden and Trial Attorney Nathan M. F. Charles of the Counterespionage Section of the Justice Department’s National Security Division.

Defense counsel: David Schlendorf Esq., Toms River

NEWARK, N.J. – A Newark man was convicted today for his role in three gunpoint carjackings and an attempted carjacking within a 10-day period, U.S. Attorney Paul J. Fishman announced.

Jamie Manning, 29, was convicted on all nine counts of a superseding indictment: one count of conspiracy to commit theft of a motor vehicle by force, violence and intimidation; three counts of carjacking; one count of attempted carjacking; and four counts of using a firearm in furtherance of a crime of violence. Manning was convicted following a six-day trial before U.S. District Judge William H. Walls in Newark federal court. The jury deliberated for six hours before returning the verdict.

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

On Dec. 20, 2012, Manning and another conspirator approached the owner of 2004 Honda Accord. Manning pressed a firearm into the victim’s side and demanded that the victim give him keys to the car. Manning and the other conspirator took the victim’s keys and purse, demanded the PIN to the victim’s debit card and attempted to push the victim into the Accord’s trunk. Manning and the other conspirator got into the Accord and fled.

During the early morning hours of Dec. 26, 2012, Manning and Corey Thermitus, 22, of Newark, approached two individuals entering a parked, 2002, four-door Nissan Altima on a street in Newark. Manning pointed a firearm at one of the victims and both Manning and Thermitus ordered the victims to get out of the car. After robbing and threatening the victims, Manning and Thermitus fled the area in the carjacked vehicle.

On Dec. 28, 2012, Thermitus approached an individual sitting in a 2011, four-door Honda Accord that was parked in the driveway of a home in Newark. Thermitus pointed a firearm at the victim and ordered the victim out of the car. After threatening to shoot the victim, Thermitus, Manning and another man fled the area in the victim’s car.

Later that night, Thermitus, Manning and a third man drove in the carjacked Honda Accord to a residential area in Newark. Thermitus and Manning approached two individuals, one of whom was a young child, who were sitting in a parked, 2006, four-door Nissan Pathfinder in the driveway of a residence. Thermitus pointed a gun at the driver of the vehicle while Manning approached the rear passenger side of the vehicle, but the driver managed to escape in the car. As the assailants fled in the Honda Accord, Thermitus fired a gun in the direction of an individual who had come outside of a residence to investigate.

The conspiracy count carries a maximum potential penalty of five years in prison. The carjacking and attempted carjacking counts each carry a maximum potential penalty of 15 years in prison. The charge of using a firearm in furtherance of a crime of violence carries a maximum potential penalty of life in prison and a mandatory minimum sentence of seven years in prison, which must run consecutively to any other prison term. Each additional firearms charge carries a mandatory 25 years which must run consecutively to any other prison term. Each count also carries a maximum $250,000 fine. Sentencing is scheduled for Aug. 25, 2015.

Thermitus previously pleaded guilty to an information charging him with three counts of theft of a motor vehicle by force, violence and intimidation; one count of attempted theft of a motor vehicle by force, violence and intimidation; and one count of discharging a firearm in furtherance of a violent crime. His sentencing is scheduled for May 19, 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 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 verdict.

The government is represented by Assistant U.S. Attorney Dara Aquila Govan of the Organized Crime/Gangs Unit in Newark and Senior Litigation Counsel Vincent Grady O’Malley of the Criminal Division in Newark.

Defense counsel: Frank Arleo Esq., West Orange, New Jersey

manning_jamie_superseding_indictment.pdf

NEWARK, N.J. – An Essex County corrections officer today admitted accepting bribes in exchange for smuggling contraband, including cell phones and tobacco, into the Essex County Jail, a federal pretrial detention facility, U.S. Attorney Paul J. Fishman announced.

John Grosso, 41, of Belleville, New Jersey, pleaded guilty before U.S. District Judge Stanley R. Chesler to an information charging him with one count of conspiring to commit extortion under color of official right.

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

Grosso, a corrections officer at the Essex County Jail, admitted that in December 2013, he agreed to accept cash bribes in return for his assistance smuggling cell phones and cigarettes to an inmate. Grosso met with the inmate’s relative in Secaucus, New Jersey, to accept the contraband and bribe before delivering the items to the inmate.

The conspiracy charge to which Grosso pleaded guilty carries a maximum potential penalty of 20 years in prison and a fine of $250,000. Grosso also must forfeit the $1,000 bribe he received in December 2013. Sentencing is scheduled for Aug. 19, 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 the Internal Affairs Division of Essex County Correctional Facility, under the leadership of Warden Roy Hendricks, with the investigation leading to today’s plea.

The government is represented by Assistant U.S. Attorneys Rahul Agarwal of the U.S. Attorney’s Office Special Prosecutions Division and Robert L. Frazer of the Criminal Division, Organized Crime/Gangs Unit, in Newark.

Defense counsel: Elizabeth H. Smith Esq., Mendham, New Jersey.

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

Anthony DeLuca, 52, of Point Pleasant, New Jersey, previously pleaded guilty before U.S. District Judge Stanley R. Chesler to an information charging him with one count of accepting bribes. Judge Chesler imposed the sentence today in Newark federal court.          

Including DeLuca, 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 $10.5 million to date through forfeiture.

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

DeLuca admitted he accepted bribes in return for referring patient blood specimens to BLS and was paid approximately $1,500 per month, which he received from another person in his medical office engaged in the same activity.

In addition to the prison term, Judge Chesler sentenced DeLuca to serve one year of supervised release and ordered him to pay a $5,000 fine.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel; the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert; IRS–Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; and inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, with the ongoing investigation.

The government is represented by Assistant U.S. Attorney Joseph N. Minish, Senior Litigation Counsel Andrew Leven, and Jacob T. Elberg, Chief of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark, as well as Assistant U.S. Attorney Barbara Ward 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: Patrick Egan Esq., Philadelphia, Pennsylvania

TRENTON, N.J. – A former international legal advisor and New York-licensed attorney today admitted his orchestration of a scheme to defraud a foreign nation of more than $3.5 million, U.S. Attorney Paul J. Fishman announced.

Bobby Boye, a/k/a “Bobby Ajiboye,” a/k/a “Bobby Aji-Boye,” 51, of Mahwah, New Jersey, pleaded guilty before U.S. District Judge Freda L. Wolfson in Trenton federal court to an information charging him with conspiracy to commit wire fraud.

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

As part of his employment as an international legal advisor for the victim nation, which is referred to in the information as “Country A,” Boye served on a committee responsible for reviewing and evaluating bids, solicited in February 2012, for a multimillion-dollar contract to provide legal and tax accounting advice to Country A.  In order to secure the lucrative contract for himself, Boye created a sham New York law and accounting firm called Opus & Best Law Services LLC (Opus & Best) that, unbeknownst to Country A, was secretly controlled by Boye.

In March 2012, Boye caused Opus & Best to submit by email a bid for the contract with Country A.  The bid documents contained multiple, material misrepresentations and omissions, including:  (1) a false claim that Opus & Best was founded in 1985 and was registered as a legal and accounting services provider in Europe, the Middle East and Africa; (2) a fraudulent listing of several purported employees of Opus & Best; and (3) a reference to prior consulting work purportedly performed by Opus & Best for another foreign country.  In reality, Boye created Opus & Best for the purpose of submitting the fraudulent bid documents.  Opus & Best employed no one other than Boye, let alone the professionals identified in the bid, and had never provided consulting services to the foreign country listed as a reference. The bid documents failed to disclose that Boye’s affiliation with Opus & Best created a conflict of interest and rendered him a third-party beneficiary of the proposed contract.

Unaware that Opus & Best was a sham firm secretly controlled by Boye, and relying on the recommendation of Boye, Country A awarded the contract to Opus & Best in June 2012.  Under the terms of the consulting contract, Boye was one of the two project coordinators acting on behalf of Country A and had authority to receive and approve invoices for payment.

Between June 2012 and December 2012, Country A wired more than $3.5 million to Opus & Best’s New York business checking account, which was controlled by Boye.  He used a substantial part of the money to purchase four properties in New Jersey for more than $1.5 million in cash, three luxury vehicles (a 2012 Bentley for $172,000, a 2012 Range Rover for $100,983, and a 2011 Rolls Royce for $215,000), and two designer watches for almost $20,000.

The conspiracy count to which Boye pleaded guilty carries a maximum potential penalty of 20 years in prison and a fine of up to $250,000, or twice the gain or loss from the offense. Sentencing is scheduled for August 13, 2015.

U.S. Attorney Fishman credited special agents of the FBI’s Garret Mountain Resident Office in Woodland Park, New Jersey, under the direction of Special Agent in Charge Richard M. Frankel in Newark, with the investigation leading to the guilty plea.

The government is represented by Assistant U.S. Attorney Shirley U. Emehelu of the U.S. Attorney’s Office’s Economic Crimes Unit in Newark and Assistant U.S. Attorney Barbara Ward of the U.S. Attorney’s 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:  K. Anthony Thomas, Assistant Federal Public Defender, Newark

TRENTON, N.J. – A Middlesex County, New Jersey, lawyer and certified public accountant was sentenced today to 27 months in prison for conspiring with a New Jersey mortgage broker to extort and defraud victims by falsely representing to them that they were the subjects of criminal investigations, U.S. Attorney Paul J. Fishman announced.

Thomas G. Frey, 55, of Edison, New Jersey, previously pleaded guilty before U.S. District Judge Joel A. Pisano to two counts of an indictment charging him with conspiracy to commit extortion under fear of economic harm and to commit wire fraud. The sentence was imposed by U.S. District Judge Anne E. Thompson in Trenton federal court.

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

Frey, Robert G. Cusic Jr., a Millstone, New Jersey, mortgage broker, and another conspirator (named “CC-1” in the indictment) schemed to defraud four victims, including two police officers, by falsely representing to them that they were the subjects of criminal investigations, principally by the IRS, in connection with investment properties that some of them owned. Frey and Cusic falsely represented that while Cusic was 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 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 of the victims.

In addition to the prison term, Judge Thompson sentenced Frey to 3 years of supervised release; 300 hours of community service and fined him $25,000.  The defendant was also ordered to repay the Criminal Justice Act funds expended on his behalf.

Frey was previously charged by complaint on April 8, 2011, along with Cusic, with one count of conspiracy to commit extortion and one count of wire fraud. Cusic pleaded guilty Nov. 28, 2011, to conspiring with Frey to extort the victims. He is awaiting sentencing.

U.S. Attorney 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 sentence.

The government is represented by Assistant U.S. Attorney Eric W. Moran of the U.S. Attorney’s Office Special Prosecutions Division in Trenton.

Defense counsel: Charles E. Waldron Esq., Lawrenceville, N.J.

NEWARK, N.J. – An Essex County, New Jersey, man was sentenced today to three years’ probation for defrauding Home Depot Inc. out of more than $470,000 through an elaborate “double-dipping” scheme he committed at various Home Depot locations, including in New Jersey, U.S. Attorney Paul J. Fishman announced.

Daniel Chalet, 29, of Bloomfield, previously pleaded guilty before U.S. Magistrate Judge James B. Clark III to an information charging him with one count of conspiracy to commit wire fraud. U.S. District Judge Jose L. Linares imposed the sentence today in Newark federal court.

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

From March 2009 through June 2012, Chalet and his conspirators routinely purchased various items from Home Depot locations in New Jersey, New York, Massachusetts, Delaware, Maryland, Connecticut and Pennsylvania. The conspirators would assemble two shopping carts containing identical items. They then purchased the items in one cart (Cart 1) and stashed the other cart in the store (Cart 2). They would typically purchase the items in Cart 1 using cash, fraudulently obtained Home Depot store credit, or some combination thereof. Chalet and his conspirators would then leave the store with the items in Cart 1, as well as the receipt for the purchase, leaving Cart 2 inside the store.

The conspirators would return to the store almost immediately with a receipt corresponding to the items in Cart 1 and retrieve Cart 2, which contained the identical set of items. Under the guise that they had forgotten to purchase an item, usually an inexpensive one, Chalet and his conspirators would return to the register with Cart 2, and purchase only the additional small item. They would present the receipt for the items from Cart 1 and deceive the cashier into believing that the items in Cart 2 had already been purchased.

Chalet and his conspirators would later go back to the same Home Depot store or travel to different Home Depot store locations to return the items. In some instances, they presented a receipt for the return, and in other instances, the defendants obtained a refund for store credit without presenting a receipt.

Chalet and his conspirators carried out the scheme hundreds of times at various Home Depot locations, fraudulently obtaining Home Depot store credit and refunds totaling at least $470,511.66.

In addition to probation, Judge Linares sentenced Chalet to pay restitution of $472,465.49.

U.S. Attorney Fishman credited special agents of the U.S. Secret Service, Newark Field Office, under the direction of Acting Special Agent in Charge Carl Agnelli, for the investigation leading to today’s sentencing.

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

Defense counsel: Richard Roberts Esq., Newark

CAMDEN, N.J. – A Lawnside, New Jersey, man was sentenced today to 70 months in prison for illegally possessing firearms and selling 22 guns without a license, U.S. Attorney Paul J. Fishman announced.

Anthony Gilmore, a/k/a “Tone,” 25, previously pleaded guilty before U.S. District Judge Renée Marie Bumb to an information charging him with one count of conspiring to deal firearms without a license and one count of possession of a firearm by a previously convicted felon. Judge Bumb imposed the sentence today in Camden federal court.

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

Between April 8, 2013, and July 8, 2014, Gilmore conspired with four others to sell 22 firearms on several occasions, for profit and without a license. The 22 firearms included handguns, shotguns and an assault rifle. Gilmore personally sold or participated in the sale of at least seven firearms, including handguns and shotguns, as well as a bullet-proof vest, to a witness cooperating with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). Gilmore’s conspirators obtained the firearms in South Carolina and brought them to New Jersey on a weekly basis, at times using Amtrak to transport the guns. On two occasions, Gilmore sold a firearm to the cooperating witness along with ammunition. All 22 weapons are now in the custody of law enforcement.

In addition to the prison term, Judge Bumb sentenced Gilmore to serve three years of supervised release.

U.S. Attorney Fishman credited special agents of the ATF, under the direction of Special Agent in Charge George P. Belsky Jr. in Newark, New Jersey, with the investigation leading to today’s sentencing. He also thanked special agents from the Drug Enforcement Administration, under the direction of Special Agent in Charge Carl J. Kotowski, as well as officers from the Winslow Township and Clementon police departments, for their work in the case.

The government is represented by Assistant U.S. Attorney Matthew T. Smith of the U.S. Attorney’s Office in Camden.

Defense counsel: Assistant Federal Public Defender Christopher O’Malley Esq., Camden

NEWARK, N.J. – A Mauritius man today admitted sexually abusing a sleeping woman aboard a cruise ship, U.S. Attorney Paul Fishman announced.

Karan Seechurn, 25, pleaded guilty before U.S. District Judge Esther Salas in Newark federal court to an information charging him with one count of abusive sexual contact.

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

Seechurn was employed by a cruise line and was responsible for restocking the minibars located in passengers’ rooms. In order to conduct this duty, he was provided with a key that gave him access to passengers’ rooms. Seechurn admitted that on Dec. 23, 2014, while he was off-duty, he entered a passenger’s room and encountered a sleeping woman. Seechurn admitted that he touched the passenger’s genitalia while she was asleep. 

The abusive sexual contact charge to which Seechurn pleaded guilty carries a maximum potential penalty of three years in prison. Sentencing is scheduled for August 3, 2015.

The federal government has special maritime jurisdiction over sexual abuse cases, such as those that occur on cruise ships.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Meredith Williams of the U.S. Attorney’s Office General Crime Unit in Newark.

Defense counsel: Linda Foster Esq., Assistant Federal Public Defender, Newark

seechurn_karan_information.pdf

NEWARK, N.J. – A Morris County, N.J., man was sentenced today to 44 months in prison for fraudulently obtaining $500,000 by promising investors favorable returns and that funds would be used to finance educational television programming for teenage audiences, U.S. Attorney Paul Fishman announced.

Peter Lareau, 78, of Mountain Lakes, N.J., previously pleaded guilty before U.S. District Judge Esther Salas to an information charging him with one count of wire fraud. Judge Salas imposed the sentencing in Newark federal court.

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

From June 2008 through January 2010, Lareau created numerous entities, including T4Teens LLC and Concordia Mediaworks LLC, for the purpose of soliciting investors. Lareau recruited investors through civic, religious and charitable organizations, as well as through alumni events at prestigious education institutions.

In addition to promising greater-than-market returns, Lareau falsely represented that investors’ funds would be used for educational television programming for teenage audiences.

He sent investors prospectuses and other information related to investment opportunities by email and then directed them to wire funds from brokerage accounts in New York to his business accounts in New Jersey.

Instead of using the funds for educational programming or other business-related purposes, Lareau used those funds for personal expenses, including groceries, tuition payments for his child, rent payments, and club memberships.

In addition to the prison term, Judge Salas sentenced Lareau to one year of supervised release and ordered him to pay restitution of $533,000.

U.S. Attorney Fishman credited special agents from the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, with the investigation leading to today’s sentencing.

The government is represented by U.S. Attorney Lorraine S. Gerson of the Economic Crimes Unit in Newark.

Defense counsel: K. Anthony Thomas Esq., Assistant Federal Public Defender, Newark  

CAMDEN, N.J. – A Filipino national appeared in federal court today to face charges that he allegedly conspired to smuggle firearms parts out of the United States, U.S. Attorney Paul J. Fishman announced.

Kirby Santos, 38, of the Republic of the Philippines, is charged in a criminal complaint with one count of conspiracy to violate the Arms Export Control Act and U.S. anti-smuggling laws. Santos was arrested in Guam on March 31, 2015, by special agents of the U.S. Department of Homeland Security-Homeland Security Investigations (DHS-HSI) and the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF). He appeared this morning before U.S. Magistrate Judge Joel Schneider in Camden federal court and was detained.

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

Beginning in 2008, Santos used an internet forum to meet others and discuss the sales and shipment of firearms and firearms parts from the United States to the Philippines. Santos met a Toms River, New Jersey, conspirator who agreed to help Santos ship firearms and firearms parts from the United States to the Philippines. Santos used his credit cards and other forms of payment to purchase firearms parts from suppliers in the United States. Knowing that they would not ship to the Philippines, Santos arranged for the suppliers – including J&T Distributing from Winchester, Kentucky, Rainier Arms from Auburn, Washington, and Midway Corporation from Columbia, Missouri, among others – to send the firearms parts to the conspirator’s Toms River address in order to make it appear as a domestic sale.

At the direction of Santos, the conspirator would then repackage the firearms parts, falsely label the contents of the package and export the firearms parts to the Philippines for ultimate delivery to Santos. To disguise his role in the conspiracy, the conspirator used an alias when sending the packages containing prohibited items. Upon receiving the firearms parts, Santos paid the conspirator through cash payments to the conspirator’s relatives in the Philippines.

During the course of the nearly five-year long conspiracy, Santos purchased and directed the unlawful exportation of more than $200,000 worth of defense articles from the United States to the Philippines without the required export license.

The conspiracy count with which Santos is charged is punishable by a maximum potential penalty of five years in prison and a $250,000 fine.

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

U.S. Attorney Fishman credited special agents of DHS-HSI, under the direction of Acting Special Agent in Charge Kevin Kelly, and special agents of the ATF, under the direction of Special Agent in Charge George P. Belsky Jr., with the investigation leading to the arrest.

The government is represented by Assistant U.S. Attorney Matthew T. Smith of the U.S. Attorney’s Office Criminal Division in Camden.

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

Defense counsel: Timothy R. Anderson Esq., Red Bank, New Jersey

TRENTON, N.J. - Three Orthodox Jewish Rabbis were convicted at trial today for conspiring to kidnap Jewish men in an effort to force them to give their wives religious divorces, referred to as “gets,” U.S. Attorney Paul J. Fishman announced.

Rabbis Mendel Epstein, 69, of Lakewood, New Jersey; Jay Goldstein a/k/a “Yaakov,” 60, of Brooklyn, New York; and Binyamin Stimler, 39, of Brooklyn, New York, were each convicted on Count One of the indictment, conspiracy to commit kidnapping. Goldstein and Stimler were additionally convicted on Count Five of the indictment, attempted kidnapping. Epstein’s son, David Epstein a/k/a “Ari,” 40, of Lakewood, New Jersey, was acquitted on three counts. The jury deliberated three days following an eight-week trial before U.S. District Judge Freda L. Wolfson in Trenton federal court.

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

On Dec. 1, 2009, in Lakewood, an Orthodox Jewish man, Israel Markowitz, was assaulted, placed in a van, tied up, beaten and shocked with a stun-gun until he agreed to give his wife a get.

On Oct. 16, 2010, in Lakewood, another Orthodox Jewish man, Ysrael Bryskman, was assaulted, tied up and beaten until he agreed to give his wife a get.

On Aug. 22, 2011, in Brooklyn, New York, another Orthodox Jewish man, Usher Chaimowitz, and his roommate, Menachem Teitlebaum, were assaulted, tied up, and beaten until Chaimowitz agreed to give his wife a get.

Based upon these incidents, the FBI began an undercover operation in August 2013 in which two FBI agents posed as a wife who was seeking a get from her recalcitrant husband, and her brother, who was trying to help her obtain the get.  Over the next several weeks, the undercover agents had multiple recorded phone calls and in-person meetings with defendant Mendel Epstein. In those meetings, Mendel Epstein arranged to have his team kidnap the husband at a warehouse in exchange for $60,000.

On October 9, 2013, Goldstein, Stimler and six other individuals, traveled from New York to a warehouse in Middlesex County, New Jersey, to execute the planned kidnapping of the husband to force him to give the get.  They arrived at the warehouse in two dark minivans shortly after 8:00 p.m.  Some of the kidnap team members put on masks and entered the warehouse office with the undercover agent posing as the brother. The remaining kidnappers walked around the outside with flashlights. Over the next 15 minutes, members of the kidnap team went in and out of the warehouse office wearing disguises, including ski masks, Halloween masks and bandanas. They discussed their plan for kidnapping and assaulting the husband, how they planned to grab him, pull him down, tie him up, and take his phone.  Members of the kidnap team brought with them to the warehouse a 30-foot nylon rope, a blindfold, vodka, license plates they had switched out, and items used to ceremonially record the get.  At 8:23 p.m., law enforcement moved into the warehouse office and arrested the eight men, including Goldstein and Stimler.  Mendel Epstein was arrested at his Brooklyn home the same night.

The count of conspiracy to commit kidnapping carries a maximum potential penalty of life in prison and a $250,000 fine, or twice the gross gain or loss from the offense. The count of attempted to commit kidnapping carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for July 15, 2015.  Nine other individuals previously entered guilty pleas in connection with this conspiracy.

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 Lakewood Police for the investigation leading to today’s verdicts.

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

Defense counsel:

Mendel Epstein: Robert G. Stahl Esq. and Laura Gasiorowski Esq., Westfield, New Jersey

Jay Goldstein: Aiden O’Connor Esq., Hackensack, New Jersey

David Epstein: Henry Mazurek Esq., New York

Binyamin Stimler: Nathan Lewin Esq., Washington, D.C. and Gedalia Stern

epstein_mendel_et_al._amended_indictment.pdf

TRENTON, N.J. – A South Jersey woman who was a member of a large-scale drug trafficking organization today admitted distributing more than 100 grams of heroin, U.S. Attorney Paul J. Fishman announced.

Dawn Rosser, 34, of Lakewood, New Jersey, pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton federal court to an information charging her with one count of conspiring to distribute heroin.

In March 2014, 20 other alleged members of the drug trafficking organization of which Rosser was a member were charged by criminal complaint with conspiring to distribute heroin. The complaint referred to the drug trafficking organization as the “Britt-Young DTO,” after its leaders, Robert Britt, a/k/a “True,” and Rufus Young, a/k/a “Equan,” a/k/a “E-Money,” a/k/a “Kintock.” Of those individuals, nine have pleaded guilty.

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

Between February 2013 and March 2014, Rosser conspired with others to distribute heroin in Ocean and Monmouth counties. Rosser admitted distributing between 100 and 400 grams of heroin.

The narcotics conspiracy charge to which Rosser pleaded guilty carries a maximum penalty of 20 years in prison and $1 million fine. Sentencing is scheduled for June 5, 2015.

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 guilty plea.

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

Defense counsel: Joseph Accardi Esq., Elizabeth, New Jersey

rosser_dawn_information.pdf

TRENTON, N.J. – A Toms River, New Jersey, man today admitted distributing heroin and cocaine as part of a large-scale drug trafficking organization that operated in Monmouth, Ocean, and Middlesex counties, U.S. Attorney Paul J. Fishman announced.

Delovi R. Canales, a/k/a “Butter,” 48, pleaded guilty before U.S. District Judge Anne E. Thompson in Trenton federal court to an information charging him with one count of conspiring to distribute heroin.

In October 2014, 20 other alleged members of the drug trafficking organization of which Canales was a member were charged by criminal complaint with conspiring to distribute heroin. The complaint referred to the drug trafficking organization as the “Cadet DTO,” after one of its leaders, Herve Cadet, a/k/a “Gotti,” a/k/a “Bro,” 29, of Neptune and Sayreville, New Jersey.

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

From November 2013 through October 2014, Cadet, Eric Smith, a/k/a “EV,” a/k/a “E,” 42, of Manchester, New Jersey, and the other members of Cadet DTO, including Canales, conspired to sell illegal drugs – chiefly heroin – in Monmouth, Ocean and Middlesex counties. Through the use of confidential informants, authorized interception of cell phone calls and other means, law enforcement learned Cadet and Smith were responsible for identifying sources of heroin supply and oversaw distributors and other conspirators who sold, packaged and stored the drugs. Members used stash houses, spoke in code and used Haitian Creole to avoid detection by law enforcement.

The narcotics conspiracy charge to which Canales pleaded guilty carries a maximum penalty of 20 years in prison and $1 million fine. Sentencing is scheduled for June 27, 2015.

U.S. Attorney Fishman credited special agents of the DEA, Newark Division, under the direction of Special Agent in Charge Carl J. Kotowski and officers of the Monmouth County Prosecutor’s Office, under the direction of Acting Prosecutor Christopher J. Gramiccioni with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Fabiana Pierre-Louis of the U.S. Attorney’s Office Criminal Division in Trenton.

Defense Counsel:  David R. Oakley Esq., Princeton, New Jersey

NEWARK, N.J. – A Union County, New Jersey, tax preparer with an office in Essex County, New Jersey, was arrested today on charges of aiding and abetting in the filing of two dozen false tax returns, U.S. Attorney Paul J. Fishman announced.

Darlene Covington, 31, of Hillside, New Jersey, was indicted by a federal grand jury on April 10, 2015, and charged with 24 counts of aiding and abetting in the filing of false tax returns. She made her initial appearance today before U.S. Judge Joseph A. Dickson in Newark federal court and was released on $75,000 unsecured bond.

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

Covington worked as a tax preparer for KCJ Financial Corp., a tax preparation business in Irvington, New Jersey. During 2009 and 2010, Covington filed 24 false tax returns for tax years 2008 and 2009, using false information and personal identification information without the knowledge, consent or permission of the individuals named in the tax returns. Covington then applied for refund acceleration loans from financial institutions for each of the fraudulent refunds and earned a portion of each loan she secured. The refunds were given to a third party.

The false filing charges with which Covington is charged each carry a maximum potential penalty of three years in prison and a $250,000 fine.

U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, and investigators of the U.S. Attorney’s Office with the investigation leading to the charges.

The government is represented by Assistant U.S. Attorney Sharon Ashe.

The charges in the indictment are mere accusations and the defendant is presumed innocent unless and until proven guilty.

Defense counsel: Chester Keller Esq., First Assistant Federal Public Defender, Newark

NEWARK, N.J. – A native of Romania who was arrested in Spain will make his initial court appearance today following his extradition to face charges that he participated in a large-scale lucrative ATM skimming scheme targeting New Jersey bank customers, U.S. Attorney Paul J. Fishman announced.

Robert Mate, a/k/a “Chioru,” a/k/a “Marcel Varga,” 29, will appear this afternoon before U.S. Magistrate Judge Joseph A. Dickson on a six-count indictment charging him with conspiracy to commit bank fraud, aggravated identity theft, conspiracy to possess 15 or more counterfeit access devices, and conspiracy to possess access device-making equipment. The other two individuals charged on the indictment, Alin Dumitru Carabus and Ionut Vasile Ciurba-Stana, have been apprehended in Spain and requests for extradition are pending.      

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

Mate participated as a high-level member of an extensive scheme to steal bank customer account information, commonly referred to as “ATM skimming,” by installing secret card-reading devices on ATMs throughout New Jersey, New York, Connecticut, Florida, and elsewhere. The scheme was organized by Marius Vintila, 31, who previously pleaded guilty to bank fraud conspiracy and aggravated identity theft charges. The scheme defrauded Citibank, TD Bank, Wells Fargo, and multiple other financial institutions out of at least $5 million, and affected thousands of bank customers. Vintila and Bogdan Radu designed and constructed sophisticated card-reader devices and pinhole camera panels capable of reading and storing customers’ bank account information and personal identification numbers. Mate and others then secretly installed the card-reader devices and the pinhole cameras panels onto bank ATMs, and removed them a few days later after they had recorded customer bank account information as customers performed routine bank transactions at ATMs. After the account information was stolen, it was used to create thousands of false and fraudulent ATM cards, which Mate and others used to withdraw millions of dollars from customers’ bank accounts.   

The ATM skimming operation in which Mate participated is one of the largest ever uncovered by law enforcement. To date, 16 individuals have been charged in connection with this scheme, 12 have pleaded guilty, and one individual, Dinu Horvat, was recently convicted after a week-long trial. Marius Vintila, the ringleader of the scheme, pleaded guilty

Marius Vintila, 31, previously pleaded guilty in February 2015 to bank fraud conspiracy and aggravated identity theft charges. Bogdan Radu, 30, pleaded guilty to bank fraud conspiracy and aggravated identity theft charges in February 2014. Dinu Horvat, 28, Enes Causevic, 24, Marius Cotiga, 35, Constantin Ginga, 53, Dezso Gyapias, 29, Ioan Leusca, 30, Constantin Pendus, 30, and Emil Revesz, 30, participated in the scheme by installing or removing the devices, and by subsequently using the fraudulent ATM cards to withdraw cash from compromised bank accounts.  Florin Apetrei, 18, Luis Franco, 23, and Mirel Hadzalic, 24, participated in the scheme by using the fraudulent ATM cards to withdraw cash. Causevic, Cotiga, Ginga, Gyapias, Leusca, and Revesz all pleaded guilty to bank fraud conspiracy and aggravated identity theft charges. Apetrei, Cotiga, Pendus, Franco, and Hadzalic pleaded guilty to bank fraud conspiracy. And Horvat was convicted at trial of bank fraud conspiracy, aggravated identity theft, conspiracy to possess 15 or more access devices, and conspiracy to possess access device-making equipment.

For their roles in the scheme, Judge Martini sentenced Ginga, Gyapias, and Leusca each to 57 months in prison and Franco and Pendus each to 33 months in prison. Hadzalic received a sentence of 34 months in prison, Apetrei received a sentence of 24 months in prison, and Cotiga received a sentence of 26 months in prison. Vintila, Causevic, Radu, Revesz, and Horvat are pending sentencing.           

Mate is charged with four counts, as described below, which carry the following maximum penalties and fines:

Count

Offense

Maximum Penalty

Maximum Fine

1

Conspiracy to Commit Bank Fraud

Thirty years in prison

$1 million

4

Aggravated Identity Theft

Mandatory, consecutive penalty of two years in prison

$250,000, or twice the gross pecuniary gain or loss from the offense

5

Conspiracy to Possess Fifteen or More Counterfeit Access Devices

Five years in prison

$250,000, or twice the gross pecuniary gain or loss from the offense

6

Conspiracy to Possess Access Device-Making Equipment

Seven and one-half years in prison

$250,000, or twice the gross pecuniary gain or loss from the offense

                    

U.S. Attorney Fishman praised special agents of the U.S. Secret Service, Newark Field Office, under the direction of Acting Special Agent in Charge Carl Agnelli, along with special agents of Immigration and Customs Enforcement, Homeland Security Investigations (HSI) in Newark, under the direction of Acting Special Agent in Charge Kevin Kelly, with the investigation leading to the charges.

The government is represented by Assistant U.S. Attorneys Rahul Agarwal of the Special Prosecutions Division and David M. Eskew of the Criminal Division, Economic Crimes Unit, in Newark.

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

NEWARK, N.J. – The owner of a home health agency today admitted her role in a $7 million scheme to defraud Medicaid and engage in bribery, money laundering, and tax evasion, U.S. Attorney Paul J. Fishman announced.

Irina Krutoyarsky, 61, Springfield, New Jersey, pleaded guilty before U.S. District Judge Katharine S. Hayden in Newark federal court to an information that charged her with conspiracy to commit health care fraud, bribery, conspiracy to commit money laundering, and tax evasion.

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

Krutoyarsky owned HHCH Health Care Inc., of Linden, New Jersey, which provided home health aides and health care services to New Jersey residents. Home health aides visit patients at their homes and provide a variety of health care services, such as assistance with eating, dressing, and grooming. These home health aide services were subsidized under the N.J. Medical Assistance Program (Medicaid).

Krutoyarsky and her conspirators defrauded Medicaid by submitting false documents to the N.J. Board of Nursing, the state agency responsible for issuing home health aide certifications. Krutoyarsky falsely represented that prospective home health aides had attended and satisfactorily completed required training and testing. In truth, Krutoyarsky charged prospective home health aides hundreds of dollars for fraudulently obtaining their certifications.

Krutoyarsky also fraudulently billed Medicaid for services not actually rendered to patients. Numerous HHCH home health aides routinely falsified records that claimed they had visited patients and provided them health care services. In truth, these home health aides had other jobs, were on vacations overseas, or were in other parts of the state during the times they claimed they were with patients. Home health aides sometimes gave cash kickbacks to patients who were also participating in the scheme. Federal agents introduced a cooperating witness (CW), posing as a prospective home health aide to Krutoyarsky. During one meeting in January 2012, Krutoyarsky and another conspirator meet with the CW to discuss having him join the scheme to defraud Medicaid. In explaining the scheme, Krutoyarsky explained that they would fraudulently bill Medicaid to obtain “free money [from the] Government.”

Krutoyarsky hired individuals with no home health certifications and no status in the country and then sent them to patients’ homes. Krutoyarsky and her conspirators then billed Medicaid, fraudulently claiming that the services had been provided by duly certified home health aides.

Krutoyarsky defrauded Medicaid out of $7 million. She directed certain home health aides to establish checking accounts at a bank near HHCH’s office and then took control of their checkbooks.  After Medicaid paid the claims and transferred the funds into HHCH accounts, Krutoyarsky then transferred portions of the money into the aides’ accounts and used the money to purchase, maintain, and pay for real property in New Jersey, New York, Florida; purchase personal property for her own use and benefit; and pay for personal expenses for her own use and benefit and the use and benefit of her family.

Krutoyarsky also bribed an employee of the N.J. Department of Labor (NJDOL), who was working in an undercover capacity with federal agents. In mid-2010, the NJDOL received a complaint that Krutoyarsky was not paying overtime wages to her employees and commenced an investigation. The department demanded Krutoyarsky produce certain HHCH records. Realizing that providing these records would reveal the Medicaid fraud scheme, Krutoyarsky paid approximately $10,000 in a cash bribe to the employee for the purpose of obstructing and unlawfully influencing the NJDOL investigation. The employee, however, was wearing a recording device and recorded Krutoyarsky making the bribe payment on video.

In May 2011, Krutoyarsky paid a second cash bribe of approximately $15,000 to the employee for the purpose of obstructing and unlawfully influencing a second NJDOL investigation related to one of Krutoyarsky’s conspirator’s companies. This bribe payment was also captured on video.

Between 2007 and 2011, Krutoyarsky cheated the IRS out of $907,150 in taxes due and owing to the United States. She sent home health aides to the homes of patients who were not eligible for Medicaid. These patients wrote checks payable to HHCH. A conspirator cashed these checks at check-cashing businesses in New Jersey and equally divided the cash with Krutoyarsky. Krutoyarsky also issued HHCH checks to “no show” employees, who then wrote personal checks back to Krutoyarsky. On her corporate tax returns, she falsely characterized these payments as legitimate business deductions, thus reducing her business’ corporate taxes.

The counts of conspiracy to commit health care fraud, bribery and money laundering each carry a maximum potential sentence of 10 years in prison, and the count of tax evasion carries a maximum potential sentence of five years in prison. All counts are also punishable by a fine of $250,000. As part of the plea agreement, Krutoyarsky will be ordered to pay a $7 million forfeiture money judgment to the United States and will forfeit several homes and properties in New Jersey, New York, and Florida, as well as hundreds of thousands of dollars seized from her bank accounts or bank accounts that she controlled. Krutoyarsky’s sentencing is scheduled for Sept. 14, 2015.

As other defendants, the charges and allegations contained in the complaint are merely accusations, and those defendants are presumed innocent unless and until proven guilty.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel, in Newark; IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; U.S. Citizenship and Immigration Services; Acting N.J Attorney General John J. Hoffman; N.J. State Comptroller Marc Larkins; Division Director Mark Anderson, Office of the State Comptroller, Medicaid Fraud Division; New Jersey Division of Consumer Affairs, under the direction of Acting Director Steve C. Lee; the N.J. Board of Nursing; the N.J. Department of Labor, under the direction of Commissioner Hal Wirth; U.S. Department of State-Bureau of Diplomatic Security; and the Marlboro Police Department, under the direction of Chief Bruce Hall, for the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorneys V. Grady O’Malley, Peter Gaeta, and Anthony Moscato of the U.S. Attorney’s Office Criminal Division in Newark.

Defense counsel: Edward V. Sapone Esq., New York

TRENTON, N.J. – A Newark, New Jersey, man was sentenced to 156 months in prison for robbing a Target Store in Union, New Jersey, on “Black Friday” in November 2012, U.S. Attorney Paul J. Fishman announced today.

DaQuaan Vaughn, 36, previously pleaded guilty before U.S. District Judge Anne E. Thompson to a superseding information charging him with one count of Hobbs Act robbery and one count of using a firearm in furtherance of a crime of violence. Vaughn also pleaded guilty to an unrelated count of firearms trafficking in connection with his unlawful sale of firearms between April and June 2012. Judge Thompson imposed the sentence today in Trenton federal court.  

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

On Nov. 23, 2012, Vaughn, Lavell Jones, 29, of East Orange, New Jersey, Darrell A. Carter, 25, or Irvington, New Jersey, and Maryland Liggins III, 30, of Newark, robbed a Target store located on Springfield Avenue in Union on Black Friday – the day after Thanksgiving – which is considered to be one of the busiest shopping days of the year. Jones posed as a shopper and served as a lookout inside the store. He alerted the others when the store was closing and money was being transferred from the store’s registers to the cash room. Liggins served as the getaway driver.

Before closing, Carter and Vaughn waited in the bathroom. When an employee entered the bathroom, Carter and Vaughn restrained the employee and threatened him with a firearm. After the store closed, Carter and Vaughn entered the cash room, restrained other Target employees with zip ties and robbed them at gunpoint, stealing more than $50,000 from a cash cart and safe. Then they fled the store and ran out to a vehicle – driven by Liggins – that was parked on the shoulder of nearby Route 78.

In addition to the prison term, Judge Thompson sentenced Vaughn to five years of supervised release and ordered him to pay $54,000 in restitution to Target. All of the defendants have the same restitution obligation until the full $54,000 is satisfied. Liggins also pleaded guilty to his role in the robbery and await sentencing.

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 Union Police Department for its role in the investigation and Target corporate security for its cooperation.

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

Defense Counsel: Timothy Donohue Esq., West Orange, New Jersey

NEWARK, N.J. – The Elizabeth Public School District has agreed to credit its School Lunch Program $272,810 and pay $49,500 to the U.S. Department of Justice to settle allegations that it improperly used federal and state funds to provide meals and catering services for school board meetings and other special functions.

The announcement was made today by U.S. Attorney Paul J. Fishman and Special Agent-in-Charge William G. Squires of U.S. Department of Agriculture (USDA), Office of Inspector General.

The school district participates in the USDA’s National School Lunch Program, which provides reimbursement payments to ensure low-cost or free meals (breakfast, lunch and snacks) for certain qualifying students. The USDA administers the program, while oversight, compliance and general administration is done by the N.J. Department of Education, Office of Fiscal Accountability and Compliance (OFAC) and the state Department of Agriculture (NJDA), Division of Food and Nutrition.

The district receives federal and state funds designated specifically for the lunch program. Those funds must be kept separate and independent from other funds and used solely for approved lunch program purposes. The district may generate revenue for its lunch program by selling snacks and meals and providing catering services, but all money used for and earned from these services must be used solely for the lunch program.                   

According to the settlement agreement:

Between July 1, 2008, and June 30, 2014, the district failed to collect, reimburse, or apply $182,243 to its lunch program for catering services provided to its Board of Directors and $90,567 for catering services provided to various schools, principals, and administrators within the district for other special functions. The United States contends the district’s lunch program was deprived of the use of $272,810. 

In addition to repaying the lunch program and paying penalties, the district will participate in training and be subject to three years of monitoring by OFAC and NJDA.

The civil settlement agreement is between the United States – acting through the U.S. Attorney’s Office for the District of New Jersey and on behalf of the USDA, OFAC, NJDA – and the Elizabeth Public School District.

U.S. Attorney Fishman credited OFAC, NJDA, and the USDA, Office of the Inspector General, with the investigation leading to the settlement.

The government is represented by Assistant U.S. Attorney Valorie D. Smith of the U.S. Attorney’s Office Civil Division in Newark.

The claims settled by this agreement are allegations only; there have been no admissions of liability.

Defense counsel: Bruce S. Rosen Esq., Florham Park, New Jersey

 

CAMDEN, N.J. – A bookkeeper at an Atlantic City, New Jersey, rolling chair company  today admitted lying to federal agents during an investigation into unreported cash taken from the business, U.S. Attorney Paul J. Fishman announced.

Abdus Mian, 66, of Atlantic City, pleaded guilty before U.S. District Judge Joseph H. Rodriguez to an information charging him with one count of making materially false statements to federal agents.

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

Mian was the bookkeeper for Royal Rolling Chairs LLC, an Atlantic City business that provided rolling chair transportation services to patrons on the Atlantic City boardwalk. Mian admitted that he maintained a second set of books that tracked the cash that William Boland, 58, of Ventnor City, New Jersey, and two other owners were removing from the business and not reporting to the IRS.

Mian admitted that he was interviewed by IRS and FBI special agents on June 9, 2011, at which time he was asked questions about his role as bookkeeper. Mian falsely stated that he only maintained one set of books, never prepared a second set of books and was unaware of the owners taking cash out of the business.

The false statements charge carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gain or loss from the offense. Sentencing is currently scheduled for July 29, 2015.

On Oct. 30, 2014, Boland admitted conspiring with his two partners at Royal Rolling Chairs to defraud the IRS of $119,880 in income taxes over the course of three years. Boland is scheduled to be sentenced by Judge Rodriguez on July 14, 2015.

U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, and special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Matthew J. Skahill of the U.S. Attorney=s Office Special Prosecutions Division in Camden and Trial Attorney Tino Lisella of the Tax Division of the U.S. Department of Justice.

Defense counsel: Steven I. Kaplan Esq., Northfield, New Jersey

NEWARK, N.J. – A Kenilworth, New Jersey, man was sentenced today to 41 months in prison for his role in the affairs of the Genovese organized crime family of La Cosa Nostra (the “Genovese family”), including engaging in a pattern of racketeering activity by extorting Christmastime tribute payments from members of the International Longshoremen’s Association (ILA), New Jersey U.S. Attorney Paul J. Fishman and Eastern District of New York U.S. Attorney Loretta E. Lynch announced.

Stephen Depiro, 59, a Genovese family soldier, previously pleaded guilty before U.S. District Judge Claire C. Cecchi to Count One of the second superseding indictment charging him with racketeering conspiracy. Depiro admitted to predicate acts involving conspiracy to commit extortion and bookmaking. Judge Cecchi imposed the sentence today in Newark federal court.

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

Since at least 2005, Depiro has managed the Genovese family’s control over the New Jersey waterfront – including the nearly three-decades-long extortion of port workers in ILA Local 1, ILA Local 1235 and ILA Local 1478. Members of the Genovese family, including Depiro, are charged with conspiring to collect tribute payments from New Jersey port workers at Christmastime each year through their corrupt influence over union officials, including the last three presidents of Local 1235 and vice president of ILA Local 1478.

During their guilty plea proceedings, Depiro and two other Genovese family associates – Albert Cernadas, 79, of Union, New Jersey, former president of ILA Local 1235 and former ILA executive vice president; and Nunzio LaGrasso, 64, of Florham Park, New Jersey, former vice president of ILA Local 1478 and ILA representative – admitted their involvement in the Genovese family, including conspiring to compel tribute payments from ILA union members, who made the payments based on actual and threatened force, violence and fear. Cernadas and LaGrasso admitted to carrying out multiple extortions of dockworkers. The timing of the extortions typically coincided with the receipt by certain ILA members of “Container Royalty Fund” checks, a form of year-end compensation. Depiro also admitted to managing an illegal sports betting business.

In addition to the prison term, Judge Cecchi sentenced Depiro to serve three years of supervised release. Cernadas was previously sentenced to probation and LaGrasso was sentenced to 28 months in prison.

U.S. Attorneys Fishman and Lynch credited the FBI in New Jersey, under the direction of Special Agent in Charge Richard M. Frankel, and in New York, under the direction of Assistant Director in Charge George Venizelos, as well as the U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, under the direction of Special Agent in Charge Cheryl Garcia, with the investigation leading to today’s sentencing. They also thanked the Waterfront Commission of New York Harbor for its cooperation and assistance in the investigation.

The government is represented by Assistant U.S. Attorney Jacquelyn M. Kasulis of the U.S. Attorney’s Office, Eastern District of New York, and Assistant U.S. Attorney Anthony Mahajan, of the U.S. Attorney’s Office, District of New Jersey.

Defense counsel: Alyssa Cimino Esq., Fairfield, New Jersey

NEWARK, N.J. – A jury today convicted Joseph A. Ferriero, the former chairman of the Bergen County Democratic Organization (BCDO), in connection with a racketeering scheme involving fraud and soliciting and accepting bribes as a party official, U.S. Attorney Paul J. Fishman announced.

Ferriero, 57, was found guilty following an eight-week trial before U.S. District Judge Esther B. Salas in Newark federal court. The jury deliberated four days before finding Ferriero guilty of conducting the BCDO’s affairs through a pattern of racketeering activity (Count One), using the mail and facilities in interstate commerce to promote bribery and distribute bribe proceeds (Count Three) and wire fraud (Count Five).

“Joseph Ferriero was convicted today of running a local political organization as a criminal enterprise, using his power and position to line his pockets,” U.S. Attorney Fishman said. “The evidence we presented at trial described a racketeering operation that ran on influence peddling, bribes and kickbacks. Rooting out and prosecuting this kind of political corruption is a constant priority for this office. The people of New Jersey are entitled to honest public service.”

“Today’s conviction of Joseph A. Ferriero reaffirms the FBI’s commitment to combat public corruption in New Jersey and serves as a reminder that those individuals who violate the public’s trust will be held accountable,” Richard M. Frankel, the FBI’s Special Agent in Charge, Newark, said.

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

Ferriero served as the chairman of the BCDO from 1998 until January 2009 and was the sole member of SJC Consulting LLC.  The jury found Ferriero accepted bribes in his capacity as BCDO chairman in the course of a scheme involving SJC. Ferriero agreed with John Carrino, a Nutley, New Jersey-based attorney and software developer that Ferriero would recommend and provide a favorable opinion of the software developer and his companies to various public officials in Bergen County with whom Ferriero had influence. The software developer agreed to pay Ferriero one-quarter to one-third of the gross receipts from any contract obtained as a result of Ferriero’s efforts. Ferriero’s financial interest in the software developer’s public contracts was completely hidden using two shell companies, one of which was created and incorporated in Nevada for the sole purpose of contracting with and accepting payments from another shell company controlled by the software developer.

The racketeering charge carries a maximum potential penalty of 20 years in prison; the Travel Act charge carries a maximum penalty of five years in prison; and the wire fraud charge carries a maximum potential penalty of 20 years in prison. Each count of the indictment also carries a maximum $250,000 fine. Sentencing is scheduled for July 27, 2015.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Frankel, and investigators from the U.S. Attorney’s Office, under the direction of Supervisory Criminal Investigator Thomas Mahoney, with the investigation leading to today’s conviction.

The government is represented by Counsel to the U.S. Attorney Rachael A. Honig and Assistant U.S. Attorney Barbara Llanes of the Special Prosecutions Division in Newark.

Defense counsel: Michael Baldassare, Jennifer Mara and Dillon Malar Esqs., Newark       

TRENTON, N.J. –Two Essex County, New Jersey, men were each sentenced to 130 months in prison for robbing a Target Store in Union, New Jersey, on “Black Friday” in November 2012, U.S. Attorney Paul J. Fishman announced today.

Lavell Jones, 29, of East Orange, New Jersey, previously pleaded guilty before U.S. District Judge Anne E. Thompson to an indictment charging him with one count of Hobbs Act robbery. Darrell A. Carter, 25, or Irvington, New Jersey, previously pleaded guilty before Judge Thompson to an information charging him with one count of Hobbs Act robbery and one count of using a firearm in furtherance of a crime of violence. Judge Thompson imposed both sentences in Trenton federal court. 

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

On Nov. 23, 2012, Jones, Carter, DaQuaan Vaughn, 36, of Newark, New Jersey, and Maryland Liggins III, 30, of Newark, robbed a Target store located on Springfield Avenue in Union on Black Friday – the day after Thanksgiving – which is considered to be one of the busiest shopping days of the year. Jones posed as a shopper and served as a lookout inside the store. He alerted the others when the store was closing and money was being transferred from the store’s registers to the cash room. Liggins served as the getaway driver.

Before closing, Carter and Vaughn waited in the bathroom. When an employee entered the bathroom, Carter and Vaughn restrained the employee and threatened him with a firearm. After the store closed, Carter and Vaughn entered the cash room, restrained other Target employees with zip ties and robbed them at gunpoint, stealing more than $50,000 from a cash cart and safe. Then they fled the store and ran out to a vehicle – driven by Liggins – that was parked on the shoulder of nearby Route 78.

In addition to the prison term, Judge Thompson sentenced Jones to three years of supervised release and Carter to five years of supervised release; both were ordered to pay $54,000 in restitution to Target. All of the defendants have the same restitution obligation until the full $54,000 is satisfied.

Vaughn and Liggins have also pleaded guilty to their roles in the robbery and await sentencing.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel, with the investigation leading to the guilty pleas. He also thanked the Union Police Department for its role in the investigation and Target corporate security for its cooperation.

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

Defense Counsel:      

Carter: Peter Carter Esq., Newark                                                                

Jones: Richie Roberts Esq., Newark