District of New Jersey

NEWARK, N.J. – A New Jersey man pleaded guilty today to orchestrating an eight-year scheme to falsify employment certifications to facilitate the illegal entry of Indian immigrants into the United States and to filing a false tax return.

U.S. Attorney Paul J. Fishman of the District of New Jersey, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Chief Richard Weber of Internal Revenue Service – Criminal Investigation (IRS-CI) and Director Bill A. Miller of the State Department’s Diplomatic Security Service (DSS) made the announcement.

Sandipkumar Patel, 41, of Edison, New Jersey, pleaded guilty before U.S. District Judge William H. Walls in Newark federal court to conspiring to defraud the United States and to filing a false federal income tax return. Sentencing is scheduled for Jan. 6, 2015.

According to court documents filed with the plea agreement, from 2001 until 2009, Patel sponsored the visa applications of Indian nationals by falsely claiming to provide employment for them in the United States. Patel falsely certified on the visa applications that he would employ the immigrants in various technical fields at several New Jersey companies, thereby facilitating their illegal entry into the United States. Over the course of the scheme, immigrants paid Patel thousands of dollars for the false certifications to fraudulently secure the visas. To disguise the scheme, Patel issued payroll checks and other payroll forms. Patel required the immigrants to return the money from the checks and also to reimburse him for his payroll tax expenses. Patel used the fraudulent pay stubs and payroll checks to support false applications to extend the visas, and Patel charged the immigrants fees for the visa extensions.

As a result of falsely carrying the immigrant employees on his payrolls, Patel overstated his payroll expenses on his federal income tax returns by more than $1.4 million over four years, under-reporting his tax obligation by over $400,000 for those years.

This case was investigated by IRS-CI and DSS. The case is being prosecuted by Senior Trial Attorneys Hope S. Olds and William H. Kenety of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney Danielle M. Corcione of the District of New Jersey, with assistance from the Criminal Division’s Asset Forfeiture and Money Laundering Section.

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Patel, Sandipkumar Information

NEWARK N.J. – The former senior vice president of marketing at A&P, a U.S. supermarket and liquor store chain, was sentenced today to 36 months in prison for his role in a scheme to defraud A&P by selling for personal gain event tickets that were intended for A&P’s use, U.S. Attorney Paul J. Fishman announced.

John R. Moritz, 45, of Mason, Ohio, previously pleaded guilty before U.S. District Judge Kevin McNulty to an information charging him with one count of wire fraud.

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

From December 2010 through December 2011, Moritz worked at A&P, a U.S. supermarket and liquor store chain headquartered in Montvale, New Jersey. He arranged for A&P to purchase thousands of tickets to sporting events, concerts and other shows that were to be used to reward high-performing A&P employees and for other legitimate business purposes. However, Moritz resold more than 7,000 tickets to third parties over the internet, without A&P’s knowledge or consent. Some of these tickets were for the 2011 Super Bowl, the 2011 New York Yankees playoff games and Bon Jovi, Lady Gaga and U2 concerts. He admitted that as a result of his conduct he fraudulently obtained $1,218,192.  

In addition to the prison term, Judge McNulty sentenced Moritz to three years of supervised release and ordered to pay restitution of $3.2 million.

U.S. Attorney Fishman credited special agents of the FBI in Newark, under the direction of Special Agent in Charge Aaron T. Ford, for the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorneys Lakshmi Srinivasan Herman of the U.S. Attorney’s Office Economic Crimes Unit in Newark and Evan Weitz of the Asset Forfeiture and Money Laundering Unit.

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Defense Counsel: Lawrence S. Feld Esq. and Paul Silverman Esq. New York

NEWARK N.J. – The former senior vice president of marketing at A&P, a U.S. supermarket and liquor store chain, was sentenced today to 36 months in prison for his role in a scheme to defraud A&P by selling for personal gain event tickets that were intended for A&P’s use, U.S. Attorney Paul J. Fishman announced.

John R. Moritz, 45, of Mason, Ohio, previously pleaded guilty before U.S. District Judge Kevin McNulty to an information charging him with one count of wire fraud.

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

From December 2010 through December 2011, Moritz worked at A&P, a U.S. supermarket and liquor store chain headquartered in Montvale, New Jersey. He arranged for A&P to purchase thousands of tickets to sporting events, concerts and other shows that were to be used to reward high-performing A&P employees and for other legitimate business purposes. However, Moritz resold more than 7,000 tickets to third parties over the internet, without A&P’s knowledge or consent. Some of these tickets were for the 2011 Super Bowl, the 2011 New York Yankees playoff games and Bon Jovi, Lady Gaga and U2 concerts. He admitted that as a result of his conduct he fraudulently obtained $1,218,192.   

In addition to the prison term, Judge McNulty sentenced Moritz to three years of supervised release and ordered to pay restitution of $3.2 million.

U.S. Attorney Fishman credited special agents of the FBI in Newark, under the direction of Special Agent in Charge Aaron T. Ford, for the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorneys Lakshmi Srinivasan Herman of the U.S. Attorney’s Office Economic Crimes Unit in Newark and Evan Weitz of the Asset Forfeiture and Money Laundering Unit.

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Defense Counsel: Lawrence S. Feld Esq. and Paul Silverman Esq. New York

TRENTON, N.J. - A former FBI special agent and his wife today admitted colluding to hide her income as part-owner of a retail pharmacy in Piscataway, New Jersey, from the Internal Revenue Service – instead using the cash to pay for home renovations and other personal expenses, U.S. Attorney Paul J. Fishman announced.

Pritesh Desai, 47, and his wife, Darshna Desai, 45, both of Watchung, New Jersey, surrendered to federal authorities this morning. Each pleaded guilty to one count of conspiring to defraud the IRS. The pair entered their guilty pleas to an information before U.S. District Judge Michael A. Shipp in Trenton federal court.

According to documents filed in this case and statements made in court:  At the time of the conspiracy, Pritesh Desai was employed as a special agent with the FBI’s New York Field Office until his resignation in July 2013, and Darshna Desai was a part-owner in DVS Pharma Inc., known as Heights Pharmacy. From June 2004 to June 2012, the couple conspired with each other and with Darshna Desai’s partner to conceal cash income from the pharmacy.
 
Darshna Desai admitted that she or her partner would separate the cash earned by Heights Pharmacy from other income received, pay a portion to Darshna Desai as cash salary, and then split the remainder.

Pritesh and Darshna Desai admitted they took certain actions to conceal her share of the cash, depositing it into various financial institutions and multiple accounts. They also acknowledged they used cash to pay personal living expenses, including renovating their residence, and gave cash to others in exchange for checks the Desais deposited in their personal bank accounts. Pritesh Desai also admitted providing false information to his employer, the FBI, when submitting financial disclosure forms for years 2007 through 2011. He falsely claimed the cash held by his family was gifts from other family members.

For tax years 2004 through 2011, Darshna Desai and her partner filed false corporate income tax returns for the pharmacy. For those same tax years, Darshna Desai and Pritesh Desai filed false joint personal income tax return which also failed to disclose the cash. The total tax loss from the fraud was between $200,000 and $400,000.

The offense to which the Desais pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing for both defendants is scheduled for Dec. 11, 2014.

U.S. Attorney Fishman credited special agents of the Department of Justice, Office of the Inspector General, under the direction of Special Agent in Charge Ronald G. Gardella, and 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. Attorneys Maureen Nakly and Jacques Pierre of the U.S. Attorney’s Special Prosecutions Division in Newark.
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Defense counsel:

Pritesh Desai: Michael Critchley and John Vazquez Esqs., Roseland, N.J.
Darshna Desai: Lawrence Horn and Richard Sapinski Esqs., Newark

Desai, Pritesh, Information
Desai, Darshna Information

Defrauded Investors in Facebook IPO and Real Estate Deals

TRENTON, N.J. –  Convicted Ponzi schemer Eliyahu Weinstein, 39, of Lakewood, N.J., who was previously sentenced to 22 years in prison for running a real estate investment fraud scheme that caused $200 million in losses, today admitted that he also defrauded investors in connection with the Facebook IPO and several additional real estate deals and then laundered the proceeds of the scheme, U.S. Attorney Paul J. Fishman announced.

Weinstein pleaded guilty before U.S. District Judge Joel A. Pisano in Trenton federal court to three counts of an indictment pending against him: one count of conspiracy to commit wire fraud, one count of committing wire fraud while on pretrial release, and one count of money laundering.

Two co-defendants, Alex Schleider, 48, of Lakewood, and Aaron Glucksman, 41, of Brooklyn, New York, have already pleaded guilty to charges related to their roles in the scheme.  Judge Pisano sentenced Glucksman on May 5, 2014, to 52 months in prison, three years of supervised release, and ordered him to forfeit $1.2 million. Judge Pisano ordered Glucksman’s sentence to run partially concurrently with a 36-month sentence recently imposed by U.S. District Judge Raymond J. Dearie of the Eastern District of New York in an unrelated case. Glucksman remains on release pending his designation to a federal institution by the U.S. Department of Justice, Bureau of Prisons. Schleider is scheduled to be sentenced Sept. 18, 2014.

“Even while facing federal charges that eventually netted him decades in prison, Weinstein couldn’t resist the buzz around the Facebook IPO and the opportunity to fleece unsuspecting investors,” U.S. Attorney Fishman said. “Shamelessly, he even used the money he stole to pay the legal fees he accumulated from the previous scam.”

“Eliyahu Weinstein spent the greater part of a decade creating and executing a series of elaborate fraudulent investment schemes, ultimately defrauding victims of over $200 million by taking advantage of trusted relationships and innocent investors,” Aaron T. Ford, FBI Special Agent in Charge, Newark, said. “This long-term, complex investigation required much in terms of investigative resources. The FBI, through its vast experience investigating investment schemes, was able to provide such resources, resulting in the arrest and today’s guilty plea of Eliyahu Weinstein.”

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

In February 2012, Weinstein and his fellow conspirators offered a pair of investors (referred to in the indictment as the “Facebook victims”) the opportunity to purchase large blocks of Facebook shares prior to the company’s initial public offering, or IPO, in May 2012. The offer was particularly attractive because large blocks of the shares were extremely difficult to get and were expected to increase in value at the time of the IPO. Weinstein and his conspirators did not actually have access to the shares.

Based on misrepresentations by Weinstein and his conspirators, the Facebook victims wired millions of dollars between February and March of 2012 to an account Weinstein and a conspirator controlled. Weinstein and another conspirator provided investors with false documents showing companies owned by various conspirators held assets, which would secure the Facebook victims’ investment.

The conspirators did not use any of the Facebook victims’ money to purchase Facebook shares, instead misappropriating it for their own use. Weinstein used some of the money to pay lawyers and experts representing him in his earlier – and at that time, still pending – criminal case and in related civil matters. Weinstein and his conspirators also used the Facebook victims’ money to make investments in businesses unrelated to Facebook and to make loans for their own benefit.

Around the same time, Weinstein and his conspirators also persuaded the Facebook victims to invest in the purported purchase of an apartment complex, “Belle Glade Gardens,” in Florida. They told the Facebook victims that Weinstein had the opportunity to purchase Belle Glade Gardens at a discounted price and immediately flip it at a substantial profit. Weinstein and his conspirators further told the Facebook victims that Weinstein had already placed $2.5 million in the trust account of a Miami law firm for the transaction; that if the Facebook victims contributed another $2.5 million toward the transaction, those funds would remain in escrow at the Miami law firm until the deal closed; and that the Facebook victims would be repaid within 60 days. The Facebook victims wired $2.83 million to the Miami law firm in order to complete the Belle Glades Gardens transaction. Weinstein and his conspirators did not use the money to purchase Belle Glades Gardens. Instead, they redirected the money from the law firm to accounts that they controlled, returned $1.8 million to the Facebook victims as a purported return on their Facebook investment, and used the remaining money for their own purposes.

In July 2012, Weinstein approached another group of investor victims (referred to in the indictment as the “Florida condominium victims”) and told them he had the opportunity to purchase the notes on seven condominiums in Florida at a discounted price of $3 million. Weinstein and his conspirators falsely represented that they had already paid $1.5 million toward the deal, and that they needed only $1.5 million to complete the transaction. They claimed that the properties had an annual rental income of approximately $780,000 and provided to the Florida condominium victims fraudulent documentation purporting to verify this fact. The victims transferred $1.5 million to Weinstein and his conspirators between August 2012 and December 2012. Weinstein did not use this money to purchase the notes on the Florida condominiums – many of which he himself had previously owned and lost to foreclosure. Instead, Weinstein and his conspirators converted the money to their own use.

Throughout the scheme, Weinstein was already under indictment and on pretrial release, and was prohibited from engaging in any monetary transaction for more than $1,000 without the approval of court-appointed special counsel. Weinstein pleaded guilty on Jan. 3, 2013, before Judge Pisano to two counts of that indictment, admitting he ran a Ponzi-style real estate investment fraud scheme that caused $200 million in losses and then laundered the proceeds of the scheme. Judge Pisano sentenced Weinstein on Feb. 25, 2014, to 264 months in prison and ordered him to pay more than $200 million in restitution and forfeiture to the victims of his scheme.

The counts to which Weinstein pleaded guilty today carry the following maximum potential penalties: 20 years in prison on the conspiracy count; 30 years in prison on the wire fraud while on pretrial release count  (20 years on the wire fraud plus 10 years for commission while on pretrial release); and 10 years on the money laundering count. All the counts are also punishable by a maximum fine of the greater of $250,000 or twice the amount of Weinstein’s gain from the scheme. Sentencing is scheduled for Dec. 15, 2014.

Charges against a third conspirator, Aaron Muschel, 64, of Brooklyn, NY, who was charged in the criminal complaint filed against Weinstein and Schleider in May 2013, remain pending. The charges against him are merely accusations and he is presumed innocent until proven guilty.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Aaron T. Ford in Newark, for the investigation leading to today’s guilty plea. He also thanked agents of IRS–Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen, for their role in the investigation.

The government is represented by Counsel to the U.S. Attorney Rachael A. Honig; Gurbir S. Grewal, Chief of the U.S. Attorney’s Office Economic Crimes Unit; Assistant U.S. Attorneys Zach Intrater of the Economic Crimes Unit; and Evan S. Weitz of the Asset Forfeiture and Money Laundering Unit.

This case was brought in coordination with President Barack 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.

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Defense counsel:  Eric Creizman Esq., New York

Weinstein, Eliyahu Indictment

NEWARK, N.J. – An Orange, New Jersey, man was taken into federal custody today and is expected to make his initial court appearance this afternoon for allegedly committing six armed robberies of New Jersey hotels, U.S. Attorney Paul J. Fishman announced.

Tremone Burnett, 42, is charged by complaint with six counts of committing a Hobbs Act robbery and one count of using a firearm during a crime of violence. He was previously charged with related offenses by the Essex County Prosecutor’s Office and has been in state custody. Burnett is expected to appear this afternoon before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court.

According to the complaint unsealed today:

From May 9, 2014, through June 19, 2014, Burnett robbed at least six New Jersey hotels at gunpoint: in Carteret, Lebanon, Newark, Rockaway, and Secaucus. In each of the robberies, Burnett pointed a handgun at a hotel employee and, in some instances, tied the victim’s hands and feet. During the course of the robberies, Burnett also variously stole uncashed employee checks, safe deposit boxes, an ATM, and a personal credit card in addition to cash.    

The Hobbs Act charges each carry a maximum penalty of 20 years in prison. The charge of brandishing a firearm during a crime of violence carries a maximum 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 count also carries a maximum fine of $250,000, or twice the gross gain or loss from the offense.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, with the investigation leading to today’s charges, along with the Essex County Prosecutor’s Office and Newark Police Department. He also credited the Carteret, Edison, Lebanon, Rockaway, Parsippany, Weehawken and Woodbridge Township police departments in New Jersey; and the Clarkstown and Ramapo police departments in New York – along with the New Jersey State Police and the Bergen County, Hunterdon County, Middlesex County, and Morris County Prosecutors’ Offices for their work on this case.

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 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: Assistant Federal Public Defender Chester Keller Esq., Newark

Burnett, Tremone Complaint

CAMDEN, N.J. – An Essex County, New Jersey, man today admitted conspiring to defraud financial institutions as part of a $15 million mortgage fraud scheme that used phony documents and “straw buyers” to make illegal profits on overbuilt condos, U.S. Attorney Paul J. Fishman announced.

Larry Fullenwider, 63, of Belleville, New Jersey, pleaded guilty before U.S. District Judge Jerome B. Simandle in Camden federal court to a second superseding indictment charging him with one count of conspiracy to commit wire fraud. Using the alias “Stanley Hyde," Fullenwider admitted purchasing four condominiums in North Wildwood, New Jersey, after presenting a false identification and using fake documents to support fraudulent loan applications.

According to the documents filed in this case and statements made in court: Fullenwider was among 11 defendants charged in July 2012 with conspiracy to commit wire fraud and conspiracy to commit money laundering. Two additional defendants, Nicholas Tarsia, 65, of Totowa, New Jersey, and Mashon Onque, 43, of East Orange, New Jersey, were charged in November 2013 with conspiracy to commit wire fraud. Tarsia was also charged with one count of conspiracy to commit money laundering.

Fullenwider’s conspirators, including Timothy Ricks, 46, of East Orange, and Kinard Henson of Ventres, Alabama, who both pleaded guilty before Judge Simandle – Ricks in February 2013 and Henson in February 2014 – located oceanfront condominiums overbuilt by financially distressed developers and negotiated a buyout price with the sellers. They then caused the sales prices for the properties – located in Wildwood Crest and North Wildwood, New Jersey, other locations in New Jersey and in Naples, Florida – to be much higher than the buyout price to ensure large proceeds. Other defendants helped conceal the true sales prices of certain properties through inflated sales contracts and sale and finder’s fee agreements.
Fullenwider served as a “straw buyer” and purchased four North Wildwood properties at the inflated rates in late January and early February of 2007. Fullenwider used the alias “Stanley Hyde” and a false Social Security number to purchase the properties. In order to qualify for mortgage loans, Fullenwider and his conspirators created false documents, such as fake W-2 forms, pay stubs, bank statements and investment statements, to make him (and other straw buyers) appear more creditworthy.

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

The wire fraud conspiracy charge is punishable by a maximum potential penalty of 30 years in prison and a $1 million fine. Sentencing is scheduled for Jan. 20, 2015.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark; and IRS–Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen in Newark, for the investigation leading to today’s guilty plea.

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

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Defense counsel: Brian O’Malley Esq., Haddon Heights, N.J.

Fullenwider, Larry Superseding Indictment

NEWARK, N.J. - An East Brunswick, New Jersey, man admitted today to sharing images of child sexual abuse from his home computer, U.S. Attorney Paul J. Fishman announced.

Armia Alber, 28, entered his guilty plea today before U.S. District Judge Stanley R. Chesler in Newark federal court to an indictment charging him with distributing images of child pornography over the Internet. Alber was initially arrested in July 2013.

According to documents filed in the case and statements made during Alber’s guilty plea proceeding: Alber admitted that between March and July 2013, he was a member of an online peer-to-peer file sharing network and had more than 600 images or videos of children being sexually abused. Alber also admitted he made images and videos of child pornography available for other members to download from his “shared” folder. During this period, a law enforcement agent successfully downloaded multiple images and videos of child sexual abuse from Alber’s computer.

On July 25, 2013, federal law enforcement agents executed a search warrant at Alber’s residence. The agents recovered two computer hard drives, both of which contained numerous images and videos of child pornography.

As part of his guilty plea, Alber agreed to forfeit the computers and computer accessories he used to commit the offense. He will also be required to register as a sex offender.

The distribution of child pornography count to which Alber pleaded guilty carries a mandatory minimum penalty of five years in prison and a maximum statutory penalty of 20 years in prison and a $250,000 fine. Sentencing is currently scheduled for Dec. 16, 2014.

U.S. Attorney Fishman credited special agents of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, Newark Field Office, under the direction of Special Agent in Charge Andrew M. McLees, with the investigation leading to today’s guilty plea. He also thanked the Middlesex County Prosecutor’s Office and the East Brunswick Police Department for their roles in the search and arrest.
The government is represented by Assistant U.S. Attorney Josh Hafetz of the U.S. Attorney’s Office General Crimes Unit in Newark.

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Defense counsel: Assistant Federal Public Defender Carol Gillen Esq., Newark

Alber, Armia Information

TRENTON, N.J. – An East Orange, New Jersey, man today admitted his involvement in a scheme to smuggle marijuana and tobacco into the Essex County Correctional Facility, U.S. Attorney Paul J. Fishman announced.

Vladimir Sauzereseteo, 40, pleaded guilty before U.S. District Judge Mary L. Cooper in Trenton federal court to an information charging him with one count of conspiring to smuggle contraband into a federal detention facility. 

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

From September 2013 to January 2014, Sauzereseteo, an associate of Muhammad Subpunallah, 32, a federal detainee at the Essex County Correctional Facility, delivered marijuana and tobacco to Brian Kapalin, 67, of Maplewood, New Jersey, a lawyer who smuggled the contraband into the jail in exchange for a cash fee.

On one occasion in January 2014 Kapalin spoke with Subpunallah over a recorded jail phone. Subpunallah asked Kapalin to deliver contraband to an inmate at the Essex County Correctional Facility. After receiving $1,650 via Western Union money transfers, Sauzereseteo used the money to purchase marijuana and delivered the drugs to Kapalin, along with a cash payment for Kapalin’s service. A few days later, Kapalin met an inmate in the attorney conference room at the Essex County Correctional Facility and gave him the marijuana.

The conspiracy charge to which to Sauzereseteo pleaded guilty carries a maximum potential penalty of five years in prison and a maximum fine of $250,000. Sentencing is scheduled for Dec. 4, 2014. Charges against Kapalin and Subpunallah are still pending, and they are considered 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, and investigators with the Internal Affairs Division of Essex County Jail, under the direction of Warden Roy Hendricks, with the investigation leading to today’s guilty plea.

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

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Defense counsel: Lorraine Gauli-Rufo Esq., Verona, New Jersey

Sauzereseteo, Vladimir Information

NEWARK, N.J. – A Newark man was indicted by a federal grand jury today on three additional counts of producing images of child sexual abuse for allegedly abusing a prepubescent girl repeatedly and filming the abuse, U.S. Attorney Paul J. Fishman announced.

Pedro Rios, 58, was charged in a superseding indictment with a total of five counts of production of child pornography and one count each of possession and distribution of child pornography. The case has been assigned to U.S. District Judge Stanley R. Chesler. An arraignment will be scheduled.

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

Law enforcement officers executed a search warrant at Rios’s home in Newark on Feb. 5, 2013. A forensic review of the computer equipment seized revealed several video files of child pornography which appear to be self-produced and allegedly depict Rios on camera engaging in sexually explicit conduct with a prepubescent female in the rear of a cab of a tractor trailer truck.

Law enforcement officers identified and interviewed the female, who allegedly said Rios would periodically drive her to his tractor trailer truck in Union County, N.J., where he would undress her and have sexual contact and sexual relations with her and record the encounters. Rios allegedly threatened to hurt the victim’s family if she told anyone.

Each 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. Rios remains detained.

U.S. Attorney Fishman credited special agents of the FBI Newark Division’s Child Exploitation Task Force, under the direction of Special Agent in Charge Aaron T. Ford in Newark, the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Carolyn A. Murray, and the N.J. Regional Computer Forensics Laboratory with the investigation leading to these 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 indictment are merely accusations and the defendant is considered innocent unless and until proven guilty.

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Defense counsel: Brian J. Neary Esq., Hackensack, N.J.

Rios, Pedro Superseding Indictment

NEWARK, N.J. – Two men were indicted by a federal grand jury today for allegedly using a real estate investment scheme to defraud 15 victims of more than $3 million, U.S. Attorney Paul J. Fishman announced.

Paul Mancuso, 46, of Glen Rock, New Jersey, is charged by indictment with one count of conspiracy to commit wire fraud and five counts of wire fraud. Pasquale Stiso, 52, of West Harrison, New York, is charged by indictment with one count of conspiracy to commit wire fraud and one count of wire fraud.

According to documents filed in this case: Since 2009, Mancuso posed as a real estate investor, broker and developer, as well as a “hard money” lender for other investments. Stiso, a disbarred attorney, held himself out as an individual working with Mancuso on various investment projects.

Mancuso and Stiso fraudulently obtained financing for projects that did not exist or in which they had no actual involvement. Some of the purported projects touted by Mancuso, Stiso, and other conspirators included investments in a phony ticket scam, the development of a pizzeria at a resort in the Bahamas, the development of a casino in Atlantic City, the development of a commercial shopping center, and the “flipping” of a piece of real estate in Matawan.

Victims lost all of their investments or life savings in Mancuso’s schemes. Instead of funding the purported projects, Mancuso and Stiso used the money for personal expenses and financing their involvement in illegal gambling pursuits.

The charge of wire fraud conspiracy and each substantive count of wire fraud carry a maximum potential penalty of 20 years in prison and a maximum fine of $250,000 or twice the gross gain or loss associated with the offense, whichever is greater. The indictment also includes a notice of forfeiture of $3,425,750, representing the fraudulent payments Mancuso and Stiso received from the scheme.

U.S. Attorney Fishman credited criminal investigators of the U.S. Attorney’s Office; 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, for the investigation leading to today’s indictment.

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

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

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Defense counsel: Mancuso: Mary Frances Palisano Esq., Newark
Stiso: Henry E. Klingeman Esq., Newark

Mancuso, Paul, and Stiso, Pasquale Indictment

NEWARK, N.J.  – A Bronx, N.Y., man is scheduled to appear in federal court today to face charges stemming from a violent crime spree spanning three states, in which he attacked, kidnapped, and raped a woman, assaulted a National Park Service employee and set fire to a used car dealership office before crashing on the George Washington Bridge, U.S. Attorney Paul J. Fishman announced.

Luis Figueroa, 33, is charged in a six-count complaint with kidnapping, brandishing a firearm during a crime of violence, possession of a firearm by a convicted felon, aggravated sexual abuse, assaulting an employee of the United States, and arson. He is scheduled to make his initial court appearance before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court this afternoon.

According to the complaint:

On the morning of June 6, 2014, Figueroa allegedly entered a multi-family residence in Luzerne County, Pa., where a woman (Victim One) with whom he had a previous relationship and several other people lived in an apartment. He waited outside the apartment armed with a loaded shotgun.

When Victim One opened the door to leave shortly after 8:00 a.m., Figueroa struck her in the head with the shotgun. Figueroa allegedly stated, “I told you, bitch.  I told you I was going to kill you.”  He then entered the apartment and punched Victim One multiple times. Figueroa also struck Victim Two, a relative of Victim One, with the shotgun, then chased her and kicked her as she tried to escape, causing her to fall down a flight of stairs, and slammed her head against the front entrance. After a brief struggle with Victim One, which enabled Victim Two to escape, Figueroa collected the shotgun from the apartment and exited the building. Figueroa then forced Victim One into the back seat of a red SUV and drove away. Victim Two was eventually treated for her injuries.

Figueroa headed east in the red SUV on Interstate 80 towards New Jersey. At one point, Figueroa told Victim One that he was going to kill her, then kill himself. As he was driving, Figueroa allegedly forced Victim One to perform a sex act. After crossing the New Jersey state border, Figueroa exited the freeway and pulled the red SUV into a rest stop area at the Kittatinny Point Visitor’s Center.

After parking the red SUV, Figueroa allegedly climbed into the back seat with Victim One and forcibly raped her. Figueroa removed the ammunition from the shotgun and disposed of the rounds in a nearby wooded area. He then returned to the vehicle and retrieved the shotgun, then left again to dispose of the firearm. Once Figueroa left the red SUV with the shotgun, Victim One got in the driver’s seat of the vehicle and sped away. Victim One was subsequently transported to a hospital to receive treatment for her injuries.  

After Victim One escaped in the red SUV, Figueroa allegedly approached U.S. National Park Service employee (Victim Three) near the parking lot area, attacked him and forced him into a nearby storage room, where he rammed Victim Three’s head into a door. Figueroa told Victim Three, “If you want to live, you better give me your car keys right now.” Victim Three handed over the keys and Figueroa drove away in Victim Three’s red minivan, heading east on Interstate 80.  Victim Three was also treated for injuries.

Figueroa eventually stopped in Paterson, New Jersey, where he left Victim Three’s red minivan at a used car dealership he sub-let on West Broadway Street. Several days prior to June 6, 2014, Figueroa was given an eviction notice to vacate the property. At 11:30 a.m., Figueroa went to a separate used car dealership (the Victim Car Dealership) in Paterson, which was several blocks away. The Victim Car Dealership is operated by the individual who leased the West Broadway Street property to Figueroa. Figueroa asked an employee to borrow a portable gas container, then drove to a nearby gas station in a white SUV and filled the container with gasoline. Figueroa returned to the Victim Car Dealership and doused a small office area near the corner of the property with gasoline. The employee managed to get the gas container out of Figueroa’s hands, but Figueroa lit a match and ignited the structure. He then fled the scene in the white SUV.

Figueroa’s alleged crime spree ended when law enforcement officers traveling in marked police vehicles spotted him on the George Washington Bridge in the white SUV. Figueroa ignored the officers’ commands to stop and led them on a high-speed chase across the bridge, during which he struck two police vehicles before crashing into a wall. Figueroa then attempted to flee from the officers on foot but they tackled him and took him into custody.

Law enforcement subsequently searched the Kittatinny Point Visitor’s Center area and recovered the shotgun Figueroa used in the attacks.

The charge of kidnapping carries a maximum penalty of life in prison and a $250,000 fine. The charge of brandishing a firearm during a crime of violence carries a mandatory minimum term of seven years in prison and a maximum penalty of life in prison and a $250,000 fine. The charge of possession of a firearm by a convicted felon carries a maximum penalty of ten years in prison and a $250,000 fine. The charge of aggravated sexual abuse carries a maximum penalty of life in prison and a $250,000 fine. The charge of assaulting an employee of the United States carries a maximum penalty of twenty years in prison and a $250,000 fine. The charge of arson carries a mandatory minimum term of five years in prison and a maximum penalty of twenty in prison and a $250,000 fine.

U.S. Attorney Fishman credited special agents of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, under the direction of Special Agent in Charge George Belsky in Woodland Park, for the investigation leading to the charges. He also thanked the Hazelton City Police Department (Pennsylvania), the Luzerne County District Attorney’s Office (Pennsylvania), the N.J. State Police, the Warren County Prosecutor’s Office, the Passaic County Prosecutor’s Office, the Bergen County Prosecutor’s Office, the Port Authority of New York and New Jersey Police Department, and the Manhattan District Attorney’s Office.

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

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Figueroa, Luis Complaint

NEWARK, N.J.  – A Bronx, N.Y., man is scheduled to appear in federal court today to face charges stemming from a violent crime spree spanning three states, in which he attacked, kidnapped, and raped a woman, assaulted a National Park Service employee and set fire to a used car dealership office before crashing on the George Washington Bridge, U.S. Attorney Paul J. Fishman announced.

Luis Figueroa, 33, is charged in a six-count complaint with kidnapping, brandishing a firearm during a crime of violence, possession of a firearm by a convicted felon, aggravated sexual abuse, assaulting an employee of the United States, and arson. He is scheduled to make his initial court appearance before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court this afternoon.

According to the complaint:

On the morning of June 6, 2014, Figueroa allegedly entered a multi-family residence in Luzerne County, Pa., where a woman (Victim One) with whom he had a previous relationship and several other people lived in an apartment. He waited outside the apartment armed with a loaded shotgun.

When Victim One opened the door to leave shortly after 8:00 a.m., Figueroa struck her in the head with the shotgun. Figueroa allegedly stated, “I told you, bitch.  I told you I was going to kill you.”  He then entered the apartment and punched Victim One multiple times. Figueroa also struck Victim Two, a relative of Victim One, with the shotgun, then chased her and kicked her as she tried to escape, causing her to fall down a flight of stairs, and slammed her head against the front entrance. After a brief struggle with Victim One, which enabled Victim Two to escape, Figueroa collected the shotgun from the apartment and exited the building. Figueroa then forced Victim One into the back seat of a red SUV and drove away. Victim Two was eventually treated for her injuries.

Figueroa headed east in the red SUV on Interstate 80 towards New Jersey. At one point, Figueroa told Victim One that he was going to kill her, then kill himself. As he was driving, Figueroa allegedly forced Victim One to perform a sex act. After crossing the New Jersey state border, Figueroa exited the freeway and pulled the red SUV into a rest stop area at the Kittatinny Point Visitor’s Center.

After parking the red SUV, Figueroa allegedly climbed into the back seat with Victim One and forcibly raped her. Figueroa removed the ammunition from the shotgun and disposed of the rounds in a nearby wooded area. He then returned to the vehicle and retrieved the shotgun, then left again to dispose of the firearm. Once Figueroa left the red SUV with the shotgun, Victim One got in the driver’s seat of the vehicle and sped away. Victim One was subsequently transported to a hospital to receive treatment for her injuries.  

After Victim One escaped in the red SUV, Figueroa allegedly approached U.S. National Park Service employee (Victim Three) near the parking lot area, attacked him and forced him into a nearby storage room, where he rammed Victim Three’s head into a door. Figueroa told Victim Three, “If you want to live, you better give me your car keys right now.” Victim Three handed over the keys and Figueroa drove away in Victim Three’s red minivan, heading east on Interstate 80.  Victim Three was also treated for injuries.

Figueroa eventually stopped in Paterson, New Jersey, where he left Victim Three’s red minivan at a used car dealership he sub-let on West Broadway Street. Several days prior to June 6, 2014, Figueroa was given an eviction notice to vacate the property. At 11:30 a.m., Figueroa went to a separate used car dealership (the Victim Car Dealership) in Paterson, which was several blocks away. The Victim Car Dealership is operated by the individual who leased the West Broadway Street property to Figueroa. Figueroa asked an employee to borrow a portable gas container, then drove to a nearby gas station in a white SUV and filled the container with gasoline. Figueroa returned to the Victim Car Dealership and doused a small office area near the corner of the property with gasoline. The employee managed to get the gas container out of Figueroa’s hands, but Figueroa lit a match and ignited the structure. He then fled the scene in the white SUV.

Figueroa’s alleged crime spree ended when law enforcement officers traveling in marked police vehicles spotted him on the George Washington Bridge in the white SUV. Figueroa ignored the officers’ commands to stop and led them on a high-speed chase across the bridge, during which he struck two police vehicles before crashing into a wall. Figueroa then attempted to flee from the officers on foot but they tackled him and took him into custody.

Law enforcement subsequently searched the Kittatinny Point Visitor’s Center area and recovered the shotgun Figueroa used in the attacks.

The charge of kidnapping carries a maximum penalty of life in prison and a $250,000 fine. The charge of brandishing a firearm during a crime of violence carries a mandatory minimum term of seven years in prison and a maximum penalty of life in prison and a $250,000 fine. The charge of possession of a firearm by a convicted felon carries a maximum penalty of ten years in prison and a $250,000 fine. The charge of aggravated sexual abuse carries a maximum penalty of life in prison and a $250,000 fine. The charge of assaulting an employee of the United States carries a maximum penalty of twenty years in prison and a $250,000 fine. The charge of arson carries a mandatory minimum term of five years in prison and a maximum penalty of twenty in prison and a $250,000 fine.

U.S. Attorney Fishman credited special agents of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, under the direction of Special Agent in Charge George Belsky in Woodland Park, for the investigation leading to the charges. He also thanked the Hazelton City Police Department (Pennsylvania), the Luzerne County District Attorney’s Office (Pennsylvania), the N.J. State Police, the Warren County Prosecutor’s Office, the Passaic County Prosecutor’s Office, the Bergen County Prosecutor’s Office, the Port Authority of New York and New Jersey Police Department, and the Manhattan District Attorney’s Office.

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

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Figueroa, Luis Complaint

CAMDEN, N.J. – An East Stroudsburg, Pennsylvania, couple was sentenced to prison today for stealing $272,247 in student loan proceeds from Liberty University and American Public University by using stolen identities to direct the money to addresses where they could intercept it, U.S. Attorney Paul J. Fishman announced.
 
Stephanie Mitchell, 37, and Ronzell Mitchell, 38, were sentenced to 12 months and 28 months in prison, respectively. They previously pleaded guilty before U.S. District Judge Renée Marie Bumb to separate informations charging each with one count of conspiracy to commit mail fraud. Judge Bumb imposed the sentences today in Camden federal court.

According to documents filed in this case and statements made in court: From Aug. 19, 2010, through March 21, 2012, the Mitchells fraudulently obtained U.S. Department of Education (ED) funds for their own use. Stephanie Mitchell regularly used a box at a UPS Store located in Montvale, New Jersey, that was opened using the name and driver’s license of another person. The couple then contacted online universities Liberty and American and posed as students for whom student loans had been issued, causing the proceeds of numerous credit balance checks and debit cards to be redirected to the UPS Store and a vacant house located in Stroudsburg, Pennsylvania.

Stephanie and Ronzell Mitchell admitted several specific instances in which they redirected student loans intended for others to addresses they controlled, fraudulently obtaining  $272,247 in ED funds.

In addition to the prison term, Judge Bumb sentenced the Mitchells each to three years of supervised release, fined them each $35,000, and ordered them to pay total restitution of $272,247, which has been paid in full.

U.S. Attorney Fishman credited special agents of the ED Office of the Inspector General, Northeastern Regional Office, under the direction of Special Agent in Charge Brian Hickey; inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, and special agents of the U.S. Secret Service, under the direction of James Mottola, Special Agent in Charge of the Newark Field Office, with the investigation leading to today’s sentencings.

The government is represented by Assistant U.S. Attorney Deborah J. Gannett of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark.
 
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Defense counsel: Ronzell Mitchell: Paul Brickfield Esq., River Edge, N.J.
Stephanie Mitchell: Susan Cassell Esq., Ridgewood, N.J.

NEWARK, N.J. – A Colorado man was sentenced today to 51 months in prison for his role in a conspiracy to transport women across state lines for prostitution in New Jersey and other states, U.S. Attorney Paul J. Fishman announced.

James Roy Smith, 36, a/k/a “Mister Smith,” of Lakewood, Colorado, previously pleaded guilty before U.S. District Judge Stanley R. Chesler to a superseding information charging him with conspiracy to transport women across state lines to work as prostitutes and transportation of a victim across state lines with the intent that the victim work as a prostitute. Judge Chesler imposed the sentence today in Newark federal court.

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

From February 2009 through June 27, 2010, Smith conspired to operate a prostitution business in numerous locations around the United States, including New Jersey, New Mexico, Nebraska and Pennsylvania. The women would be transported between states by air as well as in a Cadillac Escalade registered to Smith’s uncle. In order to attract and locate local customers, the conspirators would place advertisements for escort services on Craigslist as well as Backpage.com.

Smith admitted that in late June 2010, he conspired to transport six women from New Jersey to Philadelphia to work as prostitutes. During that time, while checked in at the Econolodge in Elizabeth, New Jersey, he also caused a victim to be transported between these two states with the intent that the victim work as a prostitute.

In addition to the prison term, Judge Chesler sentenced Smith to 15 years of supervised release, fined him $5,000 and ordered him to forfeit the Cadillac.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, with investigation leading to today’s sentencing. He also thanked FBI offices in Omaha, Nebraska and Salt Lake City, Utah; the Union County, New Jersey, Prosecutor’s Office; the Elizabeth, New Jersey, Police Department; and the Clay County, Nebraska, Sheriff’s Office for their roles in the investigation.

The government is represented by Senior Litigation Counsel Leslie F. Schwartz of the U.S. Attorney’s Office Criminal Division in Newark.

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Defense counsel: Brooke M. Barnett Esq., Newark

NEWARK, N.J. - A Belleville, New Jersey, pharmacist and 15 others were charged today for their roles in a scheme to fraudulently obtain and distribute oxycodone, U.S. Attorney Paul J. Fishman announced.

The defendants are each charged by criminal complaint with a single count of conspiring to possess and distribute oxycodone, a Schedule II controlled substance. Federal agents of the Drug Enforcement Administration Tactical Diversion Squad arrested 12 of the defendants today and two on Aug. 12, 2014. The defendants in custody are making their initial appearance this afternoon before U.S. Magistrate Judge Mark Falk in Newark federal court. Two defendants remain at large.

According to the complaint:

Using confidential sources, physical surveillance, and recorded text messages and telephone calls, investigators with the DEA discovered that members and suppliers of a drug trafficking organization (DTO) secured prescriptions for oxycodone and other controlled substances from various doctors in New Jersey, filled them at pharmacies in Belleville and elsewhere, and sold the drugs for a profit. The investigation identified Victoria Horvath, 42, of Elizabeth, New Jersey, as a senior member of the DTO, who obtained and filled prescriptions for controlled substances and then distributed them.

Vincent Cozzarelli, 77, of Belleville, is a pharmacist and owner of Rossmore Pharmacy in Belleville. The investigation revealed that Cozzarelli supplied Victoria Horvath and the DTO with oxycodone and other controlled substances even though he knew the prescriptions were fraudulently obtained and that the DTO would illegally distribute the controlled substances.

The conspiracy charge carries a maximum potential penalty of 20 years in prison and a $1 million fine.

U.S. Attorney Fishman credited special agents of the DEA under the direction of Special Agent in Charge Carl. J Kotowski for the investigation leading to the arrests. He also thanked the Belleville and Elizabeth police departments for their contribution to the case.

The government is represented by Assistant U.S. Attorney Charlton A. Rugg of the Organized Crime Drug Enforcement Task Force in Newark.

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

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DEFENDANT

AGE

RESIDENCE

42

Elizabeth, New Jersey

Alexis Horvath, a/k/a “Tima”

26

Elizabeth

Rickie Horvath, a/k/a “Yoggi”

53

Elizabeth

Steven Horvath, a/k/a “Chi-Chi,”

43

Elizabeth

Tony Marco

45

Elizabeth

Vincent Cozzarelli

77

Belleville

Daniel Horvath

25

Rutherford, New Jersey

Monica Horvath, a/k/a “Becky”

20

Rutherford

Johnny Horvath

45

Rutherford

Rhonda Musallam

38

Jersey City

Sabrina Vajda

31

Brooklyn, New York

Justin Farraj, a/k/a “Blaze”

23

Newark

Robert O’Brien

57

Bloomfield, New Jersey

Brian Perez, a/k/a “B,”

21

Newark

Matthew Policarpio, a/k/a “Papi”

26

Newark

Luis Rivera, a/k/a “Tupac”

23

Bloomfield

denotes still at large

Horvath, Victoria et al. Complaint

TRENTON, N.J. – A regional manager and a product specialist selling medical devices to hospitals for Integra LifeSciences Corp. of Plainsboro, New Jersey, today admitted their roles in a scheme to defraud hospitals of more than $800,000, U.S. Attorney Paul J. Fishman announced.

Daniel Metz, 34, of Fairfield, New Jersey, and Charles B. Carey Jr., 35, of Clark, New Jersey, each pleaded guilty before U.S. District Judge Joel A. Pisano in Trenton federal court to separate informations charging them with conspiracy to commit wire fraud.

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

Integra is a provider of orthopedic products, including devices and implants for the spine, foot and ankle, hand and wrist, and shoulder and elbow. Metz worked there from July 2005 until his termination in April 2013, first as a product specialist (also referred to as a sales representative) and then as Northeast regional manager, supervising 16 product specialists and assistant sales representatives in Massachusetts, New Jersey, New York, and Pennsylvania.  Carey was a product specialist, reporting to Metz, from January 2009 until he resigned in April 2011.

Product specialists at Integra were responsible for calling on surgeons to increase sales volume and were routinely present during surgeries. When present during surgeries, product specialists brought with them consignment trays with pre-packaged Integra products available to surgeons, as well as surgery-specific products. Integra billed the hospitals and surgery centers for the products used and product specialists (and their supervisors) were compensated based on salary, sales target-based commission and bonuses.

Metz admitted he used various fraudulent methods to overcharge hospitals and surgery centers. He would sometimes charge for a greater quantity or a more expensive product than was actually used, increasing his compensation and improving his employment evaluations.

Metz and Carey admitted that after Metz became regional manager, he taught at least some of the fraudulent methods to product specialists working for him, including Carey, who sometimes employed those methods.

Metz and Carey fraudulently caused medical facilities to pay more than $800,000 in inflated bills.

The count of conspiracy to commit wire fraud to which Metz and Carey pleaded guilty carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense.  Metz and Carey also agreed to forfeit $100,000 and $77,000, respectively, representing the amounts of money they personally made through the fraud scheme. The defrauded hospitals have been reimbursed by Integra for the fraudulent charges.

Sentencing is scheduled for Jan. 20, 2015.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, with the investigation leading to today’s guilty pleas. He also thanked detectives of the Morris County Prosecutor’s Office, under the direction of Prosecutor Fredric M. Knapp, for their contributions to the investigation.

The government is represented by Jacob T. Elberg, Chief of the U.S. Attorney’s Office’s Health Care and Government Fraud Unit, in Newark.

U.S. Attorney Paul J. Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses.  Since 2010, the office has recovered more than $540 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.

14-290                                                               

Defense counsel: Metz: Lawrence Lustberg Esq., Newark
Carey: Timothy Donohue Esq., West Orange, N.J.

Metz, Daniel Information
Carey, Charles Information

TRENTON, N.J. – A Florida man today admitted producing and selling potentially deadly toxins ricin and abrin for use as weapons and conspiring to kill a woman in the United Kingdom, U.S. Attorney Paul J. Fishman announced.

Jesse William Korff, 19, of LaBelle, Florida, pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton federal court to an information charging him with five counts of developing, producing, transferring and possessing toxins, five counts of smuggling toxins and one count of conspiring to kill a person in a foreign country.

Korff was arrested in Florida on Jan. 18, 2014, following a joint investigation by U.S. Immigration and Customs Enforcement, Homeland Security Investigations (ICE-HSI) and the FBI.

“Jesse Korff admitted producing and selling potentially deadly toxins to strangers over the Internet,” U.S. Attorney Fishman said. “Working in the shadows of a secretive computer network favored by cybercriminals, he peddled his poison on a virtual black market of illegal and dangerous goods. Today he admitted he was in the midst of aiding an overseas customer in an attempted murder. Thankfully, an undercover law enforcement officer posing as a buyer was able get Korff off the street before he could conclude the transaction.”

“HSI has worked tirelessly with our law enforcement partners to shutter underground websites such as BMR and arrest those responsible for reckless and dangerous illegal activity,” Andrew McLees, special agent in charge of HSI Newark, said. “Anyone involved in the sale of toxins designed for use in chemical terrorism must be stopped, and this guilty plea shows HSI’s commitment to stopping individuals who show callous disregard for public safety in the interest of making a buck.”

“The overriding focus of the FBI’s WMD Directorate, and the primary focus of the FBI's overall efforts is prevention,” Aaron T. Ford, Special Agent in Charge of FBI, Newark, said. “To keep the threat posed by Korff from becoming a reality, the FBI leveraged subject matter experts to include WMD coordinators, special agent bomb technicians, hazardous evidence response teams, surveillance and computer forensics personnel to disrupt the activities of Korff. The intensive three-day search, evidence collection, analysis and investigation uncovered an international nexus to Korff. Working through FBI legal attachés, information gleaned from the investigation was communicated to foreign law enforcement partners to disrupt international subjects.”

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

In April 2013 HSI special agents began investigating illicit sales activity on an underground Internet marketplace known as “Black Market Reloaded” (BMR). The website provided a platform for vendors and buyers to conduct anonymous online transactions involving biological agents, toxins, firearms, ammunition, explosives, narcotics and counterfeit items.

From August 2013 through January 2014 Korff maintained a seller’s profile on BMR under the screen name “Snowman840.” He advertised the sale of deadly toxins and provided his prospective purchasers with information about quantities necessary to kill a person of a given weight, along with instructions on how to secretly administer the toxin to avoid suspicion. Korff sold ricin and abrin to international purchasers in India, Austria, Denmark and England. He smuggled the toxins from Florida to the international purchasers by concealing the toxins in packages sent through the U.S. Postal Service.

In December 2013 Korff provided a quantity of abrin to a purchaser in London who claimed she intended to kill her mother. After the purchaser’s receipt and administration of the initial dose, which she claimed was ineffective, Korff agreed to provide a second quantity of the toxin in order to assist the purchaser in the implementation of the murder plot.

Before Korff had an opportunity to smuggle the second dose of abrin to the London purchaser, a federal undercover agent contacted Korff through BMR and negotiated the sale of two liquid doses of abrin. Korff told the buyer about his delivery methods – concealing vials in a carved-out and re-melted candle – and discussed how much abrin was needed to kill a person of a particular weight and how best to administer the toxin. Korff also assured the buyer that a victim’s death would appear to be similar to a bad case of the flu.

Following Korff’s arrest, FBI agents searched Korff’s property over three days and recovered several computers, castor beans, rosary peas, capsules, vials, jars, syringes, filters, respirators and other items commonly utilized in the manufacture, production, sale, packaging, and shipping of toxins and chemical substances. Among the items recovered was a liquid dose of abrin that Korff had intended to ship to the London purchaser.

The toxin and murder conspiracy charges to which Korff pleaded guilty carry a maximum potential penalty of life in prison and a $250,000 fine. The smuggling charges carry a maximum potential penalty of 10 years in prison and a $250,000 fine. Sentencing is scheduled for Nov. 21, 2014.

U.S. Attorney Fishman credited special agents of HSI, under the direction of Special Agent in Charge McLees in Newark, New Jersey; special agents of the FBI in Newark, under the direction of Special Agent in Charge Ford; and FBI special agents under the direction of Special Agent in Charge Paul Wysopal, Tampa Division, with the investigation leading to today’s guilty plea. He also thanked HSI in Ft. Myers, Florida, under the direction of Special Agent in Charge Susan McCormick, for their work. The U.S. Attorney also thanked the FBI’s Joint Terrorism Task Force, including the U.S. Postal Inspection Service and the Glades County, Henry County and Lee County, Florida, sheriff’s offices for their assistance. Vital support was provided by the Justice Department’s National Security Division Counterterrorism Section and FBI WMD Directorate in Washington, the FBI Laboratory Division, the DHS National Bioforensic Analysis Center; the U.S. Attorney’s Office for the Middle District of Florida; and the London Metropolitan Police Service (MPS), SO15 Counter Terrorism Command, under the direction of Commander Duncan Ball.

The government is represented by Assistant U.S. Attorney Dennis C. Carletta of the U.S. Attorney’s Office National Security Unit in Newark.

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Defense counsel:  David Holman Esq., Newark

Korff, Jesse Information

NEWARK, N.J. – An Ithaca, New York, man appeared in federal court today on charges he allegedly engaged in abusive sexual contact with a sleeping woman aboard a flight from Tokyo, Japan, to Newark Liberty International Airport, U.S. Attorney Paul J. Fishman announced.

Eun Jong Lee, 47, was detained upon arrival in Newark yesterday evening, Aug.10, 2014, and arrested by agents of the FBI. He was charged by complaint with abusive sexual contact and appeared this afternoon before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court.

According to the complaint filed today:

Lee was seated next to a woman on a United Airlines flight from Tokyo to Newark.  While the plane was in the air, the woman B who did not know Lee B fell asleep. She awoke to find Lee’s hand on the front of her shirt, touching her breast through her clothing. Lee then touched the skin of her neck and attempted to place his hand down the front of the woman’s shirt.

After asking Lee to stop touching her, the woman reported the incident to a flight crew member and provided the crew member a written statement describing what happened. The federal government has exclusive jurisdiction over all abusive sexual contact cases that occur in American airplanes in flight.

The abusive sexual contact charge carries a maximum potential penalty of two 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, with the investigation leading to the arrest. He also thanked the Port Authority of New York and New Jersey Police Department for their role in the case.

The government is represented by Shirley U. Emehelu of the U.S. Attorney’s Office Criminal Division in Newark.

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

14-289                                                           

Defense counsel: John Yauch Esq., Assistant Federal Public Defender, Newark

Lee, Eun Jong Complaint

NEWARK, N.J. – An Ocean County, New Jersey, man will make his initial court appearance today on charges that he allegedly robbed seven banks between October 2013 and January 2014, U.S. Attorney Paul J. Fishman announced.

Steven Wisnowski, 30, of Barnegat, New Jersey, is charged in a superseding complaint with seven counts of bank robbery. He made his initial court appearance today before U.S. Magistrate Judge Mark Falk in Newark federal court.

According to the superseding complaint:

Wisnowski allegedly went on a crime spree in which he robbed seven banks throughout Middlesex, Ocean, and Monmouth counties between October 2013 and January 2014.  Wisnowski robbed the following banks on the following dates:

Bank Name

Location

Date

Edison

Oct. 30, 2013

TD Bank

Brick

Nov. 7, 2013

Santander Bank

Brick

Nov. 15, 2013

Columbia Bank

Edison

Nov. 27, 2013

TD Bank

Toms River

Dec. 2, 2013

PNC Bank

Aberdeen

Dec. 9, 2013

Fulton Bank

Edison

Jan. 7, 2014

Wisnowski allegedly entered the banks wearing hats, hooded jackets and wigs to conceal his identity, approached the bank tellers and demanded money. During the Columbia Bank robbery, Wisnowski appeared to point something at the teller from under his clothing, as if he had a gun. Wisnowski then demanded money, stating: “Give me all your hundreds.”  As the teller gathered the money, Wisnowski counted backwards from 10.  He then fled with the money.

During the Fulton Bank robbery, Wisnowski allegedly gave a teller a manila envelope and stated, “Give me what I want and nobody gets hurt. I want large bills.”  He then pulled up his sweatshirt as if he had a gun. The teller gathered the money and placed it in the envelope, after which Wisnowski fled.

Law enforcement tracked Wisnowski’s vehicle to the scene of the Fulton Bank robbery and waited for him outside. They approached Wisnowski as he exited the bank and ordered him to the ground at gunpoint. Wisnowski threw the envelope filled with cash and ran. Law enforcement officers pursued Wisnowski and apprehended him moments later.

Each count of bank robbery with which Wisnowski is charged carries a maximum penalty of 20 years in prison and a fine of $250,000.

U.S. Attorney Fishman praised special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, with the investigation leading to the arrest and charges. He also thanked the Edison, Aberdeen, Brick, and Toms River police departments, and the Middlesex, Ocean, and Monmouth County prosecutor’s offices for their contributions to the case.

The government is represented by Assistant U.S. Attorney Jamari Buxton of the U.S. Attorney’s General Crimes Unit in Newark.

The charges and allegations in the complaint are merely accusations, and the defendant is considered innocent until proven guilty in a court of law.

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Wisnowski, Steven Superseding Complaint

NEWARK, N.J. – A Florida man pleaded guilty today to his role in a conspiracy to possess and traffic stolen credit card data held by New Jersey residents, U.S. Attorney Paul J. Fishman announced.

Miguel Gonzalez, 40, of Miami, Florida, pleaded guilty before U.S. District Court Judge Esther Salas in Newark federal court to an information charging him with one count of conspiracy to commit wire fraud.

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

Between January 2010 and July 2013, Gonzalez obtained and possessed stolen credit card data for more than 114,000 credit card accounts. Gonzalez purchased the stolen credit card information from various vendors who advertise and transmit the data over the Internet using email and instant chat software. These vendors sold stolen credit card data obtained from network intrusions into various corporate victims, including major retailers in the state of New Jersey. The stolen credit card data was used by Gonzalez and others to create counterfeit credit cards, which were used to enter into unauthorized and fraudulent transactions. The credit card issuers associated with the more than 114,000 stolen credit card accounts suffered a combined loss of more than $23 million. Gonzalez used the proceeds of his illegal activity to purchase multiple homes, expensive jewelry and a speedboat.

The conspiracy to commit wire fraud charge carries a maximum potential penalty of 30 years in prison and a $1 million fine. Sentencing is scheduled for Nov. 21, 2014.

U.S. Attorney Fishman credited agents of the U.S. 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 Andrew S. Pak of the Computer Hacking and Intellectual Property Section of the Office’s Economic Crimes Unit.

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Defense counsel: Ricardo P. Hermida Esq., Miami 

Gonzalez, Miguel Information

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

Marcus Taylor, 41, of Sicklerville, New Jersey, pleaded guilty before U.S. District Judge Renee Marie Bumb to an information charging him with distributing and possessing with intent to distribute oxycodone. As part of his plea agreement, Taylor will forfeit $8,775, consisting of the illegal profits obtained from his sale of oxycodone.

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

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

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

The drug distribution charge carries a maximum potential penalty of 20 years of in prison and a $1 million fine. Sentencing is scheduled for Nov. 14, 2014.

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

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

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Defense counsel: Edward Plaza Esq., Little Silver, New Jersey

Taylor, Marcus Information

NEWARK, N.J. - A Chicago man was sentenced today to 63 months in prison for stealing more than $1 million worth of iPhones and iPads from Verizon Wireless by misappropriating corporate purchasing accounts and then diverting the shipments by bribing Federal Express drivers, U.S. Attorney Paul J. Fishman announced.

Stephen Gunn, 36, previously pleaded guilty before U.S. District Judge Claire C. Cecchi to an indictment charging him with one count of conspiracy to commit wire fraud. Judge Cecchi imposed the sentence today in Newark federal court.

According to documents filed in this case and statements made in court: Gunn accessed the online accounts of dozens of Verizon’s customers, including several customers located in New Jersey, and used those accounts to place unauthorized orders for electronics products, primarily smart phones and accessories. He directed the fraudulently ordered products to be shipped to addresses in Texas, including several addresses that did not exist, via Federal Express.

At Gunn’s direction, two Federal Express drivers intercepted the shipments, removed the contents, and re-shipped the contents to addresses in Illinois provided by Gunn. In exchange, Gunn paid each of the drivers thousands of dollars. Gunn fraudulently obtained approximately 1,700 items – including several hundred Apple iPhones and iPads, Blackberry devices, and Motorola phones – worth more than $1 million.

In addition to the prison term, Judge Cecchi sentenced Gunn to serve three years of supervised release and pay $2,002,424.40 in restitution.

The two drivers who conspired with Gunn, Marion Samuel Perkins and George Greene Jr., were prosecuted by the U.S. Attorney’s Office for the Western District of Texas, pleaded guilty, and were sentenced to prison terms.

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.

The government is represented by Assistant U.S. Attorney Daniel V. Shapiro of the Computer Hacking and Intellectual Property Crimes Section of the U.S. Attorney’s Office Economic Crimes Unit in Newark.

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Defense counsel: Assistant Federal Public Defender David Holman Esq., Newark

NEWARK, N.J. - A Chicago man was sentenced today to 63 months in prison for stealing more than $1 million worth of iPhones and iPads from Verizon Wireless by misappropriating corporate purchasing accounts and then diverting the shipments by bribing Federal Express drivers, U.S. Attorney Paul J. Fishman announced.

Stephen Gunn, 36, previously pleaded guilty before U.S. District Judge Claire C. Cecchi to an indictment charging him with one count of conspiracy to commit wire fraud. Judge Cecchi imposed the sentence today in Newark federal court.

According to documents filed in this case and statements made in court: Gunn accessed the online accounts of dozens of Verizon’s customers, including several customers located in New Jersey, and used those accounts to place unauthorized orders for electronics products, primarily smart phones and accessories. He directed the fraudulently ordered products to be shipped to addresses in Texas, including several addresses that did not exist, via Federal Express.

At Gunn’s direction, two Federal Express drivers intercepted the shipments, removed the contents, and re-shipped the contents to addresses in Illinois provided by Gunn. In exchange, Gunn paid each of the drivers thousands of dollars. Gunn fraudulently obtained approximately 1,700 items – including several hundred Apple iPhones and iPads, Blackberry devices, and Motorola phones – worth more than $1 million.

In addition to the prison term, Judge Cecchi sentenced Gunn to serve three years of supervised release and pay $2,002,424.40 in restitution.

The two drivers who conspired with Gunn, Marion Samuel Perkins and George Greene Jr., were prosecuted by the U.S. Attorney’s Office for the Western District of Texas, pleaded guilty, and were sentenced to prison terms.

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.

The government is represented by Assistant U.S. Attorney Daniel V. Shapiro of the Computer Hacking and Intellectual Property Crimes Section of the U.S. Attorney’s Office Economic Crimes Unit in Newark.

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Defense counsel: Assistant Federal Public Defender David Holman Esq., Newark

Newark, N.J. – A man who admitted using a note to rob the Valley National Bank in Clifton, New Jersey, was sentenced today to 55 months in prison, U.S. Attorney Paul J. Fishman announced.

Wayne Winner, 50, of Nutley, New Jersey, pleaded guilty on April 8, 2014, to an information charging him with robbing the bank on Jan. 4, 2013. U.S. District Judge William H. Walls imposed the sentence today in Newark federal court. 

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

Winner admitted to entering the Valley National Bank in Clifton, New Jersey on Jan. 4, 2013, and handing a bag and a note to a bank teller which read, “No joke, loose bills, no dye, in a hurry.” He also admitted he intended to intimidate the teller, who placed cash in the bag before Winner left the premises.

Winner was sentenced to 40 months in prison for the April bank robbery. Judge Walls imposed the additional 15 months, to run consecutively for a total of 55 months, because Winner violated the terms of his supervised release following a prior federal bank robbery conviction – by robbing the Clifton bank. In addition to the prison term, Judge Walls sentenced Winner to a year of supervised release.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, along with the Passaic County Prosecutor’s Office and the Clifton Police Department for their work leading to Winner’s conviction.

The government is represented by Assistant U.S. Attorneys Josh Hafetz and Courtney Oliva of the U.S. Attorney’s Office General Crimes Unit in Newark.

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Defense counsel: Assistant Federal Public Defender Peter Carter Esq., Newark

Charges Include Participation in Separate $2 Million Mortgage Fraud Scheme

CAMDEN, N.J. - An Egg Harbor Township, New Jersey, man was sentenced today to 57 months in prison for trafficking millions of dollars in contraband cigarettes, laundering the proceeds through his South Jersey store and participating in a $2 million mortgage scheme in New York, U.S. Attorney Paul J. Fishman announced.

Muhammad Shafique, 44, previously pleaded guilty before U.S. District Judge Noel L. Hillman to charges of conspiracy to traffic contraband cigarettes, conspiracy to commit money laundering and conspiracy to commit wire and bank fraud. Judge Hillman imposed the sentence today in Camden federal court. 

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

From June 2010 through February 2012, Shafique engaged in a large-scale operation to traffic 149,668 cases of contraband cigarettes and defraud New Jersey of more than $4 million dollars in tax revenue. Shafique purchased the cigarettes from undercover officers and then laundered the proceeds through the bank account of Get & Go Supermarket in Pleasantville, New Jersey, a store he purchased in part with funds from the scheme. 

Shafique was also involved in a separate conspiracy to use stolen identities to fraudulently obtain mortgage loans on properties in New York. Using falsified identification documents and straw buyers posing as the actual homeowners, Shafique and other conspirators defrauded various banks and lenders out of almost $2 million. 

In addition to the prison term, Judge Hillman sentenced Shafique to serve five years of supervised release and ordered him to pay restitution of $4,046,382 for the cigarette trafficking and an additional $1,405,000 for the mortgage fraud

U.S. Attorney Fishman credited special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Robin Shoemaker, and special agents of the FBI in New Jersey and New York, under the direction of Special Agent in Charge Aaron T. Ford and Assistant Director in Charge George Venizelos, respectively.

The government is represented by Assistant U.S. Attorney Diana Carrig of the U.S. Attorney’s Office in Camden, New Jersey.

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Defense counsel: Jose Luis Ongay Esq., Philadelphia

NEWARK, N.J. – An Ocean County, New Jersey, man who is a reputed associate of the Genovese Crime Family was sentenced today to prison for his role in a racketeering conspiracy and tax evasion conspiracy, U.S. Attorney Paul J. Fishman announced. Also today, a New York man was sentenced to prison and a Hudson County, New Jersey, man pleaded guilty in connection their respective parts in the scheme.

John Breheney, a/k/a “Fu,” 49, of Little Egg Harbor, New Jersey, was sentenced to 38 months in prison. He previously pleaded guilty before U.S. District Judge Claire C. Cecchi, who imposed the sentence today in Newark federal court, to an information charging him with conspiracy to violate the Racketeer Influenced and Corrupt Organizations, or RICO, statute by participating in the activities of the Genovese Crime Family of La Cosa Nostra through a pattern of racketeering activity and through the collection of unlawful debt. He also pleaded guilty to tax evasion.

Patsy Pirozzi, 75, of Suffern, New York, was also sentenced today to 22 months in prison. Pirozzi previously pleaded guilty before Judge Cecchi to an information charging him with conspiracy to violate the RICO statute.

And Eric Patten 37, of Bayonne, New Jersey, pleaded guilty today before Judge Cecchi to an information charging him with conspiracy to violate the RICO statute.

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.

Breheney, Pirozzi and Patten each pleaded guilty to being associates of and conspiring with the Genovese crime family.

Mark Sanzo, Robert Scerbo, William Bruder, Michael O’Donnell, Graziano, Barone, Salvatore Turchio, 48, of Little Egg Harbor, New Jersey and Jose Gotay, 76, New Milford, New Jersey have also 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.

In addition to the prison terms, Judge Cecchi sentenced Breheney three years of supervised release, fined him $16,000 and ordered him to pay forfeiture of $400,000. Pirozzi was also sentenced to three years of supervised release and ordered to pay forfeiture of $31,400.

The conspiracy count to which Patten pleaded guilty carries a maximum potential punishment of 20 years in prison and a fine of $250,000.  Sentencing is scheduled for Dec. 3, 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 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:

Breheney: Anthony J. Pope Jr. Esq., Newark
Pirozzi: Michael D’Alessio Jr. Esq., Roseland, New Jersey
Patten: Alan Dexter Bowman Esq., Newark

Patten, Eric Information

Sixth Defendant Charged With Related Firearms Offense in Investigation That Intercepted at Least 22 Weapons Bound for South Jersey

CAMDEN, N.J. – Five Camden County, N.J., men and a woman from South Carolina are charged with federal firearms violations following an investigation led by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) that resulted in multiple arrests last night and this morning and the confiscation of numerous guns bound for the streets of Camden, Clementon and Lawnside, New Jersey, U.S. Attorney Paul J. Fishman announced.

Marcus Rutling, 32, of Camden and Saluda, South Carolina; Joseph Rutling, 23, of Camden; Katelynn Schippnick, 24, of Greeleyville, South Carolina: Shawn Tribbett, 32, of Camden, and Anthony Gilmore, 24, of Lawnside, are each charged with conspiracy to traffic in firearms without a license. Tribbett and a sixth defendant: Lewis DiMatessa, 37, of Clementon, are also each charged with being a felon in possession of a firearm.

Tribbett was arrested late yesterday and Gilmore, Schippnick and DiMatessa were arrested this morning by ATF special agents. The Rutlings were already in statecustody on unrelated charges.

Tribbett, Gilmore and  DiMatessa made their initial appearance in federal court today before U.S. Magistrate Judge Joel Schneider. All three were remanded to custody. Schippnick made her initial appearance in U.S. District Court for the District of South Carolina before U.S. Magistrate Judge Kay West and was released on bond. She has been ordered to appear in New Jersey before Judge Schneider on Aug. 12, 2014. Joseph and Marcus Rutling will make their initial appearances on Aug. 26, 2014. 

According to documents filed in this case and statements made in court: Over the course of the investigation, ATF special agents used a confidential informant to purchase at least 22 firearms from illegal gun brokers and dealers, including an assault rifle, shotguns, handguns and ammunition, as well as a bullet-proof vest.

The Rutlings sold guns – including the assault rifle – and ammunition out of several locations in Camden and Lawnside. The complaints charging them detail several transactions, including a sale in which the defendants provided the informant with a short-barreled shotgun out of their house in Camden.  The men said they obtained the firearms in South Carolina and brought them to New Jersey on a weekly basis, at times using Amtrak trains to transport the guns.

Gilmore sold handguns, shotguns and a bullet proof vest, mostly from a house on LaPierre Avenue in Lawnside, with Tribbett and Schippnick serving as brokers for the transactions. Tribbett, a previously convicted felon, brokered a deal in which DiMatessa, also a convicted felon, sold a rifle to the informant.
U.S. Attorney Fishman credited the ATF special agents, under the direction of ATF Special Agent in Charge George Belsky in Newark, with the ongoing investigation, and thanked special agents from the Drug Enforcement Administration, under the direction of DEA Special Agent in Charge Carl J. Kotowski, as well as officers from the Winslow Township and Clementon Police Departments, for their work leading to the arrests.

The conspiracy to traffic in firearms without a license charge carries a maximum potential penalty of five years in prison, and the felon-in-possession of a firearm charge carries a maximum potential penalty of 10 years in prison. Each count also carries a maximum $250,000 fine.

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

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

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Defense counsel:

Shawn Tribbett: Brian O’Malley Esq., Haddon Heights, New Jersey
Lewis DiMattesa: Michael Riley Esq., Mount Holly, New Jersey
Anthony Gilmore: Assistant Federal Public Defender Christopher O’Malley Esq., Camden
Marcus Rutling: Edward Borden Esq., Cherry Hill, N.J.
Joseph Rutling: Mark Catanzaro Esq., Moorestown, N.J.

Rutling, Marcus Complaint
Rutling, Joseph Complaint
Tribbett, Shawn Complaint
Gilmore, Anthony Complaint
DiMatessa, Lewis Complaint
Schippnick, Katelyn Complaint

TRENTON, N.J. – A Mercer County, New Jersey, man was sentenced today to 87 months in prison for his role in a conspiracy to distribute oxycodone pain pills, U.S. Attorney Paul J. Fishman announced.

Anthony DiMatteo, 32, of Trenton, previously pleaded guilty before U.S. District Judge Michael A. Shipp in Trenton federal court to an indictment charging him with conspiracy to distribute and possess with intent to distribute oxycodone. Judge Shipp imposed the sentence today in Trenton federal court.

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

Between May 2011 and October 2011, DiMatteo sold oxycodone-based prescription pain pills that he received from his conspirators, Joseph A. “JoJo” Giorgianni, Charles Hall III and Mary Manfredo. DiMatteo obtained the pills at JoJo’s Steakhouse in Trenton and sold them, remitting a portion of the proceeds to Giorgianni and Hall. DiMatteo also told Hall how Hall himself could obtain prescription pain pills, which could later be sold, from a Nutley, New Jersey, doctor.

In addition to the prison term, Judge Shipp sentenced DiMatteo to serve three years of supervised release and fined him $1,000.

U.S. Attorney Fishman credited special agents of the FBI’s Trenton Resident Agency, Newark Field Office, under the direction of Special Agent in Charge Aaron T. Ford, for the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorneys Eric W. Moran and Matthew J. Skahill of the U.S. Attorney’s Office Special Prosecutions Division in Trenton and Camden, respectively.

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Defense counsel: Edward Plaza Esq., Little Silver, New Jersey

CAMDEN, N.J. – A former branch manager for Newfield National Bank in Franklinville, New Jersey, today admitted that she embezzled $263,864 from the bank, U.S. Attorney Paul J. Fishman announced.

Season Wengert, 32, of Franklinville, pleaded guilty before U.S. District Court Judge Robert B. Kugler in Camden federal court to an information charging her with one count of bank embezzlement. Wengert was released on bail after her guilty plea hearing.

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

Wengert worked as the bank manager at the Franklinville Branch of the Newfield National Bank. From Sept. 4, 2007, through Jan. 7, 2013, Wengert embezzled funds by fraudulently conducting online computer transfers of money from 38 accounts belonging to 23 customers into accounts owned by her or her husband. She also withdrew money from customers’ accounts and deposited it into her accounts. As branch manager, Wengert was able to conceal her embezzlement by failing to note the fraudulent withdrawals in the customers’ passbooks and by transferring money through various customers’ accounts to cover shortages. When customers sought to withdraw money from an account which had been embezzled, Wengert would then transfer money from another victim’s account to cover the withdrawal and conceal her fraudulent conduct.  Wengert stole $263,864 for her own use.

The bank embezzlement count to which Wenger pleaded guilty carries a maximum potential penalty of 30 years in prison and a $1 million fine. Under the terms of her plea agreement, Wenger is required to make full restitution to her former employer for all of the losses resulting from her embezzlement. Sentencing is scheduled for Nov. 13, 2014.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Edward J. Hanko in Philadelphia, with the investigation leading to the 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: John C. Eastlack Jr. Esq., Cherry Hill, New Jersey

Wengert, Season Information

CAMDEN, N.J. - A Pennsylvania man was sentenced today to 180 months in prison for his role in a conspiracy to rob a drug stash house in order to sell the stolen cocaine, U.S. Attorney Paul J. Fishman announced.

Ralph Dennis, 35, and conspirator Terrance Hardee, a/k/a “Fat Cat,” 37, both of Philadelphia, were previously convicted of one count of conspiracy to commit robbery and one count of conspiracy to possess more than five kilograms of cocaine with intent to distribute. Dennis was also found guilty of using and carrying a firearm during a violent crime. The jury returned the verdict on the second day of deliberations following a three-week trial before U.S. District Judge Joseph E. Irenas, who imposed Dennis’ sentence today in Camden federal court.

Hardee awaits sentencing.

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

In June and July of 2012, Dennis and Hardee planned a gunpoint robbery of a drug stash house. They prepared to steal multiple kilograms of cocaine from the drug dealers at the location, then sell it themselves to make a profit.

During the investigation, Dennis was recorded discussing his willingness to kill anyone they found inside the house as they were robbing it. Hardee was recorded talking about his role – tying up the house’s occupants with zip ties.

Special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) arrested the pair when they arrived in Maple Shade, New Jersey, on July 16, 2012, on their way to the robbery location, with Dennis carrying a gun. Dennis and Hardee also brought gloves, and zip ties were found in the car they drove to Maple Shade. 

In addition to the prison term, Judge Irenas sentenced Dennis to five years of supervised release.

U.S. Attorney Fishman credited ATF special agents in Cherry Hill, New Jersey, under the direction of Special Agent in Charge Robin Shoemaker, with the investigation leading to today’s sentence.

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

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Defense counsel: Thomas Young and Christopher O’Malley, Esqs. Assistant Federal Public Defenders, Camden

NEWARK, N.J. - A Staten Island, New York, woman today admitted her role in one of the nation’s largest and longest running stolen identity refund fraud schemes ever identified, in which more than 8,000 fraudulent U.S. income tax returns sought more than $65 million in tax refunds and resulted in losses to the United States of more than $12 million, U.S. Attorney Paul J. Fishman announced.

Elian Matlovsky, 29, pleaded guilty today before U.S. District Judge Claire C. Cecchi to an information charging her with one count of conspiracy to defraud the United States and one count of theft of government property.

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

 Stolen Identity Refund Fraud

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 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.

Matlovsky 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.

Matlovsky and others then deposited and cashed the checks.  The conspirators used several methods, but Matlovsky opened several bank accounts, into which she deposited nearly $1 million in Tax Refund Treasury Checks.  Once the Tax Refund Treasury Checks were deposited into Matlovsky’s accounts, she and others caused proceeds of the fraud to be withdrawn, and spent those funds.

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.

The conspiracy count carries a maximum potential penalty of five years in prison and up to a $250,000 fine.  The substantive count of theft of government property carries a maximum potential penalty of 10 years in prison and up to a $250,000 fine.  The theft of mail by a postal employee carries a maximum potential penalty of five years in prison and up to a $250,000 fine. Sentencing is scheduled for Nov. 18, 2014.

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 Srinavasan Herman, Zach Intrater, and Danielle Walsman of the U.S. Attorney’s Office Criminal Division in Newark.

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Defense Counsel:  Henry E. Klingeman Esq., Newark, New Jersey

Matlovsky, Elian Information

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 Information

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 Jersey

Sanzo, Mark Information
Scerbo, Robert Information
Bruder, William Information

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 Fraud

 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 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.

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.

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Defense Counsel: Christopher Patella Esq., Bayonne, New Jersey

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., Newark

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.

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Defense counsel: Brian P. Reilly Esq., Assistant Federal Public Defender, Trenton

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.

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Defense counsel: Scott Telson Esq., Edison, New Jersey

Spisto, Paul Complaint

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

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 Jersey

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.

14-264                                                

Defense counsel: Roy Greenman Esq., Union, N.J.

Hernandez, Raymundo Information

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.

14-268                                                             

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

Kahan, Robert Indictment

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 Jersey

Graziano, Joseph Information
Barone, Dominick Information

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

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.

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Defense counsel: Yarleque: Peter Willis Esq., of Jersey City, New Jersey
Moreno: Chester Keller Esq. and Carol Gillen Esq., Assistant Federal Public Defenders, Newark

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

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

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

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.

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

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Defense counsel: Maggie Moy Esq., Assistant Federal Public Defender, Camden

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