District of New Jersey
Press releases recorded for this federal judicial district.
Hudson County, N.J., Man Indicted for Robbery Spree in Bergen and Hudson CountiesRead the Press Release
NEWARK, N.J. – A Hudson County, New Jersey, man was indicted today in connection with his alleged role in an armed robbery spree of banks and commercial establishments in Bergen and Hudson counties in July 2013, U.S. Attorney Paul J. Fishman announced.
Gary Bohanan, 44, of North Bergen, New Jersey, is charged by superseding indictment with conspiracy to commit armed bank robberies and Hobbs Act robberies, two counts of armed bank robbery, and two counts of armed Hobbs Act robbery.
Bohanan and Angel Feliu, 20, of North Bergen, were charged by indictment on April 1, 2014, with committing two bank robberies in Secaucus and Fairview, New Jersey. In a separate proceeding today, Feliu pleaded guilty to an information charging him with two counts of armed bank robbery for his role in those robberies. Bohanan will be arraigned in Newark federal court on the superseding indictment before U.S. Judge Claire C. Cecchi at a date and time to be determined.
According to documents filed in this case and statements made in court:
On July 10, 2013, Bohanan and one other individual, both wearing masks, entered a McDonald’s restaurant in North Bergen. Bohanan brandished a handgun and demanded money from the employees of McDonald’s. Bohanan and the other individual then took $1,600 from the cash registers and fled in a car driven by a third individual.
On July 18, 2013, Bohanan and other individuals cased Le Chateau restaurant in West New York, New Jersey, for the purpose of robbing it. Bohanan and the other individuals waited for an agent of the restaurant to close the restaurant, followed her home, and robbed her at gunpoint of $6,000 of proceeds from the restaurant outside her home.
On July 22, 2013, Bohanan, Feliu, and Josephine Chenet, 45, of North Bergen, allegedly robbed the Sovereign Bank (now Santander Bank) in Secaucus. (Charges from the April 1, 2014 indictment that had been pending against Chenet for her role in the bank robberies have been dismissed due to her death on June 22, 2014.)
On July 22, 2013, Bohanan and Feliu entered the bank at 10:11 a.m. Both men wore latex gloves and masks. Once inside the Sovereign Bank, Bohanan brandished a black handgun, jumped over the counter and proceeded to empty two drawers of money into a black bag, while pointing the handgun at bank tellers. As Bohanan emptied the drawers, Feliu stood guard. Bohanan and Feliu then fled the bank with $21,961.
On July 26, 2013, Bohanan, Feliu, and Chenet robbed the TD Bank, located in Fairview, New Jersey. Bohanan and Feliu entered the Bank at 9:48 a.m. Bohanan and Feliu both wore latex gloves and masks. Feliu, however, was captured by the Bank’s video surveillance system before he pulled the mask on. Feliu brandished a knife at employees and customers. Bohanan brandished what appeared to be a black handgun, but was later identified as an air pistol. Bohanan then jumped over the counter and emptied two drawers of money into a black bag, while pointing the air pistol at bank tellers. As Bohanan emptied the drawers, Feliu stood guard and held bystanders back by brandishing the knife.
Bohanan and Feliu fled on foot and were followed by concerned citizens and victims of the bank robbery. Bohanan encountered a white GMC Savana van, pointed the air pistol at the driver and ordered the driver out. Bohanan then attempted to flee the area by driving away in the van, but crashed it into a nearby structure after a short distance, at which point he attempted to flee the area on foot.
Law enforcement and concerned citizens located Bohanan hiding under a truck, which was parked a short distance away. He had with him a black bag containing a black air pistol and money covered with red dye. Feliu separated from Bohanan after the bank robbery and was also arrested shortly after the bank robbery.
The two counts of armed bank robbery with which Bohanan is charged each carry a maximum penalty of 25 years in prison and a fine of $250,000. The counts of Hobbs Act robbery with which Bohanan is charged each carry a maximum penalty of 20 years in prison. The count of conspiracy with which Bohanan is charged carries a maximum penalty of five years in prison.
Feliu also pleaded guilty to one count of conspiracy to commit armed bank robberies and Hobbs Act robberies. The counts of armed bank robbery that Feliu pleaded guilty to each carry a maximum penalty of 25 years in prison and a fine of $250,000. The count of conspiracy that Feliu plead guilty to carries a maximum penalty of five years in prison. Feliu is detained pending sentencing, which is scheduled for Nov. 20, 2014.
U.S. Attorney Fishman praised special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, with the investigation. He also thanked the Fairview, North Bergen, and Secaucus police departments for their contributions to the case.
The government is represented by Assistant U.S. Attorney Francisco J. Navarro of the U.S. Attorney’s Office General Crimes Unit in Newark.
The charges and allegations contained in the indictment are merely accusations and the defendants are considered innocent unless and until proven guilty.
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Defense counsel:
Feliu: Kevin F. Carlucci Esq., Assistant Federal Public Defender
Bohanan: Carl Herman Esq., West Orange, N.J.
Chenet: Michael Gilberti Esq., Little Silver, N.J.Bohanan, Gary Superseding Indictment
Feliu, Angel Superseding InformationThree Hudson County, New Jersey, Men Admit Racketeering Conspiracy Related to Illegal Online Gambling EnterpriseRead the Press Release
NEWARK, N.J. – Three men from Hudson County, New Jersey, today admitted conspiring with a criminal enterprise that engaged in illegal online sports betting in New Jersey and elsewhere, U.S. Attorney Paul J. Fishman announced.
Mark A. Sanzo, 56, Robert J. Scerbo, 56, and William A. Bruder, 44, all of Bayonne, New Jersey, each pleaded guilty before U.S. District Judge Claire C. Cecchi in Newark federal court to separate informations charging them with one count of racketeering conspiracy.
According to documents filed in this case and statements made in court:
Joseph Lascala, 80, of Monroe, New Jersey, was the alleged “capo” and a made member of the Genovese family operating in northern New Jersey. He directed the criminal activities of a smaller group of associates, referred to as a crew, whose activities included illegal gambling and the collection of unlawful debt.
Joseph Graziano, 77, of Springfield, New Jersey, was the principal owner of Beteagle.com, a website located in Costa Rica and used to facilitate illegal online sports betting. Dominick J. Barone, 44, also of Springfield, New Jersey, worked with Graziano in carrying out the daily activities of the website. Both men conspired with the Genovese Crime Family of La Cosa Nostra in the operation of Beteagle. Graziano and Barone pleaded guilty on July 29, 2014, to their roles in the racketeering conspiracy, each admitting that they were associates of the Genovese Crime Family. Beteagle, through the individuals that owned, operated, and controlled it, was a “criminal enterprise” that operated in interstate and foreign commerce.Lascala’s organized crime crew and the criminal enterprise joined forces to allow traditional organized crime members and associates to use the Internet and current technology to conduct traditional organized crime by engaging in and profiting from illegal sports betting through the website. Associates of the crew were given access to Beteagle and were considered “agents.” Before the advent of computerized betting, these agents would have been referred to as “bookmakers” or “bookies.” The agents had the ability to track the “sub-agents,” or bookies, under them and the wagers placed by their bettors. The agent or sub-agent maintained a group of bettors (the “package”) and were responsible for those bettors.
To place bets online, the agent or sub-agent issued the bettor a username and password to access Beteagle. This access was not given online and no money or credits were made or transferred through the website. Associates of the crew paid out winnings or collected losses in person. If a bettor failed to pay his gambling losses, the crew used their LCN status and threats of violence to collect on these debts.The agent or sub-agent paid a fee to the website for each bettor added to a package. Barone and others made weekly collections of cash in furtherance of the scheme.
Sanzo, Scerbo, and Bruder each admitted that they conspired with the criminal enterprise to commit racketeering acts, namely, the illegal sports betting operation, and that they and their conspirators profited through this criminal venture.
In addition to Graziano and Barone, John Breheney, a/k/a “Johnny Fugazi, Fu, Johnny Fu,” 49, and Salvatore Turchio, 48, both of Little Egg Harbor, New Jersey; Patsy Pirozzi, a/k/a “Uncle Patsy,” 75, Suffern, New York; and Jose Gotay, 76, New Milford, New Jersey have pleaded guilty to their role in this racketeering conspiracy and await sentencing.
As to the remaining defendants, the charges and allegations contained in a criminal complaint sworn in May 2012 are merely accusations and they are presumed innocent unless and until proven guilty.
At sentencing, Sanzo, Scerbo and Bruder each face a maximum potential punishment of 20 years in prison and a fine of $250,000. Sentencing for Sanzo is scheduled for Sept. 19, 2014; for Scerbo, Sept. 20, 2014; and for Bruder, Nov. 13, 2014. All defendants were previously released on bail.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark; the Bayonne Police Department, Special Investigations Unit, under the direction of Chief Drew Niekrasz; IRS-Criminal Investigation under the direction of Acting Special Agent in Charge Jonathan D. Larsen; the N.J. State Police, under the direction of Superintendent Rick Fuentes; and the Monmouth County Prosecutor’s Office, under the direction of Acting Prosecutor Christopher Gramiccioni, with the investigation leading to today’s guilty pleas.
The government is represented by Assistant United States Attorneys Serina M. Vash and Anthony Moscato of the New Jersey U.S. Attorney’s Office Criminal Division in Newark.
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Defense counsel:
Sanzo: Christopher L. Patella Esq., Bayonne, New Jersey
Scerbo: Thomas J. Cammarata Esq., Jersey City, New Jersey
Bruder: Daniel J. Welsh Esq., Jersey City, New JerseySanzo, Mark Information
Scerbo, Robert Information
Bruder, William InformationPennsylvania Man Sentenced to 33 Months in Prison for Role in $65 Million Stolen Identity Income Tax Refund Fraud SchemeRead the Press Release
NEWARK, N.J. – A Moscow, Pennsylvania, man was sentenced today to 33 months in prison for his role in one of the nation’s largest and longest running stolen identity refund fraud schemes ever identified, U.S. Attorney Paul J. Fishman announced today.
The scheme caused more than 8,000 fraudulent U.S. income tax returns to be filed, which sought more than $65 million in tax refunds and which resulted in losses to the United States of more than $12 million.
Michael Senatore, 44, previously pleaded guilty before U.S. District Judge Claire C. Cecchi to an information charging him with conspiracy to defraud the United States and theft of government property. Judge Cecchi imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Stolen Identity Refund FraudStolen Identity Refund Fraud (SIRF) is a common type of fraud committed against the United States government that results in more than $2 billion in losses annually to the United States 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 perpetrators complete Form 1040 Individual Income Tax Returns 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 forms are entitled to tax refunds – when in fact, the various tax withholdings indicated on the fraudulent 1040s have not been paid by the listed “taxpayers,” and no refunds are due.
- Perpetrators direct the U.S. Treasury Department to issue the refunds through checks generated by the fraudulent 1040 forms to locations they control or can access.
- With checks now in hand, SIRF perpetrators generate cash proceeds. Certain SIRF perpetrators sell refund checks at a discount to face value. In turn, the buyers then cash the checks, either themselves or using straw account holders, by cashing checks at banks or check cashing businesses or by depositing checks into bank accounts. When cashing or depositing checks, SIRF perpetrators often present false or fraudulent identification documents in the names of the “taxpayers” to whom the checks are payable.
The Investigation
Federal law enforcement agencies created a multi-agency task force in New Jersey composed 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 (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, revealed that from at least 2007, dozens of individuals in the New Jersey and New York area have been engaged in a large-scale, long-running SIRF scheme that caused more than 8,000 fraudulent 1040 forms to be filed, seeking more than $65 million in tax refunds, with more than $12 million in losses to the U.S. Treasury.
Defense Counsel: Christopher Patella Esq., Bayonne, New Jersey
Senatore and others obtained personal identifiers, such as dates of birth and Social Security numbers, belonging to Puerto Rican citizens. They used those identifiers to create fraudulent 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 the electronically-filed 1040s, law enforcement officers learned that just a handful of IP addresses created many of the fraudulent 1040 forms that lead to the issuance of tax refund checks.
Conspirators purchased mail routes, that is, lists of addresses covered by a single mail carrier. Conspirators applied for refunds, inserted addresses along the mail route as the purported home addresses of the “taxpayers,” and obtained the refund checks sent to the addresses. They also applied for checks using addresses otherwise controlled by, or accessible by, certain conspirators and collected the checks after they were delivered to those addresses. During the course of the scheme, hundreds of refund checks were mailed to just a few different addresses in a few different towns, including Nutley, Somerset and Newark, New Jersey, and Shirley, New York.
After receiving the refund checks, Senatore and others caused the checks to be cashed at check cashing institutions, and then causing the proceeds to be divided among the conspirators.
During the course of the investigation, members of the task force identified certain “hot spots” of activity and intercepted more than $22 million in refund checks – that had been applied for fraudulently – before they were delivered to members of the conspiracy.
In addition to the prison term, Judge Cecchi sentenced Senatore to three years of supervised release and fined him $6,000.
U.S. Attorney Fishman praised special agents of IRS-Criminal Investigation, under the direction of Acting 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 Special Agent in Charge James Mottola; and the Drug Enforcement Administration, under the direction of Special Agent in Charge Carl Kotowski, for the investigation.
The government is represented by Assistant U.S. Attorneys Mala Ahuja Harker, Lakshmi Srinivasan Herman, Zach Intrater and Danielle Walsman of the U.S. Attorney’s Office Criminal Division in Newark.
14-273- 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.
Newark Man Sentenced to More Than 18 Years in Prison for 14 Armed Robberies of New Jersey StoresRead the Press Release
NEWARK, N.J. – A Newark man was sentenced today to 225 months in prison for committing 14 armed robberies of commercial establishments throughout Union, Essex, Hudson and Bergen counties, U.S. Attorney Paul J. Fishman announced.
Jamar Darby, aka “Rhino,” 27, previously pleaded guilty to two counts of an indictment charging him with conspiracy to commit Hobbs Act robberies and with brandishing a firearm during one of those robberies. U.S. District Judge William H. Walls imposed the sentenced today in Newark federal court.
According to documents filed in this case and statements made in court:
Darby conspired with others to rob these commercial establishments:
Pao Da Terra
Newark
Dec. 29, 2012
Newark
Jan. 20, 2013
Newark Community Pharmacy
Newark
Jan. 24, 2013
Linden Stationary
Linden
Feb. 1, 2013
Delta Gas Station
Newark
Feb. 1, 2013
Shoppers Express
Belleville
Feb. 2, 2013
Krauszers
Kearny
Feb. 10, 2013
Krauszers
Bloomfield
Feb. 13, 2013
Pat’s Deli
Newark
Feb. 19, 2013
Smashburger
Paramus
March 16, 2013
Krauszers
Bloomfield
March 29, 2013
South Wood Discount Liquor
Linden
April 17, 2013
Newark Community Pharmacy
Newark
May 1, 2013
Subway Restaurant
Verona
May 20, 2013
Darby and his conspirators robbed each establishment at gunpoint, stealing cash, cigarettes and other items. In 13 of the 14 robberies, they used zip ties or duct tape to restrain their victims. During the Pat’s Deli robbery on Feb. 19, 2013, Darby and a conspirator restrained several victims with duct tape after threatening one victim with a .45 caliber semi-automatic handgun.
In addition to the prison term, Judge Walls sentenced Darby to three years of supervised release and ordered restitution $73,324.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, with the investigation leading to today’s guilty plea. He also thanked the Belleville, Bloomfield, Kearny, Linden, Maplewood, Newark, Paramus, Verona and West Orange police departments, along with the N.J. State Police and the Essex County Prosecutor’s Office, for their work on this case.
The government is represented by Assistant U.S. Attorneys Jamari Buxton and Rahul Agarwal of the U.S. Attorney’s Office Criminal Division in Newark.
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Defense counsel: Anthony C. Mack Esq., NewarkFormer Director of Pop Warner Sentenced to 27 Months in Prison for Stealing Hundreds of Thousands of Dollars from the OrganizationRead the Press Release
TRENTON, N.J. – The former regional director of the Eastern Region of Pop Warner Little Scholars Inc. (Pop Warner) was sentenced today to 27 months in prison for stealing hundreds of thousands of dollars from the organization and using the funds for his personal benefit, U.S. Attorney Paul J. Fishman announced.
David Marshall, 58, of Jackson, New Jersey, previously pleaded guilty before U.S. District Judge Joel A. Pisano to an information charging him with one count of wire fraud. Judge Pisano imposed the sentence today in Trenton federal court.
According the documents filed in this case and statements made in court:
Between 2005 and 2011, Marshall performed work for Pop Warner on a voluntary basis and held various positions. From 2006 through 2011, Marshall was the regional director for the Eastern Region of Pop Warner. He was responsible for handling the finances of the Eastern Region and had access to its bank and credit card accounts. Marshall used his authority to steal hundreds of thousands of dollars from Pop Warner. He improperly used funds from Pop Warner bank accounts to pay off personal debts and make cash withdrawals. Marshall also used a Pop Warner credit card to purchase personal items and other things unrelated to Pop Warner.
In addition to the prison term, Judge Pisano sentenced Marshall to three years of supervised release, ordered to pay $559,841 in restitution and forfeit $559,841.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Nicholas P. Grippo of the U.S. Attorney’s Office Criminal Division in Trenton.14-272
Defense counsel: Brian P. Reilly Esq., Assistant Federal Public Defender, TrentonEssex County, N.J., Man Charged with Distributing Sexually Explicit Images of ChildrenRead the Press Release
NEWARK, N.J. – Special agents of the FBI arrested a Bloomfield Township, New Jersey, man this morning on charges that he distributed sexually explicit images of children from his home computer, U.S. Attorney Paul J. Fishman announced.
Paul J. Spisto, 52, is charged by complaint with two counts of distributing images of child pornography over the Internet. He is scheduled to appear this afternoon before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court.According to the complaint:
On Dec. 3, 2012, and Dec. 24, 2012, Spisto distributed videos and images depicting child sexual abuse on the Internet via a Usenet newsgroup, which allowed others access to the material. An undercover agent discovered and downloaded the images and videos; the username and IP address of the distributor were traced back to Spisto’s residence.
Each distribution count carries a minimum penalty of five years in prison and a maximum potential penalty of 20 years in prison and a $250,000 fine.
U.S. Attorney Fishman credited special agents of FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, with the investigation leading to today’s arrest.
The government is represented by Assistant U.S. Attorney Barry A. Kamar of the U.S. Attorney’s Office General Crimes Unit in Newark.
The charge and allegations contained in the complaint are merely accusations and the defendant is considered innocent unless and until proven guilty.
14-270Defense counsel: Scott Telson Esq., Edison, New Jersey
Spisto, Paul Complaint
Bergen County Man Arrested, Charged with Distributing Sexually Explicit Images of ChildrenRead the Press Release
NEWARK, N.J. – Federal agents arrested a Bergen County, New Jersey, man this morning on a charge that he distributed sexually explicit images of children from his home computer, U.S. Attorney Paul J. Fishman announced.
Robert Miller, 65, of Hackensack, New Jersey, is charged by complaint with one count of distributing images of child pornography over the Internet. He appeared this afternoon before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court and was remanded without bail.
According to the criminal complaint unsealed today:
From April 30, 2014, to May 7, 2014, Miller distributed videos depicting child sexual abuse on the Internet via a peer-to-peer file-sharing program, which allowed others access to the material. An undercover agent discovered and downloaded the videos, and the username and IP address of the distributor were traced back to Miller’s residence.
On July 30, 2014, special agents from U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) executed a search warrant at Miller’s residence and seized his computer and related electronic devices, which allegedly contained the peer-to-peer program as well as multiple videos and/or images of child sexual abuse.
The distribution count with which Miller is charged carries a minimum penalty of five years in prison and a maximum potential penalty of 20 years in prison and a $250,000 fine.
U.S. Attorney Fishman credited special agents of ICE-HSI, under the direction of Special Agent in Charge Andrew M. McLees in Newark; the Bergen County Prosecutor’s Office, under the direction of Prosecutor John Molinelli; and the Hackensack Police Department, under the direction of Police Director Mike Mordaga, with the investigation leading to today’s arrest.
The government is represented by Assistant U.S. Attorney Barry A. Kamar of the U.S. Attorney’s Office General Crimes Unit in Newark.
The charge and allegations contained in the complaint are merely accusations, and the defendant is considered innocent unless and until proven guilty.
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Defense counsel: Linda Foster Esq., Assistant Federal Public Defender, Newark
Miller, Robert Complaint
Vending Machine Company Executive Who Provided False IRS Forms to Pepsi Sentenced to Six Months in Prison, Six Months’ Home ConfinementRead the Press Release
Must Also Pay $1 Million in Restitution
NEWARK, N.J. - The former principal of a New Jersey vending company was sentenced today to six months in prison, six months of home confinement and agreed to pay restitution of $1 million to the Pepsi Bottling Group for his role in a tax fraud scheme, U.S. Attorney Paul J. Fishman announced.
Joseph Belasco, 65, of Cedar Grove, New Jersey, previously pleaded guilty before U.S. District Judge Jose L. Linares to a superseding information charging him with providing a false 2008 IRS 1099 form to the wife of a PepsiCo executive for consulting services that she never performed. Judge Linares imposed the sentence today in Newark federal court.
According to documents filed in the case and statements made in court:In the spring of 1998, Belasco, along with a business associate, created Impact Cause Related Marketing (Impact Marketing), a subsidiary of Culinary Ventures Vending, a company that placed and stocked vending machines in private and commercial facilities, such as state colleges and entertainment venues. The purpose of Impact Marketing was allegedly to provide Pepsi Bottling Co. with leads for acquiring new customers to purchase its cans, bottles and fountain products. Impact Marketing and Belasco would receive commissions for as long as the client remained a Pepsi customer. According to its contract, Impact Marketing would also receive quarterly rebates, depending upon the amount of Pepsi product a customer purchased on an annual basis.
Edwin Glasspool, a Pepsi employee who developed new customers, assigned those customers to Impact Marketing. He also reassigned existing Pepsi customers to the list of new customers allegedly referred by Impact Marketing, generating additional commissions for leads for Belasco that Belasco had not actually generated himself. Between 1998 and 2008, Impact Marketing received from Pepsi $2.9 million in commissions and rebates as a result of the fraudulent scheme. Glasspool’s wife, Janice Bachman, who filed joint tax returns with her husband, received approximately $135,000 in annual income for a no-show position with Belasco and Impact Marketing. Glasspool had previously pleaded guilty to defrauding Pepsi of $2.9 million dollars and having his wife receive his annual share of the defrauded money through checks for consulting services issued by Impact Marketing, the vending company.
In addition to the incarceration and the $1 million in restitution, Judge Linares sentenced Belasco to two years of supervised release and fined him $30,000.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; and special agents of the IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s sentencing.
The government is represented by V. Grady O’Malley, Senior Litigation Counsel of the U.S. Attorney's Office Organized Crime/Gangs Unit, in Newark.
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Defense counsel: John A. Azzarello Esq., and David Fassett Esq., Chatham, New JerseyRingleader of Tax Refund Check Scam Admits $2.6 Million ConspiracyRead the Press Release
NEWARK, N.J. - The ringleader of a conspiracy to steal income tax refund checks issued by the United States today admitted his role in the scheme, which led to the theft of more than $2.6 million from the government, U.S. Attorney Paul J. Fishman announced.
Raymundo Hernandez, 35, of Bronx, New York, pleaded guilty before U.S. Magistrate Judge Michael A. Hammer in Newark federal court to an information charging him with conspiracy to steal government funds.
According to the documents filed in this case and statements made in court:
Stolen Identity Refund Fraud (SIRF) is a common type of fraud committed against the United States government that results in more than $2 billion in losses annually. SIRF schemes generally share a number of hallmarks. Perpetrators obtain personal identifying information, including Social Security numbers and dates of birth, from unwitting individuals, who often reside in the Commonwealth of Puerto Rico. They complete IRS-1040 tax return forms using the fraudulently obtained information and falsifying wages earned, taxes withheld and other data, always ensuring that fraudulent tax return generates a refund. The perpetrators then direct the U.S. Treasury Department to mail the refund checks to locations they control or can access. In some cases, they bribe mail carriers to remove the refund checks from their mail routes. With the fraudulently obtained refund checks in hand, the perpetrators generate cash proceeds by depositing the checks into bank accounts they control.
Hernandez admitted he knew the checks had been generated by conspirators filing false and fraudulent income tax returns with the IRS in order to obtain refunds to which he was not entitled. He admitted that from November 2010 through October 2012 he recruited and maintained a network of conspirators in the Newark and Bronx areas and distributed fraudulent treasury checks to that network in exchange for payment. Hernandez obtained at least 44 such checks from Luis Pena, 32, of Bronx, who pleaded guilty to his role in the conspiracy in March 2014. Pena had arranged for the fraudulent checks to be sent to a postal route and intercepted by the mail carriers on that route: Gloria Rivera 40, of Bronx, and Lourdes Ortiz, 41, of Bronx, Rivera and Ortiz also entered guilty pleas in March 2014 to their respective roles in the conspiracy.
Hernandez admitted that once he distributed the fraudulent checks, he and his conspirators deposited them into bank accounts, primarily in the names of businesses they controlled and then withdrew large amounts of the proceeds in cash. They used some of the money to purchase cars and gamble at Atlantic City casinos.
The fraudulently cashed checks totaled $2,659,718. Of these deposits, $171,589 was deposited into three bank accounts under Hernandez’ direct control.
The conspiracy count carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing before U.S. District Judge Faith S. Hochberg is currently scheduled for Nov. 6, 2014.
U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen; postal inspectors of the U. S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates; special agents of the U.S. Secret Service, under the direction of Special Agent in Charge James Mottola; and special agents of the U.S. Postal Service - Office of Inspector General, under the direction of Special Agent in Charge Rafael A. Medina, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Sara F. Merin of the U.S. Attorney’s Office General Crimes Unit in Newark.
14-264Defense counsel: Roy Greenman Esq., Union, N.J.
Hernandez, Raymundo Information
Real Estate Developer Admits Diverting Money from Trenton Affordable Housing ProjectsRead the Press Release
TRENTON, N.J. – The developer of three Trenton affordable housing projects admitted today that he made false statements to a financial institution to divert project money for personal and other unauthorized purposes, and to conducting a transaction with the proceeds of this crime, U.S. Attorney Paul J. Fishman announced.
Robert Kahan, 68, of Sunny Isles Beach, Florida, pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton federal court to two counts of an indictment charging him with making false statements in a loan application (Count 8) and to transacting in criminal proceeds that resulted from those false statements (Count 12).
According to documents filed in this case and statements made in court:
Between 2006 and 2009, Kahan was a developer of three affordable housing projects in Trenton – the Canal Plaza Homeownership Project, the Southwest Village II Project and the Catherine S. Graham Project – for which he obtained both private and public funding.
The Southwest Village II Project was a project to construct 52 affordable housing units. Kahan diverted substantial portions of the project’s financing from a $6,435,000 construction loan from Roma Bank to his own personal use, his other development projects and other uses that were outside of the project budget. In October 2008, Kahan diverted $343,354 of Southwest Village II project financing and applied it as a down payment to purchase a Florida condominium. In numerous payment applications made to the loan administrator for the project financing requesting advances of loan and subsidy money, Kahan falsely stated that all money that he was previously paid had been used to pay costs for labor, materials and other obligations for the Southwest Village II Project.
The count of making false statements in a loan application carries a maximum potential penalty of 30 years in prison and a $1 million fine. The charge of transacting in criminal proceeds carries a maximum potential penalty of 10 years in prison and a $250,000 fine. Kahan has agreed to forfeit $989,901 in criminal proceeds. Sentencing is scheduled for Nov. 18, 2014.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen; and the U.S. Department of Housing and Urban Development, Office of Inspector General, under the direction of Christina Scaringi, Special Agent in Charge, Northeast Region, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Eric Moran in Trenton and Senior Litigation Counsel Mark J. McCarren in Newark, both of the U.S. Attorney’s Office Special Prosecutions Division.
14-268Defense counsel: Scott Krasny Esq., West Trenton, New Jersey
Kahan, Robert Indictment
Owner and Employee of Illegal Online Gambling Website Admit Conspiring with Genovese Organized Crime FamilyRead the Press Release
NEWARK, N.J. – Two Union County, New Jersey, men, including the owner of an illegal online sports betting website, today admitted to conspiring with the Genovese organized crime family, U.S. Attorney Paul J. Fishman announced.
Joseph Graziano, 77, and Dominick J. Barone, 44, both of Springfield, New Jersey, each pleaded guilty before District Judge Claire C. Cecchi in Newark federal court to separate informations charging them with one count of racketeering conspiracy. Graziano agreed to forfeit $1 million to the United States and Barone agreed to forfeit $100,000.
According to documents filed in this case and statements made in court:
Graziano was the principal owner of Beteagle.com, a website located in Costa Rica and used to facilitate illegal online sports betting. Barone worked with Graziano in carrying out the daily activities of the website and both men conspired with the Genovese Crime Family of La Cosa Nostra in the operation of Beteagle.Joseph Lascala, 80, of Monroe, New Jersey, was the alleged “capo” and a made member of the Genovese family operating in northern New Jersey. He directed the criminal activities of a smaller group of associates, referred to as a crew, whose activities included illegal gambling and the collection of unlawful debt.
This organized crime crew and Graziano and Barone joined forces to allow traditional organized crime members and associates to use the Internet and current technology to conduct traditional organized crime by engaging in and profiting from illegal sports betting through the website. Associates of the crew were given access to Beteagle and were considered “agents.” Before the advent of computerized betting, these agents would have been referred to as “bookmakers” or “bookies.” The agents had the ability to track the “sub-agents,” or bookies, under them and the wagers placed by their bettors. The agent or sub-agent maintained a group of bettors (the “package”) and were responsible for those bettors.To place bets online, the agent or sub-agent issued the bettor a username and password to access Beteagle. This access was not given online and no money or credits were made or transferred through the website. Associates of the crew paid out winnings or collected losses in person. If a bettor failed to pay his gambling losses, the crew used their LCN status and threats of violence to collect on these debts.
The agent or sub-agent paid a fee to the website for each bettor added to a package. Barone and others made weekly collections of cash in furtherance of the scheme.
The count of racketeering conspiracy carries a maximum potential punishment of 20 years in prison and a fine of $250,000. Sentencing is scheduled for Barone is scheduled for Nov. 12, 2014, and for Graziano, Nov. 18, 2014.
To date, John Breheney, a/k/a “Johnny Fugazi, Fu, Johnny Fu,” 49, and Salvatore Turchio, 48, both of Little Egg Harbor, New Jersey; Patsy Pirozzi, a/k/a “Uncle Patsy,” 75, of Suffern, New York; and José Gotay, 76, New Milford, New Jersey, have pleaded guilty to their respective roles in this racketeering conspiracy and await sentencing.
As to the remaining defendants, the charges and allegations contained in a criminal complaint sworn in May 2012 are merely accusations and they are presumed innocent unless and until proven guilty.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark; the Bayonne Police Department, Special Investigations Unit, under the direction of Chief Drew Niekrasz; IRS-Criminal Investigation under the direction of Acting Special Agent in Charge Jonathan D. Larsen; the N.J. State Police, under the direction of Superintendent Rick Fuentes; and the Monmouth County Prosecutor’s Office, under the direction of Acting Prosecutor Christopher Gramiccioni, with the investigation leading to today’s guilty pleas.
The government is represented by Assistant U.S. Attorneys Serina M. Vash and Anthony Moscato of the New Jersey U.S. Attorney’s Office Criminal Division in Newark.
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Defense counsel:
Graziano: Lawrence S. Lustberg Esq., Newark
Barone: John C. Whipple Esq. Morristown, New JerseyGraziano, Joseph Information
Barone, Dominick InformationOhio Woman Admits Creating Fictitious Evidence to Obstruct A Federal InvestigationRead the Press Release
NEWARK, N.J. - An Ohio woman who claimed she investigates labor unions on behalf of attorneys admitted her role today in impeding a federal investigation, U.S. Attorney Paul J. Fishman announced.
Debbie Shank Morgan, 57, of Euclid, Ohio, pleaded guilty before U.S. District Judge Kevin McNulty in Newark federal court to obstruction of justice.
According to documents filed in this case and statements made in court:
In May 2012, Morgan contacted federal agents from the U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations (DOL-OIG) in New Jersey, a law enforcement agency that investigates allegations related to federal crimes, such as bribery and theft, involving labor unions, union officers, and employee benefit plans.
Morgan said she was a non-practicing lawyer who investigates crimes associated with labor unions, employee benefit plans and other alleged violations of federal criminal and civil law. Morgan said she had information that a former union officer and his father, both from an international labor union, had committed serious violations of federal law. She alleged they had embezzled $30 million from a political action committee (PAC) associated with the union.
Morgan provided federal agents with e-mails and other documents and items as evidence. She had, in fact, falsified, altered and created these items. For example, Morgan provided federal agents with e-mails she claimed were evidence in support of her allegations. Federal agents then obtained a court-authorized search warrant and seized the actual e-mails transmitted through the service provider. The e-mails from the search warrant demonstrated that she had altered and fabricated the e-mails before giving them to federal agents. In addition, in September 2012, she claimed that an unknown individual had fired a weapon at her car while she was driving it in Ohio. Morgan then provided federal agents with two digital recordings, allegedly with the wife of the alleged shooter. In these consensual recordings, the wife admitted that her husband had fired a weapon at Morgan’s car. The recordings, however, were fabricated and created by Morgan and an unknown third party.
The obstruction count to which Morgan pleaded guilty carries a maximum potential penalty of 20 years in prison and a $250,000 fine. Sentencing is scheduled for Nov. 6, 2014.
U.S. Attorney Fishman credited special agents of the U.S. Department of Labor Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, New York Region, under the direction of Special Agent in Charge Cheryl Garcia, for the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Anthony Moscato of the U.S. Attorney’s Office Criminal Division in Newark.
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Defense counsel: Jack A. Meyerson Esq., Philadelphia
Morgan, Debbie Shank Information
Bergen County, N.J., Couple Sentenced to Prison for Defrauding Mortgage Lenders for over $3 MillionRead the Press Release
NEWARK, N.J. - A husband and wife from Bergen County, New Jersey, were both sentenced today to prison for lying about their employment, income, and other financial information in order to fraudulently obtain millions in mortgages, U.S. Attorney Paul J. Fishman announced.
Linda Yarleque, 44, was sentenced to 24 months in prison and her husband, Fabio Moreno Vargas, 47, was sentenced to 18 months in prison. They were previously convicted by a federal jury of one count each of bank fraud and conspiracy to commit wire fraud. Yarleque and Moreno, of Westwood, New Jersey, were convicted in November 2013 following a one-week trial before U.S. District Judge William H. Walls, who imposed the sentences today in Newark federal court.
According to documents filed in this case and the evidence at trial:
Yarleque and Moreno obtained 10 fraudulent loans over three years. They falsified their employment and income, failed to disclose their debts and other properties that they owned, and lied about where they lived. They fraudulently obtained a total of $3.4 million in mortgages and personally pocketed approximately $269,000 through “cash out” refinancings that they directed to their own bank accounts. Then they spent that money on vacations, cars, and to buy more properties.
The defendants made up a phony business where Moreno was supposedly employed (My Limousine). They then obtained a phone line in the name of My Limousine and had it forwarded to their personal cell phones. When mortgage lenders called to verify Moreno’s employment, the defendants lied, posing as fictitious employees, using names such as “Janet Alvarez” and “Casandra Sterling.”
In addition to the prison term, Judge Walls sentenced Yarleque and Moreno to serve three years of supervised release and ordered them to pay restitution of $716,353 and forfeit $262,198.U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, and special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s sentencings.
The government is represented by Assistant U.S. Attorney J. Jamari Buxton of the general crimes unit and Rachael A. Honig, counsel to the U.S. Attorney.14-266
Defense counsel:
Yarleque: Peter Willis Esq., of Jersey City, New Jersey
Moreno: Chester Keller Esq. and Carol Gillen Esq., Assistant Federal Public Defenders, NewarkFormer Princeton, N.J., Youth Soccer Coach Admits Possessing Images of Sexually Exploited ChildrenRead the Press Release
TRENTON, N.J. – A former Princeton, New Jersey, youth soccer coach admitted today that he possessed images of child sexual abuse, U.S. Attorney Paul J. Fishman announced.
Jorge A. Roman, 49, pleaded guilty before U.S. District Judge Joel A. Pisano in Trenton federal court to an information charging him with one count of possession of child pornography.
According to documents filed in this case and statements made in court:On May 16, 2014, Roman possessed 600 or more images of child sexual abuse on various DVDs, computers or other digital media at his residence in Princeton. Some of the images in Roman’s possession were images of prepubescent minors engaged in sexually explicit conduct.
The count of possession of child pornography carries a maximum potential penalty of 10 years in prison and a $250,000 fine. Sentencing is scheduled for December 15, 2014.U.S. Attorney Fishman credited postal inspectors of the U.S. Postal Inspection Service, under the direction of Postal Inspector in Charge Maria L. Kelokates, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Nicholas P. Grippo of the U.S. Attorney’s Office in Trenton.
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Defense counsel: Lisa Van Hoeck Esq., Assistant Federal Public Defender, Trenton.
Roman, Jorge Information
Hudson County, N.J., Man Charged with Production and Distribution of Child PornographyRead the Press Release
NEWARK, N.J. – A Hudson County, New Jersey, man was charged today for allegedly posing as a teenage boy to solicit underage females online to produce images of themselves engaged in sexually explicit conduct and then distributing those images to others, U.S. Attorney Paul J. Fishman announced.
Erik Vanderbeck, 47, of Bayonne, New Jersey, was charged by complaint with one count of sexual exploitation of a child and one count of distribution of child pornography. He is scheduled to appear in Newark federal court today before U.S. Magistrate Judge James B. Clark III.
According to the Complaint filed in Newark federal court:
Vanderbeck allegedly met various minor females through online chat applications and in Internet chat rooms while pretending to be a teenage boy. Over the course of their correspondence, Vanderbeck would send the girls nude images and ask them to send him nude images of themselves. Once Vanderbeck received nude images, he would threaten to kidnap the victim or post her nude images online unless she sent more. When one of the victims threatened to report Vanderbeck to the authorities, he replied, “The cops will never catch me.” Vanderbeck also allegedly used nude images that he received from one minor victim to pretend to be a teenage girl named “Megan” in chats with other individuals online. Vanderbeck also distributed sexually explicit images, which he claimed to be of Megan.
Law enforcement officers executed a search warrant at Vanderbeck’s home in Bayonne on July 22, 2014. They recovered computer equipment belonging to Vanderbeck containing images appearing to be of child pornography.Law enforcement officers have interviewed several of Vanderbeck’s victims, who said they produced images of child pornography out of fear and in response to his threats.
The charge of sexual exploitation of a child carries a mandatory minimum penalty of 15 years in prison, a maximum potential penalty of 30 years in prison and a $250,000 fine. The charge of distribution of child pornography carries a mandatory minimum penalty of five years in prison, a maximum potential penalty of 20 years, and a $250,000 fine.
U.S. Attorney Fishman credited postal inspectors with the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates in Newark, and the Bayonne Police Department, under the direction of Chief Drew Niekrasz, with the investigation leading to the charges.
The government is represented by Assistant U.S. Attorney Danielle Alfonzo Walsman of the U.S. Attorney’s Office Criminal Division in Newark.
The charges and allegations contained in the complaint are merely accusations, and the defendant is considered innocent unless and until proven guilty.
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Defense counsel: Carol Gillen, Esq., Assistant Federal Public Defender, Newark
Vanderbeck, Erik Complaint
Federal Official Arrested, Charged with Self-Dealing Federal Grants to New Jersey UniversitiesRead the Press Release
NEWARK, N.J. - The Assistant Division Administrator of the Federal Highway Administration (FHWA), New Jersey Division, was arrested this morning for allegedly using a straw company to get FHWA grant funds he also oversaw as a public official, and for falsifying related federal disclosure documents, U.S. Attorney Paul J. Fishman announced.
Lawrence F. Cullari Jr., 42, of Tinton Falls, New Jersey, was arrested at his FHWA office in West Trenton by special agents from the U.S. Department of Transportation (DOT) Office of Inspector General (OIG), and criminal investigators with the U.S. Attorney’s Office for the District of New Jersey. He is charged in a criminal complaint with five counts of making false statements and one count of wire fraud.
Cullari had an initial appearance and bail hearing this afternoon before U.S. Magistrate Judge James B. Clark III and was released on a $100,000 bond.
According to the criminal complaint filed today in Newark federal court:
Cullari has been the Assistant Division Administrator at the Federal Highway Administration’s FHWA New Jersey Division since 2010. In that position, he holds the power to influence the allocation of DOT funding. Since 2006, he has also operated a private consulting and engineering company called Dencore Consulting, which was owned by his then-wife.
In about 2006, the defendant approached his then father-in-law – referred to as W.P. in the complaint – and asked to use W.P.’s company – identified as Company #1 – as a nominal or “straw” contractor to get work for Dencore Consulting from Rutgers University’s Center for Advanced Infrastructure and Transportation (Rutgers CAIT), and New Jersey Institute of Technology (NJIT).
From May 2006, until at least June 2013, Cullari prepared bids and work proposals for W.P. to sign and submit to Rutgers CAIT and NJIT on behalf of Company #1, predominantly for FHWA-funded projects. When Rutgers CAIT or NJIT awarded projects to the company, Cullari arranged for the relevant engineering reports to be completed. He had W.P. sign and mail the reports to the universities on behalf of Company #1, as if the company had performed the work. W.P. then mailed invoices on behalf of the company to the schools for payment. When the universities paid, W.P. kept a small portion of the payment, usually about $300, for himself and wrote a check to Dencore Consulting for the balance.
In addition to the self-dealing scheme, Cullari filed false Confidential Financial Disclosure Reports from 2009 through 2013. He indicated on the forms that he held no outside positions and earned no outside income, though Dencore Consulting was paid more than $130,000 relating to a number of contracts with Company #1 during those years, and more than $56,000 of that income was transferred directly from Dencore Consulting’s bank account into his personal bank account. Cullari was also a member of several “advisory boards” at Rutgers CAIT, including the CAIT Advisory Board, the Research Advisory Board, the Technology Transfer Advisory Board, and the Transportation Safety Resource Center Advisory Board, among others.
The maximum potential penalty for the wire fraud charge is 20 years in prison, and the maximum potential penalty for each false statements charge is five years in prison. All of the charges also each carry a maximum potential penalty of $250,000, or twice the gross gain or loss from the offense.
U.S. Attorney Fishman credited special agents of the U.S. Department of Transportation, Office of Inspector General, under the direction of Regional Special Agent in Charge Douglas Shoemaker, the New Jersey Department of Transportation, Office of Inspector General, under the direction of Johanna Barba Jones, and investigators in the U.S. Attorney’s Office with the ongoing investigation.The government is represented by Assistant U.S. Attorney Scott B. McBride, Deputy Chief of the U.S. Attorney’s Office Economic Crimes Unit.
The charges and allegations contained in the complaint are merely accusations and the defendant is presumed innocent unless and until proven guilty.
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Defense counsel: Assistant Federal Public Defender Carol Gillen (for purposes of initial
appearance)Cullari, Lawrence Complaint
‘Enforcer’ for Atlantic City ‘Dirty Block’ Gang Sentenced to 151 Months in Prison for Heroin Trafficking ConspiracyRead the Press Release
CAMDEN, N.J. - An Atlantic City, New Jersey, man was sentenced today to 151 months in prison for engaging in a conspiracy to distribute heroin with a criminal street gang – the “Dirty Block” – which used threats, intimidation and violence to maintain control of the city’s illegal drug trade, U.S. Attorney Paul Fishman announced.
Defense counsel: Maggie Moy Esq., Assistant Federal Public Defender, Camden
Shaamel Spencer, a/k/a “Buck,” 30, previously pleaded guilty before U.S. District Judge Joseph E. Irenas to a superseding information charging him with one count of conspiracy to distribute and to possess with intent to distribute 100 grams or more of heroin, and one count of being a previously convicted felon in possession of a firearm. Judge Irenas imposed the sentenced today in Camden federal court.
According to documents filed in this case and statements made in court:
Spencer acted as an “enforcer” on behalf of Mykal Derry, 33, of Atlantic City, helping Dirty Block control the heroin trafficking trade in and around the public housing apartment complexes of Stanley Holmes, Carver Hall, Schoolhouse, Adams Court and Cedar Court. Spencer assisted in the distribution of heroin to Dirty Block customers.
Spencer was arrested on Oct. 30, 2012, and found to be in possession of a firearm. On Feb. 12, 2013, Spencer was charged with being a previously convicted felon in possession of a firearm and ammunition. A search warrant executed at Spencer’s residence at the time of his arrest revealed approximately $4,500 in suspected drug proceeds, as well as a 9-mm semi-automatic handgun and 44 rounds of ammunition.
Spencer and other members of the Dirty Block gang – a number of them previously convicted felons – had travelled to a shooting range in Lakewood, New Jersey, where they were photographed firing handguns.
At his plea hearing, Spencer admitted to distributing heroin. He also admitted to being a previously convicted felon who possessed firearms and ammunition, and that specifically, he took a handgun to an Atlantic City casino, where he believed Derry was involved in a violent fight with his rivals. Spencer also agreed to forfeit the proceeds of his drug trafficking as well as his firearms and ammunition.
In addition to the prison term, Judge Irenas sentenced Spencer to eight 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 Aaron T. Ford; the Atlantic County Prosecutor’s Office, under the direction of Acting Prosecutor James P. McClain; the Atlantic City Police Department, under the direction of Police Chief Henry White; and the South Jersey Safe Streets Violent Incident and Gang Task Force, with the investigation leading to today’s sentencing.
The charges and allegations in the indictment charging Derry are merely accusations and the defendant is presumed innocent unless and until proven guilty.
The government is represented by Assistant U.S. Attorneys Patrick C. Askin and Justin C. Danilewitz of the U.S. Attorney’s Office Criminal Division in Camden
14-260Unlicensed Real Estate Appraiser Admits Role in Mortgage Fraud Scheme, Drug Possession and DistributionRead the Press Release
NEWARK N.J. – A Monmouth County, New Jersey, man today admitted his role in a large-scale mortgage fraud scheme as well as distribution and possession with the intent to distribute Methylone, U.S. Attorney Paul J. Fishman announced.
Paul Chemidlin , 42, of Morganville, New Jersey, pleaded guilty before U.S. District Judge Susan D. Wigenton to an information charging him with conspiracy to commit wire fraud and with distributing and possessing Methylone.
According to documents filed in this case and statements made in court:
From March 2011 through July 2012, Chemidlin and others submitted false mortgage loan applications to mortgage lenders for a property on Smith Street in Elizabeth, New Jersey. Chemidlin submitted letters to mortgage lenders that falsely stated that the borrower was obtaining the funds necessary to close the real estate transaction from a relative or friend in the form of a gift, when the funds were actually coming from a codefendant. Chemidlin provided fraudulent real estate appraisals, although he was not a licensed real estate appraiser.
While under home detention for charges stemming from wire fraud, Chemidlin was arrested for distributing and possessing with the intent to distribute Methylone.
The conspiracy count carries a maximum potential penalty of 30 years in prison and a $1 million fine. The drug count carries a maximum penalty of 20 years in prison and a $1 million fine. Sentencing is scheduled for Nov. 10, 2014.
U.S. Attorney Fishman credited the FBI Newark Mortgage Fraud Task Force with the investigation leading to today’s charges: special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates; special agents of the U.S. Housing and Urban Development, Office of Inspector General, Northeast Region of Investigations, under the direction of Special Agent in Charge Christina Scaringi; special agents of the Federal Housing Finance Agency, Office of Inspector General, under the direction of Inspector General Steve Linick; special agents of the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), under the direction of Special Inspector General Christy Romero; special agents of IRS–Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen; and the Hudson County Prosecutor’s Office, under the direction of Acting Prosecutor Gaetano T. Gregory.
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.
The pending charges and allegations against related defendants are merely allegations, and they are considered innocent unless and until proven guilty.The government is represented by Assistant U.S. Attorney Lakshmi Srinivasan Herman of the U.S. Attorney’s Office Economic Crimes Unit in Newark, Joshua Hafetz of the General Crimes Unit and Charlton A. Rugg of the Narcotics/OCDETF Unit.
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Defense Counsel: Paul Condon Esq., Jersey City, N.J.
Chemidlin, Paul Information
Remarks as Prepared for Delivery by U.S. Attorney Paul J. Fishman on the Results of the Investigation into the Newark Police DepartmentRead the Press Release
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NEWARK, NEW JERSEY
Good afternoon, and thank you all for being here.
We are here today to discuss two things. First, we want to describe the results of the investigation of the Newark Police Department that my office has conducted together with the Justice Department’s Civil Rights Division. And second, based on the results of that investigation, we are announcing that we have signed an agreement in principle with the city and the police department to make the changes that will give the people of Newark the first-class police department they deserve.
Before we start, though, I want to thank Jocelyn Samuels, the Acting Assistant Attorney General of the Justice Department’s Civil Rights Division, and the members of her staff who have worked on this investigation so closely with me and my office. Ms. Samuels will speak to you in a few minutes about why it is so important that our law enforcement officers conduct their vital work in a way that protects us at the same time it honors the Constitution we’ve all sworn to uphold. I also want to welcome Mayor Ras Baraka, Police Director Eugene Venable, and Chief of Police Anthony Campos. The city and the police department have cooperated throughout our investigation, and their presence here today reflects how deeply committed they are to this process and to the success of the police department.
The remedial measures outlined in the agreement will include significant changes to the department’s policies and procedures for stopping and questioning people; when and how officers use force; what training they receive; and improving the department’s systems of accountability. The agreement also requires fair application of officer discipline, better data collection and analysis, and more rigorous procedures for safeguarding personal property that belongs to people who have been arrested. The agreement specifically states that we will now turn to finalizing a consent decree that will be filed and enforceable in federal court. That document will require the appointment of a monitor to follow and report on the progress that the city and the police department are making. Finally, the agreement recognizes – as all of us up here know – that the police department needs to have a much deeper relationship with the community it protects.
These steps represent a major commitment to changing how the city of Newark will be policed.
So, why do we need these changes? Why are we here today?
Three years ago, we announced that we were launching an investigation into whether the Newark Police Department had engaged in a pattern or practice of unconstitutional policing. During that investigation, we met and spoke with many members of the force at every level, union representatives, other law enforcement agencies, public defenders, community members, elected representatives, and others. We reviewed thousands of reports, NPD polices and training records, and internal affairs files. Members of the team rode with the police to see first-hand what the challenges they face and how they do their jobs. We consulted with experts from other police departments around the country.
We saw what we already knew in my office to be true: most of the men and women who wear the uniform of the Newark Police Department bring enormous dedication and integrity to their jobs every day. But we also found an organization that is challenged in fundamental ways and has engaged in a pattern and practice of unconstitutional policing in a broad range of areas.
Let me start with stops. Over a three-and-a-half year period, nearly 75 percent of the reports of pedestrian stops failed to describe a constitutionally adequate reason for those stops. To stop someone on the street, an officer must have “reasonable suspicion” that the person is engaged in criminal activity. But the reasons that the police gave for those stops weren’t enough to meet that standard.
Some of this is a lack of clarity in NPD’s policies and training, which has promoted a view that living or simply being in a high-crime area is, in and of itself, criminally suspicious. But that’s not a constitutional way to police.
We also found that the burden of this practice of stopping people without sufficient reason has fallen most heavily on black people. Eighty-five percent of the people stopped by the police in Newark are black in a city where the black population is 54 percent. So it stands to reason that, if the police are stopping people in Newark for impermissible or insufficient reasons, the people who are most likely to have that happen to them are black.
Let me clear: we are not saying that this disparate impact is the result of intentional discrimination. There may be other explanations. But the City of Newark and NPD need to improve the collection and analysis of stop, search, and arrest data to permit more thorough analysis of the racial and ethnic impact of NPD’s police practices, and the Agreement provides for that.
Some of the people who have been stopped and arrested were lawfully objecting to police action or simply behaving in a way that officers perceived as disrespectful. That’s a violation of individuals’ rights under the Fourth and First Amendments. And the city has agreed that this practice has to change too.
We also found reason to believe the NPD has engaged in a pattern or practice of the use of excessive force. Over a six-year period, the NPD sustained only a single complaint that a police officer had used unreasonable force. While there is no “correct” rate at which a police department must or should sustain these kinds of complaints, that statistic is stunningly low for a police department of the size of NPD.
There are lots of reasons for this problem. The training on use of force isn’t remotely good enough; the reports themselves have been inadequate; there are a lot of situations in which force has been used and the police simply haven’t reported it; and the investigations by internal affairs have been woefully substandard. No police department can function correctly without effective reporting, supervision, and review of use of force and the city and the police department’s leadership have agreed to fix it.
The investigation also found a pattern or practice of theft of citizens’ property by NPD officers, especially in NPD’s specialized units, such as the narcotics and gang units, and at NPD’s prisoner processing unit. The NPD hasn’t adequately investigated theft complaints, it hasn’t taken corrective action against offending officers, and it has declined to implement even its own investigators’ recommendations to prevent theft. The police department has to adequately screen candidates for specialized assignments, rotate officers, and monitor those whose integrity is in question.
In fact, the entire internal affairs operation of the NPD is in severe need of overhaul. They need more training; they need more resources; and they need to have a much better system of tracking allegations against officers across the department. The absence of meaningful review has contributed to all of the other issues we’ve identified.
And it is also clear that the police department’s relationship with the people of the city have suffered from the combination of those practices. Community trust has deteriorated, and that in turn has compromised the effectiveness of the department.
The response to those problems is embodied in the Agreement in Principle that we’ve signed today. This agreement will serve as the framework for a new structure, increased transparency and accountability that is desperately needed to turn this department around. We are now in position to negotiate the final agreement, including the selection of an independent monitor, but it will certainly include remedial measures to address the deficiencies I’ve just described. Those will include civilian review and community engagement; closer use of force documentation and review; improved internal affairs practices; fair and consistent application of discipline; constitutional stop, search and arrest practices; improved data collection and review; better safeguarding of personal property; and an enhanced early warning system to support effective supervision and management.
The people of Newark deserve to be safe, whether sitting in front of their houses on Bergen Street or walking through Branch Brook Park or hustling to catch a train at Penn Station. So do the thousands of people who come here to work and to take advantage of all the city has to offer. But they also need to know that the people who are protecting them, who are making them safe, are doing this incredibly important and dangerous work while still respecting their rights under our constitution. The Justice Department has a long history of making sure of that. We recognize that great police work is constitutional police work. We are safer, and officers are more effective, when they follow the law.
I’d now like to turn the lectern over to my friend, Jocelyn Samuels, the Acting Assistant Attorney General for the Civil Rights Division of the Department of Justice to talk about exactly that.
In the last several weeks, since his election, I’ve had a few meetings with Mayor Ras Baraka to discuss this investigation, the agreement in principle, and how we move forward. I’m confident that he will continue in the same cooperative spirit that we’ve seen from the city for the last three years and that he is committed to the reforms we’re discussing today. Mayor Baraka.
I have been the U.S. Attorney for almost five years and, during that time, we have had no more important local partner in the fight against violent crime – drugs, gangs, and guns – than the Newark Police Department. I know first-hand how dedicated and professional its police officers are and I am proud of the work we have done together.
But I also know how much more effective they can and will be after we implement these changes and reforms. That will take real work: there will be difficult conversations and bad habits can be hard to break. But I am confident that the city and the police department are committed to making it happen.
I have worked in Newark almost continuously for more than 30 years. It is a hub of commerce and transportation, home to a great performing arts center and sports arena, institutions of education and government, of medicine and culture. It has a rich history and heritage going back to its founding almost 350 years ago. It is a great city, and its people deserve and are entitled to a great police force.
Justice Department Reaches Agreement with City of Newark, New Jersey, to Address Unconstitutional Policing in Newark Police DepartmentRead the Press Release
NEWARK, N.J. - The Justice Department today announced it has reached an agreement with the city of Newark, New Jersey, to address a pattern and practice of unconstitutional policing by the Newark Police Department (NPD). The agreement follows a joint investigation by the U.S. Attorney’s Office for the District of New Jersey and the Justice Department’s Civil Rights Division, the results of which were also released today.
The findings, detailed in a report provided to the city and to NPD leadership, document the NPD’s pattern or practice of constitutional violations in its stop and arrest practices; its response to individuals exercising their rights under the First Amendment; its use of force; and through theft by officers. The investigation also revealed deficiencies in NPD systems that are designed to prevent and detect misconduct.
The city of Newark cooperated with the investigation, which began on May 9, 2011, and has agreed to enter into a court-enforceable, independently monitored agreement to reform the NPD to ensure constitutional policing. The terms of the agreement are outlined in the agreement in principle released today. Among other things, the NPD must continue to develop and implement improvements to its stop, arrest and force policies and procedures, and to train its officers on how to conduct effective and constitutional policing. The NPD also must implement systems that ensure accountability, commit to building police-community partnerships and improve the quality of policing throughout the city.
“Our investigation uncovered troubling patterns in stops, arrests and use of force by the police in Newark. With this agreement, we’re taking decisive action to address potential discrimination and end unconstitutional conduct by those who are sworn to serve their fellow citizens,” said Attorney General Eric Holder. “This action reaffirms the Justice Department’s commitment to working with our law enforcement partners in order to ensure the highest standards of integrity and professionalism. Under today’s agreement, Newark Police officials are taking the first in a series of important steps to restore public trust in their Department and ensure both the safety and the civil rights of Newark residents.”
“The people of Newark deserve to be safe, and so do the thousands who come here to work, to learn, and to take advantage of all the city has to offer,” said U.S. Attorney Fishman. “They also need to know the police protecting them are doing that important – and often dangerous – work while respecting their constitutional rights. The Justice Department has a long history of making sure of that, and today we have the commitment of Newark’s mayor and the leadership of the police department to make the department the one that the city deserves.”
“Today the City of Newark has taken a bold step toward ensuring constitutional policing that better serves all of Newark’s residents,” said Acting Assistant Attorney General for the Civil Rights Division Jocelyn Samuels. “The Department of Justice report released today makes clear the depth and breadth of the challenges Newark faces in reforming its police department; but the agreement in principle provides a roadmap for reform and underscores the shared determination of the City of Newark and the Department of Justice to making this reform real and sustainable.”
During the investigation, the Justice Department reviewed thousands of NPD documents, including written policies and procedures, documentation of stops, searches and arrests, internal investigation files and use of force reports and reviews. Attorneys and investigators also interviewed NPD officers, supervisors and command staff, as well as city officials, and met with hundreds of community members and local advocates.
As the report describes, the Justice Department found reasonable cause to believe that the NPD has engaged in a pattern or practice of unconstitutional stops in violation of the Fourth Amendment. Specifically, NPD officers failed to articulate sufficient justification for nearly 75 percent of pedestrian stops. NPD officers also disproportionately stopped black people relative to their representation in Newark’s population. Although the NPD’s reports were insufficient to allow the Justice Department to determine whether this disparity was the result of intentional discrimination or was otherwise unlawful, the report urges the city of Newark and NPD to improve its collection and analysis of its stop, search and arrest data to facilitate a more thorough analysis of the racial and ethnic impacts of NPD’s police practices and to take steps to eliminate avoidable disparities.
Through the course of the investigation, the Justice Department also found that NPD officers have detained and arrested individuals who lawfully objected to police actions or behaved in a way that officers perceived as disrespectful, in violation of the First Amendment.
In addition, the Justice Department found cause to believe that the NPD engaged in a pattern or practice of the use of excessive force. The NPD has been unable to make reliable conclusions about whether a particular use of force was reasonable due to substantial underreporting and inadequate investigation of the use of force by NPD officers. Nonetheless, of the incidents reviewed as part of the Justice Department’s investigation, more than 20 percent of NPD officers reported use of force that appeared unreasonable.
The investigation also found a pattern or practice of theft of citizens’ property by NPD officers in violation of the Fourth and 14th Amendments, including by officers in NPD’s specialized units, such as the narcotics and gang units, and at NPD’s prisoner processing unit.
The Justice Department’s report details other inadequacies that contributed to a pattern of constitutional violations. Deficiencies were found in Internal Affairs (IA) processes, in investigations reviewing use of force and complaints regarding officer misconduct, in supervision and management, and in the training of officers and IA investigators.
The Justice Department conducted its investigation jointly through the Special Litigation Section of the Civil Rights Division and the U.S. Attorney’s Office for the District of New Jersey, with the assistance of law enforcement and statistics experts.
Both the report and the agreement in principle, along with summaries of each, are attached. For more information about the Civil Rights Division, please visit the division website.
Federal civil rights complaints specific to New Jersey can be directed to the U.S. Attorney’s Office civil rights complaint hotline at 855-281-3339 or can be filed by filling out a complaint form at http://go.usa.gov/9nzW.
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Agreement in Principle
NPD Fact Sheet
NPD Findings Report
Monitor SolicitationAgreement in Principle - Español
Agreement in Principle - PortugueseNewark, N.J., Man Pleads Guilty to 11 Armed Robberies in Essex and Hudson CountiesRead the Press Release
TRENTON, N.J. - A Newark man today admitted his role in a series of 11 robberies in Newark, Harrison and Jersey City between September 2012 and April 2013, U.S. Attorney Paul J. Fishman announced.
Christopher Mojica, 23, pleaded guilty to an information charging him with one count of Hobbs Act conspiracy, one count of Hobbs Act robbery and one count of discharging a firearm in furtherance of a crime of violence. He entered his plea today before U.S. District Judge Joel A. Pisano in Trenton federal court.
According to documents filed in this case and statements made in court:
Mojica conspired with others to rob New Jersey commercial establishments as follows:
New Barbershop
Newark
Sept. 14, 2012
Newark
Sept. 2012
Amcare Pharmacy
Newark
Nov. 13, 2012
Summer Pharmacy
Newark
Dec. 11, 2012
Community Health Pharmacy
Newark
Jan. 19, 2013
Delson Jewelry
Newark
Feb. 8, 2013
Pharmacy Plus
Harrison
Feb. 21, 2013
Forest Hill Pharmacy
Newark
April 4, 2013
Montgomery Pharmacy
Jersey City
April 15, 2013
Harris Pharmacy
Newark
April 16, 2013
Delta Gas Station
Newark
April 19, 2013
Mojica and his conspirators robbed each of these establishments at gunpoint, stealing cash, oxycodone pills, jewelry and other items. During the Delta Gas Station robbery on April 19, 2013, Mojica fired a .45 caliber semi-automatic handgun during his flight from the scene of the robbery.
The Hobbs Act conspiracy and robbery charges to which Mojica pleaded guilty each carry a maximum penalty of 20 years in prison. The charge of discharging a firearm in furtherance of a crime of violence carries a minimum consecutive term of 10 years in prison, and a maximum of life in prison. Each of these charges carries a statutory maximum fine of $250,000.
U.S. Attorney Fishman credited special agents with the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, with the investigation leading to today's plea. He also thanked the Newark, Harrison and Jersey City Police Departments, along with the Essex County and Hudson County Prosecutor’s Offices for their work on this case.
Sentencing before Judge Pisano is scheduled for Dec. 8, 2014.
The government is represented by Assistant U.S. Attorney Dara Aquila Govan of the Organized Crime/Gangs Unit in Newark.
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Defense counsel: Paulette Pitt Esq., Woodbridge, New Jersey
Mojica, Christopher Information
Former Financial Advisor from Gloucester County, N.J., Pleads Guilty to $900,000 Investment FraudRead the Press Release
CAMDEN, N.J. – A former financial advisor from Mantua, New Jersey, admitted today to defrauding his clients of more than $900,000 by diverting their investment checks for his personal use, U.S. Attorney Paul J. Fishman announced.
John Montague, 59, pleaded guilty today to an information charging him with one count of wire fraud. Montague entered his guilty plea before U.S. District Judge Noel L. Hillman in Camden federal court.
According to documents filed in this case and statements made in court:
Montague was licensed to sell mutual funds, variable annuities, and insurance premiums – but at no time was he licensed to sell corporate or municipal securities, direct participation programs or options. Montague engaged in a scheme to defraud his clients by soliciting and inducing them to purchase investment vehicles Montague knew he was not authorized to sell. Montague described the investment vehicles to his clients as guaranteed investments and promised a rate of return of approximately six percent. Montague instructed his clients to make their investment checks payable to him. He then deposited the checks into his personal bank accounts. To maintain the clients’ confidence in the investments, Montague issued periodic “dividend” checks to his clients.
The wire fraud charge carries a maximum potential penalty of 20 years in prison and a $250,000 fine. Sentencing is scheduled for Oct. 28, 2014.
U.S. Attorney Fishman credited special agents of the FBI’s South Jersey Resident Agency, under the direction of Special Agent in Charge Edward J. Hanko in Philadelphia, for the investigation leading to today’s guilty plea.
The government is represented by Attorney in Charge R. Stephen Stigall of the U.S. Attorney’s Office Criminal Division in Camden.
14-256Defense counsel: John J. Waldron Esq., Allentown, Pennsylvania
Montague, John Information
Former Employee of Timeshare Consulting Firm Sentenced to Three Years in Prison for Fraud ConspiracyRead the Press Release
CAMDEN, N.J. – A former employee of The Vacation Ownership Group LLC, was sentenced today to 36 months in prison and ordered to pay more than $3 million in restitution for conspiring to defraud owners of timeshare properties, U.S. Attorney Paul J. Fishman announced.
Eric Reilly, 34, of Galloway, New Jersey, previously pleaded guilty to an information charging him with one count of conspiracy to commit mail and wire fraud. Reilly entered his guilty plea before U.S. District Judge Noel L. Hillman, who also imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
The Vacation Ownership Group, a/k/a VO Group LLC, purported to offer owners of timeshares consulting services, including timeshare cancellation services. In September 2010, Reilly started working at the VO Group and was trained by VO Group managers to call using a prepared script and regularly lie to customers. Reilly would falsely state he was calling in response to a complaint they had made to timeshare developers and lenders. He gave customers the false impression that he was working for Wyndham Vacation Resorts, a developer of timeshare resorts. Reilly then would falsely represent that the VO Group could pay off the customers’ timeshares or have their timeshares cancelled. Reilly falsely told some customers that their credit would not be damaged if they stopped paying for their timeshares. Reilly gave some customers “references” who were actually VO Group employees posing as satisfied customers. After hearing Reilly’s false representations, some customers sent checks to the VO Group, including one customer who sent the VO Group a $31,385 check. Reilly admitted to causing more than $70,000 in losses.
In addition to the prison term, Judge Hillman sentenced Reilly to serve three years of supervised release and to pay $3,040,767.54 in restitution.
U.S. Attorney Fishman credited special agents from the FBI’s Atlantic City Resident Agency, under the direction of Special Agent in Charge Aaron T. Ford in Newark; and special agents from the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, under the direction of Special Agent in Charge Cheryl Garcia, New York Region, for the investigation.
Defense counsel: Gilbert J. Scutti Esq., Somerdale, New Jersey
The government is represented by Assistant U.S. Attorney R. David Walk Jr. of the U.S. Attorney’s Office Criminal Division in Camden.
14-255Newark Man Sentenced to 20 Years in Prison for Three Armed CarjackingsRead the Press Release
NEWARK, N.J. - A Newark man was sentenced today to 240 months in prison for his role in three armed carjackings that occurred in one day in Newark and Jersey City, New Jersey, U.S. Attorney Paul J. Fishman announced.
Louis Holmes, 25, previously pleaded guilty before U.S. District Judge Claire C. Cecchi to an information charging him with three counts of carjacking and one count of brandishing a firearm during the course of a violent crime. Judge Cecchi imposed the sentence today in Newark federal court.
According to documents filed in this case and in statements made in court:
Holmes admitted he participated with several other men in three carjackings that were committed in Newark and Jersey City on March 27, 2012. He said they agreed to take vehicles from their victims by force. Holmes also admitted that during the first carjacking, which occurred in Newark, he left the vehicle that he was traveling in with the other men, approached the targeted car’s driver, pointed a handgun at the driver and ordered the driver to exit the vehicle and leave the keys inside. Before driving away in the car, he robbed the driver and the passenger of their personal effects, including their cell phones.
Holmes also admitted that, in the second carjacking, which occurred in Jersey City, he again approached the car’s driver, pointed a handgun at the driver and threatened the driver by demanding his wallet and car keys. He then also pointed the handgun at the vehicle’s passenger, demanding the passenger exit the car, before driving away in the car. Holmes admitted that in the third carjacking, which was in Newark, he approached the driver of the car when the driver was outside the car, pointed a handgun at the driver, threatened the driver and demanded the car’s keys. Holmes then drove off in the third car.
In addition to the prison term, Judge Cecchi sentenced Holmes to five years of supervised release.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; the Newark Police Department, under the leadership of Director Eugene Venable; the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Carolyn A. Murray; and criminal investigators from the U.S. Attorney’s Office in Newark for the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorneys Sara F. Merin, Courtney Oliva, and Lisa M. Colone of the General Crimes Unit in Newark.
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Defense counsel: Peter Carter Esq., Assistant Federal Public Defender, Newark
National and International Leadership of MS-13 Indicted in New Jersey for Racketeering ConspiracyRead the Press Release
Gang Leaders in California and El Salvador Conspired with East Coast Members to Create Cohesive National Organization Based on Drug Trafficking, Extortion and Violence
NEWARK, N.J. – A dozen top-ranking members of the violent international street gang “Mara Salvatrucha” (MS-13) – including the California man claiming control over the gang’s United States operations – are charged by indictment with racketeering, drug trafficking and related crimes, U.S. Attorney Paul J. Fishman announced today.
Jose Juan Rodriguez-Juarez, 34, allegedly served as the leader of MS-13’s “national program.” This program, also known as the “unification of the barrio,” sought to bring all of MS-13’s local sets, or “cliques,” in the United States under a single, cohesive leadership structure, led by Rodriguez-Juarez and his deputies, including Amilcar Romero, 44, and Joel Antonio Cortez, 40.
“Members and leaders of MS-13 allegedly conspired to bring all United States cliques under a central command,” said U.S. Attorney Fishman. “According to the charges, the defendants wanted to use this new formalized structure to open new drug distribution channels facilitated by cartel alliances and bloodshed. Today’s indictment reaches gang leaders and members responsible for crime and violence in New Jersey, whether they were on the streets of Jersey City or on smuggled cell phones in a California or Central American jail.”
“Dismantling violent gangs is a continuing priority for the FBI,” Aaron T. Ford, Special Agent in Charge of the FBI, Newark Division, said. “Our efforts to address gang violence are not new, but we are working with our partners with increased manpower and increased urgency to address current circumstances. This cooperation is, and will continue to be, a critical factor for successfully defending threats that endanger the citizens of New Jersey.”
According to the indictment returned today, documents in this and related cases and statements made in court:
The goals of the national program were to increase the nationwide collection of extortion proceeds, known as “rent,” and to use these rent-collection networks to establish new drug distribution channels from California to the East Coast. Rodriguez-Juarez and other Mara Salvatrucha leaders allegedly struck a deal with the Mexican Mafia, a California prison gang, and certain Mexican drug cartels, including La Familia Michoacana, to supply methamphetamine and other drugs at cheap prices to MS-13 gang members on the East Coast, including in New Jersey.
Three MS-13 leaders in El Salvador and multiple clique leaders in New Jersey played a role in ordering – or “greenlighting” – the murder of a rival gang member in Hudson County, New Jersey, in November 2013. Law enforcement learned of the murder plot during the course of this investigation and arrested multiple conspirators before it could be completed.
All but one of the defendants are currently in law enforcement custody. Many of the gang’s top leaders conducted criminal activity while incarcerated in California, Virginia, or El Salvador -- typically by using contraband cell phones smuggled into the prison facilities. The five New Jersey-based defendants, who were charged by criminal complaint in March 2014 for the murder plot, are scheduled to make their initial appearances on the indictment tomorrow, July 18, 2014, before U.S. Magistrate Judge Madeline Cox Arleo in Newark federal court. The remaining defendants will make their initial appearances on dates to be determined.
In autumn 2013, Rodriguez-Juarez declared himself the leader of the new national program for MS-13 in the United States. He was also a made member, or “carnale,” in the Mexican Mafia, and he leveraged his status within the powerful prison gang to assert control over all MS-13 activities in the United States. Within MS-13, Rodriguez-Juarez was known by his gang moniker, “Dreamer,” but when he assumed control of the national program, he became known as “Sacerdote,” Spanish for “the priest.”
Amilcar Romero, 45, and Joel Antonio Cortez, 40, served as two of Rodriguez-Juarez’s top deputies. In autumn 2013, Rodriguez-Juarez assigned Romero to serve as the primary point-of-contact between the leadership of MS-13 in the United States and El Salvador, while Cortez assumed responsibility for recruiting MS-13 cliques on the East Coast to join the national program. Both are also alleged to have ordered acts of violence on the East Coast, including Cortez’s authorization of the November 2013 murder plot in Hudson County. Another defendant, Pedro Romero-Cruz, 28, who is incarcerated in a Virginia state prison, served as the regional leader of a program in northern Virginia and facilitated the trafficking of methamphetamine to New Jersey. Romero-Cruz also discussed efforts to expand the gang’s activity to Spain, explaining in a phone call how the expansion would be lucrative for the gang.
Carlos Sandoval-Batres, 40, currently incarcerated in a Salvadoran prison, was a top member of the gang’s leadership in El Salvador and assisted efforts to create the new “national program” in the United States. Sandoval-Batres, along with two other Salvadoran leaders, Jose Elias Garcia-Hernandez, 35, and Cristian Linares-Rodriguez, 34, also authorized the November 2013 Hudson County murder plot.
Carlos Andrew Valdez, 27, served as the leader, or “First Word,” of a northern New Jersey clique known as “Hudson Locotes Salvatrucha.” Marvin Garcia-Cruz, 31, served as the leader of another Hudson County clique, known as “Pinos Locos Salvatrucha.” They are charged along with three other members of the Hudson Locotes clique for their role in the November 2013 murder plot. Valdez and others worked with Cortez and other top gang leaders to bring all of New Jersey’s MS-13 cliques under the control of Rodriguez-Juarez’ national program. Valdez and others focused on resolving issues created when leaders of “Plainfield Locos Salvatrucha,” a Plainfield, New Jersey, clique, were arrested by federal law enforcement in autumn 2013.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Ford in Newark, with the investigation leading to the charges. The investigation involved multiple FBI Field Offices, with substantial assistance provided by the FBI Field Office in Los Angeles. U.S. Attorney Fishman also thanked the Hudson County Prosecutor’s Office, under the direction of Acting Prosecutor Gaetano T. Gregory; and the Union County Prosecutor’s Office, under the direction of Acting Prosecutor Grace Park, for their work on this case. He also acknowledged the U.S. Attorney’s Offices for the Central District of California for their assistance in the ongoing investigation.
The government is represented by Assistant U.S. Attorneys James M. Donnelly and Andrew J. Bruck of the U.S. Attorney’s Office Organized Crime/Gangs Unit in Newark.
The charges and allegations contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
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Defendants Charged, Penalties Per Count
Count
Charge
Defendants
Maximum Potential Penalty
Racketeering Conspiracy
Rodriguez-Juarez
Amilcar Romero
Cortez
Romero-Cruz
Sandoval-Batres
Valdez
Rudy GutierrezLife in prison
(Rodriguez-Juarez, Amilcar Romero, Cortez, Romero-Cruz)20 years in prison
(All others)
$250,000 fineDrug Distribution Conspiracy
Rodriguez-Juarez
Amilcar Romero
Cortez
Romero-CruzLife in prison
$10 million fineDrug Distribution
Cortez
Romero-CruzLife in prison
$10 million fineConspiracy to Commit Murder in Aid of Racketeering
Cortez
Sandoval-Batres
Garcia-Hernandez
Linares-Rodriguez
Valdez
Gutierrez
Hector Carranza-Solis
Luis Lopez-Guzman
Marvin Garcia-Cruz10 years in prison
$250,000 fineConspiracy to Possess Firearm
Garcia-Hernandez
Linares-Rodriguez
Valdez
Gutierrez
Carranza-Solis
Lopez-Guzman
Garcia-Cruz20 years in prison
$250,000 fineConspiracy to Use Interstate Facility to Commit Violent Crime
Cortez
Sandoval-Batres
Garcia-Hernandez
Linares-Rodriguez
Valdez
Gutierrez
Carranza-Solis
Lopez-Guzman
Garcia-CruzFive years in prison
$250,000 fineConspiracy to Use Interstate Facility to Distribute Proceeds of Unlawful Activity
Rodriguez-Juarez
Amilcar Romero
Cortez
Romero-Cruz
Sandoval-Batres
Valdez
Rudy GutierrezFive years in prison
$250,000 fineCharged Defendants
Last NameFirst Name
a/k/a
Age
Rodriguez-Juarez
Jose Juan
“Sacerdote”
34
Romero
Amilcar
“Chi-Chi”
45
Cortez
Joel Antonio
“Pee Wee”
40
Romero-Cruz
Pedro
“Payaso”
28
Sandoval-Batres
Carlos
“Trusty”
40
Linares-Rodriguez
Cristian
“Burro”
34
Garcia-Hernandez
Jose Elias
“Eterno”
35
Valdez
Carlos Andrew
“Catracho”
27
Carranza-Solis
Hector
“Blacky”
30
Gutierrez
Rudy
“Chiky”
22
Lopez-Guzman
a/k/a Lopez-MendezLuis
“Nino”
24
Garcia-Cruz
Marvin
“Buffalo”
31
Rodriguez-Juarez, Jose Juan et. al. Indictment
Members of Violent Bloods Street Gang Charged with Murder and Other Racketeering OffensesRead the Press Release
NEWARK, N.J. - Four alleged members of Sex Money Murder, a subset of the Bloods street gang, were indicted by a federal grand jury today on charges of murder, attempted murder, racketeering, robbery, weapons offenses and drug distribution, U.S. Attorney Paul J. Fishman announced.
Narik Wilson, a/k/a “Spaz,” 29, Emil Rutledge, a/k/a “Diddy,” 26, Laquan Reed, a/k/a “Drama,” 25, and Rajohn Wilson, a/k/a “1090,” 23, all of Newark, were charged in a 14-count superseding indictment in connection with their alleged membership in Sex Money Murder. Narik Wilson, the leader of the gang, is charged in all 14 counts, which include charges related to murder in aid of racketeering. Narik Wilson was previously charged with drug distribution and firearm possession on Oct. 7, 2011.
Rutledge is charged with 11 counts, including murder in aid of racketeering. Reed is charged with six counts, including felony murder. Rajohn Wilson is charged with three counts, which include charges related to attempted murder.
All four men are already in custody on related charges and are expected to appear in Newark federal court on a date to be determined.
“The offenses charged in today’s indictment are a checklist of the activities associated with a violent street gang that has plagued Newark for years,” U.S. Attorney Fishman said. “Illegal guns, violent assaults, murder – members of this gang allegedly used all of them to maintain control over the illicit drug trafficking that is the lifeblood of their criminal enterprise. Today’s charges call them to account for these crimes.”
“Drug dealing, illegal weapons and gang violence destroy the quality of life in our neighborhoods,” said FBI Special Agent in Charge Aaron T. Ford, Newark Division. “The charges in this indictment should reassure the residents of Newark and New Jersey that we will continue to aggressively address gang violence through increased investigative strategies and a multi-agency approach.”
According to documents filed in this case and statements made in court:
The Bloods street gang is organized into subgroups that operate in specific geographic locations. Sex Money Murder is the Bloods subgroup that operates primarily in Essex County, New Jersey. From 2007, Sex Money Murder controlled the distribution of heroin and crack cocaine in the area surrounding Martin Luther King Boulevard and Spruce Street in Newark. The gang primarily consisted of neighborhood friends and family members who joined at a young age. In addition, the gang was organized along typical Bloods governing rules, hierarchal power structures, and visible demonstrations of gang affiliations, including tattoos. The gang also stored and circulated numerous firearms from apartments located at 725 Martin Luther Blvd. and 90 Spruce St.
Under the leadership of Narik Wilson, and with the assistance of Rutledge, Reed, and Rajohn Wilson, gang members allegedly engaged in a wide range of violent criminal activity in order to deter rival gangs, secure their drug distribution business, and silence people they believed were cooperating with law enforcement. These acts included numerous murders, shootings, robberies and auto thefts.
Other members of Sex Money Murder are currently serving prison sentences in state and federal prison for gang-related crimes.
Among the charges are several attempted murders and murders including:
- Oct. 29, 2010- Rutledge and others allegedly attempted to murder a rival gang member, (described as “Victim 3” in the indictment) at Narik Wilson’s direction.
- June 16, 2011- Rutledge and others allegedly attempted to murder rival gang members, (described as “Victim 4,” “Victim 5,” “Victim 6,” and “Victim 7” in the indictment) at Narik Wilson’s direction.
- July 14, 2011- Rutledge and others allegedly murdered a rival gang member, (described as “Victim 8” in the indictment) at Narik Wilson’s direction.
- July 31, 2011- Laquan Reed and others allegedly murdered an individual (described as “Victim 9” in the indictment) while attempting to carjack the victim’s vehicle.
The counts in the Superseding Indictment carry the following maximum penalties:
Count
Offense
Defendant(s)
Maximum Penalties
Racketeering
Narik Wilson, Emil Rutledge, Laquan Reed, Rajohn Wilson
Life in prison (death eligible); $250,000 fine
2
Racketeering conspiracy
Narik Wilson, Emil Rutledge, Laquan Reed, Rajohn Wilson
Life in prison; $250,000 fine
3
Attempted murder in aid of racketeering
Narik Wilson, Emil Rutledge
10 years in prison; $250,000 fine
4
Assault with a dangerous weapon in aid of racketeering
20 years in prison; $250,000 fine
5
Use of a firearm during a violent crime
Life in prison; $250,000 fine
6
Attempted murder in aid of racketeering
10 years in prison; $250,000
7
Assault with a dangerous weapon in aid of racketeering
20 years in prison; $250,000 fine
8
Use of a firearm during a violent crime
Life in prison; $250,000 fine
9
Murder in aid of racketeering
Life in prison (death eligible); $250,000 fine
10
Use of a firearm during a violent crime
Life in prison; $250,000 fine
11
Attempted murder in aid of racketeering
Narik Wilson, Laquan Reed
10 years in prison; $250,000 fine
12
Assault with a dangerous weapon in aid of racketeering
20 years in prison; $250,000 fine
13
Use of a firearm during a violent crime
Life in prison; $250,000 fine
14
Conspiracy to use a firearm during a crime of violence or a drug trafficking crime conspiracy
Narik Wilson, Emil Rutledge, Laquan Reed, Rajohn Wilson
20 years in prison; $250,000 fine
The investigation into the criminal activities of Sex Money Murder was a combined effort by federal and local law enforcement. U.S. Attorney Fishman credited special agents of the FBI and the FBI’s Safe Streets Task Force, under the direction of Special Agent in Charge Aaron T. Ford in Newark; the Essex County Prosecutor’s Office, under the direction of Acting Essex County Prosecutor Carolyn A. Murray; the Essex County Sheriff’s Office, under the direction of Sheriff Armando V. Fontoura; and the Newark Police Department with the investigation – with the significant assistance of special agents of the Drug Enforcement Administration (DEA), under the direction of Special Agent in Charge Carl J. Kotowski; and special agents of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), under the direction of Special Agent in Charge Stephanie R. Shoemaker.
The government is represented by Assistant U.S. Attorneys Michael H. Robertson and Dara Govan of the U.S. Attorney’s Office Organized Crime/Gangs Unit in Newark.
The charges and allegations contained in the indictment are merely accusations and the defendants are considered innocent unless and until proven guilty.14-253
Wilson, Narik et. al. Superseding Indictment
Cape May County, N.J., Man Charged with Receiving Images of Child Sexual Abuse via InstagramRead the Press Release
CAMDEN, N.J. - A Cape May County, New Jersey man was arrested today by special agents U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI), on charges he received images of child sexual abuse over the Internet using his cellphone, U.S. Attorney Paul J. Fishman announced.
Jeffrey Spicer, 44, of West Wildwood, New Jersey, is charged by complaint with one count of receipt of child pornography. He made his initial appearance today before U.S. Magistrate Judge Joel Schneider in Camden federal court and was remanded without bail. A bail hearing is scheduled for Friday.
According to the complaint and statements made in court:
On March 19, 2014, law enforcement officers executed a search warrant at a home in Cape May, New Jersey, Spicer’s residence at that time. Law enforcement officers seized various forms of electronic and digital media from the residence pursuant to the warrant including Spicer’s cellphone, a thumb drive and a computer hard drive. They determined that these devices contained multiple images of child pornography.
On the receipt of child pornography count, Spicer faces a mandatory minimum term of 15 years in prison, a maximum penalty of 30 years in prison and a $250,000 fine if convicted.
U.S. Attorney Fishman credited special agents of the ICE-HIS, under the direction of Special Agent in Charge Andrew McLees; 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; the West Wildwood Police Department, under the direction of Chief Jackie Ferentz; and the N.J. Regional Computer Forensics Laboratory with the investigation leading to the charges.
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 in Camden.
The charge and allegations contained in the complaint are merely accusations, and the defendant is considered innocent unless and until proven guilty.
14-251Defense counsel: Lisa Lewis Esq., Assistant Federal Public Defender, Trenton
Spicer, Jeffrey Complaint
New York Doctor Admits Taking Bribes in Test-Referrals Scheme with New Jersey Clinical LabRead the Press Release
Twenty-ninth Defendant to Plead Guilty in Connection with Scheme
NEWARK, N.J. – A doctor with a New York practice admitted today to accepting more than $100,000 in exchange for test referrals as part of a massive bribery scheme operated by Biodiagnostic Laboratory Services LLC (BLS) of Parsippany, New Jersey, its president and numerous associates, U.S. Attorney Paul J. Fishman announced.
Peter Deplas, 47, of Glen Head, New York, pleaded guilty before U.S. District Judge Stanley R. Chesler in Newark federal court to an information charging him with one count of accepting bribes.
According to documents filed in this and other cases and statements made in court:Deplas admitted he accepted bribes through a sham lease agreement of $5,000 per month, as well as additional monthly cash payments of as much as $7,000. Over the course of 17 months, Deplas accepted approximately $120,500 in bribes in return for referring patient blood specimens to BLS, for which BLS received more than $900,000. Deplas admitted he even ordered unnecessary test for his patients in order to justify BLS bribe payments.
BLS salesman Cliff Antell negotiated the bribe arrangement with Deplas and paid him the cash, while BLS salesman Craig Nordman wrote the bribe checks pursuant to the sham lease agreement. Antell and Nordman pleaded guilty to their involvement in the scheme on June 10, 2013.
The bribery count to which Deplas pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for Oct. 29, 2014. As part of his guilty plea, Deplas agreed to forfeit $120,500, representing the bribes he received from BLS.
Including Deplas, 29 people – including 18 physicians – 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 recovered more than $7 million to date through forfeiture.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark; U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Thomas O’Donnell; IRS– Criminal Investigation, under the direction of Acting 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 leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Joseph 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 $535 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.
14-249Defense counsel: Joseph Tacopina Esq. and Chad Seigel Esq., New York
Deplas, Peter Information
Essex County, N.J., Tax Preparer Admits to Tax Fraud That Caused More Than $99,000 LossRead the Press Release
NEWARK, N.J. - A Bloomfield, New Jersey, woman who operated a tax return preparation business admitted today that she caused at least 37 fraudulent income tax returns to be filed with the IRS, causing a total tax loss of $99,864 to the United States, U.S. Attorney Paul Fishman announced.
Daidry Montanez, 41, pleaded guilty before U.S. Magistrate Judge Michael A. Hammer in Newark federal court to four counts of aiding and assisting in the filing of false federal income tax returns for tax years 2009, 2010, 2011 and 2012.
According to the information and statements made in court:
Montanez owned and operated a tax preparation business called DM Multiservices, which she ran from a storefront in Newark. On behalf of her clients, she prepared false and fraudulent individual income tax returns that contained either falsely claimed or fabricated deductions, including fictional business expenses, such as rent or lease of other business property, supplies and travel. Also included within the tax returns were purported deductions for home mortgage interest and points, state or local income tax, and unreimbursed employee expenses. Montanez used the fraudulent deductions to substantially reduce her clients’ taxable income on their individual federal income tax returns, which resulted in her clients receiving tax returns that were larger than they were due.
Montanez falsified clients’ 2009, 2010, 2011 and 2012 individual federal income tax returns. She then caused these false and fraudulent individual federal income tax returns to be filed with the IRS, resulting in a total tax loss of more than $99,864 for 37 clients.
Each of the four tax counts carries a maximum potential penalty of three years in prison and a $250,000 fine. Sentencing before U.S. District Judge Faith Hochberg is scheduled for Nov. 6, 2014.
U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen, the inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria Kelokates and special agents of the U.S. States Secret Service, under the direction of Special Agent in Charge James Mottola, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Sara F. Merin of the U.S. Attorney’s Office General Crimes Unit.
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Defense counsel: Arlindo B. Araujo Esq., Newark
Montanez, Daidry Information
Middlesex County, N.J., Woman Pleads Guilty to Sexually Exploiting A MinorRead the Press Release
TRENTON, N.J. – A Middlesex County, New Jersey, woman admitted today to sexually exploiting a minor female by coercing the girl to live stream sexually explicit acts via the Internet, U.S. Attorney Paul J. Fishman announced.
Jane Dornick, 53, of South Plainfield, New Jersey, pleaded guilty, prior to the selection of a jury, to Count One of an indictment charging her with three counts of sexual exploitation of a child. The remaining counts will be dismissed at sentencing. Dornick entered her plea before U.S. District Judge Freda L. Wolfson in Trenton federal court.
According to documents filed in this case and statements made in court:
On August 16, 2010, Dornick coerced and used “Victim 1,” a minor female, to perform sexually explicit acts and live stream them over the Internet to Michael Grennier, 51, who watched remotely via his computer in his home in South Plainfield.
The charge of sexual exploitation of a child is punishable by a mandatory minimum sentence of 15 years in prison and a maximum penalty of 30 years in prison and a $250,000 fine. Sentencing is scheduled for Nov. 7, 2014.
Grennier pleaded guilty before Judge Wolfson to a separate charge of the sexual exploitation of a minor on Dec. 16, 2013, and is scheduled to be sentenced on August 20, 2014.
U.S. Attorney Fishman credited special agents of the FBI’s Child Exploitation Task Force, under the direction of Special Agent in Charge Aaron T. Ford, for the investigation leading to today’s plea. Fishman also thanked the South Plainfield Borough Police Department, under the direction of Chief of Police James Parker, and the Middlesex County Prosecutor’s Office, under the direction of Prosecutor Andrew Carey, for their assistance with the investigation.
The government is represented by Assistant U.S. Attorneys Fabiana Pierre-Louis and Harvey Bartle, Attorney-in-Charge of the U.S. Attorney’s Trenton Office.
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Defense counsel: Bruce Throckmorton Esq., Trenton
Dornick, Jane Indictment
Essex County, N.J., Man Convicted of Brandishing Weapon During CarjackingRead the Press Release
NEWARK, N.J. – An Essex County, New Jersey man who previously admitted his role in an armed carjacking in Little Falls, New Jersey, was convicted today for brandishing a shotgun while committing that crime, U.S. Attorney Paul J. Fishman announced.
Ivan Lee, 26, of Newark, was found guilty of brandishing a firearm in furtherance of a crime of violence following a one-week trial before U.S. District Judge Susan D. Wigenton in Newark federal court. The jury deliberated three hours before returning its verdict.
According to documents in this case and the evidence at trial:
Oct. 30, 2011, Lee and Hanza Darby, 25, of Newark, were in the Little Falls area when they spotted a parked 2008 BMW 335 with passengers inside. Darby and Lee – who brandished a shotgun – approached the car and ordered the occupants out of the vehicle at gunpoint. Darby and Lee then took the car and fled the area. Law enforcement officers recovered the car in Newark on Nov. 7, 2011. Darby was standing next to it at the time. Lee previously pleaded guilty to the carjacking count and Darby has previously pleaded guilty carjacking and brandishing a weapon in furtherance of a crime of violence. Darby is awaiting sentencing.
The carjacking charge carries a maximum potential penalty of 15 years in prison. The firearm charge 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 of the two counts also carries a maximum $250,000 fine. Sentencing for Lee is scheduled for Oct. 21, 2014.
U.S. Attorney Fishman credited special agents with the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, officers of the Little Falls Police Department, under the direction of Chief John Dmuchowski; the N.J. State Police, under the direction of Col. Rick Fuentes; and the Passaic County Prosecutor’s Office, under the direction of Prosecutor Camelia M. Valdes, with the investigation leading to today’s conviction.
The government is represented by Assistant U.S. Attorney Cari Fais and Special Assistant U.S. Attorney Thomas S. Kearney of the U.S. Attorney’s Office Criminal Division in Newark.
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Defense counsel: Mark Berman Esq., of River Edge, New JerseySuffolk County, N.Y. Man Sentenced to 42 Months in Prison for Stealing Oxycodone from Manufacturing FacilityRead the Press Release
NEWARK, N.J. – A Suffolk County, New York, man who worked at a facility in Elizabeth, New Jersey, that manufactured oxycodone was sentenced today to 42 months in prison for stealing more than 70,000 pills from the facility, U.S. Attorney Paul J. Fishman announced.
Edwin Hernandez, 49, of North Babylon, New York, previously pleaded guilty before U.S. District Judge Dennis M. Cavanaugh to distribution and possession with intent to distribute oxycodone. Judge McNulty imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Hernandez was previously employed at one of the largest manufacturers of oxycodone in the United States at the company’s Elizabeth facility. On Nov. 21, 2012, he was seen by another employee scooping 30 mg oxycodone pills into a quart-sized plastic bag. A subsequent search of Hernandez’ locker by security revealed a backpack containing 8,591 30 mg oxycodone pills. Law enforcement eventually recovered an additional 61,535 pills from Hernandez’ residence. The street value of the stolen pills is $1.4 million to $2.1 million.
Oxycodone, also known as “oxy,” is a narcotic analgesic or painkiller and is classified as a Schedule II controlled substance. Demand for oxycodone-based prescription pain medication has grown to epidemic proportions in the United States and dealers profit by selling such medication on the street. Oxycodone-based Schedule II drugs have a high potential for abuse, and users will often crush and snort the pills or dissolve and inject them to get an immediate high. This abuse can lead to addiction, overdose and sometimes death.
In addition to the prison term, Judge McNulty sentenced Hernandez to three years of supervised release and ordered forfeiture of $47,000.
U.S. Attorney Fishman credited the Drug Enforcement Administration’s New Jersey Division, under the direction of Special Agent in Charge Carl J. Kotowski, for the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney J. Jamari Buxton of the U.S. Attorney’s Office General Crimes Unit in Newark.
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Defense counsel: Howard Leader Esq., New York
Head Pharmacist of West Orange Pharmacy Sentenced to 37 Months in Prison for Selling Oxycodone Without PrescriptionsRead the Press Release
NEWARK, N.J. – The former pharmacist in charge of West Orange Pharmacy was sentenced today to 37 months in prison for illegally distributing hundreds of tablets of oxycontin in exchange for thousands of dollars in cash, U.S. Attorney Paul J. Fishman announced.
Leonard “Lenny” Stefanelli, 49, of East Hanover, New Jersey, previously pleaded guilty to an information charging him with illegally dispensing oxycodone. Stefanelli also admitted to conspiring with brothers Robert and William Carlucci, both 70, of Florham Park, New Jersey, to submit fraudulent bills to health care benefit providers, including Medicare and Medicaid. U.S. District Judge Faith S. Hochberg imposed the sentence today in Newark federal court.
Stefanelli also previously agreed forfeit $1.5 million, consisting of illegal profits obtained from his illegal sales of oxycodone and his submission of fraudulent bills to health care benefit providers.
According to documents filed in this and related cases and statements made in court:
Oxycodone, the active ingredient in brand name pills such as Oxycontin, is a Schedule II controlled substance B meaning that it has a high potential for abuse, a currently accepted medical use with severe restrictions, and abuse of the drug may lead to severe psychological or physical dependence. A pharmacist can only dispense a Schedule II controlled substance when presented with a written prescription from a doctor.
On at least six separate occasions from Feb. 1, 2012, to August 6, 2012, Stefanelli sold hundreds of tablets of Oxycontin, without a prescription, in exchange for cash. Each sale took place inside West Orange Pharmacy. On Feb. 8, 2012, Stefanelli sold one bottle of 100-count Oxycontin 30-mg tablets and one bottle of 100-count Oxycontin 15-mg tablets for $1,800.
Between 1992 and October 2012, Stefanelli conspired with Robert and William Carlucci to submit fraudulent bills to health care benefit providers, including Medicaid and Medicare, reaping at least $921,634 from his scheme. Robert and William Carlucci pleaded guilty on Aug. 6, 2013, to committing health care fraud by participating in a variety of schemes designed to cheat customers and bilk insurance companies out of millions of dollars. On March 13, 2014, the Carluccis were each sentenced to 42 months in prison.
In addition to the prison term, Judge Hochberg sentenced Stefanelli to three years of supervised release, fined him $1 million and permanently barred him from working in the pharmaceutical industry.
U.S. Attorney Fishman credited special agents of the DEA, under the direction of Special Agent in Charge Carl J. Kotowski; and special agents of the Food & Drug Administration’s Office of Criminal Investigations, under the direction of Mark Dragonetti, with the investigation leading to today’s sentencing. He also thanked the Elizabeth, Clinton, Toms River, West Orange and Marlboro police departments, along with the Essex County Sheriff’s Department, for their work on this case.
The government is represented by Assistant U.S. Attorney Rahul Agarwal of the U.S. Attorney’s Office Criminal Division in Newark.
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Defense counsel: Carlos Ortiz Esq., Morristown, New Jersey
Former Wells Fargo Loan Officer Sentenced to Two Years in Prison for Role in $40.8 Million Mortgage Fraud SchemeRead the Press Release
CAMDEN, N.J. – An Ocean County, New Jersey, man who used his position as a loan officer of Wells Fargo Home Mortgage Inc., to get the company to release more than $4.6 million on fraudulent mortgage loan applications was sentenced today to 24 months in prison for his role in a $40.8 million mortgage fraud conspiracy, U.S. Attorney Paul J. Fishman announced.
Robert Serao, 48, of Bayville, New Jersey, previously pleaded guilty following his indictment to one count of conspiracy to commit wire fraud. He was the 10th defendant to plead guilty in the case. U.S. District Judge Joseph E. Irenas imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
While working in various positions – including branch manager, sales manager and loan officer – within Wells Fargo Home Mortgage Inc., a division of Wells Fargo Bank N.A., Serao entered into a conspiracy to submit mortgage loans to his employer for financially unqualified “straw buyers” based upon false and fraudulent information contained in Uniform Residential Loan Applications, HUD-1 Forms, tax returns and other documents.
Serao’s conspirators caused fraudulent mortgage loan applications and supporting documents to be submitted to Wells Fargo and numerous other mortgage lenders in various straw buyers’ names, attributing to them inflated income and assets in order to induce the mortgage lenders to approve the loans. Once the loans were approved and the mortgage lenders sent the loan proceeds in connection with the real estate closings on the properties, Serao’s conspirators took a portion of the proceeds from the fraudulent mortgage loans. Wells Fargo Home Mortgage released more than $4.6 million based on fraudulent mortgage loan applications. Serao profited from his role in the conspiracy by increased commissions on the mortgage funds.
In addition to the prison term, Judge Irenas sentenced Serao to three years of supervised release and ordered him to pay restitution of $1,520,606.
U.S. Attorney Fishman credited special agents of the FBI’s Atlantic City Resident Agency, under the direction of Special Agent in Charge Aaron T. Ford in Newark; and IRS B Criminal Investigation in Mays Landing, under the direction of Acting Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Diana Carrig of the U.S. Attorney’s Office in Camden.
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Defense counsel: Robert A. Weir Jr. Esq. and Edward J. Plaza Esq., Red Bank, New Jersey
Two Men Involved in Atlantic City Kidnapping and Murder Case Sentenced to PrisonRead the Press Release
CAMDEN, N.J. – Two Atlantic City, N.J., residents were sentenced to prison today for their roles in the kidnapping and death of a 20-year-old Atlantic City woman, U.S. Attorney Paul J. Fishman announced.
Aziz Sanders, 21, was sentenced to 30 years in prison and DeShawn Hicks, 22, was sentenced to 20 years in prison. Each previously pleaded guilty before U.S. District Judge Joseph H. Rodriguez to separate, one-count informations charging them with use of a firearm, and aiding and abetting the use of a firearm, in furtherance of a crime of violence – specifically, the Hobbs Act robbery and kidnapping that resulted in the death of Nadirah Ruffin, whose body was found in Philadelphia in April 2011. Judge Rodriguez imposed the sentences today in Camden federal court.Henry Ruffin (no relation to Nadirah Ruffin), 43, previously pleaded guilty before Judge Rodriguez to an information charging him with one count of misprision of a felony by concealing what he knew about several people allegedly involved in the home invasion and kidnapping of Nadirah Ruffin.
According to documents filed in this case and statements made in court:On March 23, 2011, D.H. met with Isiah Ruffin (no relation to the victim) in the courtyard area of a housing complex on North Maryland Avenue, a section of Atlantic City known as “Back Maryland,” to talk to Isiah Ruffin about a dispute between Isiah Ruffin and Victim One. After a brief conversation, D.H. viciously assaulted Isiah Ruffin, knocking Isiah Ruffin unconscious and robbing him of cash. When Isiah Ruffin regained consciousness, D.H. assaulted Isiah Ruffin again. As a result of the assault, Isiah Ruffin was treated at the Atlantic City Medical Center for a possible concussion and facial lacerations. After Isiah Ruffin was released from the hospital, Shamerria Smith, 27, and Sanders visited Isiah Ruffin, during which time Isiah Ruffin told Smith that D.H. had assaulted him.
To retaliate, Smith planned to enter Victim One’s house and assault and rob Victim One of illegal drugs and money. Sanders agreed to help Smith execute her plan and recruited Hicks to participate. Smith supplied the gun, duct-tape and handcuffs.
On March 26, 2011, Smith, Sanders and Hicks entered Victim One’s house and duct-taped Victim One and four other victims, including Nadirah Ruffin, who were present. While in the house, Sanders and Hicks took money from Victim One, some of which Victim One had earned from selling illegal drugs. They took money from another victim, as well as marijuana that the victim was planning to sell. Sanders and Hicks admitted to taking more than $500 dollars and 50 bags of marijuana from the house.
During the robbery, Nadirah Ruffin recognized Smith’s voice. Smith ordered Sanders to punch Nadirah Ruffin. After Sanders hit Nadirah Ruffin, Smith punched her because she did not think Sanders had hit her hard enough. As the defendants were leaving the residence, Smith told Sanders and Hicks to take Nadirah Ruffin from the residence. Smith, Sanders and Hicks then placed Nadirah Ruffin into a green van. They drove to the Clementon area and eventually to Philadelphia. Smith said that because she was a mother she could not kill Nadirah Ruffin. Smith placed the gun near Sanders and told him that they were not leaving until someone else killed Nadirah Ruffin. Sanders and Hicks took Nadirah Ruffin to the banks of the Schuylkill River, where Sanders shot her in the head, killing her. Her body was dumped in the river.
On June 17, 2014, Smith was sentenced to 35 years in prison for her role in the kidnapping and death of Nadirah Ruffin.
In addition to the prison terms, Judge Rodriguez sentenced Hicks and Sanders to five years each of supervised release and ordered them each to pay $1.5 million in restitution.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; the Atlantic County Prosecutor’s Office and the Atlantic City Police Department, for the investigation leading to the sentencings.
The government is represented by Assistant U.S. Attorneys Jason M. Richardson and Matthew T. Smith of the U.S. Attorney’s Office Criminal Division in Camden, assisted by Assistant U.S. Attorney David Feder of the U.S. Attorney’s Office Appeals Division in Newark, and Mark Coyne, Chief of the Appeals Division.
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Defense counsel:
Sanders: Edward Borden Esq. and Carl J. Herman Esq., Cherry Hill, N.J.
Hicks: Michael Huff Esq. and David Glazer Esq.. Livingston, N.J.Morris County, N.J., Man Admits Defrauding Investers of $500,000 Through Phony Investment SchemeRead the Press Release
NEWARK, N.J. – A Morris County, N.J., man today admitted he fraudulently obtained $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, 77, of Mountain Lakes, N.J., pleaded guilty before U.S. District Judge Esther Salas in Newark federal court to an information charging him with one count of wire fraud.
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.
The wire fraud charge carries a maximum potential penalty of 20 years in prison and a maximum fine of $250,000. Sentencing is scheduled for Oct. 14, 2014.
U.S. Attorney Fishman credited special agents from the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, for the investigation leading to today’s plea.
The government is represented by U.S. Attorney Lorraine S. Gerson of the Economic Crimes Unit in Newark.
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Defense counsel: K. Anthony Thomas Esq., Assistant Federal Public Defender, Newark
Lareau, Peter Information
Owner of N.J. Accounting Business Charged with Nearly $1 Million Fraud on Her Clients and the U.S. GovernmentRead the Press Release
CAMDEN, N.J. – An accountant from Toms River, N.J., was arrested today by special agents of IRS – Criminal Investigation and the Social Security Administration, Office of the Inspector General (SSA OIG), on charges she allegedly stole $905,000 from client tax refunds and social security benefits, U.S. Attorney Paul J. Fishman announced.
Doreen Gentile, 59, was indicted by a grand jury, charged with 14 counts of mail fraud, nine counts of forging endorsements on treasury checks of the United States, two counts of aggravated identity theft and two counts of filing false income tax returns. Gentile is scheduled to make her initial appearance this afternoon before Magistrate Judge Ann Marie Donio in Camden federal court.
According to the indictment unsealed today:
Gentile, owned and operated Doreen A. Gentile & Associates, LLC (“DAG & Associates”), an accounting practice based in Toms River. Gentile maintained clients throughout central and southern New Jersey. In addition to preparing federal and state income tax returns, she also managed property for clients in Salem County.
As part of her scheme, Gentile would show her clients a tax return that indicated that they had no tax or refund due, owed a minimal amount of tax (generally under $40) or were due a refund that was far less then what they were entitled. Gentile then prepared a second set of tax returns, signed without her clients’ permission, that she submitted to the IRS for the full tax refund. Based on the second set of returns, the IRS or the New Jersey issued tax refund checks care of DAG & Associates and mailed them to the DAG & Associates post office box in Toms River. Gentile then deposited the tax refund checks into the DAG & Associates bank account without her clients’ permission.
Gentile also directed clients to make payments to the IRS to pay for various tax liabilities. After the payments were made, Gentile, without the victims’ knowledge, applied for refunds and had the checks mailed to her. Once she received the refund checks she forged the victims’ signatures and deposited the refunds into her account.
In addition, when one of her clients died in September 2005, Gentile did not inform the SSA. Instead, Gentile allowed the SSA to continue sending retirement benefits, which she accessed through the deceased victim’s bank account and used for her personal expenses at clothing and jewelry stores.
On her personal individual tax return, Gentile failed to report the income generated by her theft of her clients’ refund checks and the money she embezzled from the deceased victim’s estate.
The 14 counts of mail fraud alleged in the indictment each carry a maximum potential penalty of 20 years in prison and a $250,000 fine. The nine counts of forging endorsements on treasury checks of the United States and one count of theft of government funds each carry a maximum potential penalty of 10 years in prison and a $250,000 fine. The two counts of filing false income tax returns each carry a maximum potential penalty of three years in prison and a $100,000 fine. The two counts of aggravated identity theft each carry a maximum potential consecutive sentence of two years in prison and a $250,000 fine.
U.S. Attorney Fishman credited special agents of IRS – Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen, and special agents of SSA OIG under the direction of Special Agent in Charge Edward J. Ryan, with the investigation.
The government is represented by Assistant U.S. Attorney Jason M. Richardson of the U.S. Attorney=s Office Criminal Division in Camden.
The charge and allegations contained in the indictment are merely accusations, and the defendant is considered innocent unless and until proven guilty.14-239
Defense counsel: Robert Weir Esq., Red Bank, N.J.
Gentile, Doreen Indictment
Former N.J. Lawyer Admits $40.8 Million Mortgage Fraud SchemeRead the Press Release
CAMDEN, N.J. – A former N.J. lawyer today admitted he conspired to participate in a scheme that caused lenders to release $40.8 million based on fraudulent mortgage loan applications and conspired to launder the proceeds of the fraud, U.S. Attorney Paul J. Fishman announced.
Joseph W. Witkowski, 68, of Flemington, N.J., pleaded guilty before U.S. District Judge Joseph E. Irenas in Camden federal court to an indictment charging him with one count each of conspiracy to commit wire fraud and conspiracy to commit money laundering. Witkowski, a former attorney, was released on bail.
According to documents filed in this case and statements made in court:
Witkowski and his conspirators located oceanfront condominiums overbuilt by financially distressed developers in Wildwood Crest, N.,J.; premier real estate in vacation destinations in Georgia and South Carolina; and properties in New Jersey owned by financially distressed homeowners facing foreclosure. They then recruited “straw buyers” – people with good credit scores but lacking the financial resources to qualify for mortgage loans – to purchase those properties.
Witkowski and his conspirators created false documents, including fake W-2 forms, income tax returns, investment statements, and rental agreements, to make the straw buyers appear more creditworthy than they actually were. They also established numerous telephone lines for companies owned by some of the conspirators so that when a lender contacted the telephone number, the conspirators could falsely verify that a straw buyer was employed by the company listed on his or her fraudulent loan application.
Witkowski also caused fraudulent mortgage loan applications in the name of the straw buyers and supporting documents, which attributed to the straw buyers inflated income and assets, to be submitted to mortgage lenders. Once the loans were approved and the mortgage lenders sent the loan proceeds in connection with real estate closings on the properties, Witkowski and his conspirators had some of the funds wired or checks deposited into various accounts that he and his conspirators controlled.
To date, 10 of Witkowski’s conspirators have pleaded guilty to participating in this mortgage fraud conspiracy, including Charles Harvath, Stephen F. Corba Jr., John Siuszko, Michael Williams, William Brown, Mark Kreischer, Crystal Brame, Aku I. Muhammad, George Lachenmayr Jr. and Robert Serao.
The wire fraud conspiracy charge to which Witkowski pleaded guilty carries a maximum potential penalty of 30 years in prison and a $1 million fine. The money laundering conspiracy charge carries a maximum potential penalty of 10 years in prison and a $250,000 fine. Witkowski has agreed to forfeit $2,412,899, representing the proceeds of the fraud. Sentencing is scheduled for Nov. 14, 2014.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; and special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Diana Carrig of the U.S. Attorney’s Office in Camden.
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Defense counsel: Maggie Moy Esq., Assistant Federal Public Defender, Camden
Witkowski, Joseph et. al. Indictment
Cedar Grove, N.J. Doctor Sentenced to Two Years in Prison for Accepting Bribes for Test Referrals to Clinical LaboratoryRead the Press Release
NEWARK, N.J. – A Cedar Grove, N.J., doctor was sentenced today to 24 months in prison for accepting tens of thousands of dollars in bribes from Parsippany, N.J.,-based Biodiagnostic Laboratory Services LLC (BLS) as part of a long-running scheme operated by the lab, its president, and numerous associates, U.S. Attorney Paul J. Fishman announced.
Dennis Aponte, 46, previously pleaded guilty U.S. District Judge Stanley R. Chesler to violating the Federal Travel Act. Judge Chesler imposed Aponte’s sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
On April 9, 2013, federal agents arrested BLS president and part owner, David Nicoll, 39, of Mountain Lakes, N.J.; Scott Nicoll, 32, of Wayne, N.J., a senior BLS employee and David Nicoll’s brother; and Craig Nordman, 34, of Whippany, N.J., a BLS employee and the CEO of Advantech Sales LLC – an entity used by BLS to make illegal payments. Authorities also arrested New Jersey physician Frank Santangelo, 43, of Boonton, N.J.
On June 10, 2013, David Nicoll, Scott Nicoll, Nordman, and four other associates of BLS pleaded guilty to informations charging them with one count of conspiracy to violate the Anti-Kickback Statute and the Federal Travel Act and one count of money laundering. On July 24, 2013, Santangelo pleaded guilty to an information charging him with violating the Travel Act, money laundering and failing to file tax returns. The sentences for the BLS employees and Santangelo are pending.
Aponte admitted that he and David Nicoll agreed that BLS would pay Aponte bribes to refer to BLS blood specimens from the patients of his West New York, N.J., medical practice. From October 2012 to March 2013, Nordman, acting at David Nicoll’s direction, paid Aponte approximately $3,000 per month in cash in return for blood specimens referred to BLS. The lab made more than $175,000 through testing on blood specimens referred by Aponte.
In addition to the prison term, Judge Chesler sentenced Aponte to one year of supervised release, fined him $50,000 and ordered forfeiture of $235,000.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Tom O’Donnell; IRS–Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen, and the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, with the ongoing investigation leading to today’s sentencing.
The government is represented by Senior Litigation Counsel Andrew Leven, Assistant U.S. Attorney Joseph Minish, and Jacob T. Elberg, Chief of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark, as well as Assistant U.S. Attorney Barbara Ward of the office’s Asset Forfeiture and Money Laundering Unit.
U.S. Attorney 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 $535 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.
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Defense counsel: John Vazquez Esq. & Michael Critchley Esq., Roseland, N.J.
Member and Associate of Lucchese Organized Crime Family Convicted of Racketeering and Other CrimesRead the Press Release
Attorney and Company CEO also Convicted in Illegal Takeover and Looting
of Publicly Traded CompanyCAMDEN, N.J. – A member and an associate of the Lucchese organized crime family and two Texas brothers were convicted today of racketeering and other charges after a six-month trial, U.S. Attorney Paul J. Fishman for the District of New Jersey and Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division announced.
Nicodemo S. Scarfo, 49, of Galloway, N.J., a member of the Lucchese organized crime family of La Cosa Nostra (LCN) and Salvatore Pelullo, 47, of Philadelphia, an associate of the Lucchese and Philadelphia LCN families, were convicted of all the counts against them, including racketeering conspiracy and related offenses, including securities fraud, wire fraud, mail fraud, bank fraud, extortion, money laundering and obstruction of justice. Two other defendants, William and John Maxwell, were also convicted. Co-defendants David Adler, Gary McCarthy and Donald Manno were acquitted on all counts.
“Today, four people stand convicted for giving new meaning to ‘corporate takeover’ – looting a publicly traded company to benefit their criminal enterprise,” U.S. Attorney Fishman said. “The defendants stole more than $12 million from shareholders through rampant self-dealing, fraudulent SEC filings and intimidation. The public should not have to worry that the interests of shareholders are being subverted to benefit organized crime or for other corrupt ends.”
“Nicodemo Scarfo, Salvatore Pellulo and their cohorts used threats of physical and economic harm to take over a publicly traded financial firm, then callously and systematically looted the company out of millions of dollars to buy luxury items for themselves,” Assistant Attorney General Caldwell said. “As a result of today’s guilty verdict, this mafia member and his conspirators now face substantial prison sentences.”
The jury deliberated two weeks before delivering its verdicts following a six-month trial before U.S. District Judge Robert B. Kugler in Camden federal court. The defendants were charged in an indictment returned in 2011 by a federal grand jury in Camden. It named Nicodemo D. Scarfo (Scarfo Sr.) – Nicodemo S. Scarfo’s father and the imprisoned former boss of the Philadelphia LCN family – and Vittorio Amuso, the imprisoned boss of the Lucchese family, as conspirators.
Five other defendants – Cory Leshner, Howard Drossner, John Parisi, Todd Stark, and Scarfo’s wife, Lisa Murray-Scarfo – have previously pleaded guilty to various charges related to their roles in the criminal scheme.
According to documents filed in this case and the evidence at trial:
Scarfo is a made member of the Lucchese family, having become a member after an attempt on his life in 1989 following an internal struggle for control of the Philadelphia family. In the mid-1990s, while Scarfo Sr. and Amuso were in federal prison in Atlanta, Amuso arranged for Scarfo to become a member of the Lucchese family as a favor to Scarfo Sr. As a member of the Lucchese family, Scarfo was required to earn money and participate in the affairs of the Lucchese family.
In April 2007, Scarfo, Pelullo and others devised a scheme to take over FirstPlus Financial Group Inc. (FPFG), a publicly held company in Texas. Scarfo and Pelullo used threats of economic harm to intimidate and remove the prior management and board of directors of replaced those officers with individuals beholden to Scarfo and Pelullo, including William Maxwell, an attorney from Houston, Texas, and his brother, John Maxwell, of Irving, Texas, who acted as the company’s CEO.
Once the takeover was completed, the figurehead board named William Maxwell as “special counsel” to FPFG, a position that he used to funnel $12 million to himself, Scarfo and Pelullo through fraudulent legal services and consulting agreements. The agreements, as well as FPFG’s fraudulent acquisitions of companies controlled by Scarfo and Pelullo, were designed to mask the true identity and nature of the control exerted over FPFG and to conceal the source of the money fraudulently conveyed to Scarfo and Pelullo.In a telephone call intercepted by law enforcement, Pelullo called Scarfo to tell him about the sudden death of a former FPFG executive. This former executive had provided information to Pelullo and Maxwell that they used to extort control of FPFG. At the time of his death, he was a member of FPFG’s “compliance team.” Scarfo and Pelullo expressed relief regarding his death. After laughing about how he was “crushed” that “the rat is dead,” Pelullo acknowledged that the executive was “the only connection, the only tie to anything.” Scarfo replied: “Oh boy. Yeah, Sal, you wanna know something though? That’s one that I know you can’t take credit for . . . [laughter] . . . and that’s the natural best thing. You know what I mean? That is so like Enron-ish. You know what I mean? Kenneth Lay, he bailed out and took a heart attack.”
Scarfo and Pelullo used their illicit gains to fund extravagant purchases, including an $850,000 yacht for both defendants, a luxury home for Scarfo, a Bentley automobile for Pelullo, and thousands of dollars in jewelry for Scarfo’s wife. As a direct result of the enterprise’s criminal activity, FPFG and its shareholders suffered a loss of at least $12 million.
The conspiracy to commit bank fraud count carries a maximum potential penalty of 30 years in prison and a $1 million fine; the RICO conspiracy, wire fraud conspiracy, wire fraud, conspiracy to obstruct justice counts each carry a maximum potential penalty of 20 years in prison and a $250,000 fine; the conspiracy to commit money laundering and felon in possession of a weapon counts each carry a maximum potential penalty of 10 years in prison and a $250,000 fine; the securities fraud conspiracy, conspiracy to make false statements in a loan application and conspiracy to transfer firearms to a prohibited person counts each carry a maximum potential penalty of five years in prison and a $250,000 fine.Sentencing for Scarfo is scheduled for Oct. 22, 2014; for Pelullo, Oct. 21, 2014; and for both Maxwell brothers, Oct. 23, 2014.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark; the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, under the direction of Special Agent in Charge Cheryl Garcia, New York Region; and the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Robin Shoemaker in Newark. He also thanked the FBI in Philadelphia, under the direction of Special Agent in Charge Edward J. Hanko, and the U.S. Securities and Exchange Commission for their roles in the investigation.
The government is represented by Assistant U.S. Attorney Steven D’Aguanno and Howard Wiener of the District of New Jersey’s Organized Crime/Gangs Unit and Trial Attorney Adam L. Small of the Criminal Division’s Organized Crime and Gang Section.
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Defense counsel:
Scarfo: Michael E. Riley Esq., Mount Holly, N.J.
Pelullo: J. Michael Farrell Esq., Wenonah, N.J.
William Maxwell: Michael N. Huff Esq., Philadelphia
John Maxwell: Mark W. Catanzaro Esq., Mount Holly
David Adler: Barry I. Gross Esq., Philadelphia
Gary McCarthy: Yune T. Do Esq., Philadelphia
Donald Manno: Donald Francis Manno Esq., Cherry Hill, N.J.Essex County, N.J., Man Charged with Armed Robbery of Irvington BankRead the Press Release
NEWARK, N.J. – An Essex County, N.J., man made his initial court appearance today on charges of bank robbery in connection with an attempt to rob a bank in Irvington, N.J., U.S. Attorney Paul J. Fishman announced.
Karim Brunson, 24, of Newark, was charged by complaint with one count of bank robbery and one count of possession of a firearm during the commission of a crime of violence. He made his initial court appearance today before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court.
According to documents filed in this case and statements made in court:
Brunson allegedly entered the front door of the Investors Savings Bank in Irvington at 11:30 a.m. on June 28, 2014, with a dark-colored mask over his face. Brunson pulled out a loaded .357-caliber revolver handgun from his waistband and pointed it into the lobby. An off-duty Irvington Police lieutenant was in uniform and working inside the bank as a security guard. As Brunson entered the lobby, he pointed the handgun at the officer’s head and threw a plastic shopping bag toward one of the bank tellers. Brunson then yelled for the teller to “Put the money in the bag.”
When Brunson looked away momentarily, the off-duty police officer grabbed Brunson’s hand and the gun and fought with Brunson on the floor of the bank lobby. Another bank employee and a second off-duty police officer arrived to help the Irvington Police lieutenant subdue Brunson.
The bank robbery charge carries a maximum potential penalty of 20 years in prison. The weapons charge carries a mandatory seven years in prison to be served consecutively to his sentence on the bank robbery.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, and officers of the Irvington Police Department, under the direction of Police Director Joseph Santiago, with the ongoing investigation that led to the charges.
The government is represented by Assistant U.S. Attorney James Donnelly of the Criminal Division in Newark.
The charges and allegations contained in the complaint are merely accusations and the defendant is presumed innocent unless and until proven guilty.
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Defense counsel: Linda Foster Esq., Assistant Federal Public Defender, Newark
Brunson, Karim Complaint
South Carolina Man Charged with Tampering with Witnesses in Federal TrialRead the Press Release
CAMDEN, N.J. - A South Carolina man was arrested today and charged with tampering with witnesses in a federal criminal trial that concluded last September, U.S. Attorney Paul J. Fishman announced.
Dennis Nadeau, 53, of Myrtle Beach, S.C., was arrested at his home this morning by agents of the FBI and charged by a complaint with misleading conduct with intent to influence the testimony of four actual and potential witnesses in the trial of the U.S. v. Adam Lacerda et al. Nadeau will have an initial appearance before U.S. Magistrate Judge Karen M. Williams in Camden federal court at a later date.
According to documents filed in this case and in the prior criminal case:
From 2010 through 2013, Nadeau worked at the New Jersey-based Vacation Ownership Group LLC and its successor, VO Financial. In 2013, 13 former VO Group employees pleaded guilty to conspiring to defraud timeshare owners. Four other VO Group employees, including VO Group President Adam Lacerda and his wife, Ashley Lacerda, were convicted by a jury of conspiracy and related charges after a seven-week trial that concluded last September. The Lacerdas have been in custody since the trial and all defendants are awaiting sentencing.
Shortly before the start of last year’s trial, Ashley Lacerda allegedly directed Nadeau to call potential trial witnesses and try to convince them that they had not been defrauded. Nadeau called several individuals, made numerous false statements about their dealings with VO, and tried to get them to agree with the false statements. Unbeknownst to three of the witnesses, Nadeau was recording the calls.
The witness tampering count with which Nadeau is charged carries a maximum penalty of 20 years in prison and a fine of the greater of $250,000 or twice the gain or loss caused by the offense.
U.S. Attorney Fishman credited special agents of the FBI’s Atlantic City Resident Agency, under the direction of Special Agent in Charge Aaron T. Ford, with the ongoing investigation leading to today’s charges.
The charges and allegations in the complaint are merely accusations and the defendant is presumed innocent unless and until proven guilty.
The government is represented by Assistant U.S. Attorney R. David Walk Jr. of the U.S. Attorney’s Office in Camden.
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Nadeau, Dennis Complaint
Warren County, N.J., Man Sentenced to 15 Years in Prison for Distributing Images of Child Sexual Abuse over the InternetRead the Press Release
NEWARK, N.J. – A registered sex offender who was formerly employed at a law office in Paterson, N.J., was sentenced today to 180 months in prison for distributing images of child sexual abuse over the Internet, U.S. Attorney Paul J. Fishman announced.
Kevin Rease, 34, of Hackettstown, N.J., previously pleaded guilty to one count of an indictment charging him with distributing images of child pornography. U.S. District Judge Claire C. Cecchi imposed the sentence today in Newark federal court.
According to documents filed in the case and statements in court:
Rease admitted that on Feb. 12, 2013, he made images and videos of child sexual abuse stored on his work computer available for others to download via an online peer-to-peer file sharing network. On that date, an undercover law enforcement agent successfully downloaded videos of child sexual abuse from Rease through the network.
In addition to the prison term, Judge Cecchi sentenced Rease to a lifetime of supervised release. In sentencing Rease, Judge Cecchi cited the defendant’s previous child exploitation convictions as a reason for the lengthy term.
U.S. Attorney Fishman credited special agents of the FBI’s Child Exploitation Task Force, under the direction of Special Agent in Charge Aaron T. Ford in Newark, and the New Jersey Regional Computer Forensics Laboratory with the investigation.
The government is represented by Assistant U.S. Attorney Danielle Alfonzo Walsman of the U.S. Attorney’s Office Criminal Division in Newark.
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Defense counsel: William B. Ware Esq., Chester, N.J.Monmouth County, N.J., Doctor Indicted on Oxycodone Distribution Conspiracy, Money Laundering and Tax ChargesRead the Press Release
TRENTON, N.J. – A Monmouth County, N.J., doctor who allegedly wrote illegal prescriptions for oxycodone was indicted on charges that he participated in a conspiracy to illegally distribute the medication, laundered money and failed to pay taxes, U.S. Attorney Paul J. Fishman announced.
Dr. Paul DiLorenzo, 60, of Ocean Township, N.J., is charged in a superseding indictment, returned today by a federal grand jury, with one count of conspiracy to distribute oxycodone, one count of structuring financial transactions, one count of conspiracy to launder money and eight counts of failing to collect and pay payroll taxes.
According to documents filed in this case:
Oxycodone, the active ingredient in brand name pills such as Oxycontin, Roxicodone and Percocet, is a Schedule II controlled substance, meaning that it has a high potential for abuse, is only currently accepted in medical use applications with severe restrictions, and abuse of the drug may lead to severe psychological or physical dependence.
Between 2009 and June 27, 2012, DiLorenzo allegedly issued prescriptions to conspirators for drugs containing oxycodone outside the usual course of medical practice and not for any legitimate medical purpose. DiLorenzo charged purported patients $500 in cash for the first visit, $300 in cash for each successive visit and an additional $150 in cash for urine tests.
DiLorenzo employed three conspirators to act as “staff” at his office despite the fact that none of them had any medical training. DiLorenzo provided one of his conspirators with blank prescription pads and stamps in order to generate oxycodone prescriptions for purported patients. DiLorenzo would allegedly sign the prescriptions, often without any medical examination or only a cursory examination. DiLorenzo’s conspirators would obtain oxycodone pills at pharmacies and then distribute the pills.
DiLorenzo allegedly agreed to split the proceeds with some of his conspirators, but never reported or paid any employment taxes.DiLorenzo structured his share of the proceeds, depositing $1,090,939 in cash into various accounts via more than 150 separate transactions. All but one of the deposits was for an amount less than $10,000, which is the amount that requires the filing of a Currency Transaction Report (CTR). The one deposit for more than $10,000 – a $10,044 cash deposit – was accompanied by a deposit slip in the amount of $9,544. After being told by the teller that the amount was in excess of $10,000, DiLorenzo attempted to cancel the deposit rather than have the bank prepare and file a CTR. DiLorenzo also accumulated $521,212.25 in cash that was found at his house and the house of his parents.
The count of conspiracy to distribute oxycodone carries a maximum potential penalty of 20 years in prison and a $1 million fine. The structuring count carries a maximum potential penalty of 10 years in prison and a $500,000 fine. The conspiracy to launder money count carries a maximum potential penalty of 20 years in prison and a $500,000 fine. The tax counts each carry a maximum potential penalty of five years in prison and a $250, 000 fine.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen; and special agents of the Drug Enforcement Administration, under the direction of Special Agent in Charge Carl Kotowski, with the investigation leading to today’s indictment.
The government is represented by Assistant U.S. Attorney R. Joseph Gribko of the U.S. Attorney’s Office in Trenton and Tino Lisella, trial attorney with the U.S. Department of Justice, Tax Division.
The charge and allegations contained in the superseding indictment are merely accusations, and the defendant is considered innocent unless and until proven guilty.
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Defense counsel: Robert DeGroot Esq., Newark
DiLorenzo, Paul Superceding Indictment
Bergen County, N.J., Man Admits Receiving Images of Child Sexual Abuse over the InternetRead the Press Release
TRENTON, N.J. - A Bergen County, N.J., man admitted today that he downloaded images and videos depicting child sexual abuse on a computer at his parents’ house, U.S. Attorney Paul J. Fishman announced.
Joshua Babilonia, 24, of Fair Lawn, N.J., pleaded guilty before U.S. District Judge Joel A. Pisano in Trenton federal court to an information charging him with one count of receiving images of child sex abuse over the Internet.
According to documents filed in this case and statements made in court:
Special agents of the U.S. Department of Immigration and Customs Enforcement, Homeland Security Investigations (ICE HSI) executed a search warrant on Sept. 13, 2012, at the Fair Lawn residence of Babilonia’s parents. Agents seized digital evidence that contained more than 600 images and a large number of videos depicting child sexual abuse, including material that involved prepubescent minors and portrayed sadistic or masochistic conduct. The evidence seized included three files previously downloaded from Babilonia by law enforcement agents working in an undercover capacity on a peer-to-peer network.
During today’s guilty plea proceeding, Babilonia admitted he was a member of the online network between January 2011 and September 2012, and searched for and downloaded images of child sexual abuse. He also admitted that his files were viewable and downloadable by others on the network.
Babilonia faces a mandatory minimum penalty of five years in prison, and a maximum potential penalty of 20 years in prison and a $250,000 fine. Sentencing is currently scheduled for Oct. 15, 2014. Babilonia will also be required to register as a sex offender.
U.S. Attorney Fishman credited special agents of ICE HSI, under the direction of Special Agent in Charge Andrew M. McLees in Newark, with the investigation.
The government is represented by Assistant U.S. Attorney Danielle M. Corcione of the U.S. Attorney's Office General Crimes Unit in Newark.
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Defense counsel: Adolph Galluccio Esq., Totowa, N.J.
Babilonia, Joshua Information
Pennsylvania Man Sentenced to 27 Months in Prison for Stealing More Than 900 Pieces of Verizon Wireless MerchandiseRead the Press Release
NEWARK, N.J. - A Pennsylvania man was sentenced today to 27 months in prison for misappropriating over 900 cellular telephones, handheld devices and accessories belonging to Verizon Wireless and selling those items online for a profit, U.S. Attorney Paul J. Fishman announced.
Defense counsel: Wayne Powell Esq., Cherry Hill, N.J.
James Hopkins, 35, of Telford, Pa., previously pleaded guilty before U.S. District Judge William H. Walls to an information charging him with mail fraud. Judge Walls imposed the sentence in Newark federal court.
According to documents filed in this case and statements made in court:
Hopkins worked as an account executive at a branch office for Verizon Wireless in Trevose, Pa. From February through November 2009, Hopkins placed numerous orders for Verizon Wireless cellular telephones, handheld devices and accessories in the names of existing Verizon Wireless customers without their knowledge. After arranging for the merchandise to be shipped to the home of a relative in New Jersey, the defendant manipulated Verizon’s computer database to conceal the fraudulent orders and shipments. Hopkins received $328,517 worth of stolen Verizon Wireless merchandise, which he sold on eBay for a profit of $272,290.
In addition to the prison term, Judge Walls sentenced Hopkins to serve two years of supervised release, ordered him to pay $303,623 in restitution, and forfeit $272,290.
U.S. Attorney Fishman credited postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, for the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Joseph B. Shumofsky of the U.S. Attorney’s Office Economic Crime Unit in Newark.
14-231Georgia Man Admits Defrauding Investors Out of More Than $800,000Read the Press Release
NEWARK, N.J. – A Georgia business owner who held himself out to be an investor and loan broker admitted his role in defrauding investors of more than $800,000, U.S. Attorney Paul J. Fishman announced.
Ronnie Singleton, 41, of Lithonia, Ga., pleaded guilty before U.S. District Judge Esther Salas in Newark federal court to Count One of an indictment charging him with conspiring to commit wire fraud.According to documents in this case and statements made in court:
Singleton owned and operated a business called Wonder World Inc. and held himself out to be a financier. Using the Internet and telephone, he met his codefendant, Michael Woodruff, 66, of Peeples Valley, Ariz., and the two agreed to work together to find investors. Singleton falsely represented that he would providing financing for real estate deals through a “European system of financing” that involved leasing financial instruments. Singleton received more than $800,000 in investors’ funds, $360,000 of which he wired to Woodruff. Instead of obtaining the promised financing for the real estate projects, Singleton instead used the investors’ money for his own personal benefit.
The count to which Singleton pleaded guilty carries a maximum potential penalty of 20 years in prison and a fine of $250,000 or twice the gross amount of any gain or loss from the offense. Sentencing is scheduled for Sept. 30, 2014. The charges against Woodruff are pending.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; and inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, for the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Jenny Kramer of the Economic Crimes Unit and Assistant U.S. Attorney Charlton Rugg of the Criminal Division.
The charges and allegations against Woodruff are merely accusations and he remains innocent unless and until proven guilty.
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Defense counsel: Paul Condon Esq., Jersey City, N.J.Singleton, Ronnie Indictment
Burlington County, N.J., Man Charged with Bank Fraud for Running Multi-Million Dollar Check-Kiting SchemeRead the Press Release
TRENTON, N.J. – A Burlington County, N.J., man was arrested this morning for allegedly orchestrating a large scale check-kiting scheme that caused $8.8 million in losses to three banks in New Jersey, U.S. Attorney Paul J. Fishman announced.
Luis G. Rogers Sr., 71, of Beverly, N.J., is charged by complaint with one count of bank fraud. He is scheduled to make his initial appearance today in Trenton federal court before U.S. Magistrate Judge Tonianne J. Bongiovanni.
According to the complaint:
Rogers was the chief executive officer of Lease Group Resources Inc. (LGR), an office equipment leasing company based in Mount Holly, N.J., and was also the principal of several other business entities (the LGR Entities). From November 2012 through April 2013, Rogers maintained and controlled numerous checking accounts in the names of the LGR Entities at three separate banks: Liberty Bell Bank, Roma Financial, and Susquehanna Bank.
Rogers allegedly engaged in what is known as a “check-kiting” scheme – creating artificial balances in his bank accounts by causing checks to be written against the accounts knowing the money was not there to cover them. Rogers would allegedly deposit the checks into other accounts he controlled to artificially inflate the balances of those accounts. Rogers, or others acting on his behalf, allegedly deposited hundreds of millions of dollars into the LGR Entities’ accounts, amounts that far exceeded LGR’s annual revenues. In April 2013, the banks discovered the scheme and either returned or dishonored many of the pending checks and charged back the amounts of the checks against the LGR Entities’ accounts. This resulted in the accounts being overdrawn and the banks sustaining millions of dollars in losses. Specifically, Liberty Bell lost $3.7 million, Roma Bank lost $2.1 million, and Susquehanna lost $3 million.
The charge of bank fraud carries a maximum potential penalty of 30 years in prison and a $1 million fine.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, for the investigation leading to today’s arrest.
The government is represented by Assistant U.S. Attorney Nicholas P. Grippo of the U.S. Attorney’s Office Criminal Division in Trenton.
The charges and allegations in the complaint are merely accusations, and the defendant is considered innocent unless proven guilty.14-230
Rogers, Luis Complaint
New Jersey U.S. Attorney Files Civil Suit Seeking Forfeiture of $1.7 Million Seized from New York-Based ExporterRead the Press Release
Cellular Next LLC Allegedly Participated in Drug Money Laundering
Through Black Market Peso ExchangeNEWARK, N.J. - The United States filed a civil forfeiture complaint today seeking to forfeit $1,742,289, previously seized from cellular phone wholesale company Cellular Next LLC, which allegedly represents narcotics proceeds laundered through the Black Market Peso Exchange (BMPE), U.S. Attorney Paul J. Fishman announced.
According to the complaint filed today in Newark federal court:
Cellular Next, which operates out of New York and Miami and is registered as a business entity in New Jersey, has a history of receiving narcotics proceeds. Drug Enforcement Administration (DEA), New York Drug Enforcement Task Force (NYDETF) and Immigration and Customs Enforcement, Homeland Security Investigations (HSI) undercover agents have sent wire transfers of such proceeds to the company at the direction of BMPE brokers based in Colombia.
The BMPE is a currency exchange system which uses illegal drug proceeds in the United States to pay for goods that then are shipped to Colombia. It is the primary method used by Colombian narcotics traffickers to launder their illicit funds. The recipients in Colombia pay for those goods in pesos, which are then forwarded to the narcotics traffickers. The system allows narcotics traffickers to launder and transport their narcotics dollars through the United States financial system by using domestic accounts held by businesses or individuals doing business in the United States. Seizure and forfeiture actions are aimed at disrupting and destroying the flow of these narcotics dollars by targeting the domestic accounts and the entities that receive these illicit funds.
Representatives of Cellular Next have, on numerous occasions, received narcotics proceeds without asking for the appropriate identification or filing the appropriate paperwork to comply with the Bank Secrecy Act, which was designed to combat money laundering. Cellular Next has a history of having its bank accounts closed by financial institutions for misuse, for having allowed large numbers of structured cash deposits from at least 2010 through 2013.
One money laundering customer sent the $1.7 million the government seeks to forfeit to Cellular Next LLC using BMPE.
U.S. Attorney Fishman credited the New York Drug Enforcement Task Force, comprising agents and officers from DEA New York, New York City Police Department and New York State Police; and agents and officers of U.S. Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge Andrew M. McLees in Newark, with the ongoing investigation.
The government is represented by Assistant U.S. Attorney Evan S. Weitz of the U.S. Attorney's Office Asset Forfeiture and Money Laundering Unit.
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Cellular Next Complaint
Mercer County, N.J., Man Admits Robbery ConspiracyRead the Press Release
TRENTON, N.J. - A Mercer County, N.J., man today admitted his role in the March 2013 robbery of a commercial establishment, U.S. Attorney Paul J. Fishman announced.
Felix M. Lugo, 39, formerly of Trenton, N.J., pleaded guilty before U.S. District Judge Michael A. Shipp in Trenton federal court to an information charging him with one count of conspiracy to commit Hobbs Act robbery.
According to documents filed in this case and statements made in court:
Lugo conspired with Arturo Delacruz, 35, and Samuel Matias Cruz, 33, both of Trenton, to rob the Rapido Flores Multiservices Agency in Trenton. Lugo and Cruz committed the robbery, during which at least one victim was physically assaulted and restrained. Lugo and Cruz stole more than $6,000 and fled the scene in a vehicle driven by Delacruz.
Delacruz and Cruz were previously arrested by special agents from the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) on criminal complaints charging each with one count of conspiracy to commit Hobbs Act robbery. Those charges remain pending.
The Hobbs Act conspiracy to which Lugo pleaded guilty carries a maximum potential penalty of 20 years in prison, as well as a maximum fine of $250,000, or twice the gross gain or loss arising out of the offense. Sentencing is scheduled for Oct. 6, 2014.
U.S. Attorney Fishman credited special agents of the ATF, under the direction of Special Agent in Charge Stephanie R. Shoemaker; the Mercer County Prosecutor’s Office, under the direction of Prosecutor Joseph L. Bocchini Jr.; the Burlington County Prosecutor’s Office, under the direction of Prosecutor Robert D. Bernardi; troopers from N.J. State Police, under the direction of Col. Rick Fuentes; the Trenton Police Department, under the direction of Police Chief Ralph Rivera Jr.; and the Westampton Police Department, under the direction of Police Chief Ricky W. Smith, for their investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Dennis C. Carletta of the U.S. Attorney’s Office National Security Unit in Newark.
14-228Defense counsel: Henry E. Klingeman Esq., Newark
Lugo, Felix Information