District of New Jersey

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NEWARK, NEW JERSEY

Good afternoon, and thank you all for being here.

We are here today to discuss two things.  First, we want to describe the results of the investigation of the Newark Police Department that my office has conducted together with the Justice Department’s Civil Rights Division. And second, based on the results of that investigation, we are announcing that we have signed an agreement in principle with the city and the police department to make the changes that will give the people of Newark the first-class police department they deserve.

Before we start, though, I want to thank Jocelyn Samuels, the Acting Assistant Attorney General of the Justice Department’s Civil Rights Division, and the members of her staff who have worked on this investigation so closely with me and my office. Ms. Samuels will speak to you in a few minutes about why it is so important that our law enforcement officers conduct their vital work in a way that protects us at the same time it honors the Constitution we’ve all sworn to uphold.  I also want to welcome Mayor Ras Baraka, Police Director Eugene Venable, and Chief of Police Anthony Campos. The city and the police department have cooperated throughout our investigation, and their presence here today reflects how deeply committed they are to this process and to the success of the police department.

The remedial measures outlined in the agreement will include significant changes to the department’s policies and procedures for stopping and questioning people; when and how officers use force; what training they receive; and improving the department’s systems of accountability. The agreement also requires fair application of officer discipline, better data collection and analysis, and more rigorous procedures for safeguarding personal property that belongs to people who have been arrested. The agreement specifically states that we will now turn to finalizing a consent decree that will be filed and enforceable in federal court. That document will require the appointment of a monitor to follow and report on the progress that the city and the police department are making. Finally, the agreement recognizes – as all of us up here know – that the police department needs to have a much deeper relationship with the community it protects.

These steps represent a major commitment to changing how the city of Newark will be policed.

So, why do we need these changes? Why are we here today?

Three years ago, we announced that we were launching an investigation into whether the Newark Police Department had engaged in a pattern or practice of unconstitutional policing. During that investigation, we met and spoke with many members of the force at every level, union representatives, other law enforcement agencies, public defenders, community members, elected representatives, and others. We reviewed thousands of reports, NPD polices and training records, and internal affairs files.  Members of the team rode with the police to see first-hand what the challenges they face and how they do their jobs.  We consulted with experts from other police departments around the country.

We saw what we already knew in my office to be true:  most of the men and women who wear the uniform of the Newark Police Department bring enormous dedication and integrity to their jobs every day. But we also found an organization that is challenged in fundamental ways and has engaged in a pattern and practice of unconstitutional policing in a broad range of areas.

Let me start with stops. Over a three-and-a-half year period, nearly 75 percent of the reports of pedestrian stops failed to describe a constitutionally adequate reason for those stops.  To stop someone on the street, an officer must have “reasonable suspicion” that the person is engaged in criminal activity. But the reasons that the police gave for those stops weren’t enough to meet that standard.

Some of this is a lack of clarity in NPD’s policies and training, which has promoted a view that living or simply being in a high-crime area is, in and of itself, criminally suspicious.  But that’s not a constitutional way to police.

We also found that the burden of this practice of stopping people without sufficient reason has fallen most heavily on black people. Eighty-five percent of the people stopped by the police in Newark are black in a city where the black population is 54 percent. So it stands to reason that, if the police are stopping people in Newark for impermissible or insufficient reasons, the people who are most likely to have that happen to them are black.

Let me clear:  we are not saying that this disparate impact is the result of intentional discrimination. There may be other explanations.  But the City of Newark and NPD need to improve the collection and analysis of stop, search, and arrest data to permit more thorough analysis of the racial and ethnic impact of NPD’s police practices, and the Agreement provides for that.

Some of the people who have been stopped and arrested were lawfully objecting to police action or simply behaving in a way that officers perceived as disrespectful. That’s a violation of individuals’ rights under the Fourth and First Amendments. And the city has agreed that this practice has to change too.

We also found reason to believe the NPD has engaged in a pattern or practice of the use of excessive force. Over a six-year period, the NPD sustained only a single complaint that a police officer had used unreasonable force.  While there is no “correct” rate at which a police department must or should sustain these kinds of complaints, that statistic is stunningly low for a police department of the size of NPD.

There are lots of reasons for this problem.  The training on use of force isn’t remotely good enough; the reports themselves have been inadequate; there are a lot of situations in which force has been used and the police simply haven’t reported it; and the investigations by internal affairs have been woefully substandard. No police department can function correctly without effective reporting, supervision, and review of use of force and the city and the police department’s leadership have agreed to fix it.

The investigation also found a pattern or practice of theft of citizens’ property by NPD officers, especially in NPD’s specialized units, such as the narcotics and gang units, and at NPD’s prisoner processing unit. The NPD hasn’t adequately investigated theft complaints, it hasn’t taken corrective action against offending officers, and it has declined to implement even its own investigators’ recommendations to prevent theft. The police department has to adequately screen candidates for specialized assignments, rotate officers, and monitor those whose integrity is in question.

In fact, the entire internal affairs operation of the NPD is in severe need of overhaul.  They need more training; they need more resources; and they need to have a much better system of tracking allegations against officers across the department. The absence of meaningful review has contributed to all of the other issues we’ve identified.

And it is also clear that the police department’s relationship with the people of the city have suffered from the combination of those practices.  Community trust has deteriorated, and that in turn has compromised the effectiveness of the department.

The response to those problems is embodied in the Agreement in Principle that we’ve signed today. This agreement will serve as the framework for a new structure, increased transparency and accountability that is desperately needed to turn this department around.  We are now in position to negotiate the final agreement, including the selection of an independent monitor, but it will certainly include remedial measures to address the deficiencies I’ve just described. Those will include civilian review and community engagement; closer use of force documentation and review; improved internal affairs practices; fair and consistent application of discipline; constitutional stop, search and arrest practices; improved data collection and review; better safeguarding of personal property; and an enhanced early warning system to support effective supervision and management.

The people of Newark deserve to be safe, whether sitting in front of their houses on Bergen Street or walking through Branch Brook Park or hustling to catch a train at Penn Station. So do the thousands of people who come here to work and to take advantage of all the city has to offer. But they also need to know that the people who are protecting them, who are making them safe, are doing this incredibly important and dangerous work while still respecting their rights under our constitution. The Justice Department has a long history of making sure of that. We recognize that great police work is constitutional police work. We are safer, and officers are more effective, when they follow the law.

I’d now like to turn the lectern over to my friend, Jocelyn Samuels, the Acting Assistant Attorney General for the Civil Rights Division of the Department of Justice to talk about exactly that.

In the last several weeks, since his election, I’ve had a few meetings with Mayor Ras Baraka to discuss this investigation, the agreement in principle, and how we move forward.  I’m confident that he will continue in the same cooperative spirit that we’ve seen from the city for the last three years and that he is committed to the reforms we’re discussing today.  Mayor Baraka.

I have been the U.S. Attorney for almost five years and, during that time, we have had no more important local partner in the fight against violent crime – drugs, gangs, and guns – than the Newark Police Department. I know first-hand how dedicated and professional its police officers are and I am proud of the work we have done together.

But I also know how much more effective they can and will be after we implement these changes and reforms.  That will take real work:  there will be difficult conversations and bad habits can be hard to break.  But I am confident that the city and the police department are committed to making it happen.

I have worked in Newark almost continuously for more than 30 years. It is a hub of commerce and transportation, home to a great performing arts center and sports arena, institutions of education and government, of medicine and culture. It has a rich history and heritage going back to its founding almost 350 years ago. It is a great city, and its people deserve and are entitled to a great police force.

NEWARK, N.J. - The Justice Department today announced it has reached an agreement with the city of Newark, New Jersey, to address a pattern and practice of unconstitutional policing by the Newark Police Department (NPD).  The agreement follows a joint investigation by the U.S. Attorney’s Office for the District of New Jersey and the Justice Department’s Civil Rights Division, the results of which were also released today.

The findings, detailed in a report provided to the city and to NPD leadership, document the NPD’s pattern or practice of constitutional violations in its stop and arrest practices; its response to individuals exercising their rights under the First Amendment; its use of force; and through theft by officers.  The investigation also revealed deficiencies in NPD systems that are designed to prevent and detect misconduct.

The city of Newark cooperated with the investigation, which began on May 9, 2011, and has agreed to enter into a court-enforceable, independently monitored agreement to reform the NPD to ensure constitutional policing.  The terms of the agreement are outlined in the agreement in principle released today.  Among other things, the NPD must continue to develop and implement improvements to its stop, arrest and force policies and procedures, and to train its officers on how to conduct effective and constitutional policing.  The NPD also must implement systems that ensure accountability, commit to building police-community partnerships and improve the quality of policing throughout the city.

“Our investigation uncovered troubling patterns in stops, arrests and use of force by the police in Newark. With this agreement, we’re taking decisive action to address potential discrimination and end unconstitutional conduct by those who are sworn to serve their fellow citizens,” said Attorney General Eric Holder. “This action reaffirms the Justice Department’s commitment to working with our law enforcement partners in order to ensure the highest standards of integrity and professionalism. Under today’s agreement, Newark Police officials are taking the first in a series of important steps to restore public trust in their Department and ensure both the safety and the civil rights of Newark residents.”

“The people of Newark deserve to be safe, and so do the thousands who come here to work, to learn, and to take advantage of all the city has to offer,” said U.S. Attorney Fishman. “They also need to know the police protecting them are doing that important – and often dangerous – work while respecting their constitutional rights. The Justice Department has a long history of making sure of that, and today we have the commitment of Newark’s mayor and the leadership of the police department to make the department the one that the city deserves.”

“Today the City of Newark has taken a bold step toward ensuring constitutional policing that better serves all of Newark’s residents,” said Acting Assistant Attorney General for the Civil Rights Division Jocelyn Samuels.  “The Department of Justice report released today makes clear the depth and breadth of the challenges Newark faces in reforming its police department; but the agreement in principle provides a roadmap for reform and underscores the shared determination of the City of Newark and the Department of Justice to making this reform real and sustainable.”

During the investigation, the Justice Department reviewed thousands of NPD documents, including written policies and procedures, documentation of stops, searches and arrests, internal investigation files and use of force reports and reviews.  Attorneys and investigators also interviewed NPD officers, supervisors and command staff, as well as city officials, and met with hundreds of community members and local advocates.

As the report describes, the Justice Department found reasonable cause to believe that the NPD has engaged in a pattern or practice of unconstitutional stops in violation of the Fourth Amendment.  Specifically, NPD officers failed to articulate sufficient justification for nearly 75 percent of pedestrian stops.  NPD officers also disproportionately stopped black people relative to their representation in Newark’s population.  Although the NPD’s reports were insufficient to allow the Justice Department to determine whether this disparity was the result of intentional discrimination or was otherwise unlawful, the report urges the city of Newark and NPD to improve its collection and analysis of its stop, search and arrest data to facilitate a more thorough analysis of the racial and ethnic impacts of NPD’s police practices and to take steps to eliminate avoidable disparities.

Through the course of the investigation, the Justice Department also found that NPD officers have detained and arrested individuals who lawfully objected to police actions or behaved in a way that officers perceived as disrespectful, in violation of the First Amendment.

In addition, the Justice Department found cause to believe that the NPD engaged in a pattern or practice of the use of excessive force.  The NPD has been unable to make reliable conclusions about whether a particular use of force was reasonable due to substantial underreporting and inadequate investigation of the use of force by NPD officers.  Nonetheless, of the incidents reviewed as part of the Justice Department’s investigation, more than 20 percent of NPD officers reported use of force that appeared unreasonable.

The investigation also found a pattern or practice of theft of citizens’ property by NPD officers in violation of the Fourth and 14th Amendments, including by officers in NPD’s specialized units, such as the narcotics and gang units, and at NPD’s prisoner processing unit.

The Justice Department’s report details other inadequacies that contributed to a pattern of constitutional violations.  Deficiencies were found in Internal Affairs (IA) processes, in investigations reviewing use of force and complaints regarding officer misconduct, in supervision and management, and in the training of officers and IA investigators.

The Justice Department conducted its investigation jointly through the Special Litigation Section of the Civil Rights Division and the U.S. Attorney’s Office for the District of New Jersey, with the assistance of law enforcement and statistics experts.

Both the report and the agreement in principle, along with summaries of each, are attached.  For more information about the Civil Rights Division, please visit the division website.

Federal civil rights complaints specific to New Jersey can be directed to the U.S. Attorney’s Office civil rights complaint hotline at 855-281-3339 or can be filed by filling out a complaint form at http://go.usa.gov/9nzW.

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Agreement in Principle
NPD Fact Sheet
NPD Findings Report
Monitor Solicitation

Agreement in Principle - Español
Agreement in Principle - Portuguese

TRENTON, N.J. - A Newark man today admitted his role in a series of 11 robberies in Newark, Harrison and Jersey City between September 2012 and April 2013, U.S. Attorney Paul J. Fishman announced.

Christopher Mojica, 23, pleaded guilty to an information charging him with one count of Hobbs Act conspiracy, one count of Hobbs Act robbery and one count of discharging a firearm in furtherance of a crime of violence. He entered his plea today before U.S. District Judge Joel A. Pisano in Trenton federal court.

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

Mojica conspired with others to rob New Jersey commercial establishments as follows:

New Barbershop

Newark

Sept. 14, 2012

Newark

Sept. 2012

Amcare Pharmacy

Newark

Nov. 13, 2012

Summer Pharmacy

Newark

Dec. 11, 2012

Community Health Pharmacy

Newark

Jan. 19, 2013

Delson Jewelry

Newark

Feb. 8, 2013

Pharmacy Plus

Harrison

Feb. 21, 2013

Forest Hill Pharmacy

Newark

April 4, 2013

Montgomery Pharmacy

Jersey City

April 15, 2013

Harris Pharmacy

Newark

April 16, 2013

Delta Gas Station

Newark

April 19, 2013

Mojica and his conspirators robbed each of these establishments at gunpoint, stealing cash, oxycodone pills, jewelry and other items. During the Delta Gas Station robbery on April 19, 2013, Mojica fired a .45 caliber semi-automatic handgun during his flight from the scene of the robbery.

The Hobbs Act conspiracy and robbery charges to which Mojica pleaded guilty each carry a maximum penalty of 20 years in prison.  The charge of discharging a firearm in furtherance of a crime of violence carries a minimum consecutive term of 10 years in prison, and a maximum of life in prison. Each of these charges carries a statutory maximum fine of $250,000.

U.S. Attorney Fishman credited special agents with the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, with the investigation leading to today's plea.  He also thanked the Newark, Harrison and Jersey City Police Departments, along with the Essex County and Hudson County Prosecutor’s Offices for their work on this case.

Sentencing before Judge Pisano is scheduled for Dec. 8, 2014.

The government is represented by Assistant U.S. Attorney Dara Aquila Govan of the Organized Crime/Gangs Unit in Newark.

14- 257                                    

Defense counsel: Paulette Pitt Esq., Woodbridge, New Jersey

Mojica, Christopher Information

CAMDEN, N.J. – A former financial advisor from Mantua, New Jersey, admitted today to defrauding his clients of more than $900,000 by diverting their investment checks for his personal use, U.S. Attorney Paul J. Fishman announced.

John Montague, 59, pleaded guilty today to an information charging him with one count of wire fraud. Montague entered his guilty plea before U.S. District Judge Noel L. Hillman in Camden federal court.

According to documents filed in this case and statements made in court: Montague was licensed to sell mutual funds, variable annuities, and insurance premiums – but at no time was he licensed to sell corporate or municipal securities, direct participation programs or options.  Montague engaged in a scheme to defraud his clients by soliciting and inducing them to purchase investment vehicles Montague knew he was not authorized to sell.  Montague described the investment vehicles to his clients as guaranteed investments and promised a rate of return of approximately six percent.  Montague instructed his clients to make their investment checks payable to him. He then deposited the checks into his personal bank accounts.  To maintain the clients’ confidence in the investments, Montague issued periodic “dividend” checks to his clients.

The wire fraud charge carries a maximum potential penalty of 20 years in prison and a $250,000 fine. Sentencing is scheduled for Oct. 28, 2014.

U.S. Attorney Fishman credited special agents of the FBI’s South Jersey Resident Agency, under the direction of  Special Agent in Charge Edward J. Hanko in Philadelphia, for the investigation leading to today’s guilty plea.

The government is represented by Attorney in Charge R. Stephen Stigall of the U.S. Attorney’s Office Criminal Division in Camden.

14-256                                      

Defense counsel:   John J. Waldron Esq., Allentown, Pennsylvania

Montague, John Information

CAMDEN, N.J. – A former employee of The Vacation Ownership Group LLC, was sentenced today to 36 months in prison and ordered to pay more than $3 million in restitution for conspiring to defraud owners of timeshare properties, U.S. Attorney Paul J. Fishman announced.

Eric Reilly, 34, of Galloway, New Jersey, previously pleaded guilty to an information charging him with one count of conspiracy to commit mail and wire fraud. Reilly entered his guilty plea before U.S. District Judge Noel L. Hillman, who also imposed the sentence today in Camden federal court.

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

The Vacation Ownership Group, a/k/a VO Group LLC, purported to offer owners of timeshares consulting services, including timeshare cancellation services. In September 2010, Reilly started working at the VO Group and was trained by VO Group managers to call using a prepared script and regularly lie to customers. Reilly would falsely state he was calling in response to a complaint they had made to timeshare developers and lenders. He gave customers the false impression that he was working for Wyndham Vacation Resorts, a developer of timeshare resorts. Reilly then would falsely represent that the VO Group could pay off the customers’ timeshares or have their timeshares cancelled. Reilly falsely told some customers that their credit would not be damaged if they stopped paying for their timeshares. Reilly gave some customers “references” who were actually VO Group employees posing as satisfied customers. After hearing Reilly’s false representations, some customers sent checks to the VO Group, including one customer who sent the VO Group a $31,385 check. Reilly admitted to causing more than $70,000 in losses.

In addition to the prison term, Judge Hillman sentenced Reilly to serve three years of supervised release and to pay $3,040,767.54 in restitution.

U.S. Attorney Fishman credited special agents from the FBI’s Atlantic City Resident Agency, under the direction of Special Agent in Charge Aaron T. Ford in Newark; and special agents from the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, under the direction of Special Agent in Charge Cheryl Garcia, New York Region, for the investigation.

The government is represented by Assistant U.S. Attorney R. David Walk Jr. of the U.S. Attorney’s Office Criminal Division in Camden.

14-255                                                            

Defense counsel: Gilbert J. Scutti Esq., Somerdale, New Jersey

NEWARK, N.J. - A Newark man was sentenced today to 240 months in prison for his role in three armed carjackings that occurred in one day in Newark and Jersey City, New Jersey, U.S. Attorney Paul J. Fishman announced.

Louis Holmes, 25, previously pleaded guilty before U.S. District Judge Claire C. Cecchi to an information charging him with three counts of carjacking and one count of brandishing a firearm during the course of a violent crime. Judge Cecchi imposed the sentence today in Newark federal court.

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

Holmes admitted he participated with several other men in three carjackings that were committed in Newark and Jersey City on March 27, 2012.  He said they agreed to take vehicles from their victims by force. Holmes also admitted that during the first carjacking, which occurred in Newark, he left the vehicle that he was traveling in with the other men, approached the targeted car’s driver, pointed a handgun at the driver and ordered the driver to exit the vehicle and leave the keys inside. Before driving away in the car, he robbed the driver and the passenger of their personal effects, including their cell phones. 

Holmes also admitted that, in the second carjacking, which occurred in Jersey City, he again approached the car’s driver, pointed a handgun at the driver and threatened the driver by demanding his wallet and car keys. He then also pointed the handgun at the vehicle’s passenger, demanding the passenger exit the car, before driving away in the car. Holmes admitted that in the third carjacking, which was in Newark, he approached the driver of the car when the driver was outside the car, pointed a handgun at the driver, threatened the driver and demanded the car’s keys. Holmes then drove off in the third car. 

In addition to the prison term, Judge Cecchi sentenced Holmes to five years of supervised release.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; the Newark Police Department, under the leadership of Director Eugene Venable; the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Carolyn A. Murray; and criminal investigators from the U.S. Attorney’s Office in Newark for the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorneys Sara F. Merin, Courtney Oliva, and Lisa M. Colone of the General Crimes Unit in Newark.

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

Gang Leaders in California and El Salvador Conspired with East Coast Members to Create Cohesive National Organization Based on Drug Trafficking, Extortion and Violence

NEWARK, N.J. – A dozen top-ranking members of the violent international street gang “Mara Salvatrucha” (MS-13) – including the California man claiming control over the gang’s United States operations – are charged by indictment with racketeering, drug trafficking and related crimes, U.S. Attorney Paul J. Fishman announced today.

Jose Juan Rodriguez-Juarez, 34, allegedly served as the leader of MS-13’s “national program.” This program, also known as the “unification of the barrio,” sought to bring all of MS-13’s local sets, or “cliques,” in the United States under a single, cohesive leadership structure, led by Rodriguez-Juarez and his deputies, including Amilcar Romero, 44, and Joel Antonio Cortez, 40.

“Members and leaders of MS-13 allegedly conspired to bring all United States cliques under a central command,” said U.S. Attorney Fishman. “According to the charges, the defendants wanted to use this new formalized structure to open new drug distribution channels facilitated by cartel alliances and bloodshed. Today’s indictment reaches gang leaders and members responsible for crime and violence in New Jersey, whether they were on the streets of Jersey City or on smuggled cell phones in a California or Central American jail.”

“Dismantling violent gangs is a continuing priority for the FBI,” Aaron T. Ford, Special Agent in Charge of the FBI, Newark Division, said. “Our efforts to address gang violence are not new, but we are working with our partners with increased manpower and increased urgency to address current circumstances. This cooperation is, and will continue to be, a critical factor for successfully defending threats that endanger the citizens of New Jersey.”

According to the indictment returned today, documents in this and related cases and statements made in court:

The goals of the national program were to increase the nationwide collection of extortion proceeds, known as “rent,” and to use these rent-collection networks to establish new drug distribution channels from California to the East Coast. Rodriguez-Juarez and other Mara Salvatrucha leaders allegedly struck a deal with the Mexican Mafia, a California prison gang, and certain Mexican drug cartels, including La Familia Michoacana, to supply methamphetamine and other drugs at cheap prices to MS-13 gang members on the East Coast, including in New Jersey.

Three MS-13 leaders in El Salvador and multiple clique leaders in New Jersey played a role in ordering – or “greenlighting” – the murder of a rival gang member in Hudson County, New Jersey, in November 2013. Law enforcement learned of the murder plot during the course of this investigation and arrested multiple conspirators before it could be completed.

All but one of the defendants are currently in law enforcement custody. Many of the gang’s top leaders conducted criminal activity while incarcerated in California, Virginia, or El Salvador -- typically by using contraband cell phones smuggled into the prison facilities. The five New Jersey-based defendants, who were charged by criminal complaint in March 2014 for the murder plot, are scheduled to make their initial appearances on the indictment tomorrow, July 18, 2014, before U.S. Magistrate Judge Madeline Cox Arleo in Newark federal court. The remaining defendants will make their initial appearances on dates to be determined.

In autumn 2013, Rodriguez-Juarez declared himself the leader of the new national program for MS-13 in the United States. He was also a made member, or “carnale,” in the Mexican Mafia, and he leveraged his status within the powerful prison gang to assert control over all MS-13 activities in the United States. Within MS-13, Rodriguez-Juarez was known by his gang moniker, “Dreamer,” but when he assumed control of the national program, he became known as “Sacerdote,” Spanish for “the priest.”

Amilcar Romero, 45, and Joel Antonio Cortez, 40, served as two of Rodriguez-Juarez’s top deputies. In autumn 2013, Rodriguez-Juarez assigned Romero to serve as the primary point-of-contact between the leadership of MS-13 in the United States and El Salvador, while Cortez assumed responsibility for recruiting MS-13 cliques on the East Coast to join the national program. Both are also alleged to have ordered acts of violence on the East Coast, including Cortez’s authorization of the November 2013 murder plot in Hudson County. Another defendant, Pedro Romero-Cruz, 28, who is incarcerated in a Virginia state prison, served as the regional leader of a program in northern Virginia and facilitated the trafficking of methamphetamine to New Jersey. Romero-Cruz also discussed efforts to expand the gang’s activity to Spain, explaining in a phone call how the expansion would be lucrative for the gang.

Carlos Sandoval-Batres, 40, currently incarcerated in a Salvadoran prison, was a top member of the gang’s leadership in El Salvador and assisted efforts to create the new “national program” in the United States. Sandoval-Batres, along with two other Salvadoran leaders, Jose Elias Garcia-Hernandez, 35, and Cristian Linares-Rodriguez, 34, also authorized the November 2013 Hudson County murder plot.

Carlos Andrew Valdez, 27, served as the leader, or “First Word,” of a northern New Jersey clique known as “Hudson Locotes Salvatrucha.” Marvin Garcia-Cruz, 31, served as the leader of another Hudson County clique, known as “Pinos Locos Salvatrucha.” They are charged along with three other members of the Hudson Locotes clique for their role in the November 2013 murder plot. Valdez and others worked with Cortez and other top gang leaders to bring all of New Jersey’s MS-13 cliques under the control of Rodriguez-Juarez’ national program. Valdez and others focused on resolving issues created when leaders of “Plainfield Locos Salvatrucha,” a Plainfield, New Jersey, clique, were arrested by federal law enforcement in autumn 2013.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Ford in Newark, with the investigation leading to the charges. The investigation involved multiple FBI Field Offices, with substantial assistance provided by the FBI Field Office in Los Angeles. U.S. Attorney Fishman also thanked the Hudson County Prosecutor’s Office, under the direction of Acting Prosecutor Gaetano T. Gregory; and the Union County Prosecutor’s Office, under the direction of Acting Prosecutor Grace Park, for their work on this case. He also acknowledged the U.S. Attorney’s Offices for the Central District of California for their assistance in the ongoing investigation.

The government is represented by Assistant U.S. Attorneys James M. Donnelly and Andrew J. Bruck of the U.S. Attorney’s Office Organized Crime/Gangs Unit in Newark.

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

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Defendants Charged, Penalties Per Count

Count

Charge

Defendants

Maximum Potential Penalty

1.  

Racketeering Conspiracy

Rodriguez-Juarez
Amilcar Romero
Cortez
Romero-Cruz
Sandoval-Batres
Valdez
Rudy Gutierrez

Life in prison
(Rodriguez-Juarez, Amilcar Romero, Cortez, Romero-Cruz)

20 years in prison
(All others)
$250,000 fine

1.  

Drug Distribution Conspiracy

Rodriguez-Juarez
Amilcar Romero
Cortez
Romero-Cruz

Life in prison
$10 million fine

1.  

Drug Distribution

Cortez
Romero-Cruz

Life in prison
$10 million fine

1.  

Conspiracy to Commit Murder in Aid of Racketeering

Cortez
Sandoval-Batres
Garcia-Hernandez
Linares-Rodriguez
Valdez
Gutierrez
Hector Carranza-Solis
Luis Lopez-Guzman
Marvin Garcia-Cruz

10 years in prison
$250,000 fine

1.  

Conspiracy to Possess Firearm

Garcia-Hernandez
Linares-Rodriguez
Valdez
Gutierrez
Carranza-Solis
Lopez-Guzman
Garcia-Cruz

20 years in prison
$250,000 fine

1.  

Conspiracy to Use Interstate Facility to Commit Violent Crime

Cortez
Sandoval-Batres
Garcia-Hernandez
Linares-Rodriguez
Valdez
Gutierrez
Carranza-Solis
Lopez-Guzman
Garcia-Cruz

Five years in prison
$250,000 fine

1.  

Conspiracy to Use Interstate Facility to Distribute Proceeds of Unlawful Activity

Rodriguez-Juarez
Amilcar Romero
Cortez
Romero-Cruz
Sandoval-Batres
Valdez
Rudy Gutierrez

Five years in prison
$250,000 fine

Charged Defendants

Last Name

First Name

a/k/a

Age

Rodriguez-Juarez

Jose Juan

“Sacerdote”

34

Romero

Amilcar

“Chi-Chi”

45

Cortez

Joel Antonio

“Pee Wee”

40

Romero-Cruz

Pedro

“Payaso”

28

Sandoval-Batres

Carlos

“Trusty”

40

Linares-Rodriguez

Cristian

“Burro”

34

Garcia-Hernandez

Jose Elias

“Eterno”

35

Valdez

Carlos Andrew

“Catracho”

27

Carranza-Solis

Hector

“Blacky”

30

Gutierrez

Rudy

“Chiky”

22

Lopez-Guzman a/k/a Lopez-Mendez

Luis

“Nino”

24

Garcia-Cruz

Marvin

“Buffalo”

31

                                       

Rodriguez-Juarez, Jose Juan et. al. Indictment

NEWARK, N.J. - Four alleged members of Sex Money Murder, a subset of the Bloods street gang, were indicted by a federal grand jury today on charges of murder, attempted murder, racketeering, robbery, weapons offenses and drug distribution, U.S. Attorney Paul J. Fishman announced.

Narik Wilson, a/k/a “Spaz,” 29, Emil Rutledge, a/k/a “Diddy,” 26, Laquan Reed, a/k/a “Drama,” 25, and Rajohn Wilson, a/k/a “1090,” 23, all of Newark, were charged in a 14-count superseding indictment in connection with their alleged membership in Sex Money Murder.  Narik Wilson, the leader of the gang, is charged in all 14 counts, which include charges related to murder in aid of racketeering. Narik Wilson was previously charged with drug distribution and firearm possession on Oct. 7, 2011.

Rutledge is charged with 11 counts, including murder in aid of racketeering. Reed is charged with six counts, including felony murder. Rajohn Wilson is charged with three counts, which include charges related to attempted murder.

All four men are already in custody on related charges and are expected to appear in Newark federal court on a date to be determined.

“The offenses charged in today’s indictment are a checklist of the activities associated with a violent street gang that has plagued Newark for years,” U.S. Attorney Fishman said. “Illegal guns, violent assaults, murder – members of this gang allegedly used all of them to maintain control over the illicit drug trafficking that is the lifeblood of their criminal enterprise. Today’s charges call them to account for these crimes.”

“Drug dealing, illegal weapons and gang violence destroy the quality of life in our neighborhoods,” said FBI Special Agent in Charge Aaron T. Ford, Newark Division. “The charges in this indictment should reassure the residents of Newark and New Jersey that we will continue to aggressively address gang violence through increased investigative strategies and a multi-agency approach.”

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

The Bloods street gang is organized into subgroups that operate in specific geographic locations. Sex Money Murder is the Bloods subgroup that operates primarily in Essex County, New Jersey. From 2007, Sex Money Murder controlled the distribution of heroin and crack cocaine in the area surrounding Martin Luther King Boulevard and Spruce Street in Newark. The gang primarily consisted of neighborhood friends and family members who joined at a young age. In addition, the gang was organized along typical Bloods governing rules, hierarchal power structures, and visible demonstrations of gang affiliations, including tattoos. The gang also stored and circulated numerous firearms from apartments located at 725 Martin Luther Blvd. and 90 Spruce St.

Under the leadership of Narik Wilson, and with the assistance of Rutledge, Reed, and Rajohn Wilson, gang members allegedly engaged in a wide range of violent criminal activity in order to deter rival gangs, secure their drug distribution business, and silence people they believed were cooperating with law enforcement. These acts included numerous murders, shootings, robberies and auto thefts.

Other members of Sex Money Murder are currently serving prison sentences in state and federal prison for gang-related crimes.

Among the charges are several attempted murders and murders including:

• Oct. 29, 2010- Rutledge and others allegedly attempted to murder a rival gang member, (described as “Victim 3” in the indictment) at Narik Wilson’s direction.

• June 16, 2011- Rutledge and others allegedly attempted to murder rival gang members, (described as “Victim 4,” “Victim 5,” “Victim 6,” and “Victim 7” in the indictment) at Narik Wilson’s direction.

• July 14, 2011- Rutledge and others allegedly murdered a rival gang member, (described as “Victim 8” in the indictment) at Narik Wilson’s direction.

• July 31, 2011- Laquan Reed and others allegedly murdered an individual (described as “Victim 9” in the indictment) while attempting to carjack the victim’s vehicle. 

The counts in the Superseding Indictment carry the following maximum penalties:

Count

Offense

Defendant(s)

Maximum Penalties

Racketeering

Narik Wilson, Emil Rutledge, Laquan Reed, Rajohn Wilson

Life in prison (death eligible); $250,000 fine

2

Racketeering conspiracy

Narik Wilson, Emil Rutledge, Laquan Reed, Rajohn Wilson

Life in prison; $250,000 fine

3

Attempted murder in aid of racketeering

Narik Wilson, Emil Rutledge

10 years in prison; $250,000 fine

4

Assault with a dangerous weapon in aid of racketeering

20 years in prison; $250,000 fine

5

Use of a firearm during a violent crime

Life in prison; $250,000 fine

6

Attempted murder in aid of racketeering

10 years in prison; $250,000

7

Assault with a dangerous weapon in aid of racketeering

20 years in prison; $250,000 fine

8

Use of a firearm during a violent crime

Life in prison; $250,000 fine

9

Murder in aid of racketeering

Life in prison (death eligible); $250,000 fine

10

Use of a firearm during a violent crime

Life in prison; $250,000 fine

11

Attempted murder in aid of racketeering

Narik Wilson, Laquan Reed

10 years in prison; $250,000 fine

12

Assault with a dangerous weapon in aid of racketeering

20 years in prison; $250,000 fine

13

Use of a firearm during a violent crime

Life in prison; $250,000 fine

14

Conspiracy to use a firearm during a crime of violence or a drug trafficking crime conspiracy

Narik Wilson, Emil Rutledge, Laquan Reed, Rajohn Wilson

20 years in prison; $250,000 fine

The investigation into the criminal activities of Sex Money Murder was a combined effort by federal and local law enforcement. U.S. Attorney Fishman credited special agents of the FBI and the FBI’s Safe Streets Task Force, under the direction of Special Agent in Charge Aaron T. Ford in Newark; the Essex County Prosecutor’s Office, under the direction of Acting Essex County Prosecutor Carolyn A. Murray; the Essex County Sheriff’s Office, under the direction of Sheriff Armando V. Fontoura; and the Newark Police Department with the investigation – with the significant assistance of special agents of the Drug Enforcement Administration (DEA), under the direction of Special Agent in Charge Carl J. Kotowski; and special agents of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), under the direction of Special Agent in Charge Stephanie R. Shoemaker.

The government is represented by Assistant U.S. Attorneys Michael H. Robertson and Dara Govan of the U.S. Attorney’s Office Organized Crime/Gangs Unit in Newark.

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

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Wilson, Narik et. al. Superseding Indictment

CAMDEN, N.J. - A Cape May County, New Jersey man was arrested today by special agents U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI), on charges he received images of child sexual abuse over the Internet using his cellphone, U.S. Attorney Paul J. Fishman announced.

Jeffrey Spicer, 44, of West Wildwood, New Jersey, is charged by complaint with one count of receipt of child pornography. He made his initial appearance today before U.S. Magistrate Judge Joel Schneider in Camden federal court and was remanded without bail. A bail hearing is scheduled for Friday.

According to the complaint and statements made in court: On March 19, 2014, law enforcement officers executed a search warrant at a home in Cape May, New Jersey, Spicer’s residence at that time.  Law enforcement officers seized various forms of electronic and digital media from the residence pursuant to the warrant including Spicer’s cellphone, a thumb drive and a computer hard drive. They determined that these devices contained multiple images of child pornography.

 On the receipt of child pornography count, Spicer faces a mandatory minimum term of 15 years in prison, a maximum penalty of 30 years in prison and a $250,000 fine if convicted.

U.S. Attorney Fishman credited special agents of the ICE-HIS, under the direction of Special Agent in Charge Andrew McLees; the Cape May County Prosecutor’s Office, under the direction of Prosecutor Robert L. Taylor; the Lower Township Police Department, under the direction of Chief William Mastriana; the West Wildwood Police Department, under the direction of Chief Jackie Ferentz; and the N.J. Regional Computer Forensics Laboratory with the investigation leading to the charges.

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

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

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

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Defense counsel: Lisa Lewis Esq., Assistant Federal Public Defender, Trenton

Spicer, Jeffrey Complaint

Twenty-ninth Defendant to Plead Guilty in Connection with Scheme

NEWARK, N.J. – A doctor with a New York practice admitted today to accepting more than $100,000 in exchange for test referrals as part of a massive bribery scheme operated by Biodiagnostic Laboratory Services LLC (BLS) of Parsippany, New Jersey, its president and numerous associates, U.S. Attorney Paul J. Fishman announced.

Peter Deplas, 47, of Glen Head, New York, pleaded guilty before U.S. District Judge Stanley R. Chesler in Newark federal court to an information charging him with one count of accepting bribes.

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

Deplas admitted he accepted bribes through a sham lease agreement of $5,000 per month, as well as additional monthly cash payments of as much as $7,000. Over the course of 17 months, Deplas accepted approximately $120,500 in bribes in return for referring patient blood specimens to BLS, for which BLS received more than $900,000. Deplas admitted he even ordered unnecessary test for his patients in order to justify BLS bribe payments.

BLS salesman Cliff Antell negotiated the bribe arrangement with Deplas and paid him the cash, while BLS salesman Craig Nordman wrote the bribe checks pursuant to the sham lease agreement. Antell and Nordman pleaded guilty to their involvement in the scheme on June 10, 2013.

The bribery count to which Deplas pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for Oct. 29, 2014. As part of his guilty plea, Deplas agreed to forfeit $120,500, representing the bribes he received from BLS.

Including Deplas, 29 people – including 18 physicians – have pleaded guilty in connection with the bribery scheme, which its organizers have admitted involved millions of dollars in bribes and resulted in more than $100 million in payments to BLS from Medicare and various private insurance companies. The investigation has recovered more than $7 million to date through forfeiture.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark; U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Thomas O’Donnell; IRS– Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen; and inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, with the ongoing investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Joseph Minish, Senior Litigation Counsel Andrew Leven, and Jacob T. Elberg, Chief of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark, as well as Assistant U.S. Attorney Barbara Ward of the office’s Asset Forfeiture and Money Laundering Unit.

U.S. Attorney Paul J. Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $535 million in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.

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Defense counsel: Joseph Tacopina Esq. and Chad Seigel Esq., New York      

Deplas, Peter Information

NEWARK, N.J. - A Bloomfield, New Jersey, woman who operated a tax return preparation business admitted today that she caused at least 37 fraudulent income tax returns to be filed with the IRS, causing a total tax loss of $99,864 to the United States, U.S. Attorney Paul Fishman announced.

Daidry Montanez, 41, pleaded guilty before U.S. Magistrate Judge Michael A. Hammer in Newark federal court to four counts of aiding and assisting in the filing of false federal income tax returns for tax years 2009, 2010, 2011 and 2012.

According to the information and statements made in court:

Montanez owned and operated a tax preparation business called DM Multiservices, which she ran from a storefront in Newark. On behalf of her clients, she prepared false and fraudulent individual income tax returns that contained either falsely claimed or fabricated deductions, including fictional business expenses, such as rent or lease of other business property, supplies and travel. Also included within the tax returns were purported deductions for home mortgage interest and points, state or local income tax, and unreimbursed employee expenses. Montanez used the fraudulent deductions to substantially reduce her clients’ taxable income on their individual federal income tax returns, which resulted in her clients receiving tax returns that were larger than they were due.

Montanez falsified clients’ 2009, 2010, 2011 and 2012 individual federal income tax returns. She then caused these false and fraudulent individual federal income tax returns to be filed with the IRS, resulting in a total tax loss of more than $99,864 for 37 clients.

Each of the four tax counts carries a maximum potential penalty of three years in prison and a $250,000 fine. Sentencing before U.S. District Judge Faith Hochberg is scheduled for Nov. 6, 2014.

U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen, the inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria Kelokates and special agents of the U.S. States Secret Service, under the direction of Special Agent in Charge James Mottola, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Sara F. Merin of the U.S. Attorney’s Office General Crimes Unit.

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Defense counsel: Arlindo B. Araujo Esq., Newark

Montanez, Daidry Information

TRENTON, N.J. – A Middlesex County, New Jersey, woman admitted today to sexually exploiting a minor female by coercing the girl to live stream sexually explicit acts via the Internet, U.S. Attorney Paul J. Fishman announced.

Jane Dornick, 53, of South Plainfield, New Jersey, pleaded guilty, prior to the selection of a jury, to Count One of an indictment charging her with three counts of sexual exploitation of a child. The remaining counts will be dismissed at sentencing. Dornick entered her plea before U.S. District Judge Freda L. Wolfson in Trenton federal court.

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

On August 16, 2010, Dornick coerced and used “Victim 1,” a minor female, to perform sexually explicit acts and live stream them over the Internet to Michael Grennier, 51, who watched remotely via his computer in his home in South Plainfield.

The charge of sexual exploitation of a child is punishable by a mandatory minimum sentence of 15 years in prison and a maximum penalty of 30 years in prison and a $250,000 fine. Sentencing is scheduled for Nov. 7, 2014.

Grennier pleaded guilty before Judge Wolfson to a separate charge of the sexual exploitation of a minor on Dec. 16, 2013, and is scheduled to be sentenced on August 20, 2014.

U.S. Attorney Fishman credited special agents of the FBI’s Child Exploitation Task Force, under the direction of Special Agent in Charge Aaron T. Ford, for the investigation leading to today’s plea. Fishman also thanked the South Plainfield Borough Police Department, under the direction of Chief of Police James Parker, and the Middlesex County Prosecutor’s Office, under the direction of Prosecutor Andrew Carey, for their assistance with the investigation.

The government is represented by Assistant U.S. Attorneys Fabiana Pierre-Louis and Harvey Bartle, Attorney-in-Charge of the U.S. Attorney’s Trenton Office.

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Defense counsel: Bruce Throckmorton Esq., Trenton

Dornick, Jane Indictment

NEWARK, N.J. – An Essex County, New Jersey man who previously admitted his role in an armed carjacking in Little Falls, New Jersey, was convicted today for brandishing a shotgun while committing that crime, U.S. Attorney Paul J. Fishman announced.

Ivan Lee, 26, of Newark, was found guilty of brandishing a firearm in furtherance of a crime of violence following a one-week trial before U.S. District Judge Susan D. Wigenton in Newark federal court. The jury deliberated three hours before returning its verdict.

According to documents in this case and the evidence at trial: Oct. 30, 2011, Lee and Hanza Darby, 25, of Newark, were in the Little Falls area when they spotted a parked 2008 BMW 335 with passengers inside. Darby and Lee  – who brandished a shotgun – approached the car and ordered the occupants out of the vehicle at gunpoint. Darby and Lee then took the car and fled the area. Law enforcement officers recovered the car in Newark on Nov. 7, 2011. Darby was standing next to it at the time. Lee previously pleaded guilty to the carjacking count and Darby has previously pleaded guilty carjacking and brandishing a weapon in furtherance of a crime of violence. Darby is awaiting sentencing.

The carjacking charge carries a maximum potential penalty of 15 years in prison. The firearm charge carries a maximum potential penalty of life in prison and a mandatory minimum sentence of seven years in prison, which must run consecutively to any other prison term. Each of the two counts also carries a maximum $250,000 fine. Sentencing for Lee is scheduled for Oct. 21, 2014.

U.S. Attorney Fishman credited special agents with the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, officers of the Little Falls Police Department, under the direction of Chief John Dmuchowski; the N.J. State Police, under the direction of Col. Rick Fuentes; and the Passaic County Prosecutor’s Office, under the direction of Prosecutor Camelia M. Valdes, with the investigation leading to today’s conviction.

The government is represented by Assistant U.S. Attorney Cari Fais and Special Assistant U.S. Attorney Thomas S. Kearney of the U.S. Attorney’s Office Criminal Division in Newark.

14-248            
                                               
Defense counsel: Mark Berman Esq., of River Edge, New Jersey

NEWARK, N.J. – A Suffolk County, New York, man who worked at a facility in Elizabeth, New Jersey, that manufactured oxycodone was sentenced today to 42 months in prison for stealing more than 70,000 pills from the facility, U.S. Attorney Paul J. Fishman announced.

Edwin Hernandez, 49, of North Babylon, New York, previously pleaded guilty before U.S. District Judge Dennis M. Cavanaugh to distribution and possession with intent to distribute oxycodone. Judge McNulty imposed the sentence today in Newark federal court.

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

Hernandez was previously employed at one of the largest manufacturers of oxycodone in the United States at the company’s Elizabeth facility. On Nov. 21, 2012, he was seen by another employee scooping 30 mg oxycodone pills into a quart-sized plastic bag. A subsequent search of Hernandez’ locker by security revealed a backpack containing 8,591 30 mg oxycodone pills. Law enforcement eventually recovered an additional 61,535 pills from Hernandez’ residence. The street value of the stolen pills is $1.4 million to $2.1 million.

Oxycodone, also known as “oxy,” is a narcotic analgesic or painkiller and is classified as a Schedule II controlled substance. Demand for oxycodone-based prescription pain medication has grown to epidemic proportions in the United States and dealers profit by selling such medication on the street. Oxycodone-based Schedule II drugs have a high potential for abuse, and users will often crush and snort the pills or dissolve and inject them to get an immediate high. This abuse can lead to addiction, overdose and sometimes death.

In addition to the prison term, Judge McNulty sentenced Hernandez to three years of supervised release and ordered forfeiture of $47,000.

U.S. Attorney Fishman credited the Drug Enforcement Administration’s New Jersey Division, under the direction of Special Agent in Charge Carl J. Kotowski, for the investigation leading to today’s sentencing.

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

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Defense counsel: Howard Leader Esq., New York

NEWARK, N.J. – The former pharmacist in charge of West Orange Pharmacy was sentenced today to 37 months in prison for illegally distributing hundreds of tablets of oxycontin in exchange for thousands of dollars in cash, U.S. Attorney Paul J. Fishman announced.

Leonard “Lenny” Stefanelli, 49, of East Hanover, New Jersey, previously pleaded guilty to an information charging him with illegally dispensing oxycodone. Stefanelli also admitted to conspiring with brothers Robert and William Carlucci, both 70, of Florham Park, New Jersey, to submit fraudulent bills to health care benefit providers, including Medicare and Medicaid. U.S. District Judge Faith S. Hochberg imposed the sentence today in Newark federal court.

Stefanelli also previously agreed forfeit $1.5 million, consisting of illegal profits obtained from his illegal sales of oxycodone and his submission of fraudulent bills to health care benefit providers.

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

Oxycodone, the active ingredient in brand name pills such as Oxycontin, is a Schedule II controlled substance B meaning that it has a high potential for abuse, a currently accepted medical use with severe restrictions, and abuse of the drug may lead to severe psychological or physical dependence. A pharmacist can only dispense a Schedule II controlled substance when presented with a written prescription from a doctor.

On at least six separate occasions from Feb. 1, 2012, to August 6, 2012, Stefanelli sold hundreds of tablets of Oxycontin, without a prescription, in exchange for cash. Each sale took place inside West Orange Pharmacy. On Feb. 8, 2012, Stefanelli sold one bottle of 100-count Oxycontin 30-mg tablets and one bottle of 100-count Oxycontin 15-mg tablets for $1,800.  

Between 1992 and October 2012, Stefanelli conspired with Robert and William Carlucci to submit fraudulent bills to health care benefit providers, including Medicaid and Medicare, reaping at least $921,634 from his scheme. Robert and William Carlucci pleaded guilty on Aug. 6, 2013, to committing health care fraud by participating in a variety of schemes designed to cheat customers and bilk insurance companies out of millions of dollars. On March 13, 2014, the Carluccis were each sentenced to 42 months in prison.

In addition to the prison term, Judge Hochberg sentenced Stefanelli to three years of supervised release, fined him $1 million and permanently barred him from working in the pharmaceutical industry.

U.S. Attorney Fishman credited special agents of the DEA, under the direction of Special Agent in Charge Carl J. Kotowski; and special agents of the Food & Drug Administration’s Office of Criminal Investigations, under the direction of Mark Dragonetti, with the investigation leading to today’s sentencing. He also thanked the Elizabeth, Clinton, Toms River, West Orange and Marlboro police departments, along with the Essex County Sheriff’s Department, for their work on this case.    

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

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Defense counsel: Carlos Ortiz Esq., Morristown, New Jersey

CAMDEN, N.J. – An Ocean County, New Jersey, man who used his position as a loan officer of Wells Fargo Home Mortgage Inc., to get the company to release more than $4.6 million on fraudulent mortgage loan applications was sentenced today to 24 months in prison for his role in a $40.8 million mortgage fraud conspiracy, U.S. Attorney Paul J. Fishman announced.

Robert Serao, 48, of Bayville, New Jersey, previously pleaded guilty following his indictment to one count of conspiracy to commit wire fraud. He was the 10th defendant to plead guilty in the case. U.S. District Judge Joseph E. Irenas imposed the sentence today in Camden federal court.

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

While working in various positions – including branch manager, sales manager and loan officer – within Wells Fargo Home Mortgage Inc., a division of Wells Fargo Bank N.A., Serao entered into a conspiracy to submit mortgage loans to his employer for financially unqualified “straw buyers” based upon false and fraudulent information contained in Uniform Residential Loan Applications, HUD-1 Forms, tax returns and other documents. 

Serao’s conspirators caused fraudulent mortgage loan applications and supporting documents to be submitted to Wells Fargo and numerous other mortgage lenders in various straw buyers’ names, attributing to them inflated income and assets in order to induce the mortgage lenders to approve the loans. Once the loans were approved and the mortgage lenders sent the loan proceeds in connection with the real estate closings on the properties, Serao’s conspirators took a portion of the proceeds from the fraudulent mortgage loans. Wells Fargo Home Mortgage released more than $4.6 million based on fraudulent mortgage loan applications. Serao profited from his role in the conspiracy by increased commissions on the mortgage funds. 

In addition to the prison term, Judge Irenas sentenced Serao to three years of supervised release and ordered him to pay restitution of $1,520,606.

U.S. Attorney Fishman credited special agents of the FBI’s Atlantic City Resident Agency, under the direction of Special Agent in Charge Aaron T. Ford in Newark; and IRS B Criminal Investigation in Mays Landing, under the direction of Acting Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s sentencing.

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

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Defense counsel: Robert A. Weir Jr. Esq. and Edward J. Plaza Esq., Red Bank, New Jersey    

CAMDEN, N.J. – Two Atlantic City, N.J., residents were sentenced to prison today for their roles in the kidnapping and death of a 20-year-old Atlantic City woman, U.S. Attorney Paul J. Fishman announced.

Aziz Sanders, 21, was sentenced to 30 years in prison and DeShawn Hicks, 22, was sentenced to 20 years in prison. Each previously pleaded guilty before U.S. District Judge Joseph H. Rodriguez to separate, one-count informations charging them with use of a firearm, and aiding and abetting the use of a firearm, in furtherance of a crime of violence – specifically, the Hobbs Act robbery and kidnapping that resulted in the death of Nadirah Ruffin, whose body was found in Philadelphia in April 2011. Judge Rodriguez imposed the sentences today in Camden federal court.

Henry Ruffin (no relation to Nadirah Ruffin), 43, previously pleaded guilty before Judge Rodriguez to an information charging him with one count of misprision of a felony by concealing what he knew about several people allegedly involved in the home invasion and kidnapping of Nadirah Ruffin.

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

On March 23, 2011, D.H. met with Isiah Ruffin (no relation to the victim) in the courtyard area of a housing complex on North Maryland Avenue, a section of Atlantic City known as “Back Maryland,” to talk to Isiah Ruffin about a dispute between Isiah Ruffin and Victim One. After a brief conversation, D.H. viciously assaulted Isiah Ruffin, knocking Isiah Ruffin unconscious and robbing him of cash. When Isiah Ruffin regained consciousness, D.H. assaulted Isiah Ruffin again. As a result of the assault, Isiah Ruffin was treated at the Atlantic City Medical Center for a possible concussion and facial lacerations. After Isiah Ruffin was released from the hospital, Shamerria Smith, 27, and Sanders visited Isiah Ruffin, during which time Isiah Ruffin told Smith that D.H. had assaulted him.

To retaliate, Smith planned to enter Victim One’s house and assault and rob Victim One of illegal drugs and money. Sanders agreed to help Smith execute her plan and recruited Hicks to participate. Smith supplied the gun, duct-tape and handcuffs.

On March 26, 2011, Smith, Sanders and Hicks entered Victim One’s house and duct-taped Victim One and four other victims, including Nadirah Ruffin, who were present. While in the house, Sanders and Hicks took money from Victim One, some of which Victim One had earned from selling illegal drugs. They took money from another victim, as well as marijuana that the victim was planning to sell. Sanders and Hicks admitted to taking more than $500 dollars and 50 bags of marijuana from the house.

During the robbery, Nadirah Ruffin recognized Smith’s voice. Smith ordered Sanders to punch Nadirah Ruffin. After Sanders hit Nadirah Ruffin, Smith punched her because she did not think Sanders had hit her hard enough. As the defendants were leaving the residence, Smith told Sanders and Hicks to take Nadirah Ruffin from the residence. Smith, Sanders and Hicks then placed Nadirah Ruffin into a green van. They drove to the Clementon area and eventually to Philadelphia. Smith said that because she was a mother she could not kill Nadirah Ruffin. Smith placed the gun near Sanders and told him that they were not leaving until someone else killed Nadirah Ruffin. Sanders and Hicks took Nadirah Ruffin to the banks of the Schuylkill River, where Sanders shot her in the head, killing her. Her body was dumped in the river.

On June 17, 2014, Smith was sentenced to 35 years in prison for her role in the kidnapping and death of Nadirah Ruffin.

In addition to the prison terms, Judge Rodriguez sentenced Hicks and Sanders to five years each of supervised release and ordered them each to pay $1.5 million in restitution.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; the Atlantic County Prosecutor’s Office and the Atlantic City Police Department, for the investigation leading to the sentencings.

The government is represented by Assistant U.S. Attorneys Jason M. Richardson and Matthew T. Smith of the U.S. Attorney’s Office Criminal Division in Camden, assisted by Assistant U.S. Attorney David Feder of the U.S. Attorney’s Office Appeals Division in Newark, and Mark Coyne, Chief of the Appeals Division.

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Defense counsel:

Sanders: Edward Borden Esq. and Carl J. Herman Esq., Cherry Hill, N.J.
Hicks: Michael Huff Esq. and David Glazer Esq.. Livingston, N.J.

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

Peter Lareau, 77, of Mountain Lakes, N.J., pleaded guilty before U.S. District Judge Esther Salas in Newark federal court to an information charging him with one count of wire fraud.

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

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

In addition to promising greater-than-market returns, Lareau falsely represented that investors’ funds would be used for educational television programming for teenage audiences.
He sent investors prospectuses and other information related to investment opportunities by email and then directed them to wire funds from brokerage accounts in New York to his business accounts in New Jersey.

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

The wire fraud charge carries a maximum potential penalty of 20 years in prison and a maximum fine of $250,000. Sentencing is scheduled for Oct. 14, 2014.

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

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

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

Lareau, Peter Information

CAMDEN, N.J. – An accountant from Toms River, N.J., was arrested today by special agents of IRS – Criminal Investigation and the Social Security Administration, Office of the Inspector General (SSA OIG), on charges she allegedly stole $905,000 from client tax refunds and social security benefits, U.S. Attorney Paul J. Fishman announced.

Doreen Gentile, 59, was indicted by a grand jury, charged with 14 counts of mail fraud, nine counts of forging endorsements on treasury checks of the United States, two counts of aggravated identity theft and two counts of filing false income tax returns. Gentile is scheduled to make her initial appearance this afternoon before Magistrate Judge Ann Marie Donio in Camden federal court.

According to the indictment unsealed today: Gentile, owned and operated Doreen A. Gentile & Associates, LLC (“DAG & Associates”), an accounting practice based in Toms River. Gentile maintained clients throughout central and southern New Jersey. In addition to preparing federal and state income tax returns, she also managed property for clients in Salem County.

As part of her scheme, Gentile would show her clients a tax return that indicated that they had no tax or refund due, owed a minimal amount of tax (generally under $40) or were due a refund that was far less then what they were entitled. Gentile then prepared a second set of tax returns, signed without her clients’ permission, that she submitted to the IRS for the full tax refund. Based on the second set of returns, the IRS or the New Jersey issued tax refund checks care of DAG & Associates and mailed them to the DAG & Associates post office box in Toms River. Gentile then deposited the tax refund checks into the DAG & Associates bank account without her clients’ permission.

Gentile also directed clients to make payments to the IRS to pay for various tax liabilities.  After the payments were made, Gentile, without the victims’ knowledge, applied for refunds and had the checks mailed to her.  Once she received the refund checks she forged the victims’ signatures and deposited the refunds into her account.

In addition, when one of her clients died in September 2005, Gentile did not inform the SSA. Instead, Gentile allowed the SSA to continue sending retirement benefits, which she accessed through the deceased victim’s bank account and used for her personal expenses at clothing and jewelry stores.    

On her personal individual tax return, Gentile failed to report the income generated by her theft of her clients’ refund checks and the money she embezzled from the deceased victim’s estate.

The 14 counts of mail fraud alleged in the indictment each carry a maximum potential penalty of 20 years in prison and a $250,000 fine. The nine counts of forging endorsements on treasury checks of the United States and one count of theft of government funds each carry a maximum potential penalty of 10 years in prison and a $250,000 fine. The two counts of filing false income tax returns each carry a maximum potential penalty of three years in prison and a $100,000 fine. The two counts of aggravated identity theft each carry a maximum potential consecutive sentence of two years in prison and a $250,000 fine.

U.S. Attorney Fishman credited special agents of IRS – Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen, and special agents of SSA OIG under the direction of Special Agent in Charge Edward J. Ryan, with the investigation.

The government is represented by Assistant U.S. Attorney Jason M. Richardson of the U.S. Attorney=s Office Criminal Division in Camden.

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

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Defense counsel: Robert Weir Esq., Red Bank, N.J.

Gentile, Doreen Indictment

CAMDEN, N.J. – A former N.J. lawyer today admitted he conspired to participate in a scheme that caused lenders to release $40.8 million based on fraudulent mortgage loan applications and conspired to launder the proceeds of the fraud, U.S. Attorney Paul J. Fishman announced.

Joseph W. Witkowski, 68, of Flemington, N.J., pleaded guilty before U.S. District Judge Joseph E. Irenas in Camden federal court to an indictment charging him with one count each of conspiracy to commit wire fraud and conspiracy to commit money laundering. Witkowski, a former attorney, was released on bail.

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

Witkowski and his conspirators located oceanfront condominiums overbuilt by financially distressed developers in Wildwood Crest, N.,J.; premier real estate in vacation destinations in Georgia and South Carolina; and properties in New Jersey owned by financially distressed homeowners facing foreclosure. They then recruited “straw buyers” – people with good credit scores but lacking the financial resources to qualify for mortgage loans – to purchase those properties.

Witkowski and his conspirators created false documents, including fake W-2 forms, income tax returns, investment statements, and rental agreements, to make the straw buyers appear more creditworthy than they actually were. They also established numerous telephone lines for companies owned by some of the conspirators so that when a lender contacted the telephone number, the conspirators could falsely verify that a straw buyer was employed by the company listed on his or her fraudulent loan application.

Witkowski also caused fraudulent mortgage loan applications in the name of the straw buyers and supporting documents, which attributed to the straw buyers inflated income and assets, to be submitted to mortgage lenders. Once the loans were approved and the mortgage lenders sent the loan proceeds in connection with real estate closings on the properties, Witkowski and his conspirators had some of the funds wired or checks deposited into various accounts that he and his conspirators controlled.

To date, 10 of Witkowski’s conspirators have pleaded guilty to participating in this mortgage fraud conspiracy, including Charles Harvath, Stephen F. Corba Jr., John Siuszko, Michael Williams, William Brown, Mark Kreischer, Crystal Brame, Aku I. Muhammad, George Lachenmayr Jr. and Robert Serao.

The wire fraud conspiracy charge to which Witkowski pleaded guilty carries a maximum potential penalty of 30 years in prison and a $1 million fine. The money laundering conspiracy charge carries a maximum potential penalty of 10 years in prison and a $250,000 fine. Witkowski has agreed to forfeit $2,412,899, representing the proceeds of the fraud. Sentencing is scheduled for Nov. 14, 2014.

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

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

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

Witkowski, Joseph et. al. Indictment

NEWARK, N.J. – A Cedar Grove, N.J., doctor was sentenced today to 24 months in prison for accepting tens of thousands of dollars in bribes from Parsippany, N.J.,-based Biodiagnostic Laboratory Services LLC (BLS) as part of a long-running scheme operated by the lab, its president, and numerous associates, U.S. Attorney Paul J. Fishman announced.

Dennis Aponte, 46, previously pleaded guilty U.S. District Judge Stanley R. Chesler to violating the Federal Travel Act. Judge Chesler imposed Aponte’s sentence today in Newark federal court.

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

On April 9, 2013, federal agents arrested BLS president and part owner, David Nicoll, 39, of Mountain Lakes, N.J.; Scott Nicoll, 32, of Wayne, N.J., a senior BLS employee and David Nicoll’s brother; and Craig Nordman, 34, of Whippany, N.J., a BLS employee and the CEO of Advantech Sales LLC – an entity used by BLS to make illegal payments. Authorities also arrested New Jersey physician Frank Santangelo, 43, of Boonton, N.J.

On June 10, 2013, David Nicoll, Scott Nicoll, Nordman, and four other associates of BLS pleaded guilty to informations charging them with one count of conspiracy to violate the Anti-Kickback Statute and the Federal Travel Act and one count of money laundering.  On July 24, 2013, Santangelo pleaded guilty to an information charging him with violating the Travel Act, money laundering and failing to file tax returns. The sentences for the BLS employees and Santangelo are pending.

Aponte admitted that he and David Nicoll agreed that BLS would pay Aponte bribes to refer to BLS blood specimens from the patients of his West New York, N.J., medical practice.  From October 2012 to March 2013, Nordman, acting at David Nicoll’s direction, paid Aponte approximately $3,000 per month in cash in return for blood specimens referred to BLS. The lab made more than $175,000 through testing on blood specimens referred by Aponte.

In addition to the prison term, Judge Chesler sentenced Aponte to one year of supervised release, fined him $50,000 and ordered forfeiture of $235,000.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Tom O’Donnell; IRS–Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen, and the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, with the ongoing investigation leading to today’s sentencing.

The government is represented by Senior Litigation Counsel Andrew Leven, Assistant U.S. Attorney Joseph Minish, and Jacob T. Elberg, Chief of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark, as well as Assistant U.S. Attorney Barbara Ward of the office’s Asset Forfeiture and Money Laundering Unit.

U.S. Attorney Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $535 million in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.

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Defense counsel: John Vazquez Esq. & Michael Critchley Esq., Roseland, N.J.

Attorney and Company CEO also Convicted in Illegal Takeover and Looting of Publicly Traded Company

CAMDEN, N.J. – A member and an associate of the Lucchese organized crime family and two Texas brothers were convicted today of racketeering and other charges after a six-month trial, U.S. Attorney Paul J. Fishman for the District of New Jersey and Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division announced.

Nicodemo S. Scarfo, 49, of Galloway, N.J., a member of the Lucchese organized crime family of La Cosa Nostra (LCN) and Salvatore Pelullo, 47, of Philadelphia, an associate of the Lucchese and Philadelphia LCN families, were convicted of all the counts against them, including racketeering conspiracy and related offenses, including securities fraud, wire fraud, mail fraud, bank fraud, extortion, money laundering and obstruction of justice. Two other defendants, William and John Maxwell, were also convicted. Co-defendants David Adler, Gary McCarthy and Donald Manno were acquitted on all counts.

“Today, four people stand convicted  for giving new meaning to ‘corporate takeover’ – looting a publicly traded company to benefit their criminal enterprise,” U.S. Attorney Fishman said. “The defendants stole more than $12 million from shareholders through rampant self-dealing, fraudulent SEC filings and intimidation. The public should not have to worry that the interests of shareholders are being subverted to benefit organized crime or for other corrupt ends.”

“Nicodemo Scarfo, Salvatore Pellulo and their cohorts used threats of physical and economic harm to take over a publicly traded financial firm, then callously and systematically looted the company out of millions of dollars to buy luxury items for themselves,” Assistant Attorney General Caldwell said. “As a result of today’s guilty verdict, this mafia member and his conspirators now face substantial prison sentences.”   

The jury deliberated two weeks before delivering its verdicts following a six-month trial before U.S. District Judge Robert B. Kugler in Camden federal court. The defendants were charged in an indictment returned in 2011 by a federal grand jury in Camden. It named Nicodemo D. Scarfo (Scarfo Sr.) – Nicodemo S. Scarfo’s father and the imprisoned former boss of the Philadelphia LCN family – and Vittorio Amuso, the imprisoned boss of the Lucchese family, as conspirators.

Five other defendants – Cory Leshner, Howard Drossner, John Parisi, Todd Stark, and Scarfo’s wife, Lisa Murray-Scarfo – have previously pleaded guilty to various charges related to their roles in the criminal scheme.

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

Scarfo is a made member of the Lucchese family, having become a member after an attempt on his life in 1989 following an internal struggle for control of the Philadelphia family.  In the mid-1990s, while Scarfo Sr. and Amuso were in federal prison in Atlanta, Amuso arranged for Scarfo to become a member of the Lucchese family as a favor to Scarfo Sr. As a member of the Lucchese family, Scarfo was required to earn money and participate in the affairs of the Lucchese family.

In April 2007, Scarfo, Pelullo and others devised a scheme to take over FirstPlus Financial Group Inc. (FPFG), a publicly held company in Texas. Scarfo and Pelullo used threats of economic harm to intimidate and remove the prior management and board of directors of replaced those officers with individuals beholden to Scarfo and Pelullo, including William Maxwell, an attorney from Houston, Texas, and his brother, John Maxwell, of Irving, Texas, who acted as the company’s CEO.

Once the takeover was completed, the figurehead board named William Maxwell as “special counsel” to FPFG, a position that he used to funnel $12 million to himself, Scarfo and Pelullo through fraudulent legal services and consulting agreements. The agreements, as well as FPFG’s fraudulent acquisitions of companies controlled by Scarfo and Pelullo, were designed to mask the true identity and nature of the control exerted over FPFG and to conceal the source of the money fraudulently conveyed to Scarfo and Pelullo. 

In a telephone call intercepted by law enforcement, Pelullo called Scarfo to tell him about the sudden death of a former FPFG executive. This former executive had provided information to Pelullo and Maxwell that they used to extort control of FPFG. At the time of his death, he was a member of FPFG’s “compliance team.” Scarfo and Pelullo expressed relief regarding his death. After laughing about how he was “crushed” that “the rat is dead,” Pelullo acknowledged that the executive was “the only connection, the only tie to anything.” Scarfo replied: “Oh boy. Yeah, Sal, you wanna know something though? That’s one that I know you can’t take credit for . . . [laughter] . . . and that’s the natural best thing. You know what I mean? That is so like Enron-ish. You know what I mean?  Kenneth Lay, he bailed out and took a heart attack.”

Scarfo and Pelullo used their illicit gains to fund extravagant purchases, including an $850,000 yacht for both defendants, a luxury home for Scarfo, a Bentley automobile for Pelullo, and thousands of dollars in jewelry for Scarfo’s wife. As a direct result of the enterprise’s criminal activity, FPFG and its shareholders suffered a loss of at least $12 million.

The conspiracy to commit bank fraud count carries a maximum potential penalty of 30 years in prison and a $1 million fine; the RICO conspiracy, wire fraud conspiracy, wire fraud, conspiracy to obstruct justice counts each carry a maximum potential penalty of 20 years in prison and a $250,000 fine; the conspiracy to commit money laundering and felon in possession of a weapon counts each carry a maximum potential penalty of 10 years in prison and a $250,000 fine; the securities fraud conspiracy, conspiracy to make false statements in a loan application and conspiracy to transfer firearms to a prohibited person counts each carry a maximum potential penalty of five years in prison and a $250,000 fine.

Sentencing for Scarfo is scheduled for Oct. 22, 2014; for Pelullo, Oct. 21, 2014; and for both Maxwell brothers, Oct. 23, 2014.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark; the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, under the direction of Special Agent in Charge Cheryl Garcia, New York Region; and the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Robin Shoemaker in Newark. He also thanked the FBI in Philadelphia, under the direction of Special Agent in Charge Edward J. Hanko, and the U.S. Securities and Exchange Commission for their roles in the investigation.

The government is represented by Assistant U.S. Attorney Steven D’Aguanno and Howard Wiener of the District of New Jersey’s Organized Crime/Gangs Unit and Trial Attorney Adam L. Small of the Criminal Division’s Organized Crime and Gang Section.

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Defense counsel: Scarfo: Michael E. Riley Esq., Mount Holly, N.J.
Pelullo: J. Michael Farrell Esq., Wenonah, N.J.
William Maxwell: Michael N. Huff Esq., Philadelphia
John Maxwell: Mark W. Catanzaro Esq., Mount Holly
David Adler: Barry I. Gross Esq., Philadelphia
Gary McCarthy: Yune T. Do Esq., Philadelphia
Donald Manno: Donald Francis Manno Esq., Cherry Hill, N.J.

NEWARK, N.J. – An Essex County, N.J., man made his initial court appearance today on charges of bank robbery in connection with an attempt to rob a bank in Irvington, N.J., U.S. Attorney Paul J. Fishman announced.

Karim Brunson, 24, of Newark, was charged by complaint with one count of bank robbery and one count of possession of a firearm during the commission of a crime of violence. He made his initial court appearance today before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court.

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

Brunson allegedly entered the front door of the Investors Savings Bank in Irvington at 11:30 a.m. on June 28, 2014, with a dark-colored mask over his face. Brunson pulled out a loaded .357-caliber revolver handgun from his waistband and pointed it into the lobby. An off-duty Irvington Police lieutenant was in uniform and working inside the bank as a security guard. As Brunson entered the lobby, he pointed the handgun at the officer’s head and threw a plastic shopping bag toward one of the bank tellers. Brunson then yelled for the teller to “Put the money in the bag.” 

When Brunson looked away momentarily, the off-duty police officer grabbed Brunson’s hand and the gun and fought with Brunson on the floor of the bank lobby. Another bank employee and a second off-duty police officer arrived to help the Irvington Police lieutenant subdue Brunson.

The bank robbery charge carries a maximum potential penalty of 20 years in prison. The weapons charge carries a mandatory seven years in prison to be served consecutively to his sentence on the bank robbery.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, and officers of the Irvington Police Department, under the direction of Police Director Joseph Santiago, with the ongoing investigation that led to the charges.

The government is represented by Assistant U.S. Attorney James Donnelly of the Criminal Division in Newark.

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

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

Brunson, Karim Complaint

CAMDEN, N.J. - A South Carolina man was arrested today and charged with tampering with witnesses in a federal criminal trial that concluded last September, U.S. Attorney Paul J. Fishman announced.

Dennis Nadeau, 53, of Myrtle Beach, S.C., was arrested at his home this morning by agents of the FBI and charged by a complaint with misleading conduct with intent to influence the testimony of four actual and potential witnesses in the trial of the U.S. v. Adam Lacerda et al. Nadeau will have an initial appearance before U.S. Magistrate Judge Karen M. Williams in Camden federal court at a later date.

According to documents filed in this case and in the prior criminal case:

From 2010 through 2013, Nadeau worked at the New Jersey-based Vacation Ownership Group LLC and its successor, VO Financial. In 2013, 13 former VO Group employees pleaded guilty to conspiring to defraud timeshare owners. Four other VO Group employees, including VO Group President Adam Lacerda and his wife, Ashley Lacerda, were convicted by a jury of conspiracy and related charges after a seven-week trial that concluded last September. The Lacerdas have been in custody since the trial and all defendants are awaiting sentencing.

Shortly before the start of last year’s trial, Ashley Lacerda allegedly directed Nadeau to call potential trial witnesses and try to convince them that they had not been defrauded. Nadeau called several individuals, made numerous false statements about their dealings with VO, and tried to get them to agree with the false statements. Unbeknownst to three of the witnesses, Nadeau was recording the calls.

The witness tampering count with which Nadeau is charged carries a maximum penalty of 20 years in prison and a fine of the greater of $250,000 or twice the gain or loss caused by the offense.

U.S. Attorney Fishman credited special agents of the FBI’s Atlantic City Resident Agency, under the direction of Special Agent in Charge Aaron T. Ford, with the ongoing investigation leading to today’s charges.

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

The government is represented by Assistant U.S. Attorney R. David Walk Jr. of the U.S. Attorney’s Office in Camden.

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Nadeau, Dennis Complaint

NEWARK, N.J. – A registered sex offender who was formerly employed at a law office in Paterson, N.J., was sentenced today to 180 months in prison for distributing images of child sexual abuse over the Internet, U.S. Attorney Paul J. Fishman announced.

Kevin Rease, 34, of Hackettstown, N.J., previously pleaded guilty to one count of an indictment charging him with distributing images of child pornography. U.S. District Judge Claire C. Cecchi imposed the sentence today in Newark federal court.

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

Rease admitted that on Feb. 12, 2013, he made images and videos of child sexual abuse stored on his work computer available for others to download via an online peer-to-peer file sharing network. On that date, an undercover law enforcement agent successfully downloaded videos of child sexual abuse from Rease through the network.

In addition to the prison term, Judge Cecchi sentenced Rease to a lifetime of supervised release. In sentencing Rease, Judge Cecchi cited the defendant’s previous child exploitation convictions as a reason for the lengthy term.

U.S. Attorney Fishman credited special agents of the FBI’s Child Exploitation Task Force, under the direction of Special Agent in Charge Aaron T. Ford in Newark, and the New Jersey Regional Computer Forensics Laboratory with the investigation.

The government is represented by Assistant U.S. Attorney Danielle Alfonzo Walsman of the U.S. Attorney’s Office Criminal Division in Newark.

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Defense counsel: William B. Ware Esq., Chester, N.J.

TRENTON, N.J. – A Monmouth County, N.J., doctor who allegedly wrote illegal prescriptions for oxycodone was indicted on charges that he participated in a conspiracy to illegally distribute the medication, laundered money and failed to pay taxes, U.S. Attorney Paul J. Fishman announced.

Dr. Paul DiLorenzo, 60, of Ocean Township, N.J., is charged in a superseding indictment, returned today by a federal grand jury, with one count of conspiracy to distribute oxycodone, one count of structuring financial transactions, one count of conspiracy to launder money and eight counts of failing to collect and pay payroll taxes.

According to documents filed in this case:

Oxycodone, the active ingredient in brand name pills such as Oxycontin, Roxicodone and Percocet, is a Schedule II controlled substance, meaning that it has a high potential for abuse, is only currently accepted in medical use applications with severe restrictions, and abuse of the drug may lead to severe psychological or physical dependence.

Between 2009 and June 27, 2012, DiLorenzo allegedly issued prescriptions to conspirators for drugs containing oxycodone outside the usual course of medical practice and not for any legitimate medical purpose. DiLorenzo charged purported patients $500 in cash for the first visit, $300 in cash for each successive visit and an additional $150 in cash for urine tests.

DiLorenzo employed three conspirators to act as “staff” at his office despite the fact that none of them had any medical training. DiLorenzo provided one of his conspirators with blank prescription pads and stamps in order to generate oxycodone prescriptions for purported patients.  DiLorenzo would allegedly sign the prescriptions, often without any medical examination or only a cursory examination. DiLorenzo’s conspirators would obtain oxycodone pills at pharmacies and then distribute the pills. 

DiLorenzo allegedly agreed to split the proceeds with some of his conspirators, but never reported or paid any employment taxes.

DiLorenzo structured his share of the proceeds, depositing $1,090,939 in cash into various accounts via more than 150 separate transactions. All but one of the deposits was for an amount less than $10,000, which is the amount that requires the filing of a Currency Transaction Report (CTR). The one deposit for more than $10,000 – a $10,044 cash deposit – was accompanied by a deposit slip in the amount of $9,544. After being told by the teller that the amount was in excess of $10,000, DiLorenzo attempted to cancel the deposit rather than have the bank prepare and file a CTR.  DiLorenzo also accumulated $521,212.25 in cash that was found at his house and the house of his parents.

The count of conspiracy to distribute oxycodone carries a maximum potential penalty of 20 years in prison and a $1 million fine. The structuring count carries a maximum potential penalty of 10 years in prison and a $500,000 fine. The conspiracy to launder money count carries a maximum potential penalty of 20 years in prison and a $500,000 fine. The tax counts each carry a maximum potential penalty of five years in prison and a $250, 000 fine.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen; and special agents of the Drug Enforcement Administration, under the direction of Special Agent in Charge Carl Kotowski, with the investigation leading to today’s indictment.

The government is represented by Assistant U.S. Attorney R. Joseph Gribko of the U.S. Attorney’s Office in Trenton and Tino Lisella, trial attorney with the U.S. Department of Justice, Tax Division.

The charge and allegations contained in the superseding indictment are merely accusations, and the defendant is considered innocent unless and until proven guilty.

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Defense counsel: Robert DeGroot Esq., Newark

DiLorenzo, Paul Superceding Indictment

TRENTON, N.J. - A Bergen County, N.J., man admitted today that he downloaded images and videos depicting child sexual abuse on a computer at his parents’ house, U.S. Attorney Paul J. Fishman announced.

Joshua Babilonia, 24, of Fair Lawn, N.J., pleaded guilty before U.S. District Judge Joel A. Pisano in Trenton federal court to an information charging him with one count of receiving images of child sex abuse over the Internet.

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

Special agents of the U.S. Department of Immigration and Customs Enforcement, Homeland Security Investigations (ICE HSI) executed a search warrant on Sept. 13, 2012, at the Fair Lawn residence of Babilonia’s parents. Agents seized digital evidence that contained more than 600 images and a large number of videos depicting child sexual abuse, including material that involved prepubescent minors and portrayed sadistic or masochistic conduct. The evidence seized included three files previously downloaded from Babilonia by law enforcement agents working in an undercover capacity on a peer-to-peer network.

During today’s guilty plea proceeding, Babilonia admitted he was a member of the online network between January 2011 and September 2012, and searched for and downloaded images of child sexual abuse. He also admitted that his files were viewable and downloadable by others on the network.

Babilonia faces a mandatory minimum penalty of five years in prison, and a maximum potential penalty of 20 years in prison and a $250,000 fine. Sentencing is currently scheduled for Oct. 15, 2014. Babilonia will also be required to register as a sex offender.

U.S. Attorney Fishman credited special agents of ICE HSI, under the direction of Special Agent in Charge Andrew M. McLees in Newark, with the investigation.

The government is represented by Assistant U.S. Attorney Danielle M. Corcione of the U.S. Attorney's Office General Crimes Unit in Newark.

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Defense counsel: Adolph Galluccio Esq., Totowa, N.J.

Babilonia, Joshua Information

NEWARK, N.J. - A Pennsylvania man was sentenced today to 27 months in prison for misappropriating over 900 cellular telephones, handheld devices and accessories belonging to Verizon Wireless and selling those items online for a profit, U.S. Attorney Paul J. Fishman announced.

James Hopkins, 35, of Telford, Pa., previously pleaded guilty before U.S. District Judge William H. Walls to an information charging him with mail fraud. Judge Walls imposed the sentence in Newark federal court.

According to documents filed in this case and statements made in court: Hopkins worked as an account executive at a branch office for Verizon Wireless in Trevose, Pa. From February through November 2009, Hopkins placed numerous orders for Verizon Wireless cellular telephones, handheld devices and accessories in the names of existing Verizon Wireless customers without their knowledge. After arranging for the merchandise to be shipped to the home of a relative in New Jersey, the defendant manipulated Verizon’s computer database to conceal the fraudulent orders and shipments. Hopkins received $328,517 worth of stolen Verizon Wireless merchandise, which he sold on eBay for a profit of $272,290.

In addition to the prison term, Judge Walls sentenced Hopkins to serve two years of supervised release, ordered him to pay $303,623 in restitution, and forfeit $272,290.

U.S. Attorney Fishman credited postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, for the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorney Joseph B. Shumofsky of the U.S. Attorney’s Office Economic Crime Unit in Newark.

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Defense counsel: Wayne Powell Esq., Cherry Hill, N.J.

NEWARK, N.J. – A Georgia business owner who held himself out to be an investor and loan broker admitted his role in defrauding investors of more than $800,000, U.S. Attorney Paul J. Fishman announced.

Ronnie Singleton, 41, of Lithonia, Ga., pleaded guilty before U.S. District Judge Esther Salas in Newark federal court to Count One of an indictment charging him with conspiring to commit wire fraud.

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

Singleton owned and operated a business called Wonder World Inc. and held himself out to be a financier. Using the Internet and telephone, he met his codefendant, Michael Woodruff, 66, of Peeples Valley, Ariz., and the two agreed to work together to find investors. Singleton falsely represented that he would providing financing for real estate deals through a “European system of financing” that involved leasing financial instruments. Singleton received more than $800,000 in investors’ funds, $360,000 of which he wired to Woodruff. Instead of obtaining the promised financing for the real estate projects, Singleton instead used the investors’ money for his own personal benefit.

The count to which Singleton pleaded guilty carries a maximum potential penalty of 20 years in prison and a fine of $250,000 or twice the gross amount of any gain or loss from the offense. Sentencing is scheduled for Sept. 30, 2014. The charges against Woodruff are pending.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; and inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, for the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Jenny Kramer of the Economic Crimes Unit and Assistant U.S. Attorney Charlton Rugg of the Criminal Division.

The charges and allegations against Woodruff are merely accusations and he remains innocent unless and until proven guilty.

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Defense counsel: Paul Condon Esq., Jersey City, N.J.

Singleton, Ronnie Indictment

TRENTON, N.J. – A Burlington County, N.J., man was arrested this morning for allegedly orchestrating a large scale check-kiting scheme that caused $8.8 million in losses to three banks in New Jersey, U.S. Attorney Paul J. Fishman announced.

Luis G. Rogers Sr., 71, of Beverly, N.J., is charged by complaint with one count of bank fraud.  He is scheduled to make his initial appearance today in Trenton federal court before U.S. Magistrate Judge Tonianne J. Bongiovanni.

According to the complaint:

Rogers was the chief executive officer of Lease Group Resources Inc. (LGR), an office equipment leasing company based in Mount Holly, N.J., and was also the principal of several other business entities (the LGR Entities). From November 2012 through April 2013, Rogers maintained and controlled numerous checking accounts in the names of the LGR Entities at three separate banks: Liberty Bell Bank, Roma Financial, and Susquehanna Bank.

Rogers allegedly engaged in what is known as a “check-kiting” scheme – creating artificial balances in his bank accounts by causing checks to be written against the accounts knowing the money was not there to cover them. Rogers would allegedly deposit the checks into other accounts he controlled to artificially inflate the balances of those accounts. Rogers, or others acting on his behalf, allegedly deposited hundreds of millions of dollars into the LGR Entities’ accounts, amounts that far exceeded LGR’s annual revenues. In April 2013, the banks discovered the scheme and either returned or dishonored many of the pending checks and charged back the amounts of the checks against the LGR Entities’ accounts. This resulted in the accounts being overdrawn and the banks sustaining millions of dollars in losses. Specifically, Liberty Bell lost $3.7 million, Roma Bank lost $2.1 million, and Susquehanna lost $3 million.   

The charge of bank fraud carries a maximum potential penalty of 30 years in prison and a $1 million fine. 
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, for the investigation leading to today’s arrest.

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

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

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Rogers, Luis Complaint

Cellular Next LLC Allegedly Participated in Drug Money Laundering
Through Black Market Peso Exchange

NEWARK, N.J. - The United States filed a civil forfeiture complaint today seeking to forfeit $1,742,289, previously seized from cellular phone wholesale company Cellular Next LLC, which allegedly represents narcotics proceeds laundered through the Black Market Peso Exchange (BMPE), U.S. Attorney Paul J. Fishman announced.

According to the complaint filed today in Newark federal court:

Cellular Next, which operates out of New York and Miami and is registered as a business entity in New Jersey, has a history of receiving narcotics proceeds. Drug Enforcement Administration (DEA), New York Drug Enforcement Task Force (NYDETF) and Immigration and Customs Enforcement, Homeland Security Investigations (HSI) undercover agents have sent wire transfers of such proceeds to the company at the direction of BMPE brokers based in Colombia.

The BMPE is a currency exchange system which uses illegal drug proceeds in the United States to pay for goods that then are shipped to Colombia. It is the primary method used by Colombian narcotics traffickers to launder their illicit funds. The recipients in Colombia pay for those goods in pesos, which are then forwarded to the narcotics traffickers. The system allows narcotics traffickers to launder and transport their narcotics dollars through the United States financial system by using domestic accounts held by businesses or individuals doing business in the United States. Seizure and forfeiture actions are aimed at disrupting and destroying the flow of these narcotics dollars by targeting the domestic accounts and the entities that receive these illicit funds.

Representatives of Cellular Next have, on numerous occasions, received narcotics proceeds without asking for the appropriate identification or filing the appropriate paperwork to comply with the Bank Secrecy Act, which was designed to combat money laundering. Cellular Next has a history of having its bank accounts closed by financial institutions for misuse, for having allowed large numbers of structured cash deposits from at least 2010 through 2013.

One money laundering customer sent the $1.7 million the government seeks to forfeit to Cellular Next LLC using BMPE.

U.S. Attorney Fishman credited the New York Drug Enforcement Task Force, comprising agents and officers from DEA New York, New York City Police Department and New York State Police; and agents and officers of U.S. Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge Andrew M. McLees in Newark, with the ongoing investigation.

The government is represented by Assistant U.S. Attorney Evan S. Weitz of the U.S. Attorney's Office Asset Forfeiture and Money Laundering Unit.       

14-227                                           

Cellular Next Complaint

TRENTON, N.J. - A Mercer County, N.J., man today admitted his role in the March 2013 robbery of a commercial establishment, U.S. Attorney Paul J. Fishman announced.

Felix M. Lugo, 39, formerly of Trenton, N.J., pleaded guilty before U.S. District Judge Michael A. Shipp in Trenton federal court to an information charging him with one count of conspiracy to commit Hobbs Act robbery.   

According to documents filed in this case and statements made in court: Lugo conspired with Arturo Delacruz, 35, and Samuel Matias Cruz, 33, both of Trenton, to rob the Rapido Flores Multiservices Agency in Trenton. Lugo and Cruz committed the robbery, during which at least one victim was physically assaulted and restrained. Lugo and Cruz stole more than $6,000 and fled the scene in a vehicle driven by Delacruz.

Delacruz and Cruz were previously arrested by special agents from the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) on criminal complaints charging each with one count of conspiracy to commit Hobbs Act robbery. Those charges remain pending.  

The Hobbs Act conspiracy to which Lugo pleaded guilty carries a maximum potential penalty of 20 years in prison, as well as a maximum fine of $250,000, or twice the gross gain or loss arising out of the offense. Sentencing is scheduled for Oct. 6, 2014.

U.S. Attorney Fishman credited special agents of the ATF, under the direction of Special Agent in Charge Stephanie R. Shoemaker; the Mercer County Prosecutor’s Office, under the direction of Prosecutor Joseph L. Bocchini Jr.; the Burlington County Prosecutor’s Office, under the direction of Prosecutor Robert D. Bernardi; troopers from N.J. State Police, under the direction of Col. Rick Fuentes; the Trenton Police Department, under the direction of Police Chief Ralph Rivera Jr.; and the Westampton Police Department, under the direction of Police Chief Ricky W. Smith, for their investigation leading to today’s guilty plea.

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

14-228                                                      

Defense counsel: Henry E. Klingeman Esq., Newark

Lugo, Felix Information

NEWARK, N.J. – One of the leaders of a massive, international counterfeit goods conspiracy was sentenced today to 120 months in prison for his role in the scheme, U.S. Attorney Paul J. Fishman announced.

Hai Dong Jiang, a/k/a “Jimmy,” a/k/a “Dong,” 37, of Staten Island, N.Y., previously pleaded guilty before U.S. District Judge Esther Salas in Newark federal court to an information charging him with one count of conspiracy to traffic in counterfeit goods.

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

From November 2009 through February 2012, Dong Jiang and his co-defendants ran one of the largest counterfeit goods smuggling and distribution conspiracies ever charged by the Department of Justice. The defendants and others conspired to import hundreds of containers of counterfeit goods – primarily handbags, and footwear, and perfume – from China into the United States in furtherance of the conspiracy. These goods, if legitimate, would have had a retail value of more than $300 million.

The counterfeit goods were manufactured in China and smuggled into the United States through containers fraudulently associated with legitimate importers, with false and fraudulent shipping paperwork playing a critical role in the smuggling scheme. Some of the conspirators created and managed the flow of false shipping paperwork between China and the United States, and supervised the importation of counterfeit goods, and others controlled the importation of the counterfeit goods into the United States.

Other conspirators managed the distribution of counterfeit goods once those goods arrived in the United States. After importation, the counterfeit goods were delivered to warehouses, and distributed throughout New York, New Jersey, and elsewhere. Certain conspirators paid large amounts of cash to undercover law enforcement officers to assist in the removal of counterfeit goods from the port.

Some conspirators acted as wholesalers for the counterfeit goods, supplying retailers who sold counterfeit goods to customers in the United States. Other conspirators were money structurers, who arranged for cash to be wired to China in amounts small enough to avoid applicable financial reporting requirements, to evade detection of the smuggling scheme and related proceeds. 

Law enforcement introduced several undercover special agents (collectively, the UCs) to the conspirators. The UCs purported to have unspecified “connections” at the port, which allowed the UCs to release containers that were on hold and pass them through to the conspirators. The conspirators paid the UCs for these “services.”  In total, during the course of this investigation, the conspirators provided the UCs more than $2 million.

UCs recorded dozens of phone calls and in-person meetings with various conspirators.  The investigation also utilized several court-authorized wiretaps of telephones and electronic communications.

Dong Jiang served as one of the directors of the smuggling scheme. Dong Jiang ordered counterfeit merchandise from China; negotiated shipments of counterfeit goods from China; arranged for payment for that merchandise and supervised the distribution of that merchandise in and around the New York/New Jersey area.

In addition to the prison term, Judge Salas sentenced Dong Jiang to two years of supervised release ordered forfeiture of cash and property as described in the plea agreement (attached).

U.S. Attorney Fishman praised special agents of Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), under the direction of Special Agent in Charge Andrew M. McLees, and special agents of the FBI, 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 Andrew Pak and Zach Intrater of the Computer Hacking and Intellectual Property section of the Economic Crimes Unit of the U.S. Attorney’s Office in Newark and Nicholas Grippo of the U.S. Attorney’s Office in Trenton.

14-229                                                      
Defense counsel: Joseph Conway Esq., Mineola, N.Y.

Dong Jiang, Hai Plea Agreement

NEWARK, N.J. – A Dominican national who was extradited from Canada earlier this year today admitted 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. 

Alejandro Javier, 51, pleaded guilty before U.S. District Judge Claire C. Cecchi to an information charging him with one count of conspiracy to steal government funds and one count of theft of government funds.

Javier and others participated in a scheme that 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 the losses to the United States of more than $12 million. A Dominican national, Javier evaded capture until July 2, 2013, when Canadian law enforcement authorities arrested him as he tried to illegally enter Canada. He had been incarcerated there until he was extradited to New Jersey on Jan. 10, 2014.

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 Individual Income Tax Return Form 1040s (Form 1040) 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, in various ways.

• Certain SIRF perpetrators sell the tax 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 refund 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. 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 engaged in a large-scale, long running SIRF scheme.

Javier and others obtained personal identifiers, such as dates of birth and Social Security numbers, belonging to Puerto Rican citizens. Javier and others 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 fraudulent 1040 forms were created and 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, which, in turn, led to the issuance of tax refund checks that the conspirators obtained, sold, cashed, and spent.

Conspirators purchased mail routes, that is, lists of addresses covered by a single mail carrier. Conspirators applied for tax refunds, inserted addresses along the mail route as the purported home addresses of the “taxpayers,” and obtained the checks sent to the addresses. In other instances, the conspirators applied for checks using addresses otherwise controlled by, or accessible by, certain conspirators, and collected the checks after they were delivered to those addresses. Hundreds of refund checks were mailed to just a few different addresses in a few towns, including Nutley, Somerset and Newark in New Jersey and Shirley, N.Y. After receiving the checks, Javier and others cashed the checks and divided the proceeds.  

Members of the New Jersey Task Force identified certain “hot spots” of activity related to the scheme, where conspirators were directing millions of dollars of refunds just a few towns and cities. New Jersey Task Force members then interacted with U.S. Postal Service employees in these hot spots, and identified the characteristics of refund checks connected to the scheme. More than $22 million in fraudulently applied for refund checks were interdicted by law enforcement and never delivered.

The conspiracy count to which Javier pleaded guilty 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. Sentencing for Javier is scheduled for Oct. 8, 2014.

U.S. Attorney Fishman praised special agents of the DEA, under the direction of special agent in charge Carl J. Kotowski; IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen; and inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, with the investigation leading to today’s guilty plea. He also thanked the U.S. Secret Service, under the direction of Special Agent in Charge James Mottola; and HSI-ICE, under the direction of Special Agent in Charge Andrew M. McLees, for their roles.

The government is represented by Assistant U.S. Attorneys Lakshmi Srinivasan Herman, Zach Intrater, and Danielle Walsman of the U.S. Attorney’s Office Criminal Division in Newark, and Mala Harker of the Special Prosecutions Division.  

14-226                                                           

Defense Counsel: David Oakley Esq., Princeton, N.J.

Javier, Alejandro Information

TRENTON, N.J. – A New Jersey jewelry store owner who used his business to further one of the largest credit card fraud schemes ever charged by the Justice Department today became the 18th conspirator to admit his role in the scheme, U.S. Attorney Paul J. Fishman announced.

Vijay Verma, 46, of Iselin, N.J., pleaded guilty before U.S. District Judge Anne E. Thompson in Trenton federal court to an information charging him with one count of access device fraud.
  
According to documents filed in this case and statements made in court:

Verma was indicted in October 2013 as part of a scheme to fabricate more than 7,000 false identities to obtain tens of thousands of credit cards. Participants in the scheme doctored credit reports to pump up the spending and borrowing power associated with the cards. They then borrowed or spent as much as they could, based on the phony credit history, but did not repay the debts – causing more than $200 million in confirmed losses to businesses and financial institutions. These debts were incurred at Verma’s jewelry store, among many other locations, where Verma would allow fraudulently obtained credit cards to be swiped in phony transactions.

The scheme involved a three-step process in which the defendants would make up a false identity by creating fraudulent identification documents and a fraudulent credit profile with the major credit bureaus; pump up the credit of the false identity by providing false information about that identity’s creditworthiness to those credit bureaus; then run up large charges.

The scope of the criminal fraud enterprise required other scheme participants to construct an elaborate network of false identities. Across the country, they maintained more than 1,800 “drop addresses,” including houses, apartments and post office boxes, which they used as the mailing addresses for the false identities.

Verma admitted he allowed others who came to his Jersey City, N.J., store to swipe cards he knew did not legitimately belong to them. Verma would then split the proceeds of the phony transactions with these other conspirators.

The count to which Verma pleaded guilty carries a maximum potential penalty of 15 years in prison and a $250,000 fine, or twice the gain or loss caused by the offense. Sentencing is scheduled for Sept. 25, 2014.
  
U.S. Attorney Fishman credited special agents of the FBI’s Cyber Division, under the direction of Special Agent in Charge Aaron T. Ford; postal inspectors from the U.S. Postal Inspection Service, under the direction of Postal Inspector in Charge Maria L. Kelokates; and special 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. He also thanked the U.S. Social Security Administration Office of Inspector General, Office of Investigations in New Jersey for assisting in the investigation.

The government is represented by Assistant U.S. Attorneys Zach Intrater and Daniel V. Shapiro of the U.S. Attorney’s Office Economic Crimes Unit and Barbara Ward of the office’s Asset Forfeiture Unit in Newark.

This case 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. 

14-225                
                                      
Defense counsel: Gerald Krovatin Esq., Newark

Verma, Vijay Information

NEWARK, N.J. - A Bergen County, N.J., man who was re-entering the United States from a trip abroad was arrested today at Newark International Airport on charges that he allegedly orchestrated a scheme to defraud a foreign nation of more than $3.5 million, U.S. Attorney Paul J. Fishman announced today.

Bobby Boye, a/k/a “Bobby Ajiboye,” a/k/a “Bobby Aji-Boye,” 50, of Franklin Lakes, N.J., is charged by complaint with one count of wire fraud conspiracy and six counts of wire fraud. He is scheduled to make his initial appearance tomorrow before U.S. Magistrate Judge Mark Falk in Newark federal court.

According to the complaint: Beginning in July 2010, Boye worked as an international legal advisor for the victim nation, which is referred to in the complaint as “Country A.” Boye served on a three-member committee responsible for reviewing and evaluating bids, solicited in February 2012, for a multi-million dollar contract to provide legal and tax accounting advice to Country A.  Boye allegedly deceived Country A representatives into awarding the lucrative contract to Opus & Best Services LLC (Opus & Best), a sham New York law and accounting firm that, unbeknownst to Country A, was secretly controlled by Boye.
 
On March 17, 2012, Boye allegedly caused Opus & Best to submit by email a bid for the contract with Country A. The bid documents, which allegedly were authored by Boye and a conspirator (CC-1), contained multiple, material misrepresentations and omissions, including: (1) a false claim that Opus & Best was founded in 1985, when in fact it was not founded until late March 2012; (2) a fraudulent listing of several purported employees of Opus & Best, who were described in the bid as a “first class talent of attorneys, accountants and economists.” There was no record of individuals of those same names as being admitted to practice law in New York or New Jersey or as being New York-licensed certified public accountants; (3) a false representation that Opus & Best had no conflicts of interest; Boye was both the sole member of Opus & Best and a member of the committee reviewing the bids; (4) a reference to prior consulting work purportedly performed by Opus & Best for another foreign country when that country had never awarded any type of consulting services contract to Opus & Best; and (5) a false representation that there were no third-party beneficiaries to the proposed contract between Opus & Best and Country A, when Boye himself was an undisclosed third-party beneficiary, given his alleged concealed intent to misappropriate the contract for his own benefit.
 
Unaware that Opus & Best allegedly was a sham firm, and relying on the recommendation of Boye, Country A awarded the contract to Opus & Best in June 2012.  Under the terms of the consulting contract, Boye was one of the two project coordinators acting on behalf of Country A and had authority to receive and approve invoices for payment.

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

The conspiracy and wire fraud counts with which Boye is charged each carry a maximum potential penalty of 20 years in prison and a fine of up to $250,000, or twice the gain or loss from the offense.

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 the arrest.

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

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

This arrest 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.

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Defense counsel:  TBD

Boye, Bobby Complaint

NEWARK, N.J. – A Miami man today admitted his role in a multi-state conspiracy to possess and sell prescription medication taken from a stolen tractor trailer, U.S. Attorney Paul J. Fishman announced.

Martin Lopez, a/k/a “El Negro,” 47, pleaded guilty before U.S. District Judge William J. Martini in Newark federal court to an information charging him with conspiracy to possess stolen prescription medicine.

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

On Dec. 2, 2009, a full shipment of prescription respiratory medicine manufactured by Dey LLP in Allen, Texas, was stolen on its way to Sandoz Inc. in Mechanicsburg, Pa. Lopez admitted that from December 2009 through March 2010, he conspired with others to acquire and sell medicine stolen from the shipment.

In early 2010, Lopez spoke with Ernesto Romero-Vidal, a/k/a “Bemba,” 48, of Hallandale, Fla., to identify a potential buyer for the stolen medicine. On March 2, 2010, Lopez arranged to have the medicine delivered to a buyer in New Jersey. Two days later, two other conspirators delivered the stolen goods to the buyer in return for $64,000 in cash, which they split with Lopez.

The conspiracy charge carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for Sept. 24, 2014.

On Dec. 18, 2013, Romero-Vidal was sentenced by Judge Martini to 80 months in prison for his role in the scheme and other federal charges.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen; and detectives of the North Bergen Police Department, under the direction of Chief Robert J. Dowd, with the investigation leading to today’s guilty plea.

The government is represented by Senior Litigation Counsel Leslie Faye Schwartz and Assistant U.S. Attorney Jane H. Yoon of the U.S. Attorney’s Office Criminal Division in Newark.

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Defense counsel: Kathleen M. Theurer Esq., Jersey City, N.J.

Lopez, Martin Information

TRENTON, N.J. – A New Jersey jewelry store owner who used his business to further one of the largest credit card fraud schemes ever charged by the Justice Department today admitted his role in the scheme, the 17th conspirator to do so, New Jersey U.S. Attorney Paul J. Fishman announced.

Vinod Dadlani, 51, of Lyndhurst, N.J., pleaded guilty today before U.S. District Judge Anne E. Thompson in Trenton federal court to an information charging him with one count of conspiracy to commit bank fraud.
  
According to documents filed in this case and statements made in court:

Dadlani was indicted in October 2013 as part of a conspiracy to fabricate more than 7,000 false identities to obtain tens of thousands of credit cards. Members of the conspiracy doctored credit reports to pump up the spending and borrowing power associated with the cards. They then borrowed or spent as much as they could, based on the phony credit history, but did not repay the debts – causing more than $200 million in confirmed losses to businesses and financial institutions.  These debts were incurred at Dadlani’s jewelry store, among many other locations, where Dadlani would allow fraudulently obtained credit cards to be swiped in phony transactions.

The scheme involved a three-step process in which the defendants would make up a false identity by creating fraudulent identification documents and a fraudulent credit profile with the major credit bureaus; pump up the credit of the false identity by providing false information about that identity’s creditworthiness to those credit bureaus; then run up large charges.

The scope of the criminal fraud enterprise required Dadlani’s conspirators to construct an elaborate network of false identities. Across the country, the conspirators maintained more than 1,800 “drop addresses,” including houses, apartments and post office boxes, which they used as the mailing addresses for the false identities.

During his guilty plea proceeding, Dadlani admitted he worked with other conspirators, who came to his Jersey City, N.J., store and allowed them to swipe cards he knew did not legitimately belong to them. Dadlani would then split the proceeds of the phony transactions with the conspirators.

The count to which Dadlani pleaded guilty carries a maximum potential penalty of 30 years in prison and a $1 million fine, or twice the gain or loss caused by the offense.

Dadlani is scheduled for sentencing by JudgeThompson on Sept. 24, 2014.
  
U.S. Attorney Fishman praised special agents of the FBI’s Cyber Division, under the direction of Special Agent in Charge Aaron T. Ford, for the investigation; as well as postal inspectors from the U.S. Postal Inspection Service, under the direction of Postal Inspector in Charge Maria L. Kelokates; and special agents of the U.S. Secret Service, under the direction of Special Agent in Charge James Mottola. He also thanked the U.S. Social Security Administration Office of Inspector General, Office of Investigations in New Jersey for assisting in the investigation.

The government is represented by Assistant U.S. Attorneys Zach Intrater and Daniel V. Shapiro of the U.S. Attorney’s Office Economic Crimes Unit and Barbara Ward of the office’s Asset Forfeiture Unit in Newark.

This case 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. 

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Defense counsel: Vincent Sarubbi Esq., Haddonfield, N.J.

Dadlani, Vinod Information

NEWARK, N.J. - Fourteen people – including a former U.S. Citizenship and Immigration Services officer and a U.S. Postal Service worker – have been arrested and charged for their alleged roles in a multi-state drug trafficking ring supplying large quantities of methamphetamine to the Jersey City area, U.S. Attorney Paul J. Fishman announced today.

Nine alleged members of the ring were arrested June 16 to 18, 2014, by agents of the Drug Enforcement Administration (DEA) as well as state and local law enforcement following a one-year investigation led by the DEA. They were charged by complaint with conspiracy to distribute methamphetamine. The New Jersey defendants made their initial court appearances before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court.

Among the 14 people charged today are defendants from Las Vegas, Nev., Los Angeles, Calif., and Phoenix, Ariz.

According to the documents filed in this case and statements made in court: Since July 2013 law enforcement has been investigating a drug trafficking organization (DTO) operating in Jersey City. The DTO coordinated shipments of methamphetamine from suppliers in Arizona, California, and Nevada through the mail to locations in northern New Jersey. Suppliers concealed the methamphetamine inside parcels that were shipped to addresses provided by the New Jersey-based conspirators, who would repackage the drugs for sale to lower level distributors.

John Freehauf, 36, a/k/a “Johnnie Rocket,” a/k/a “Agent,” of Jersey City, a former officer with the U.S. Citizenship and Immigration Service (USCIS), allegedly coordinated the acquisition of the methamphetamine, ordering several pounds per month from various interstate suppliers. Freehauf negotiated the price and provided New Jersey addresses for his suppliers. He and Benjamin Navarro, 44, a/k/a “Kristie,” of Jersey City, repackaged the drugs for distribution to lower level suppliers and retailers. 

Maria Lisa Pascual, 36, of North Bergen, N.J., used her position with the U.S. Postal Service to track and oversee the shipment of parcels. Pascual, Arnold Balagtas, 54, of Jersey City, and other conspirators redistributed smaller quantities of methamphetamine to lower level dealers and retailers. Pascual and Freehauf agreed to use the same sources of supply and to work together to set a common “market price” for methamphetamine in the northern New Jersey area. Pascual and Freehauf also assisted each other in distributing methamphetamine to lower level dealers.  Pascual has recently been terminated by the U.S. Postal Service. The defendants are:

Name

Age

Residence

36

Jersey City

Benjamin Navarro*

44

Jersey City

Maria Lisa Pascual

36

North Bergen, N.J.

Arnold Balagtas

54

Jersey City

Margaret Tiangco*

38

Jersey City

Javier Diaz

30

Los Angeles, Calif.

Candace Healy

21

Fresh Meadows, N.Y.

Ricce Anciado Jr.

44

Union, N.J.

Stephanie Luna*

36

Bergenfield, N.J.

Benedict Cipriano

51

Jersey City

Ricky Tulud

43

Belleville, N.J.

Janice Vidallon

31

Belleville

Ryan Bontempi

34

Phoenix, Ariz.

Howard Taylor

49

Phoenix

*Denotes fugitive

Freehauf, Pascual, Balagtas, Anciado, Tulud, Healy and Vidallon all appeared June 17, 2014, before U.S. Magistrate Judge Waldor in Newark federal court.  Diaz appeared in federal court in Los Angeles June 17, 2014, and is scheduled to appear in Newark federal court on June 30, 2014. Cipriano appeared before Judge Waldor today. Navarro, Luna and Tiangco remains at large. 

Bontempi, a/k/a “Rooster;” and Taylor were both arrested on May 12, 2014, in Phoenix, Arizona. Both were detained and transported to New Jersey, where they made their initial appearances today before Judge Waldor.

The count with which each of the defendants is charged carries a minimum penalty of 10 years in prison and a maximum potential penalty of life in prison and a $10 million fine. 

U.S. Attorney Fishman credited special agents of the DEA, under the direction of Special Agent in Charge Carl J. Kotowski; U.S. Postal Inspectors under the direction of Inspector in Charge Maria L. Kelokates; law enforcement officers from the N.J. National Guard Counter Drug Task Force, under the direction of the Adjutant General, Brig. Gen. Michael L. Cunniff; the N.J. State Police, under the direction of Superintendent Rick Fuentes; the Edison Police Department, under the direction of Chief Thomas Bryan; and the Jersey City Police Department, under the direction of Chief Robert Cowan, with the investigation leading to the charges.

The government is represented by Assistant U.S. Attorneys Adam N. Subervi and Charlton Rugg of the U.S. Attorney’s Office Narcotics Unit in Newark.

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

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Defense counsel:

Freehauf: Joseph Rubino Esq., West Orange, N.J.
Navarro: Pascual: Gregory Tomczak Esq., Montclair, N.J.
Balagtas: Angelo Servidio Esq., Nutley, N.J.
Tiangco: Diaz: TBD
Healy: Elizabeth Smith Esq., Mendham, N.J.
Anciado Jr.: Bruce Rosen Esq., Florham Park, N.J.
Luna: Cipriano: Zahid Quaraishi Esq., Morristown, N.J.
Tulud: Candace Hom Esq., Assistant Federal Public Defender, Newark
Vidallon: Stephen Truano Esq., Newark
Bontempi: David Ruhnke Esq., Montclair
Taylor: Kathleen Theurer Esq., Jersey City

Freehauf, John et al., Complaint
Bontempi - Taylor Complaint

CAMDEN, N.J. – An Atlantic City, N.J., woman was sentenced today to 35 years in prison for her role in the kidnapping and death of a 20-year-old Atlantic City woman, U.S. Attorney Paul J. Fishman announced.

Shamerria Smith, 27, previously pleaded guilty before U.S. District Judge Joseph H. Rodriguez to an information charging her with one count of use of a firearm in furtherance of a crime of violence – specifically, the Hobbs Act robbery and kidnapping that resulted in the death of Nadirah Ruffin. Judge Rodriguez imposed the sentence today in Camden federal court.

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

On March 23, 2011, a person identified as “D.H.” met with Isiah Ruffin (no relation to the victim) in the courtyard area of a housing complex on North Maryland Avenue, a section of Atlantic City known as “Back Maryland,” to talk to Isiah Ruffin about a dispute between Isiah Ruffin and Victim One. After a brief conversation, D.H. viciously assaulted Isiah Ruffin, knocking Isiah Ruffin unconscious and robbing him of cash. When Isiah Ruffin regained consciousness, D.H. assaulted him again. As a result of the assault, Isiah Ruffin was treated at the Atlantic City Medical Center for a possible concussion and facial lacerations. After Isiah Ruffin was released from the hospital, Smith and Aziz Sanders, 21, of Atlantic City, visited Isiah Ruffin, during which time Isiah Ruffin told Smith that D.H. had assaulted him.

 To retaliate, Smith planned to enter Victim One’s house and assault and rob Victim One of illegal drugs and money. Sanders agreed to help Smith execute her plan and recruited a third co-defendant, DeShawn Hicks, 22, of Atlantic City, to participate. Smith supplied the gun, duct-tape and handcuffs.

On March 26, 2011, Smith, Sanders, and Hicks entered Victim One’s house and duct-taped Victim One and four other victims, including Nadirah Ruffin, who were present. While in the house, Sanders and Hicks took money from Victim One, some of which Victim One had earned from selling illegal drugs. They took money from another victim, as well as marijuana that the victim was planning to sell. Sanders and Hicks admitted to taking more than $500 dollars and 50 bags of marijuana from the house.

During the robbery, Nadirah Ruffin recognized Smith’s voice. Smith ordered Sanders to punch Nadirah Ruffin. After Sanders hit Nadirah Ruffin, Smith punched her because she did not think Sanders had hit her hard enough. As the three defendants were leaving the residence, Smith told Sanders and Hicks to take Nadirah Ruffin from the residence. Smith, Sanders and Hicks then placed Nadirah Ruffin in a green van. They drove first to the Clementon area and eventually to Philadelphia. Smith said that because she was a mother she could not kill Nadirah Ruffin. Smith placed the gun near Sanders and told him that they were not leaving until someone else killed Nadirah Ruffin. Sanders and Hicks took Nadirah Ruffin to the banks of the Schuylkill River, where Sanders shot her in the head, killing her. Her body was dumped in the river.

In addition to the prison terms, Judge Rodriguez sentenced Smith five years of supervised release and ordered her to pay restitution of $1,512,840.  Hicks and Sanders have also pleaded guilty and both are scheduled to be sentenced July 9, 2014.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; the Atlantic County Prosecutor’s Office, under the direction of Acting Prosecutor James P. McClain; and the Atlantic City Police Department, under the direction of Chief Henry White, for the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorneys Jason M. Richardson and Matthew T. Smith of the U.S. Attorney’s Office Criminal Division in Camden, assisted by Assistant U.S. Attorney David Feder of the U.S. Attorney’s Office Appeals Division in Newark, and Mark Coyne, Chief of the Appeals Division.

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Defense counsel: Smith: Christopher O’Malley Esq., Assistant Federal Public Defender, Camden
Sanders: Edward Borden Esq., Cherry Hill, N.J., and Carl J. Herman Esq., West Orange, N.J.
Hicks: Michael Huff Esq., Camden, and David Glazer Esq.

Investigation Led to Conviction of More Than 600 American Subscribers to Illegal Site

NEWARK, N.J. – A Ukrainian man who founded and ran an international hardcore child sexual abuse website was sentenced today to 360 months in prison for his role in a child exploitation enterprise, U.S. Attorney Paul J. Fishman announced.

Maksym Shynkarenko, 35, of Kharkov, Ukraine, previously pleaded guilty to Count 31 of an indictment charging him with conducting a child exploitation enterprise in connection with a website he operated between 2005 and 2008. The investigation into that website has led to convictions in 47 states of more than 600 American consumers of hardcore images of children being sexually assaulted and abused.

Shynkarenko was initially detained in Thailand in January 2009 pending extradition. He was transported to the United States, where he has been in custody since making his initial court appearance in June 2012. He pleaded guilty to the charge Jan. 8, 2014, before U.S. District Judge William H. Walls, who also imposed the sentence today in Newark federal court.

“Shynkarenko worked the supply side of a market that sells images of the most depraved, predatory abuse of children,” said U.S. Attorney Fishman. “Those images endure – as do the wounds inflicted when they were created and when others look at them. Shynkareko appropriately will spend decades of his life paying for significantly fostering the international consumption of documented child sex abuse.”

“The massive HSI investigation that led to today’s sentencing of an international, hardcore child sex abuse website founder is directly tied to more than 600 other criminal convictions for child pornography across 47 states, including dozens of individuals who were already convicted sex offenders,” said Andrew McLees, special agent in charge of U.S. Immigration and Customs Enforcement, Homeland Security Investigations (HSI) Newark. “Today’s sentencing illustrates HSI Newark’s ongoing commitment to identify and seek prosecution of criminals who destroy lives by preying on innocent children. The website operated by Shynkarenko not only offered subscribers access to thousands of images and videos showing graphic, unimaginable child sexual abuse, but it further exploited these victims by making money off their mistreatment. As we did in this case, HSI and our international law enforcement partners will continue to use every tool at our disposal to track down those who exploit children and bring them to justice.”

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

From at least 2005 through mid-2008, Shynkarenko operated from Ukraine a website, that he helped design, which offered access to thousands of images and videos of child sexual abuse. Subscribers typically paid a fee of $79.99 for a 20-day subscription to the website. Shynkarenko worked in conjunction with other individuals, including one from Siberia who helped process credit card payments in a way that disguised the true nature of the purchases. Shynkarenko and the others operating the website granted access to images and videos to subscribers on hundreds of occasions from 2005 to 2008.

During his guilty plea proceeding, Shynkarenko said he worked with other individuals who advertised the child pornography website over the Internet under names such as “Illegal.CP” and “Pedo Heaven.”

HSI agents first located the child pornography website operated by Shynkarenko in October 2005 – based in part on e-mails recovered from the computer of an individual in Long Branch, N.J. At that time, the banner page of the site identified it as “Illegal.CP,” and the page featured more than a dozen images of minors engaged in sexual acts with other minors and adults. That page declared “[n]ow you are in [sic] few minutes away from the best children porn site on the net!” and “[i]f you join this site you will get tons of uncensored forbidden pics . . . forbidden stories, of course, many videos.” The words “join now” appeared at the top and bottom of the page.

Working with the U.S. Attorney’s Office for the District of New Jersey, HSI agents in Newark were able to identify hundreds of individuals who subscribed to the “Illegal.CP” website between November 2005 and February 2006. Those leads, largely developed through agents’ monitoring of the website, led to what became a three-phase investigation: Operation Emissary, Emissary II, and Thin Ice. In late 2006, agents recovered a database of hundreds of additional individuals whose credit cards had been processed while subscribing to the “Illegal.CP” website. During the third phase in 2008, the continued investigation by HSI agents focused more on the operators of the website, including Shynkarenko, and recovered evidence of hundreds of additional individuals who had attempted to subscribe. 

The leads, along with master search warrants prepared by the New Jersey U.S. Attorney’s Office, were distributed to HSI offices and U.S. Attorney’s Offices throughout the nation. The investigation has led to the conviction of more than 600 individuals in 47 states, making the investigation one of the most successful child sexual abuse investigations in the nation’s history. A list of the more than 600 American consumers of images of child sexual abuse convicted as a result of the investigation and the sentences they received was made available at the time of Shynkarenko’s guilty plea, and can be accessed at http://go.usa.gov/9c93.

In addition to the prison term, Judge Walls sentenced Shynkarenko to serve a lifetime of supervised release, and noted he would be required to register as a sex offender, but would likely be deported. In sentencing Shynkarenko, Judge Walls referred to his conduct as “one of the most serious crimes imaginable in our culture as human beings.”

U.S. Attorney Fishman credited HSI special agents, under the direction of Special Agent in Charge McLees, for the investigation leading to today’s guilty plea. He also thanked the United States Marshals Service, under the direction of U.S. Marshal Juan Mattos Jr., for its work in transporting Shynkarenko from Thailand, and acknowledged the important work of Thai authorities. U.S. Attorney Fishman also thanked the numerous HSI offices and U.S. Attorney’s Offices around the country which prosecuted the cases that secured the 600 convictions achieved during Operations Emissary and Operation Thin ICE, and thanked the Department of Justice’s Office of International Affairs and Child Exploitation and Obscenity Section for their important roles.

The government is represented by Senior Litigation Counsel Mark J. McCarren and Assistant U.S. Attorney Danielle Walsman of the U.S. Attorney’s Office in Newark and Attorney in Charge Harvey Bartle IV in Trenton.

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Defense counsel: Nicholas Wooldridge Esq. and Arkady Bukh Esq., Brooklyn, N.Y.

TRENTON, N.J. – The owner of several New Jersey businesses was sentenced today to46 months in prison for evading taxes on income from his ownership of a casino in Trinidad, costing the United States approximately $1.3 million in tax losses, U.S. Attorney Paul J. Fishman announced.

David Migliore, 51, of Brielle, N.J., previously pleaded guilty before U.S. District Judge Mary L. Cooper to one count of an indictment charging him with evading taxes with respect to his 2011 personal tax return. Judge Cooper imposed the sentence today in Trenton federal court.   

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

Migliore owns Brielle Investment LLC, Brielle Investments & Management Co. LLC and La Soufriere Maritime Inc. – all headquartered in New Jersey – as well as Island Club Casino in Trinidad.

From 2009 to 2011, Migliore earned millions of dollars from Island Club Casino, resulting in $1,286,657 in taxes due. During that time, Migliore took steps to conceal his income and assets from the IRS. At his guilty plea proceeding, Migliore admitted to using unreported bank accounts in Trinidad to deposit personal income, using U.S. bank accounts in the names of his New Jersey business entities to receive income from Island Club Casino and to using those business entities to pay for personal expenses.

Migliore also admitted to transferring income from Island Club Casino directly to vendors in the U.S. for personal expenses and directing Island Club Casino employees to send his income through Western Union to individuals in New Jersey who collected the cash on his behalf. 

In addition to the prison term, Judge Cooper sentenced Migliore to serve three years of supervised release. As part of his guilty plea and sentence, Migliore also has paid restitution of $1,286,657 to the IRS.

U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen; the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark; and U.S. Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge Andrew M. McLees in Newark; as well as law enforcement officers from the Monmouth County Prosecutor’s Office, under the direction of Acting Monmouth County Prosecutor Christopher J. Gramiccioni; police officers from Wall Township Police Department, under the direction of Chief Robert Brice; and international assistance from the Financial Intelligence Unit for Trinidad & Tobago, with the investigation. U.S. Attorney Fishman also thanked the Department of Justice’s Office of International Affairs for assistance provided.

The government is represented by Assistant U.S. Attorney Rahul Agarwal of the U.S. Attorney’s Office Special Prosecutions Division in Newark.

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Defense counsel: Robert Weir Esq., Red Bank, N.J.

NEWARK, N.J. – An Orange County, N.Y., man who owned a New Jersey company was sentenced today to 18 months in prison for filing false income tax returns, U.S. Attorney Paul J. Fishman announced.

Richard Jackowitz, 61, of Warwick, N.Y., previously pleaded guilty before U.S. District Judge Susan D. Wigenton in Newark federal court to an information charging him with two counts of filing false tax returns.

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

Jackowitz owned and operated Branded Marketing, a Haskell, N.J., company that sold debit cards. For the 2007 and 2008 tax years, Jackowitz had unreported income from his company of $105,512 and $359, 677, respectively. Jackowitz’s false tax returns caused a loss to the IRS of more than $300,000.

In addition to the prison term, Judge Wigenton sentenced Jackowitz to one year of supervised release and fined him $4,000. As part of his plea agreement, Jackowitz also agreed to pay $319,940 in restitution to the government.

U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen; and special agents of the FBI, 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 Joseph B. Shumofsky and Jenny Kramer of the U.S. Attorney’s Office Economic Crimes Unit in Newark.

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Defense counsel: John D. Williams Esq., Vernon, N.J.

TRENTON, N.J. – The former president of a Burlington, N.J.,-based defense contracting business was arrested and charged today with allegedly stealing $3 million through fraudulent contracts with the U.S. Department of Defense, U.S. Attorney Paul J. Fishman announced.

Richard Melton, 44, of Moorestown, N.J., was charged by complaint with one count of conspiracy to commit wire fraud for receiving $3 million from 2008 to 2009 as a result of allegedly fraudulent contracts with the U.S. Department of Defense (DoD). Melton is scheduled to make his initial court appearance this afternoon before U.S. Magistrate Judge Tonianne J. Bongiovanni in Trenton federal court.

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

Melton was the founder, owner, and president of Partz Network LLC (Partz Network), a company located in Burlington. Melton owned and operated Partz Network from April 2003 to December 2009. Partz Network contracted with the government to supply the DoD with parts on small-dollar contracts. The majority of the contracts were for replacement parts for military rolling stock: trucks, trailers, and engineering equipment. The majority of Partz Network’s DoD contracts required that the items provided be manufactured by DoD-recognized qualified manufacturers.

Melton and his conspirators allegedly lied on Partz Network’s bids for DoD contracts, stating that they would be providing the “exact product” sought by the DoD, meaning that the product was manufactured by a DoD-recognized qualified manufacturer. In fact, Partz Network was allegedly providing parts made by unapproved, and oftentimes unknown, sources.

In 2007, the Defense Logistics Agency (DLA), a DoD contracting agency, became aware of reports of nonconforming parts being received from Partz Network. As a result, DLA required Partz Network to provide “traceability documents” to confirm that the items it was supplying were actually being manufactured by DoD recognized qualified manufacturers. Partz Network provided traceability documents and invoices to DLA regarding items provided under the DoD contracts.  When DLA researched the traceability documents supplied by Partz Network, DLA learned that the documents were either altered or completely fictitious.

For example, on Nov. 15, 2007, Partz Network submitted a bid electronically through the DoD’s internet bid system to supply the DoD with 1,400 oil pans for $53.85 per item. Partz Network represented that the company was providing the exact product manufactured by one of the two DoD-recognized qualified manufacturers. Partz Network was subsequently awarded the contract for 1,400 oil pans for a total contract price of $75,390. Both the request for quotation (RFQ) and the final contract included the language that the exact product was required. The items ultimately provided by Partz Network were not the exact products required under the contract because the items were not manufactured by a qualified manufacturer. In fact, on Nov. 10, 2007, five days prior to Partz Network submitting its bid for the contract, Melton sent an e-mail to a Partz Network employee with a link to the DoD RFQ that stated the following: “Bid these (1400) HMMWW oil pans at $53.85 and I will have them made overseas by [a company located in the People’s Republic of China] or another overseas firm, 200-day lead time.” Based on Partz Network documents related to that contract, Partz Network purchased the oil pans that were provided to the DoD from a company located in India in January 2008.

On Aug. 27, 2009, Partz Network was awarded a contract to supply the DoD with 887 bearing half sets for a total contract price of $16,010.35. Partz Network certified that the items would be the exact product required under the contract. The items ultimately provided by Partz Network under the contract were not the exact products required because the items were not manufactured by the qualified manufacturer. DoD ultimately inspected the items and determined that the items were manufactured by an unapproved source.

The wire fraud conspiracy count with which Melton is charged carries a maximum potential penalty of 20 years in prison and a fine of $250,000, or twice the gain or loss from the offense. 

U.S. Attorney Fishman credited special agents of the U.S. Department of Defense, Criminal Investigative Service, under the direction of Director James Burch; special agents of Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HIS), under the direction of Special Agent in Charge Andrew M. McLees, with the investigation leading to today’s arrest.

The government is represented by Assistant U.S. Attorneys Fabiana Pierre-Louis of the U.S. Attorney’s Office Criminal Division in Trenton and Evan Weitz of the Office’s Asset Forfeiture 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 S. Christie Esq., Newark

Melton, Richard Complaint

NEWARK, N.J. – A doctor who was convicted at trial of receiving cash kickbacks for diagnostic testing referrals was sentenced today to 21 months in prison, U.S. Attorney Paul J. Fishman announced today. 

Maryam Jafari, 43, was convicted Feb. 4, 2014, of all three counts of a superseding indictment charging her with conspiracy and two counts of violating the federal health care anti-kickback statute after a three-week trial before U.S. District Judge Claire C. Cecchi, who imposed the sentence today in Newark federal court.

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

Jafari was a doctor licensed in New Jersey to practice internal medicine and operated an office in Newark. From 2010 through December 2011, Jafari solicited and received cash kickbacks from Orange Community MRI LLC (Orange MRI) in exchange for MRIs and CAT scans she referred to the diagnostic testing facility.

At the end of each month, OCM printed patient reports that included information such as dates of service, patient name, referring health care practitioner and medical insurance to be billed. The reports were used to tally the number of tests referred by each doctor and determine the amount of kickback payment paid to the referring healthcare provider.

On Nov. 22, 2011, Jafari met with a cooperating witness at Jafari’s office and accepted a white envelope containing $1,965 in cash, payments for three months of tests Jafari referred to Orange MRI. On Dec. 6, she accepted another payment of $420 in cash for referrals from October 2011. A trial on these charges in 2012 ended in a mistrial when the jury could not reach a unanimous verdict.    

In addition to the prison term, Judge Cecchi sentenced Jafari to two years of supervised release, fined her $45,000 and ordered forfeiture of $40,261.

U.S. Attorney Fishman credited special agents of the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Tom O’Donnell, who investigated the case with criminal investigators from the U.S. Attorney’s Office.  

The government is represented by Assistant U.S. Attorneys Scott B. McBride, deputy chief of the Economic Crimes Unit, and Joseph G. Mack, deputy 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 $535 million in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.

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Defense counsel: Maria Noto Esq., Matawan, N.J.

NEWARK, N.J. - The owner and operator of Larino Masonry Inc., a construction company based in northern New Jersey, today admitted underreporting more than $1 million diverted from his business for his personal benefit, U.S. Attorney Paul J. Fishman announced.

Juan Larino, 53, of West New York, N.J., pleaded guilty before U.S. District Judge Katherine S. Hayden in Newark federal court to an information charging him with one count of filing a false federal personal income tax return.

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

During his operation of the business, Larino received checks made payable to Larino Masonry Inc. Larino admitted that instead of depositing all of the payments into bank accounts held by the business, he cashed some of the checks for his own personal benefit.

For the tax years 2010 through 2011, Larino filed individual income tax returns in which he claimed to report all of his income from the construction business. However, Larino failed to report approximately $1.1 million in cash that he kept from checks made payable to Larino Masonry Inc. Larino’s failure to truthfully disclose income he received as owner of the company resulted in a tax loss to the United States of $200,000 to $400,000.

As part of his guilty plea, Larino agreed to make full restitution for all losses resulting from his false tax returns. He also agreed to forfeit $575,000 in a related civil case with the U.S. Attorney's Office.

The subscribing to false tax returns charge carries a maximum potential penalty of three years in prison and a $100,000 fine. Sentencing is scheduled for Sept. 29, 2014.

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

The government is represented by Assistant U.S. Attorney Evan S. Weitz of the U.S. Attorney's Office Asset Forfeiture and Money Laundering Unit.

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Defense counsel: Vincent Martinelli Esq., Staten Island, N.Y.

Larino, Juan Information

NEWARK, N.J. - A Sussex County, N.J., chiropractor today admitted destroying patient appointment records sought by federal agents investigating potential billing fraud at her medical office, U.S. Attorney Paul J. Fishman announced.

Mary Jean Negri, 57, of Lafayette, N.J., pleaded guilty before U.S. District Judge Katharine S. Hayden in Newark federal court to an information charging her with one count of obstructing an investigation of a health care offense.

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

For the past 24 years, Negri, a licensed chiropractor and registered nurse in New Jersey, has owned Lafayette Hilltop Chiropractic Center (Lafayette Hilltop). In May 2012 she discovered the FBI and the U.S. Attorney’s Office were investigating Lafayette Hilltop for potentially fraudulent billing practices. Negri suspected that investigators were interested in obtaining Lafayette Hilltop’s patient appointment books as evidence of potential fraud. In an effort to obstruct the government’s investigation, she discarded those patient appointment books.  

The obstruction charge carries a maximum potential penalty of five years in prison and a maximum $250,000 fine, or twice the gain or loss caused by the offense. Sentencing is scheduled for Sept. 29, 2014.

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

The government is represented by Assistant U.S. Attorney Scott B. McBride, Deputy Chief of the U.S. Attorney’s Office’s Economic Crimes Unit.

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Defense counsel: John M. Vazquez Esq., Roseland, N.J.

Negri, Mary Jean Information

NEWARK, N.J. – A Michigan woman today admitted her role in one of the nation’s largest and longest running stolen identity refund fraud schemes ever prosecuted, U.S. Attorney Paul J. Fishman announced.

Rosa Marmol, 36, of Grand Rapids, Mich., pleaded guilty today before U.S. District Judge Claire C. Cecchi, to a superseding information charging her with conspiracy to defraud the United States and theft of government property. Marmol had been previously indicted on these charges in February 2014.

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

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

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

Federal law enforcement agencies, recognizing that SIRF was a serious problem, created a multi-agency task force in New Jersey 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 (the New Jersey Task Force).

An investigation led by the New Jersey Task Force with assistance from U.S. Immigration and Customs Enforcement, Homeland Security Investigations, has revealed that starting as early as 2007, dozens of individuals in the New Jersey and New York area have been engaged in large-scale, long-running SIRF scheme that has caused more than 8,000 fraudulent 1040 forms to be filed, seeking more than $65 million in tax refunds, with losses to the U.S. Treasury of more than $12 million.

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

Marmol and the other members of the conspiracy then gained control of checks, sometimes bribing mail carriers to intercept checks and deliver them to other members of the conspiracy.  Marmol used the bank accounts of her family’s bodega and check cashing business, Tienda Guadalajara Jalisco, in Grand Rapids to negotiate the checks she cashed.

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

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 Acting Special Agent in Charge Carl Kotowski, for the investigation leading to today’s guilty plea.

The conspiracy count carries a maximum potential penalty of five years in prison and a $250,000 fine. The count of theft of government property carries a maximum potential penalty of 10 years in prison and up to a $250,000 fine. Sentencing is scheduled for Sept. 10, 2014.

The government is represented by Assistant U.S. Attorneys Danielle Alfonzo Walsman of the U.S. Attorney’s Office’s Health Care and Government Fraud Unit.

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Defense counsel: Damian Conforti Esq., Newark                                                                                                               

Marmol, Rosa Superseding Information

TRENTON N.J. - An Essex County, N.J. contractor who was paid nearly $100,000 to renovate the home of a Bronx, N.Y., woman, today admitted his role in defrauding her of the money in connection with the remodeling project, U.S. Attorney Paul J. Fishman announced today.

Raymond Norville, 45, of Orange, N.J., owner of RRL Unique Homes Inc., a construction company, pleaded guilty before U.S. District Judge Joel A. Pisano in Trenton federal court to a superseding information charging him with one count of conspiracy to commit wire fraud.

According to documents filed in this case and statements made in court: In 2011, Norville was a contractor who owned RRL Unique Homes Inc. The victim, identified only as “C.P.,” wanted to renovate her newly purchased home in the Riverdale section of Bronx. Norville agreed to perform the renovations on the residence for $250,000.  He submitted invoices to C.P., inducing her to pay him $98,600 in cash for the purchase of materials, supplies, architectural plans, rental equipment and permits needed for the project. Norville emailed pictures of materials that he intended to purchase. Norville neither delivered to the job site, nor provided proofs of purchase for the materials. By May 2011, work on the project had not started and C.P. demanded either a refund or the materials and supplies Norville promised to buy. Norville attempted to repay a portion of the $98,600 by providing C.P. with a check for $24,500, which was rejected for insufficient funds.

The count of conspiracy to commit wire fraud carries a maximum potential penalty of five years in prison and a fine of $250,000 or twice the gross gain or loss from the offense. Sentencing is scheduled for Sept. 17, 2014.

U.S. Attorney Fishman credited special agents of the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, under the direction of Special Agent in Charge Cheryl Garcia for the New York Region; and detectives of the Waterfront Commission of New York Harbor, under the direction of Commissioner Jan Gilhooly, for the investigation leading to today’s guilty plea.

The government is represented by Senior Litigation Counsel V. Grady O’Malley in Newark.

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Defense counsel: David P. Schroth Esq., Trenton

Norville, Ray Information

NEWARK, N.J. – Two members of a massive, international counterfeit goods conspiracy today admitted their roles in the scheme, U.S. Attorney Paul J. Fishman announced.

Ke Dao Jiang, 37, of Queens, and Wu Lin, 31, of Maspeth, N.Y., each pleaded guilty before U.S. District Judge Esther Salas in Newark federal court to an information charging them with one count of conspiracy to traffic in counterfeit goods.

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

From November 2009 through February 2012, the defendants and their conspirators ran one of the largest counterfeit goods smuggling and distribution conspiracies ever charged by the Department of Justice.  The defendants and others conspired to import hundreds of containers of counterfeit goods – primarily handbags, and footwear, and perfume – from China into the United States in furtherance of the conspiracy. These goods, if legitimate, would have had a retail value of more than $300 million.

The counterfeit goods were manufactured in China and smuggled into the United States through containers fraudulently associated with legitimate importers, with false and fraudulent shipping paperwork playing a critical role in the smuggling scheme. Some of the conspirators created and managed the flow of false shipping paperwork between China and the United States, and supervised the importation of counterfeit goods, and others controlled the importation of the counterfeit goods into the United States.

Other conspirators managed the distribution of counterfeit goods once those goods arrived in the United States. After importation, the counterfeit goods were delivered to warehouses, and distributed throughout New York, New Jersey, and elsewhere. Certain conspirators paid large amounts of cash to undercover law enforcement officers to assist in the removal of counterfeit goods from the port.

Some conspirators acted as wholesalers for the counterfeit goods, supplying retailers who sold counterfeit goods to customers in the United States. Other conspirators were money structurers, who arranged for cash to be wired to China in amounts small enough to avoid applicable financial reporting requirements, to evade detection of the smuggling scheme and related proceeds. 

Both Jiang and Wu served as wholesalers and worked with other conspirators to distribute the counterfeit goods to small-scale retailers in New Jersey and New York.

Law enforcement introduced several undercover special agents (collectively, the UCs) to the conspirators.  The UCs purported to have unspecified “connections” at the port, which allowed the UCs to release containers that were on hold, and pass them through to the conspirators.  The conspirators paid the UCs for these “services.”  In total, during the course of this investigation, the conspirators provided the UCs more than $2 million.

The UCs recorded dozens of phone calls and in-person meetings with various conspirators. The investigation also utilized several court-authorized wiretaps of telephones and electronic communications.

The conspiracy to traffic in counterfeit goods count carries a maximum potential penalty of 10 years in prison and a fine of $2 million. Sentencing for Lin is scheduled for Oct. 6, 2014, and for Jiang, Oct. 7, 2014.

U.S. Attorney Fishman credited special agents of Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), under the direction of Special Agent in Charge Andrew M. McLees, and special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, for the investigation leading to the guilty pleas.

The government is represented by Assistant U.S. Attorneys Andrew Pak and Zach Intrater of the Computer Hacking and Intellectual Property section of the Economic Crimes Unit of the U.S. Attorney’s Office in Newark and Nicholas Grippo of the U.S. Attorney’s Office in Trenton.

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Defense counsel: Jiang: Warren Sutnick Esq., Hackensack, N.J.
Lin: Wanda Akin Esq., Newark

Jiang, Ke Dao Information
Lin, Wu Information