District of New Jersey
Press releases recorded for this federal judicial district.
Two Former Pharmaceutical/Medical Technology Executives Sentenced for Their Roles in Insider Trading SchemeRead the Press Release
Pair Netted More Than $1.4 Million in Illicit Profits over Five Years
NEWARK, N.J. - Two former pharmaceutical and medical technology firm executives were sentenced today for their involvement in an extensive insider trading network that repeatedly exploited non-public material information for financial gain, U.S. Attorney Paul J. Fishman announced.
Mark Cupo, 53, of Morris Plains, N.J. was sentenced to 16 months in prison and Mark Foldy, 44, also of Morris Plains, N.J. was sentenced to two years of probation, including six months of home confinement with electronic monitoring. Cupo previously pleaded guilty before U.S. District Judge Katharine S. Hayden to a seven-count information charging him with two counts of conspiracy to commit securities fraud and five counts of securities fraud. Foldy previously pleaded guilty before Judge Hayden to a four-count information charging him with one count of conspiracy to commit securities fraud and three counts of securities fraud. Judge Hayden imposed both sentences today in Newark federal court.
According to documents filed in this case and statements made in court:
From 2007 to 2012, Cupo, who was an executive at Sanofi-Aventis, a global pharmaceutical company based in New Jersey, repeatedly obtained non-public material information from his friend and former employee, John Lazorchak, 43, of Long Valley, N.J., who was director of financial reporting at Celgene Corp., another global pharmaceutical company based in New Jersey. The inside information included non-public merger and acquisition plans, quarterly earnings results, and a regulatory application decision. Cupo would pass the information to his friends, Lawrence Grum, 50, of Livingston, N.J., and Michael Castelli, 50, of Morris Plains, N.J., who would then execute numerous profitable trades based on that information and share the profits with Cupo and Lazorchak.
During the course of the multi-year insider trading operation, Cupo divulged inside information to Grum and Castelli regarding then-confidential plans by his own employer, Sanofi-Aventis, to acquire Chattem Inc. Grum and Castelli traded on the Chattem-related inside information prior to its public announcement, reaping substantial profits.
Foldy, a friend and high school classmate of Lazorchak, was a marketing executive at Stryker Corp., a leading medical technology business with a major division located in New Jersey. Through the course of his employment at Stryker, Foldy learned of Stryker’s then-confidential plans to acquire Orthovita Inc. Foldy leaked news of the planned acquisition to Lazorchak prior to public announcement, and Lazorchak, in turn, passed the inside information to Cupo. Cupo informed Grum and Castelli of the impending deal so that they could trade ahead of the public announcement of the Orthovita acquisition for substantial profits.
Foldy also received inside information from Lazorchak regarding Celgene’s planned acquisition of Pharmion Corp. and profitably traded on the Pharmion-related inside information. Foldy passed inside information on to a family member and friend.
In addition to the prison terms, Judge Hayden sentenced Cupo to two years of supervised release.
Cupo and Foldy are the third and fourth defendants charged with participating in this insider trading network to be sentenced. On April 9, 2014, Grum was sentenced to one year and one day in prison and Castelli was sentenced to nine months in prison. Lazorchak is scheduled to be sentenced by Judge Hayden on April 22, 2014, and another conspirator and high school friend of Lazorchak, Michael Pendolino, is scheduled to be sentenced by Judge Hayden on May 5, 2014.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, for the investigation leading to today’s sentences. He also thanked the U.S. Securities and Exchange Commission’s Market Abuse Unit, under the direction of Daniel M. Hawke.
The government is represented by Assistant U.S. Attorney Shirley U. Emehelu of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
Today’s sentencing is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorney’s offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
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Defense counsel:
Cupo: Joseph J. Bell Esq. and Joseph J. Bell IV Esq., Rockaway, N.J.
Mark Foldy: Jonathan Marks Esq., New York
John Lazorchak: Lawrence S. Lustberg Esq., Newark
Lawrence Grum: Scott A. Resnik Esq., New York
Michael Castelli: Daniel Zinman Esq. and Daniel Stein Esq., New York
Michael Pendolino: James S. Friedman Esq., NewarkMiddlesex County, N.J., Man Sentenced to 18 Months in Prison for Scheme to File Fraudulent Tax ReturnsRead the Press Release
NEWARK – A Middlesex County, N.J., man was sentenced today to 18 months in prison for his role in filing fraudulent income tax returns and illegally receiving approximately $500,000 in refunds, U.S. Attorney Paul J. Fishman announced.
Badatunde Olugbake, 55, of Perth Amboy, N.J., previously pleaded guilty before U.S. District Judge Jose L. Linares to a three-count information charging him mail fraud, filing false claims against the United States, and receiving stolen government funds. Judge Linares imposed the sentence today in Newark federal court.According to documents filed in this case and statements made in court:
From February 2008 through December 2010, Olugbake was involved in a scheme to file false and fraudulent tax returns to obtain tax refund checks. Olugbake deposited more than $400,000 in tax refunds as part of that scheme into bank accounts he controlled.
Through the unauthorized use of names and Social Security numbers of unsuspecting victims, along with false addresses, statements concerning income and dependents, and claims for refunds, Olugbake manipulated tax returns so that the purported claimants qualified for the Earned Income Credit. Olugbake then mailed the fraudulent returns to the IRS. The IRS processed the false returns as if they were legitimate and issued refund checks that were mailed to the fraudulent addresses associated with the returns, where the checks were retrieved by Olugbake and deposited into bank accounts under his control.
In addition to the prison term, Judge Linares sentenced Olugbake to three years of supervised release and ordered him to pay $500,422 in restitution.
U.S. Attorney Fishman credited special agents of 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 sentencing.
The government is represented by Assistant U.S. Attorney Andrew J. Bruck of the U.S. Attorney’s Criminal Division and Assistant U.S. Attorney Jacques S. Pierre of the U.S. Attorney’s Special Prosecutions Division in Newark.
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Defense counsel: Vincent J. Nuzzi Esq., Dover, N.J.
Contractor Admits Fraud and Aggravated AssaultRead the Press Release
CAMDEN, N.J. – The principal of a Pennsylvania construction company today admitted his role in an employee kickback scheme that occurred during a reconstruction project at the Ft. Dix military base in Burlington County, N.J., U.S. Attorney Paul J. Fishman announced today.
Leonard Santos, 67, of Yardley, Pa., owner of Sands Mechanical Inc. of Bristol, Pa., pleaded guilty before U.S. District Judge Joseph H. Rodriguez in Camden federal court to Count One of an indictment charging him with conspiracy to obtain kickbacks from public works employees and Count Three, charging him with causing persons to travel in interstate commerce to commit a crime of violence.
According documents filed in this case and statements made in court:
Between November 2009 and September 2010, Santos operated Sands Mechanical Inc. as a subcontractor on the restoration and rehabilitation of the Marine Corps Reserve Training Center at Joint Base-McGuire-Dix-Lakehurst in Burlington County, N.J. Sands provided HVAC and plumbing services. The general contractor was a company headquartered in Marriotsville, Md. During the project Santos demanded that certain employees kickback a percentage of their weekly paychecks or face termination.
In February 2010, the U.S. Department of Labor’s Wage and Hour Division (WHD) was tipped off that the Sands employees were being forced to kickback portions of their salary and were not being paid the prevailing wage for Burlington County. Santos conceded that Sands failed to pay the proper prevailing wage to its employees and agreed to repay $80,000 to those deprived employees. Santos cut settlement checks to those employees who were owed back wages. However, Cottone and Featherston warned those employees not to cash their settlement checks. Instead, Cottone and Featherston took the employees to a nearby check cashing business, where they endorsed their checks over to Cottone, who cashed them and returned the funds to Santos. Since these kickbacks were removed from employees’ checks, Santos routinely submitted inaccurate weekly payroll forms that are required whenever the federal government subsidizes a construction project.
The general contractor’s site manager was routinely critical of the work performance of Sands’ employees, which, at times, necessitated that work be done over. The site manager was targeted by Santos, Cottone and others by having his truck torched in front of his residence at 4 a.m. on May 17, 2010. This tactic failed to warn off the site manager. On June 09, 2010, at 5 AM, while riding his bike, the site manager was intentionally run down by a car driven by Cottone’s nephew and two friends. The victim sustained multiple serious injuries.
The count of conspiracy to demand kickbacks from employees on a federally subsidized project carries a maximum potential penalty of five years in prison and a $250,000 fine. The count of causing others to travel in interstate commerce to commit a crime of violence carries a maximum potential penalty of 20 years in prison. Sentencing is scheduled for July 28, 2014.
Two Sands’ supervisors have already pleaded guilty to these charges: Richard Cottone, 39, of Windsor, Pa., (Santos’ son-in-law) pleaded guilty Dec. 11, 2012, and Michael Featherston, 44, of Cumberland County, N.J., pleaded guilty Jan. 10, 2012. Both are awaiting sentencing. A third Sands supervisor, Alex Rabinovich, 58, of Richboro, Pa., pleaded guilty on Sept. 18, 2013, to Count Four, conspiracy to bribe a representative of a prime contractor of federally subsidized construction projects and is awaiting sentencing.
U.S. Attorney Fishman credited special agents of the U.S. Department of Labor Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, under the direction of Acting Special Agent in Charge Cheryl Garcia; the Department of Labor-Wage and Hour Division, under the direction of Acting Regional Administrator Mark Watson Jr.; Naval Criminal Investigative Service, under the direction of Special Agent in Charge Jeremy Gauthier, Northeast field office; and the Air Force Office of Special Investigations, under the direction of Special Agent Seth Neville, detachment commander, Joint Base McGuire-Dix-Lakehurst.The government is represented by Senior Litigation Counsel V. Grady O’Malley and Assistant U.S. Attorney Andrew Bruck of the U.S. Attorney’s Office Organized Crime-Gangs Unit in Newark.
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Defense counsel: Guillermo R. Arango Jr. Esq., New Brunswick, N.J.
Santos, Leonard and Rabinovich, Alex Indictment
Burlington County Man Sentenced to 30 Years in Prison for Producing Images of Child Sexual AbuseRead the Press Release
CAMDEN, N.J. – A Burlington County, N.J., man was sentenced today to 30 years in prison for his role in producing images of child sexual abuse, U.S. Attorney Paul J. Fishman announced.
David Clark, 49, of Southampton, N.J., previously pleaded guilty before U.S. District Judge Joseph H. Rodriguez in to an information charging him with three counts of producing child pornography. Judge Rodriguez imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
From 2004 through March 9, 2011, Clark employed, used, persuaded, induced, enticed or coerced three separate minor victims to engage in sexually explicit conduct for the purpose of producing a visual depiction of such conduct.
In addition to the prison term, Judge Rodriguez sentenced Clark to a lifetime term of supervised release.
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; investigators with the Burlington County Prosecutor=s Office, under the direction of Prosecutor Robert D. Bernardi; and detectives with the N.J. State Police, under the direction of Col. Rick Fuentes, and the N.J. Regional Computer Forensic Laboratory, with the investigation leading to today=s sentencing.
The government is represented by Assistant U.S. Attorney Jacqueline M. Carle of the Criminal Division in Camden.
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Defense counsel: Lori M. Koch Esq., Assistant Federal Public Defender, Camden
"Enforcer" for Atlantic City "Dirty Block" Gang Admits Participating in Heroin Trafficking ConspiracyRead the Press Release
CAMDEN, N.J. - An Atlantic City, N.J., man admitted today to engaging in a conspiracy to distribute heroin with the “Dirty Block” criminal street gang that allegedly used threats, intimidation and violence to maintain control of the illegal drug trade in Atlantic City.
Shaamel Spencer, a/k/a “Buck,” 30, pleaded guilty before U.S. District Judge Joseph E. Irenas in Camden federal court to a superseding information charging him with one count of conspiracy to distribute and to possess with intent to distribute 100 grams or more of heroin, and one count of being a previously convicted felon in possession of a firearm.
According to documents filed in this case and statements made in court:
During the period of the conspiracy Spencer acted as an “enforcer” on behalf of Mykal Derry, 33, of Atlantic City, helping Dirty Block to control the heroin trafficking trade in and around the public housing apartment complexes of Stanley Holmes, Carver Hall, Schoolhouse, Adams Court and Cedar Court in Atlantic City. Spencer assisted in the distribution of heroin to Dirty Block customers.
Spencer was arrested on October 30, 2012, and found to be in possession of a firearm at the time of the arrest. On February 12, 2013, Spencer was charged federally with being a previously convicted felon in possession of a firearm and ammunition. A search warrant executed at Spencer’s residence at the time of his arrest revealed approximately $4,500 in suspected drug proceeds, as well as a 9mm semi-automatic handgun and approximately 44 rounds of 9mm ammunition.
Spencer and other members of the Dirty Block gang – a number of them previously convicted felons – travelled to a shooting range in Lakewood, N.J., where they were photographed firing handguns.
As part of his guilty plea, Spencer admitted to distributing heroin. He also admitted to being a previously convicted felon who possessed firearms and ammunition, and that specifically, he took a handgun to an Atlantic City casino where he believed Derry was involved in a violent fight with his rivals. Spencer also agreed to forfeit the proceeds of his drug trafficking as well as his firearms and ammunition.
The drug conspiracy charge carries a minimum penalty of five years in prison, a maximum potential penalty of 40 years in prison, and maximum $5 million fine. The felon-in-possession charge carries a maximum potential penalty of 10 years in prison and a maximum $250,000 fine. Sentencing is scheduled for July 22, 2014.
U.S. Attorney Fishman credited special agents of the FBI’s Newark Division, Atlantic City Resident Agency, under the direction of Special Agent in Charge Aaron T. Ford; the Atlantic County Prosecutor’s Office, under the direction of Acting Prosecutor James P. McClain; the Atlantic City Police Department, under the direction of Police Chief Henry White; and the South Jersey Safe Streets Violent Incident and Gang Task Force, with the investigation.
The charges and allegations in the indictment charging Derry are merely accusations and the defendant is presumed innocent unless and until proven guilty.
The government is represented by Assistant U.S. Attorneys Patrick C. Askin and Justin C. Danilewitz.14-130
Defense counsel: Assistant Federal Public Defender Maggie Moy Esq., Camden
Spencer, Shaamel Information
Essex County, N.J., Man Convicted of Being A Felon in Possession of A FirearmRead the Press Release
NEWARK, N.J. - An Essex County, N.J., man with a felony criminal record has been convicted by a federal jury for carrying a loaded semi-automatic pistol, U.S. Attorney Paul J. Fishman announced today.
Victor Lopez, 25, of Newark, was convicted of one count of being a felon in possession of a firearm following a three-day trial before U.S. District Judge Anne E. Thompson in Newark federal court. The jury deliberated for four hours before returning the guilty verdict.
According to documents filed in this case and the evidence at trial:
Officers of the Passaic Police Department responded to a 911 call on Sept. 13, 2012, about a possible burglary in progress at an apartment building in Passaic, N.J., where they encountered Lopez leaving the building
Officers questioned the Lopez, who appeared nervous, and found a gun in his back pocket. The .380 caliber semi-automatic handgun was loaded with seven bullets, including one in the chamber. Four of the bullets were hollow-point rounds.
The charge of being a felon in possession carries a maximum potential penalty of 10 years in prison and a $250,000 fine. Sentencing is scheduled for June 23, 2014.
U.S. Attorney Fishman credited special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of, and officers of the City of Passaic Police Department, under the direction of Deputy Chief Rosario J. Capuana, with the investigation.
The government is represented by Assistant U.S. Attorneys Sara F. Merin and Jonathan W. Romankow of the U.S. Attorney=s Office Criminal Division in Newark.
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Defense counsel: Vincent Sanzone Jr. Esq., Elizabeth, N.J.
Bergen County, N.J., Doctor Charged with Tax ViolationsRead the Press Release
Allegedly Made Millions of Dollars in Cash Deposits; Transferred Ownership of Home to Family Member; and Failed to File Tax Returns
NEWARK – A Bergen County, N.J., doctor who owns three immediate care facilities in Hudson County, N.J., was arrested today on multiple tax violations, including allegedly making cash deposits of more than $5.8 million into bank accounts he controlled, U.S. Attorney Paul J. Fishman announced.
Medhat El Amir, 59, of Saddle River, N.J., was indicted April 10, 2014, by a federal grand jury on one count of corruptly endeavoring to impede the due administration of the internal revenue code, four counts of tax evasion and three counts of failure to file tax returns. He was arrested at his home this morning by agents of IRS-Criminal Investigation and the U.S. Department of Health and Human Services, Office of Inspector General. He is scheduled to make his initial court appearance this afternoon before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court.
According to the Indictment:
El Amir was a primary care doctor and 60 percent owner of Immediate Care P.C., (Immediate), which provided urgent care health services for its patients at an office in North Bergen, N.J., and two offices in Jersey City.
From Feb. 11, 2005, through Dec. 31, 2010, El Amir allegedly attempted to impede the internal revenue code in a number of ways. He fraudulently transferred his residence in Saddle River to his sister, identified only as “A.E.A.,” for $2.5 million to keep the property out of the reach of the IRS while continuing to live there. He also cashed checks made out to Immediate at a check cashing facility and deposited that unreported income into a number of bank accounts he controlled and used the money for personal expenses. During a four-year period, El Amir received checks totaling $7,261,084 from insurance companies for medical treatments provided by Immediate and caused $5,836,298 in cash to be deposited into 15 bank accounts he maintained and/or controlled.
El Amir also allegedly filed a false 2008 personal income tax return, claiming interest deductions to which he was not entitled, and sent fraudulent correspondence to the IRS that under-reported the amount of income he and his wife received from Immediate in calendar year 2008 and the amount of income deductions to which he was entitled.
Despite earning a significant income through Immediate, El Amir did not file a personal income tax return, Form 1040, for calendar years 2007, 2009 and 2010. While El Amir did file a personal income Form 1040 for calendar year 2008, this return substantially under-reported the income El Amir received from Immediate in calendar year 2008.
The count of corruptly endeavoring to impede the due administration of the internal revenue code carries a maximum potential penalty of three years in prison and a $5,000 fine. The counts of tax evasion each carry a maximum potential penalty of five years in prison and a $250,000 fine and the counts of failure to file a tax return each carry a maximum potential penalty of one year in prison and a $25,000 fine.U.S. Attorney Fishman credited special agents of the IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen, and the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Tom O’Donnell, with the investigation leading to today’s indictment.
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.
The government is represented by Assistant U.S. Attorney Deborah J. Gannett of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark.
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El Amir, Medhat Indictment
West Orange, N.J., Woman Sentenced to 30 Months in Prison for Stealing Nearly $100,000 from an Elderly WomanRead the Press Release
TRENTON, N.J. – A West Orange, N.J., woman who defrauded an elderly victim of nearly $100,000 by taking the victim’s Social Security payments and secretly applying for a reverse mortgage on the victim’s home was sentenced today to 30 months in prison, U.S. Attorney Paul J. Fishman announced.
Shawn L. Craig, 47, previously pleaded guilty before U.S District Judge Michael A. Shipp to an information charging her with one count of mail fraud and one count of filing false personal federal income tax return for 2011 by not disclosing income, including money fraudulently obtained from her victim. Judge Shipp imposed the sentence today in Trenton federal court.
According to documents in this case and statements made in court:
In November 2010 Craig entered into a general power of attorney with the victim, an elderly woman, to serve as her attorney-in-fact. Craig was trusted to act in the victim’s best interest and to arrange for the payment of the victim’s living expenses.
After gaining access to the victim’s bank accounts, Craig diverted a portion of the victim’s funds for her own benefit and the benefit of her family, including paying her automobile insurance; purchasing a bar and bar stools; making a tuition payment; and paying for entertainment at the Wachovia Center in Philadelphia. At the time Craig made those purchases, the funds in the victim’s accounts consisted primarily of the victim’s Social Security benefits.
In December 2010, Craig submitted an application in the victim’s name to a commercial lender for a reverse mortgage on the victim’s residence in East Orange. When the victim refused to sign a specific power of attorney permitting the closing of the reverse mortgage to go forward, Craig forged the victim’s signature on the document and presented it to the title agent at the title agent’s office in Morristown, N.J.
Craig used the money from the reverse mortgage to purchase items at retail establishments including Gucci, Coach, Nike, Apple, Footlocker and various other shoe stores; pay for meals and entertainment at restaurants, liquor stores and other establishments, including the Taj Mahal in Atlantic City, N.J., the Staples Center in Los Angeles and Amazing LA Tours in Santa Monica, Calif.; fund travel to, and stays at, hotels in New Jersey, California and Florida; and pay personal bills, including automobile insurance, gas and electric, cell phone and cable bills.
In June 2011, Craig was notified that the general power of attorney had been revoked, so she transferred the victim’s funds to a new bank account. In all, Craig misused approximately $99,000 of the victim’s funds.
Craig also admitted that she caused a tax preparer to prepare and electronically file with the IRS a false and fraudulent personal income tax return for tax year 2011 by not disclosing as income the funds that she had fraudulently obtained from the victim.
In addition to the prison term, Judge Shipp sentenced Craig to three years of supervised release, fined her $10,000 and ordered her to pay restitution of $75,663.
U.S. Attorney Fishman credited special agents of the U.S. Department of Housing and Urban Development, Office of Inspector General, Northeast Region, under the direction of special Agent in Charge Christina Scaringi; the FBI, under the direction of Special Agent in Charge Aaron T. Ford; IRS – Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen; and Social Security Administration, Office of Inspector General, under the direction of Special Agent in Charge Edward J. Ryan, with the investigation leading to today’s sentence.
The government is represented by Assistant U.S. Attorneys Maureen Nakly and Jacques S. Pierre of the U.S. Attorney’s Office Special Prosecutions Division in Newark.
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Defense counsel: Thomas R. Ashley Esq., Newark
Two Leaders of 'Red Breed Guerillas' Street Gang Sentenced to Lengthy Prison Terms for Drug and Gun PossessionRead the Press Release
NEWARK, N.J. – Two leaders of a Bloods street gang set known as the “Red Breed Guerillas” were sentenced today to prison terms for drug trafficking and illegal possession of weapons, U.S. Attorney Paul J. Fishman announced.
Kaseem Upshaw, a/k/a “Uzi Kaz”, 34, and Anthony Pearson, a/k/a “Iz”, 32, both of Newark, were sentenced to 130 and 128 months, respectively, in prison. Both pleaded guilty in November 2013 before U.S. District Judge Esther Salas to conspiracy to distribute heroin and being convicted felons in possession of eight firearms. Judge Salas imposed the sentence today in Newark federal court.
According to documents filed in the case and statements made in court:
On Sept. 1, 2011, law enforcement officials executed a search warrant on an apartment on Stratford Place in Newark. They recovered 2,440 envelopes of heroin and eight guns, including three semi-automatic rifles, four handguns, and one shotgun, as well as 400 rounds of ammunition. Pearson and Upshaw were charged in a superseding indictment with being leaders of the Bloods set known as the “Red Breed Guerillas,” which controlled the drug trade in that area of Newark, and with being responsible for maintaining that apartment as part of their heroin distribution efforts.
During their guilty pleas, both Pearson and Upshaw admitted that from March 1, 2011, through Sept. 1, 2011, they used the apartment on Stratford Place in Newark to store heroin that was eventually distributed on the street. They both admitted they were in possession of the eight firearms after having previously convicted of felonies in New Jersey Superior Court.
In addition to the prison terms, Judge Salas sentenced Upshaw and Pearson each to five years of supervised release.
U.S. Attorney Fishman credited Drug Enforcement Administration, under the direction of Special Agent in Charge Carl Kotowski; and Newark Police Department, under the direction of Police Director Sheilah A. Coley and Police Chief Ivonne Roman, for the investigation leading to today’s sentencings.
The Government was represented by Assistant U.S. Attorneys James Donnelly and Robert Frazer of the Organized Crime/Gangs Unit in Newark.
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Defense counsel:
Upshaw: James Patton Esq., Livingston, N.J.
Pearson: Michael Pedicini Esq., Chatham, N.J.Two Defendants Sentenced to Prison in Insider Trading SchemeRead the Press Release
NEWARK, N.J. – The two primary traders in an extensive insider trading network were sentenced to prison today for repeatedly using information divulged by insiders at pharmaceutical/medical technology firms operating in New Jersey, U.S. Attorney Paul J. Fishman announced.
Lawrence Grum, 50, of Livingston, N.J., was sentenced to one year and one day in prison and Michael Castelli, 50, of Morris Plains, N.J., was sentenced to nine months in prison. Grum previously pleaded guilty before U.S. District Judge Katharine S. Hayden to an information charging him with two counts of conspiracy to commit securities fraud and four counts of securities fraud. Castelli previously pleaded guilty before Judge Hayden to an information charging him with two counts of conspiracy to commit securities fraud and five counts of securities fraud. Judge Hayden imposed both sentences today in Newark federal court.
According to documents filed in this case and statements made in court:
From 2007 to 2012 Grum and Castelli executed numerous, profitable trades based on inside information fed to them by their friend, Mark Cupo, 53, of Morris Plains, who was an executive at Sanofi-Aventis, a global pharmaceutical company with United States operations based in New Jersey. Cupo, in turn, obtained much of the inside information from his friend and former employee, John Lazorchak, 43, of Long Valley, N.J., who was director of financial reporting at Celgene Corp., another global pharmaceutical company based in New Jersey. Lazorchak also obtained certain inside information from Mark Foldy, 44, of Morris Plains, a friend and former high school classmate of Lazorchak, who was a marketing executive at Stryker Corp., a leading medical technology business with a major division located in New Jersey.
During the course of the multi-year insider trading operation, Grum and Castelli regularly received from Lazorchak, via Cupo, material, non-public information about Celgene’s anticipated corporate acquisitions, numerous quarterly earnings results, and regulatory news, with the understanding that Grum and Castelli would trade based on the inside information and share their profits with Lazorchak and Cupo. Grum and Castelli also received inside information directly from Cupo regarding a corporate acquisition planned by Cupo’s employer, Sanofi, as well as inside information Cupo had obtained from Lazorchak regarding a Stryker acquisition. Lazorchak, in turn, had obtained the Stryker inside information from his friend, Foldy.
Grum and Castelli made efforts to conceal their involvement in insider trading by, for example, compiling binders of market research to try to provide an independent basis for their knowledge of confidential, material nonpublic information.
The material, non-public information available to Grum and Castelli enabled them to reap substantial profits by engaging in lucrative securities trading ahead of the public announcement of several corporate acquisitions, numerous quarterly earnings results, and regulatory news. In addition, they shared a portion of their profits with Lazorchak and Cupo for their respective roles in providing Grum and Castelli inside information.
In addition to the prison terms, Judge Hayden sentenced Grum and Castelli to two years each of supervised release.
Grum and Castelli are the last of the six defendants charged with participating in this insider trading network to plead guilty. The other four defendants: Lazorchak, Cupo, Foldy, and Michael Pendolino, 44, of Nashua, N.H., entered their guilty pleas before Judge Hayden on Oct. 7, 2013, and are awaiting sentencing.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, for the investigation leading to today’s guilty pleas. He also thanked the U.S. Securities and Exchange Commission=s Market Abuse Unit, under the direction of Daniel M. Hawke.The government is represented by Assistant U.S. Attorney Shirley U. Emehelu of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.
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Defense counsel:
Lawrence Grum: Scott A. Resnik Esq., New York
Michael Castelli: Daniel Zinman Esq. and Daniel Stein Esq., New York
John Lazorchak: Lawrence S. Lustberg Esq., Newark
Mark Cupo: Joseph J. Bell Jr. Esq. and Joseph J. Bell, IV Esq., Rockaway, N.J.
Mark Foldy: Jonathan Marks Esq., New York,
Michael Pendolino: James S. Friedman Esq., NewarkTom's River, N.J., Chiropractor Admits Receiving Bribes for Patient ReferralsRead the Press Release
NEWARK, N.J. – A chiropractor with a practice in Toms River, N.J., admitted today to accepting bribes to refer a number of his patients to a New Jersey-licensed pain management physician, U.S. Attorney Paul J. Fishman announced.
Norman Eastburn, 48, of Jackson, N.J., pleaded guilty to an information charging him with one count of violating the Anti-Kickback statute. He entered his guilty plea before U.S. District Judge Stanley R. Chesler in Newark federal court.
According to documents filed in this case and statements made in court:
Eastburn was paid a cash fee per patient he referred to the pain management physician. As part of the scheme, the pair negotiated specific kickback amounts that would be paid based on which payor would be billed – Medicare or a private healthcare insurer – and what type of pain treatment would be rendered.
Eastburn indicated to the pain physician that a medical doctor’s involvement in pain procedures would increase Eastburn’s likelihood of being reimbursed by insurers. As an example, Eastburn recounted a prior situation in which he misled a patient by telling her that she required an injection that he did not then believe, in fact, was medically necessary, then then paid a doctor $500 in cash to administer it.
The violation of the Anti-Kickback statute carries a maximum potential penalty of five years in prison and a $250,000 fine. In addition, Eastburn has agreed to forfeit to the United States the money he was paid in bribes. Sentencing is scheduled for July 8, 2014.U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, and the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Tom O’Donnell, with the investigation.
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.
The government is represented by Senior Litigation Counsel Andrew Leven of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark.
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Defense counsel: Peter Carter Esq., Assistant Federal Public Defender, Newark
Eastburn, Norman Information
Morris County, N.J., Physician Admits Taking Bribes in Test-Referrals Scheme with New Jersey Clinical LabRead the Press Release
26th Defendant to Plead Guilty in Connection with Scheme
NEWARK, N.J. – A physician with a practice in Madison, N.J. admitted today to accepting bribes of $2,000 per month in exchange for test referrals as part of a long-running scheme operated by Biodiagnostic Laboratory Services LLC (BLS) of Parsippany, N.J., its president and numerous associates, U.S. Attorney Paul J. Fishman announced.
Wayne Lajewski, 51, pleaded guilty today 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:Lajewski admitted he accepted bribes of $2,000 cash per month over two years in return for referring patient blood specimens to BLS, for which BLS received more than $850,000.
The bribery count to which Lajewski pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for July 8, 2014. As part of his guilty plea, Lajewski agreed to forfeit $48,000, representing the bribes he received from BLS.
Including Lajewski, 26 people – including 15 physicians – have pleaded guilty in connection with the bribery scheme, which its organizers have admitted involved millions of dollars in bribes and resulted in more than $100 million in payments to BLS from Medicare and various private insurance companies.
The investigation has recovered more than $7 million to date through forfeiture.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark; U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Thomas O’Donnell; IRS– Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen; and inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, with the ongoing investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Joseph Minish, Senior Litigation Counsel Andrew Leven, and Jacob T. Elberg, Chief of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark, as well as Assistant U.S. Attorney Barbara Ward of the office’s Asset Forfeiture and Money Laundering Unit.
U.S. Attorney Paul J. Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $535 million in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.
14-121Defense counsel: Robert C. Scrivo Esq., Morristown, N.J.
Lajewski, Wayne Information
Former Partner of A Freehold Office Equipment Leasing Company Admits Stealing More Than $600,000Read the Press Release
TRENTON, N.J. – A former partner of a Freehold, N.J.-based office equipment leasing company today admitted stealing more than $600,000 in a fraudulent loan scheme, U.S. Attorney Paul J. Fishman announced.
Jason Lee Lum, 35, of Yardley, Pa., pleaded guilty before U.S. District Judge Anne E. Thompson in Trenton federal court to an information charging him with wire fraud for receiving approximately $682,000 in fraudulently obtained loan proceeds.
According to documents filed in this case and statements made in court:
Lee Lum was a partner in a company called Superior Data Corp., which was in the business of providing office equipment leasing services. As a result of the high cost of leasing office equipment, the company would obtain loans through a financing company for its clients to lease office equipment. After a client agreed to lease office equipment, a company employee would submit the lease agreement paperwork to the financing company in order to obtain a loan for the client. If the financing company approved the loan, the financing company would send the loan proceeds directly to the company’s bank account. The client would then receive the leased office equipment and would directly repay the loan to the financing company.
As a partner at the company, Lee Lum was responsible for the company’s finances and for submitting loan documentation on behalf of clients. From October 2011 to May 2012, Lee Lum forged signatures of existing company clients on loan documents and then submitted the documents to the financing company. The company clients had neither approved nor consented to the loan documents being submitted, nor did the clients obtain any office equipment in connection with the fraudulent loan applications. When the financing company approved the fraudulent loan applications, Lee Lum directed the proceeds to be sent to the company’s bank account, which he controlled. Lee Lum used the fraudulently obtained loan proceeds to pay personal expenses, company payroll (including his own salary), and to increase the company’s revenue for accounting purposes. Lee Lum sought to conceal his fraud by making payments on the fraudulently obtained loans. When Lee Lum began to fall behind on those payments, the financing company that issued the loans sought payment directly from the company’s clients, whose names were on the fraudulent loans.
The wire fraud count to which Lee Lum pleaded guilty carries a maximum penalty of 20 years in prison and a $250,000 fine. As part of the plea, Lee Lum agreed to pay restitution in the amount of $682,862. Sentencing is scheduled for Sept. 19, 2014.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Fabiana Pierre-Louis of the U.S. Attorney’s Office Criminal Division in Trenton.
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Defense counsel: Frederick W. Klepp Esq., Cherry Hill, N.J.
Lee Lum, Jason Information
Nigerian National Faces New Stolen Identity Tax Refund Charges in 31-Count Federal Indictment Returned in New JerseyRead the Press Release
NEWARK, N.J. - A Nigerian national who formerly resided in Livingston, N.J., was arraigned today on a 31-count superseding indictment charging him with participating in an $3 million scheme to use stolen identities to generate fraudulent tax refunds, U.S. Attorney Paul J. Fishman announced.
Kole Akinola, 40, allegedly engaged in a stolen identity refund fraud, or “SIRF,” scheme that resulted in more than $3 million in losses to the U.S. Treasury and the theft of the personal identification information of hundreds of individuals. Akinola was indicted April 1, 2014, and was arraigned on the charges today before U.S. District Judge Jose L. Linares in Newark federal court. The superseding indictment charges Akinola with one count of conspiring to steal government funds, 10 counts of misusing the personal identification information of others, 10 counts of illegally using social security numbers and 10 counts of aggravated identity theft.
Akinola originally was arrested on a complaint in April 2011 and indicted in May 2011 on one count of conspiring to steal government funds in relation to an approximately four-month scheme to file fraudulent income tax returns to illegally obtain refunds. Akinola, who is subject to a final order of removal to Nigeria, has been detained since the time of his arrest. The new charges allege a conspiracy lasting approximately three years, including the time of his incarceration.
According to documents filed in this case and statements made in court:
In April 2011, Akinola was arrested for driving under the influence in Glen Ridge, N.J. At the time of arrest, Akinola was found to be in possession of debit cards and Turbo Tax receipts in the names of third parties; two composition books and loose papers containing the personal identifiers of numerous individuals, including names, social security numbers and dates of birth; a July 2007 inmate population report from Union County Correctional Facility, which included the names, social security numbers, and dates of birth of over 700 inmates; W-2 forms in the names of third parties, which included employer identification numbers, or “EINs”; and several cellular telephones and handheld electronic devices.The government alleges that the personal identification information, EINs, and electronic devices found in Akinola’s possession at the time of his arrest were used in connection with a SIRF conspiracy to file numerous fraudulent tax returns seeking tax refunds.
Akinola and the other members of the conspiracy obtained personal identifiers – such as dates of birth and Social Security numbers – belonging to numerous U.S. citizens, including from inmate population reports from prison facilities. The conspirators used those identifiers to create fake 1040 forms, which falsely reported wages and withheld taxes to create the appearance that the “taxpayers” were entitled to tax refunds. The returns were filed electronically with the IRS and generated refunds.
Members of the conspiracy then directed the refunds onto pre-paid debit cards, which were mailed to addresses in New Jersey and elsewhere, where they could be retrieved by the conspirators. They then used the pre-paid debit cards to make ATM withdrawals and purchases in New Jersey for their personal use and benefit.
As recently as July 2013, while incarcerated at Hudson County Correctional Facility, Akinola was found to be illegally in possession of a cellular telephone and three prison inmate population reports, from three separate dates, that contained the names and personal identification information of hundreds of inmates.
The conspiracy count carries a maximum potential penalty of 10 years in prison; each count of misuse of personal identification information carries a maximum potential penalty of 15 years in prison; each count of illegal use of a Social Security number carries a maximum potential penalty of five years in prison; and each aggravated identity theft count carries a mandatory penalty of two years in prison, which would be consecutive to any term imposed for a conviction of illegal use of a Social Security number. Each count also carries a maximum $250,000 fine.
U.S. Attorney Fishman praised special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Jonathan D. Larsen; and postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Marie Kelokates, for the investigation.
The government is represented by Assistant U.S. Attorneys Joseph B. Shumofsky and Andrew S. Pak of the U.S. Attorney’s Office Criminal Division in Newark.
The charges and allegations contained in the superseding indictment are merely accusations, and the defendant is considered innocent unless and until proven guilty.14-119
Defense counsel: Assistant Federal Public Defender K. Anthony Thomas Esq., Newark
Akinola, Kole SIndictment
Miami-Dade, Fla. Police Officer Charged in Cocaine Trafficking ConspiracyRead the Press Release
NEWARK, N.J. - An internal affairs officer of the Miami-Dade Police Department was arrested this morning in Miami Gardens, Fla., and charged with allegedly aiding a narcotics trafficking organization – distributing cocaine from the Dominican Republic in New Jersey and elsewhere – by orchestrating a murder-for-hire plot; providing firearms and sensitive law enforcement information; and facilitating the transport of drug proceeds, New Jersey U.S. Attorney Paul J. Fishman announced.
Ralph Mata, 45, a/k/a “the Milk Man,” of Broward County, Fla. – a lieutenant with the Miami-Dade Police Department, Internal Affairs – is charged by federal criminal complaint with one count each of: aiding and abetting a conspiracy to distribute cocaine; conspiring to distribute cocaine; and engaging in monetary transactions in property derived from specified unlawful activity – specifically, drug proceeds.
Mata is scheduled to appear tomorrow, April 9, 2014, before U.S. Magistrate Judge Alicia M. Otazo-Reyes in federal court in the Southern District of Florida.
According to the complaint unsealed today:
After rival drug dealers threatened to kill members of the drug trafficking organization, or “DTO,” with which Mata conspired, Mata and members of the DTO discussed a murder plot. Mata stated that his contacts – assassins – would wear uniforms and badges to make it appear as though the two targets of the plot were being pulled over by law enforcement before shooting them. Mata arranged to pay two assassins $150,000 per target. Ultimately, the DTO decided not to move forward with the murder plot, but Mata still received a payment for setting up the meetings.
Mata purchased several firearms to provide protection and security to the DTO members located in the Dominican Republic, which he transported on two separate trips from Miami to the Dominican Republic between Oct.5, 2012, and Jan. 17, 2013. A number of these firearms have been recovered by law enforcement.
Mata also helped to transport narcotics proceeds for the DTO in exchange for thousands of dollars in cash and a Rolex watch valued at approximately $10,000.
Mata also used sources of information available to him as a law enforcement officer to find out information about the seizure of $419,000 in narcotics proceeds from a Bergen County, N.J., residence, which members of the DTO suspected had been stolen by another member, but were in fact seized by law enforcement.
The narcotics charges each carry a statutory mandatory minimum penalty of 10 years in prison and a maximum potential penalty of life in prison and a $10 million fine. The transaction involving drug proceeds charge carries a maximum potential penalty of 10 years in prison and a $250,000 fine.
U.S. Attorney Fishman credited special agents of the FBI’s Garret Mountain Resident Office, under the direction of Special Agent in Charge Aaron T. Ford in Newark; the DEA’s Paterson Post of Duty under the direction of Special Agent in Charge Carl J. Kotowski; IRS – Criminal Investigation, Newark Field Office, under the Acting Special Agent in Charge Jonathan D. Larsen; and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, New York, under the direction of James T. Hayes Jr. He also thanked the Miami FBI, Miami-Dade Police Department and Miami-Area Corruption Task Force for their assistance with the arrest. The investigation is ongoing.
The government is represented by Assistant U.S. Attorneys Mary Toscano of the U.S. Attorney’s Office Special Prosecutions Division, José Almonte of the Criminal Division, and Barbara Ward and Marion Percell, Chief, of the office’s Asset Forfeiture Unit.
The charges and allegations contained in the complaint are merely accusations and the defendant is considered innocent unless and until proven guilty.14-120
Defense counsel: TBD
Mata, Ralph Complaint
Trenton Man Sentenced to Eight Years in Prison for Possession of Three Guns, Including Loaded Semi-Automatic RifleRead the Press Release
TRENTON, N.J. – A Trenton, N.J., man with a previous conviction for drug distribution was sentenced today to 96 months in prison for possessing three firearms, including a loaded semi-automatic rifle and a loaded revolver, U.S. Attorney Paul J. Fishman announced.
Isaiah Harris, 26, previously pleaded guilty before U.S. District Judge Michael A. Shipp to an information charging him with one count of being a convicted felon in possession of firearms and ammunition. Judge Shipp imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:
At approximately 6:00 a.m. on Nov. 15, 2012, law enforcement officers entered a residence on Stuyvesant Avenue in Trenton to execute an unrelated warrant for Harris’ arrest and encountered Harris in a bedroom on the second floor. They recovered a loaded Taurus .38-caliber revolver from the bed Harris had been occupying and later discovered in the bedroom a loaded Norinco SKS, 7.62 semi-automatic rifle and a partially disassembled second Norinco SKS, 7.62 semi-automatic rifle. Harris admitted at his plea hearing that he possessed these weapons.
In addition to the prison term, Judge Shipp sentenced Harris to three years of supervised release, ordered him to forfeit the firearms and ammunition and fined him $1,000.
U.S. Attorney Fishman credited special agents and task force officers of the ATF’s Trenton Field Office, under the direction of Acting Special Agent in Charge George Belsky in Newark, N.J., and law enforcement officers from the Trenton Police Department, under the direction of Police Director Ralph Rivera Jr.; the Mercer County Sheriff’s Office, under the direction of Sheriff John Kemler; and the Mercer County Prosecutor’s Office, under the direction of Prosecutor Joseph L. Bocchini Jr., for the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney John E. Clabby of the U.S. Attorney’s Office Criminal Division in Trenton.14-118
Defense counsel: Assistant Federal Public Defender Lisa Van Hoeck Esq., Trenton
Owners of Popular Ocean City, N.J., Pizza Restaurants Arrested, Face Indictment Charging Tax and Structuring CrimesRead the Press Release
CAMDEN, N.J. - The owners of popular Ocean City, N.J., restaurant chain Manco & Manco Pizza were arrested this morning at their Somers Point, N.J., home by IRS-Criminal Investigation special agents on an indictment charging the couple with multiple counts of tax evasion and other offenses, U.S. Attorney Paul J. Fishman announced.
Charles Bangle, 54, and his wife Mary Bangle, 53, face a 30-count indictment charging the couple with one count of conspiracy to evade income taxes, five counts of income tax evasion for 2007 through 2011, and one count of making false statements to the IRS. Charles Bangle is also charged with 23 counts of structuring financial transactions to avoid reporting requirements.
The Bangles are scheduled to appear on the charges this afternoon before U.S. Magistrate Judge Ann Marie Donioin Camden federal court.
According to the indictment unsealed today:
Manco & Manco Pizza – formerly Mack & Manco – is an iconic restaurant located in the heart of the Ocean City’s Boardwalk and maintains three stores on the Boardwalk and one store in Somers Point. Charles and Mary Bangle were employees of Mack & Manco Pizza until they purchased a controlling interest in 2011. Charles Bangle handled the day-to-day operations of the business and Mary Bangle was responsible for handling cash and payroll.
Between 2007 and 2011, Charles and Mary Bangle skimmed large sums of cash from the business. Charles Bangle deposited significant amounts of that cash into their personal bank account at TD Bank in amounts less than $10,000, the amount which triggers a Currency Transaction Report from financial institutions to the U.S. Department of Treasury.
The Bangles then used the money to pay for personal expenditures. They concealed approximately $981,000 in income from the IRS, which they had a legal obligation to report on their personal income tax returns. Had they accurately reported all their income to the IRS, the Bangles would have owed an additional $336,273.
The Bangles claimed the deposits into their personal checking account were from cash salary earned at the pizza business.
Each of the 30 counts of the indictment carries a maximum potential penalty of five 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, with the investigation.
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, as well as Assistant U.S. Attorney Peter W. Gaeta of the office’s Asset Forfeiture Unit.14-117
Defense counsel:
Charles Bangle: Vincent Sarubbi Esq., Haddonfield, N.J.
Mary Bangle: TBDBangle, Charles and Mary Indictment
Georgia Man Admits Traveling from New York to New Jersey for Illicit Sexual Conduct with ChildrenRead the Press Release
TRENTON, N.J. – A Georgia man living in Long Island, N.Y., admitted today he traveled from New York to New Jersey to have sexual contact with a minor, U.S. Attorney Paul J. Fishman announced.
Richard J. Simone Jr., 23, of Acworth, Ga., pleaded guilty before U.S. District Judge Mary L. Cooper in Trenton federal court to Count One of an indictment charging him with traveling across state lines for the purpose of engaging in sexual conduct with a minor. Simone has been in custody since his arrest in September 2013.
According to documents filed in this case and statements made in court:
Simone admitted that beginning in July 2013, he engaged in numerous graphic communications over the Internet with an individual he believed was the father of a 9-year-old girl. In those communications, Simone discussed having sex with the girl and her minor babysitter. The individual with whom he was corresponding was actually an undercover agent from the Department of Homeland Security, Homeland Security Investigations, and both of the minors were fictitious. On Sept. 13, 2013, Simone traveled from Long Island to Monmouth County, N.J., for the purpose of having sex with the two minors. Simone was arrested when he arrived at the location where he and the undercover had arranged to meet.
The count to which Simone pleaded guilty carries a maximum potential penalty of 30 years in prison and a $250,000 fine. He will also be required to register as a sex offender. Sentencing is scheduled for August 6, 2014.
U.S. Attorney Fishman credited agents of Homeland Security Investigations, under the direction of Special Agent in Charge Andrew M. McLees in Newark; the West Long Branch Borough Police Department, under the direction of Chief of Police Lawrence L. Mihlon, for the investigation leading to today’s guilty plea. He also thanked HSI New York; U.S. Customs and Border Protection, and the Monmouth County Prosecutor’s Office, for their assistance with the investigation.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Child Exploitation and Obscenity Section (CEOS) in the Justice Department’s Criminal Division, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov
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.14-116
Defense counsel: Guy L. Womack Esq., Houston, Texas
Simone, Richard Indictment
Two Plead Guilty in New Jersey Federal Court to Roles in Multimillion-Dollar International Cybercrime SchemeRead the Press Release
Defendants Managed “Cash Out” Crews for Organization that Allegedly Capitalized on Information Hacked From Customers of More Than a Dozen Global Financial Institutions
TRENTON, N.J. – An alleged member of an international cybercrime, identity theft and credit card fraud conspiracy admitted today to using information hacked from customer accounts held at more than a dozen banks, brokerage firms, payroll processing companies and government agencies in an attempt to steal at least $15 million from American customers, the second member of the conspiracy to plead guilty this week, U.S. Attorney Paul J. Fishman announced.
Robert Dubuc, 40, of Malden, Mass. – who was in court today – and Oleg Pidtergerya, 49, of Brooklyn, N.Y. – who was in court yesterday, March 31, 2014 – each pleaded guilty to an information charging one count of wire fraud conspiracy, and one count of conspiracy to commit access device fraud and identity theft. Both defendants entered their guilty pleas before U.S. District Judge Peter G. Sheridan in Trenton federal court.
According to documents filed in the case and statements made in court:
Both Dubuc and Pidtergerya were asked by leaders of the conspiracy to participate in a scheme to “cash out” bank accounts and pre-paid debit cards opened in the names of others. Oleksiy Sharapka, 33, of Kiev, Ukraine, allegedly directed the conspiracy with the help of Leonid Yanovitsky, 39, also of Kiev. Pidtergerya managed a cash out crew in New York for Sharapka and Yanovitsky, and defendant Dubuc controlled a cash out crew in Massachusetts for the organization.
Pursuant to the scheme, conspiring hackers first gained unauthorized access to the bank accounts of customers of more than a dozen global financial institutions and businesses, including: Aon Hewitt; Automatic Data Processing Inc.; Citibank N.A.; E-Trade; Electronic Payments Inc.; Fundtech Holdings LLC, iPayment Inc.; JP Morgan Chase Bank N.A.; Nordstrom Bank; PayPal; TD Ameritrade; U.S. Department of Defense, Defense Finance and Accounting Service; TIAA-CREF; USAA; and Veracity Payment Solutions Inc.
After obtaining unauthorized access to the bank accounts, Sharapka and Yanovitsky diverted money from them to bank accounts and pre-paid debit cards they controlled. They then implemented a sophisticated “cash out” operation, employing crews of individuals known as “cashers” to withdraw the stolen funds from the Fraudulent Accounts, among other ways, by making ATM withdrawals and fraudulent purchases in New York, Massachusetts, Illinois, Georgia and elsewhere. Both Sharapka and Yanovitsky are under indictment in the United States and remain at large.
During their guilty plea proceedings, Pidtergerya and Dubuc admitted they were aware fraudulent accounts and cards were created without the consent of the individuals in whose names they were opened. Both men admitted coordinating ATM and bank withdrawals of the stolen funds. In addition they admitted to sending proceeds of the fraud to Sharapka and Yanovitsky in Ukraine.
The government’s ongoing investigation into the organization has so far identified attempts to defraud the victim companies and their customers of more than $15 million.
The wire fraud conspiracy count carries a maximum potential penalty of 20 years in prison, and the conspiracy to commit access device fraud and identity theft count carries a maximum potential penalty of five years in prison. Each count also carries a maximum $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for July 7, 2014, for Pidtergerya and July 8, 2014, for Dubuc.
U.S. Attorney Fishman credited the U.S. Secret Service, under the direction of Special Agent in Charge James Mottola; U.S Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge Andrew M. McLees; Department of Defense, Defense Criminal Investigative Service, under the direction of Special Agent in Charge Jeffery D. Thorpe, Cyber Field Office; and IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen, with the ongoing investigation. He also thanked the Department of Homeland Security’s Customs and Border Protection for assistance with the Yarmolitsky arrest.
The government is represented by Economic Crimes Unit Chief Gurbir S. Grewal of the U.S. Attorney’s Office in Newark.
The charges and allegations concerning alleged conspirators are merely allegations and the defendants are presumed innocent unless and until proven guilty.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.
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Defense counsel:
Oleg Pidtergerya: Mitchell Elman Esq., Port Washington, N.Y.
Robert Dubuc: Angelo Servidio Esq., Nutley, N.J.Pidtergerya, Oleg Information
Dubuc, Robert InformationHudson County Trio Indicted for Robberies of Sovereign Bank in Secaucus, N.J., and TD Bank in Fairview, N.J.Read the Press Release
NEWARK, N.J. – Two men and a woman from Hudson County, N.J., were indicted today in connection with their roles in two bank robberies that took place last summer, U.S. Attorney Paul J. Fishman announced.
Gary Bohanan, 44, Angel Feliu, 20, and Josephine Chenet, 45, all of North Bergen, N.J., are each charged by indictment with two counts of bank robbery. The indictment was returned by a federal grand jury sitting in Newark.
According to documents filed in this case and statements made in court:
Bohanan, Feliu, and Chenet allegedly robbed the Sovereign Bank (now Santander Bank), in Secaucus, N.J., on July 22, 2013. Bohanan and Feliu entered the bank at 10:11 a.m. Both wore latex gloves on their hands and masks over their face. Once inside, Bohanan brandished a black handgun, jumped over the counter and proceeded to empty two drawers of money into a black bag, while pointing the handgun at bank tellers. As Bohanan emptied the drawers, Feliu stood guard. Bohanan and Feliu then fled the bank into a car driven by Chenet.
Bohanan, Feliu, and Chenet also allegedly robbed the TD Bank, in Fairview, N.J., on July 26, 2013. Bohanan and Feliu, both wearing latex gloves and masks, entered the bank at 9:48 a.m. Feliu was recorded by the Bank’s video surveillance system before he pulled the mask over his face. Once inside the TD Bank, Feliu brandished a knife at employees and customers. Bohanan brandished what appeared to be a black handgun, but was later identified as an air pistol. Bohanan jumped over the counter and proceeded to empty two drawers of money into a black bag, while pointing the air pistol at bank tellers. As Bohanan emptied the drawers, Feliu stood guard and held bystanders back by brandishing the knife.
Bohanan and Feliu fled on foot and were followed by concerned citizens and victims of the bank robbery. Bohanan encountered a white GMC Savana van, pointed the air pistol at the driver and ordered the driver out of the van. Bohanan then took control of the van and attempted to flee the area by driving away in the van, drove a short distance and crashed. He exited the van and attempted to flee on foot. Law enforcement and concerned citizens located Bohanan hiding under a truck, which was parked a short distance away. Bohanan was found with a black bag containing, among other things, a black air pistol and money covered with red dye.
Feliu separated from Bohanan after the bank robbery and was seen getting into the passenger’s seat of a waiting vehicle that was driven by Chenet. Citizens followed the vehicle as it drove away at a high rate of speed and observed Feliu exit the vehicle and run into a cemetery in North Bergen, where he was located by law enforcement.
The counts of bank robbery with which Bohanan, Feliu, and Chenet are each charged each carry a maximum penalty of 20 years in prison and a fine of $250,000. Bohanan and Feliu have been detained pending trial.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, with the investigation. He also thanked the Fairview, North Bergen, and Secaucus police departments for their contributions to the case.
The government is represented by Assistant U.S. Attorney Francisco J. Navarro of the U.S. Attorney’s Office General Crimes Unit in Newark.
The charges and allegations contained in the indictment are merely accusations and the defendants are considered innocent unless and until proven guilty.
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Defense counsel:
Feliu: Kevin F. Carlucci Esq., Assistant Federal Public Defender, Newark
Bohanan: Carl Herman Esq., West Orange, N.J.
Chenet: Michael Gilberti, Esq., Little Silver, N.J.Bohanan et al. Indictment
Former Owner of New Jersey Private Detective Firm Sentenced to Prison for Social Security Disability FraudRead the Press Release
NEWARK, N.J. - A Hunterdon County, N.J., man was sentenced today to 23 months in prison for fraudulently collecting Social Security disability payments while continuing to do work he claimed he was unable to do for his private detective firm, U.S. Attorney Paul J. Fishman announced.
David Disney, 46, of Alexandria Township and Saddle Brook Township, N.J. – and the former owner of DM Disney & Associates – previously pleaded guilty after one day of trial to one count of theft of government funds contained in the indictment against him. He entered his guilty plea before U.S. District Judge Faith S. Hochberg, who also imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Disney applied for disability insurance payments in the fall of 2003 as a result of a head injury he suffered in January of that year. In his application, Disney claimed an inability to work, take care of himself or his finances, or even to concentrate for more than five minutes. Based on that application, Disney and his two dependent children were deemed eligible for monthly disability benefit payments to replace his lost income. By signing the application, Disney agreed to notify the Social Security Administration if there was any improvement in his medical condition or if he regained the ability to work and earn income.
During the time that Disney was receiving disability benefits, he continued to perform surveillance for clients of DM Disney & Associates, marketed his business through personal appearances on The Maury Povich Show, testified before the New York State Workers’ Compensation Board on behalf of clients and even applied to renew his New Jersey Private Detective License and purchase a handgun.
Between 2003 and 2008, Disney collected more than $144,000 in monthly disability payments to which he was not entitled by continuing to make false statements to the Social Security Administration and underreporting the income he was earning.
Disney admitted he took the benefits knowing he was not entitled to them.
In addition to the prison term, Judge Hochberg sentenced Disney to serve two years of supervised release and ordered him to pay a $5,000 fine and $144,000 in restitution to the Social Security Administration.
U.S. Attorney Fishman credited special agents of the Social Security Administration – Office of the Inspector General, under the direction of Special Agent in Charge Edward J. Ryan of the New York Field Division, with the investigation.
The government is represented by Assistant U.S. Attorneys Danielle Alfonzo Walsman and Osmar J. Benvenuto of the U.S. Attorney’s Criminal Division in Newark.14-115
Defense counsel: James Patton Esq., Livingston, N.J.
Chicago Man Admits Stealing More Than $1 Million Worth of Iphones and IpadsRead the Press Release
NEWARK, N.J. - A Chicago man today admitted he stole more than $1 million worth of iPhones and iPads from Verizon Wireless through an elaborate scheme that involved misappropriating corporate purchasing accounts and then diverting the shipments by bribing Federal Express drivers, U.S. Attorney Paul J. Fishman announced.
Stephen Gunn, 36, pleaded guilty before U.S. District Judge Claire C. Cecchi in Newark federal court to an indictment charging him with one count of conspiracy to commit wire fraud.
According to documents filed in this case and statements made in court:
Gunn accessed the online accounts of dozens of Verizon’s customers, including several customers located in New Jersey, and used those accounts to place unauthorized orders for electronics products, primarily, smart phones and accessories. He directed the fraudulently ordered products be shipped to addresses in Texas, including several addresses that did not exist, via Federal Express.
At Gunn’s direction, two Federal Express drivers intercepted the shipments, removed the contents, and re-shipped the contents to addresses in Illinois provided by Gunn. In exchange, Gunn paid the drivers each thousands of dollars. Gunn fraudulently obtained approximately 1,700 items—including several hundred Apple iPhones and iPads, Blackberry devices, and Motorola phones—worth more than $1 million.
The conspiracy to commit wire fraud count to which Gunn pleaded guilty 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. Sentencing is scheduled for July 15, 2014.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, for the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Daniel V. Shapiro of the U.S. Attorney’s Office Computer Hacking and Intellectual Property Crimes Section of the Economic Crimes Unit in Newark.
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Defense counsel: David Holman Esq., Assistant Federal Public Defender, NewarkGunn, Stephen Indictment
Former Fugitive Admits Selling Bogus Insurance PoliciesRead the Press Release
CAMDEN, N.J. – A former insurance broker admitted today to conspiring to defraud purchasers of commercial liability insurance by overcharging for policies as well as issuing some customers bogus policies, U.S. Attorney Paul J. Fishman announced.
Thomas M. Grubb Jr., 58, of Voorhees, N.J., pleaded guilty before Chief U.S. District Judge Jerome B. Simandle in Camden federal court to an indictment charging him with one count of conspiracy to commit mail fraud and wire fraud.
Grubb was originally arrested on April 14, 2008, and charged by complaint with one count of obstruction of justice. On Nov. 5, 2008, Grubb failed to appear in court and a warrant was issued for his arrest.
Special agents of IRS-Criminal Investigation apprehended Grubb in Port Charlotte, Fla., on Dec. 6, 2011.
According to documents filed in this case and statements made in court:
Grubb was employed at Aconorate Insurance Agency in Hammonton, N.J., when Aconorate engaged in a scheme to defraud its clients by overcharging them for commercial liability insurance and selling them policies that were not issued by a legitimate insurance carrier. Grubb – along with the individuals identified in court documents as “CC-1,” the owner of Aconorate, and “CC-2,” an information technology employee at Aconorate – procured insurance for Aconorate commercial liability insurance clients through an insurance broker in Texas, identified as “GM.” Many of the clients were bars, restaurants, and nightclubs.
Grubb and the owner of Aconorate substantially inflated the premiums that they charged these customers, sometimes increasing the quote that GM provided by as much as 700 to 800 percent. Between June 2004 and July 2006, Grubb and the owner of Aconorate collected more than $1 million dollars in premiums for commercial liability insurance procured through GM and kept over $597,000 of the premiums for themselves.
Grubb and others also took steps to create the appearance that the insurance companies purportedly issuing the policies were legitimate, including creating websites, mailing addresses, and telephone numbers for the insurance companies, and setting up their own mechanism to pay claims.
The mail fraud and wire fraud conspiracy charge carries a maximum potential penalty of 20 years in prison and a $250,000 fine. Sentencing is scheduled for July 30, 2014.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark; and IRS–Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen, Newark field office, with 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.14-111
Defense counsel: Anne Singer Esq., Haddonfield
Grubb, Thomas Indictment
Jersey City Man Pleads Guilty to Armed Robbery of Jewelry StoreRead the Press Release
TRENTON, N.J. – A Jersey City man admitted today to committing an armed robbery of a jewelry store in Hudson County, N.J., U.S. Attorney Paul J. Fishman announced.
Mouhamadou Lamine Amar, 20, pleaded guilty before U.S. District Judge Mary L. Cooper in Trenton federal court to an indictment charging him with committing a Hobbs Act robbery and with brandishing a firearm during the robbery.
According to documents filed in this case and statements made in court:
On June 28, 2013, Amar entered a jewelry store in Jersey City and held a gun to a store employee’s head. He grabbed and pushed the employee when the employee tried to flee. He tied up the employee and threatened to shoot the employee if the employee tried to escape. Amar was arrested inside the store while still in possession of the firearm.
The Hobbs Act robbery count to which Amar pleaded guilty carries a maximum potential penalty of 20 years in prison. The count of brandishing a firearm during a violent crime carries a maximum penalty of life in prison and a mandatory minimum sentence of seven years in prison, which must run consecutively to any other prison term. Each count also carries a maximum $250,000 fine or twice the gross gain or loss arising out of the offense. Sentencing is scheduled for July 10, 2014.
U.S. Attorney Fishman credited special agents, detectives and investigators assigned to the Joint Terrorism Task Force (JTTF), under the direction of FBI Special Agent in Charge Aaron T. Ford in Newark, with the investigation leading to today’s guilty plea. The JTTF comprises law enforcement officers from numerous federal, state and local agencies throughout New Jersey. U.S. Attorney Fishman also thanked the Jersey City Police Department and the Hudson County Prosecutor’s Office for their work on this case.
The government is represented by Assistant U.S. Attorney Andrew Kogan of the U.S. Attorney’s Office Criminal Division in Newark.
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Defense counsel: Jeffrey B. Steinfeld Esq., Newark
Amar, Mouhamadou Lamine Indictment
Bridgeton, N.J. Jersey Tax Preparer Admits Personal Income Tax EvasionRead the Press Release
CAMDEN, N.J. - A Bridgeton, N.J., tax preparer today admitted he knowingly failed to report more than $300,000 diverted from his tax preparation service for his personal use, U.S. Attorney Paul J. Fishman announced.
William Jones, 67, pleaded guilty before U.S. District Judge Robert B. Kugler in Camden federal court to an information charging him with one count of income tax evasion.
According to documents filed in this case and statements made in court:
Jones admitted that he operated Your Financial Services and PLM Tax Services, both Bridgeton businesses that provided tax return preparation and payroll services for their clients. Your Financial Services provided refund anticipation loans backed by Refund Advantage, a company that processed income tax returns and provided refund anticipation loans for smaller tax offices.
From 2007 through 2010, Jones offered Your Financial Services’ clients refund anticipation loans processed by Refund Advantage for which Jones received fees and additional yearly incentives. Since Your Financial Services was a Schedule C business, Jones was required to report the income generated by Your Financial Services on his U.S. individual income tax return.
However, for the years 2007, 2008, 2009, and 2010, Jones only reported to the IRS Form W-2 wages, property tax information, and interest and dividend income, omitting all of the diverted payments from Refund Advantage made to Your Financial Services. He admitted that he deposited the business receipts into his personal bank account and used the money for personal expenditures.
From 2007 through 2010, Jones admitted that he diverted a total of $310,248 in gross receipts of Your Financial Services into his personal bank account. He would have owed the government $90,266 in taxes had he reported the additional gross receipts on his income tax returns.
The charge to which William Jones pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for July 1, 2014.
U.S. Attorney Fishman credited special agents of IRS-Criminal investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen, for the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Jason M. Richardson of the U.S. Attorney's Office Criminal Division in Camden.14-108
Defense counsel: Christopher O’Malley Esq., Camden
Jones, William Information
Pennsylvania Man Admits Mann Act Violations in Running Prostitution BusinessRead the Press Release
NEWARK, N.J. – An Allentown, Pa., man previously charged with sex trafficking of a minor today admitted his role in coercing women to travel from Pennsylvania to New Jersey to engage in prostitution and sexual activity for which any person can be charged with a crime, U.S. Attorney Paul J. Fishman announced.
Francisco Torrellas, a/k/a “Francisco Fordham Jr.,” “Dream,” “Daddy,” and “Pretty,” pleaded guilty before U.S. District Judge Claire C. Cecchi to Count Nine of a 10-count superseding indictment, which charged him with one count of coercion and enticement to engage in prostitution. He agreed to a sentence of 10 years in prison as part of his plea.
According to the superseding indictment and other documents filed in court:
From November 2010 to February 2013, Torrellas allegedly conspired with others to operate a prostitution business in New Jersey, Pennsylvania and elsewhere. Torrellas managed the business, traveled, and caused prostitute employees, including a minor, to travel interstate for the purpose of engaging in sex acts in exchange for money.
Torrellas used the Internet to post advertisements for sexual services on the website Backpage.com. Torrellas also developed rules for the prostitutes, booked hotel rooms, and, while incarcerated, used the phone to manage, promote, and carry on his prostitution business, specifically causing his conspirators and others to direct the proceeds of the business to his commissary account at the Essex County Correctional Facility. Torrellas also attempted to influence, delay or prevent the testimony of another person or persons in connection with the case against him.
The conspiracy count carries a maximum potential penalty of five years in prison. The Travel Act counts each carry a maximum potential penalty of five years in prison. The counts relating to trafficking and transportation of a minor carry a mandatory minimum penalty of ten years in prison and a maximum penalty of life imprisonment. The count relating to coercion and enticement to engage in prostitution carries a maximum potential penalty of 20 years in prison and the count charging obstruction of justice carries the maximum term that could have been imposed for the offenses charged. The defendant also faces a fine of $250,000 or twice the amount of the gain or loss from the offense for each count of conviction. Sentencing is scheduled for July 15, 2014.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; and the Secaucus, Jersey City, and the Allentown, Pa., police departments with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorneys Danielle Corcione and Jenny Kramer of the U.S. Attorney’s Office Criminal Division in Newark.
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Defense counsel: Michael N. Pedicini Esq., Chatham, N.J.Torrellas, Francisco SIndictment
Owner of Bulk Mailing Company Sentenced to 18 Months in Prison for Multimillion-Dollar FraudRead the Press Release
NEWARK, N.J. – One of the operators of Clevett Worldwide Mailers LLC, a Succasunna, N.J., bulk mailing house, was sentenced today to 18 months in prison for defrauding clients of more than $1 million through a fraudulent bulk-mailing scheme in which he shredded millions of pieces of mail rather than delivering them, U.S. Attorney Paul J. Fishman announced.
Harold Clevett, 68, of Middlesex, N.J., previously pleaded guilty before U.S. District Judge Kevin McNulty to an indictment charging him with one count of conspiracy to commit wire fraud. Judge McNulty imposed the sentence today in Newark federal court.
Clevett’s son, Mark Clevett, 37, of Randolph, N.J., who owned and operated the business with his father, also previously pleaded guilty to the same charge and was sentenced to 24 months in prison on Feb. 24, 2014.
According to documents filed in this case and statements made in court:
Mark Clevett owned, and both Clevetts operated, Clevett Worldwide Mailers, which contracted with international and domestic customers to handle large mailings. Customers sent their mail jobs to Clevett Worldwide Mailers for sorting, addressing and delivery to the post office. The company received fees for each piece of mail and for the total weight of the mail that it handled.
Both father and son admitted that rather than sending their clients’ mail as contracted, they directed their employees to throw away all or part of it, and even called in a shredding company to destroy unsent mail.
Mark and Harold Clevett also acknowledged they charged their customers for the full amount of the mailings, even sending some of their customers fraudulent postal forms to make it appear as though the mailings were delivered. The pair admitted that between 2007 and June 2011, they discarded and shredded nearly 3 million pieces of customer mail and reaped nearly $1 million in illicit profits.
In addition to the prison term, Judge McNulty sentenced Harold Clevett to serve one year of supervised release, six months of which will be home confinement and ordered him to pay restitution of $999,461.
U.S. Attorney Fishman credited postal 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 sentencing.The government is represented by Assistant U.S. Attorneys Rahul Agarwal and Michael Robertson of the U.S Attorney’s Office in Newark.
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Defense counsel:
Harold Clevett: Brian J. Neary Esq., Hackensack, N.J.
Mark Clevett: Don Larsen Esq., Montville, N.J.21 Alleged Heroin Traffickers Federally Charged in New JerseyRead the Press Release
Multiple Arrests Made in Coordinated Takedown
TRENTON, N.J. – The New Jersey U.S. Attorney’s Office has charged 21 members and suppliers of a large-scale drug trafficking organization allegedly responsible for distributing heroin and cocaine throughout New Jersey’s Monmouth and Ocean counties, U.S. Attorney Paul J. Fishman announced today.The alleged leaders of the conspiracy, Robert Britt, a/k/a “True,” 44; and Rufus Young, a/k/a “Equan,” a/k/a “E-Money,” a/k/a “Kintock,” 41, both of Asbury Park, N.J., were among the 19 defendants charged in a complaint unsealed today, 13 of whom were arrested this morningas part of a takedown coordinated by federal and local law enforcement authorities. Britt has been incarcerated in New Jersey in connection with New Jersey state offenses since April 2013.Three of those charged are fugitives and the remaining defendants were already in custody.
Thomas Shannon, a/k/a “Cuzzo,” 35, of Asbury Park – who is also charged in today’s complaint with Britt and Young – was arrested along with Anthony J. Brooks, 44, of San Bernardino, Calif., and Rashawn Ramos, 37, of Perth Amboy, N.J., March 20, 2014, on a separate complaint charging related offenses.
Each defendant (see attached chart) was charged with one count of conspiracy to distribute one kilogram or more of heroin. Those arrested today are scheduled to make their initial court appearances this afternoon before U.S. Magistrate Judge Tonianne J. Bongiovanni in Trenton federal court. Those arrested on March 20, 2014, have been in federal custody since their arrests and will appear before Judge Bongiovanni at a later date.
“This case highlights what has become all too clear: heroin is a serious problem that affects communities across New Jersey,” U.S. Attorney Fishman said. “Working with our state and local partners, federal law enforcement will continue to track the purveyors of this poison wherever they set up shop.”
“We are all aware that crimes like the ones alleged in these complaints pose a significant and increasing threat to the public health and safety of our communities,” FBI Newark Special Agent in Charge Aaron T. Ford said. “The arrests today signify the growing efforts of the FBI and our state and local partners, to combat these organizations and make our communities safe for all. Cooperation between dedicated groups of law enforcement partners is, and will continue to be, a critical factor for successfully defending threats that endanger our communities.”
According to the federal criminal complaints filed in Trenton federal court:
From February 2013 through March 2014, the defendants engaged in a drug distribution conspiracy to profit from the distribution of controlled substances – chiefly heroin – in Ocean and Monmouth counties. Through the authorized interception of cell phone calls, the use of confidential informants and other means, law enforcement learned Britt and Young were leaders of the drug trafficking organization (the Britt-Young DTO), responsible for identifying sources of heroin supply. Britt and Young also oversaw distributors and other conspirators, who sold, packaged and stored the drugs. Members used temporary prepaid phones, replacing them after a few weeks of use, and spoke in code to avoid detection by law enforcement. Britt continued to communicate with Young to oversee and participate in the conspiracy, including identifying new sources of supply, narcotics customers, and other unlawful opportunities for the Britt-Young DTO, even after he was incarcerated.
The Britt-Young DTO sold prepackaged bundles of heroin, containing approximately one-fifth of a gram, and “bricks,” which contained approximately one gram. Discussions about drug quality, consumer satisfaction, pricing and the nature of the drug distribution business were captured on calls recorded by law enforcement.
The Britt-Young DTO acquired heroin from various suppliers, including Shannon, who obtained narcotics from out of state suppliers and laundered the sale proceeds. Shannon received kilogram quantities of heroin and cocaine from Brooks and others, who shipped the drugs to him through the mail. The drug packages were sent to Ramos’ residence in New Jersey and he then contacted Shannon to retrieve the packages. Shannon then took the narcotics to stash houses he controlled in Asbury Park and Long Branch, N.J. Shannon deposited cash from his narcotics sales into various third-party “straw” bank accounts and Brooks and other conspirators withdrew the funds at bank locations in California.
On March 20, 2014, law enforcement executed search warrants at Shannon’s stash houses and seized more than one kilogram of heroin, a half-kilogram of cocaine, 30 grams of crack cocaine, and various narcotics-related paraphernalia, including grinders, empty baggies, scales and other items used to package and prepare heroin and cocaine for distribution, as well as three firearms.
“Heroin continues a major contributing factor in much of the crime in Brick Township,” Brick Township Police Chief Nils R. Bergquist Jr. said. “We recognize the people who distribute heroin don’t recognize borders and often come from places other than Brick. Our ability to partner with the FBI and Safe Streets Task Force has allowed us to interrupt a significant source of heroin coming into Brick Township. This investigation should serve as a model of how federal, state and local agencies should come together.”
“In our local fight against narcotics we are pleased to have an excellent working relationship with the FBI as well as the New Jersey U.S. Attorney’s Office,” Toms River Police Chief Mitchell Little said. “The effort to rid society of drugs cannot be fought on a single front, and this cooperative effort goes to show how effective law enforcement agencies can be when we use a team approach.”
The conspiracy count with which each defendant is charged carries a minimum potential penalty of 10 years in prison, a maximum of life in prison, and a $10 million fine.
The conspiracy count in the earlier complaint with which Shannon, Ramos and Brooks are charged, and the possession of controlled substances count with which Shannon is charged, also carry a minimum potential penalty of five years in prison, a maximum of 40 years in prison, and a $5 million fine. Shannon and Brooks are also charged in a money laundering conspiracy count that carries a potential penalty of up to 20 years in prison and $500,000 fine.
“Our undercover narcotic operations beyond the borders of Ocean County and the solid interagency partnerships we have developed are beginning to yield substantial success in stemming the flow of illegal narcotics into Ocean County,” Joseph D. Coronato, Ocean County Prosecutor, said. “This type of multiagency operation, striking at the top level distribution leadership, is the most significant way to address the ever increasing heroin epidemic threatening our families in this county, state and nation.”
“These defendants are responsible for delivering the heroin that has been killing people in record numbers,” Acting Monmouth County Prosecutor Christopher J. Gramiccioni said. “They were profiting off the addiction of heroin by supplying cheap and easy access to anybody with a few bucks in their pocket.”
U.S. Attorney Fishman credited special agents of the FBI, Red Bank Resident Office, under the direction of Special Agent in Charge Ford; officers of the Brick Township Police Department, under the direction of Chief Bergquist: and officers of the Toms River Police Department, under the direction of Chief Little, with the investigation. He additionally credited special agents of the Bureau of Alcohol Tobacco Firearms and Explosives, under the direction of Acting Special Agent in Charge George Belsky; inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates; officers of the Monmouth County Prosecutor’s Office, under the direction of acting Prosecutor Gramiccioni; and officers of the Ocean County Prosecutor’s Office, under the direction of Prosecutor Coronato. He also thanked the Monmouth County Sheriff’s Office and the Neptune Township, Asbury Park, Marlboro, Long Branch and Freehold police departments for their roles in the case.
The government is represented by Assistant U.S. Attorney Nicholas Grippo of the U.S. Attorney’s Office Criminal Division in Trenton.
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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Defendant
Age
Residence
44
Asbury Park, N.J.
Rufus Young, a/k/a “Equan,” a/k/a “E-Money,” a/k/a “Kintock”
41
Asbury Park
Thomas Shannon, a/k/a “Cuzzo”
35
Asbury Park and Jersey City, N.J.
Jonathon Thomas, a/k/a “Life”
38
Neptune, N.J.
Antoine Harris
33
East Orange, N.J.
Tyshon Young, a/k/a “Young Boy,” a/k/a “Young Money”
28
Asbury Park
Jason O’Neal, a/k/a “Born”
41
Farmingdale, N.J.
Travis Whitfield, a/k/a “Trav”
29
Brick, N.J.
Jamar Johnson, a/k/a “Rep”
35
Lakewood, N.J.
Dawn Rosser
33
Lakewood
Valerie Resendes, a/k/a “Val”
26
Beachwood, N.J.
Melissa Piana
31
Toms River, N.J.
*Tyree Murray
26
Bayville, N.J.
Kenneth Greenhow, a/k/a “Fame”
40
Asbury Park
*Robert Ketcham
27
Bayville
Richard Durham
27
Brick
Kyle Adams
27
Barnegat, N.J.
Kareem Hayes, a/k/a “Bless”
33
Belmar, N.J.
*Matthew Miller, a/k/a “Star”
39
Neptune
Anthony Brooks
44
San Bernadino, Calif.
Rashawn Ramos
37
Perth Amboy, N.J.
*denotes fugitive
Britt-Young DTO Complaint
Shannon ComplaintRemarks as Prepared for U.S. Attorney Paul J. Fishman at 2014 Anti-Violence SummitRead the Press Release
RUTGERS, LIVINGSTON CAMPUS, PISCATAWAY, N.J.
Good morning. Thank you, Andrew [Carey], for that introduction. During the three and a half years we worked together in the US Attorney’s Office, I got to see first-hand your dedication to the fight against violent crime and am delighted to have you as a partner. I want to thank John [Farmer], whom I have known now for more than 20 years. He has had a remarkable career in public service and I am proud to call him a close friend. And thank you to Rutgers – and by that, I mean all of you who work so hard here – for hosting this very important gathering.
Exactly three months ago, on Christmas Day, Zainee Hailey – a 13-year-old girl, an honor student, a cheerleader, a member of her church’s youth choir – took out the garbage and never came back. She was an innocent bystander, shot and killed by a bullet meant for a boy who was only a year or two older than she was.
One Saturday night, in early August, Barry Church was sitting on his front stoop with his son, enjoying a warm summer night. A stray bullet struck him in the side of his chest and killed him. That same night, Carmen Wright was crossing a street in Trenton when she was struck by a car that was out of control because the driver had been shot in the neck and his foot was stuck on the accelerator.
Ten days before Christmas, Dustin Friedland was gunned down in front of his new wife during a carjacking in the parking garage of the Short Hills Mall.
And on a September afternoon, three men in Camden, armed with an AK-47, sprayed 14 rounds across a park toward a housing project and hit a school bus filled with 35 preschoolers.
These stories resonate because they are the tales of the innocent – a young, teenage girl; a newly married husband Christmas shopping; a group of preschoolers on a bus. And even to a public that is used to hearing reports of violence almost every night on the news, hardened because those acts are so frequent, these stories shock us – the acts are so senseless, the consequences so stunning, that they stop us in our tracks. We are here for them.
But, as awful as those crimes are, everyone here knows they are the tip of the iceberg. There were 37 homicides last year in Trenton – a record for that city. There were 111 in Newark – the highest number in a quarter of a century – not to mention the almost 400 carjackings in and around that city, which is a level that exists nowhere else in the country. While some cities like Elizabeth, Atlantic City, and Camden did better than in 2012, Camden’s homicides still numbered 57 – a ridiculously high count for a city of that size. We don’t always – or maybe even often – hear about all of those victims. We are here for them too.
And all across the state – in communities like Asbury Park, Jersey City, Bridgeton and Plainfield – honest, hardworking mothers and fathers – and kids – live every day with an unacceptable level of violence. We are here for them.
Over the last four years, we have brought some very successful cases in federal court, and we will continue to focus relentlessly on the most violent offenders who are causing the most harm and wreaking the most havoc. The Dirty Block case in Atlantic City, the MS-13 case in Plainfield, the Southside Cartel case in Newark are just three examples of major ongoing prosecutions of gangs responsible for serious violence and the drug dealing that fuels it. We have worked with every county prosecutor in this room and with the local police in their jurisdictions to identify the most dangerous criminals in those communities and to try to take them off the streets. We have collaborated with every level of law enforcement – including, of course, Attorney General Hoffman and his office – to meet this challenge, using innovative methods and new ideas to complement old-fashioned police work. I have seen extraordinary things from what we call C-4, our unprecedented fusion center in Camden; from the various VEST (that’s Violent Enterprise Source Target) efforts around the state; and from the other inventive policing strategies you will hear more about today. And I want to thank all of the members of federal, state, county and local law enforcement who have made time to be here today; I am proud of you and their colleagues for your dedication and hard work.
But as talented as they and their colleagues are, and as successful as they’ve been, we all understand that law enforcement, acting alone, is not the answer. As my friend (and my boss), Attorney General Eric Holder, is fond of saying, we will never arrest our way out of this problem. Every great cop or agent, and every experienced prosecutor, knows that we just can’t do our jobs – we can’t win this fight – without the help, support and partnership of the community members we serve. While it is true that the violence is fueled by gangs, drugs and guns, we all recognize that towns with inadequate housing, communities with too few jobs, schools that are underperforming and dangerous and parks that are littered with needles and shell casings are not going to nurture a culture that is safe and secure. We know that there are thousands of law abiding, good people in those communities, aching for streets that they can walk in, schools that are safe and playgrounds where their children can actually play. But to help them reclaim the neighborhoods that they deserve – to give the children of those neighborhoods hope – we need to work with them, and they need to work with us.
This isn’t a new idea – not in New Jersey, and not to federal law enforcement officials. Back in my last tour in the U.S. Attorney’s Office, in the early 1990s, Trenton was the pilot project for a program called Weed and Seed. Funded by the Department of Justice, we developed a real partnership among my office, the State Attorney General, and the City of Trenton. We combined intensive community policing and stepped up drug enforcement in areas around three schools, which stayed open late into the evening so they could function like real community centers. Those neighborhoods were also the focus of extra housing rehabilitation and enhanced cultural activities. We called those schools “Safe Havens” – and we wanted to turn them into exactly that for the people in that community.
While that program is over, the concept – that those of us in law enforcement must seek out those in local government, non-profits, health and religious institutions, schools and treatment centers – the idea that we will achieve more together – that is what today is all about.
Today’s program is designed to emphasize that strategy and some of its pieces. First, we’re going to talk about enforcement strategies around the state – what’s working and what’s not. And I suspect what you’ll hear is that we have been most successful when we share intelligence, work hand-in-hand, and figure out together where each agency can most effectively deploy its resources in combination with everyone else. The goal is to be smart, and nimble, and efficient – making sure that violent and career offenders will continue to receive tough penalties.
There needs to be an emphasis on real community policing. From my days working on Weed and Seed, I know how vital it is for people in a neighborhood to have a real relationship with the cop on the beat. I know my good friend Scott Thompson, the Chief of the Camden County Police Department, will have a few things to say about that.
And we need to constantly think about crime prevention in a comprehensive way. An after school program for at-risk kids is crime prevention. Midnight basketball is crime prevention; and so is drug treatment; and the new inspiring federal reentry court we’re running in Newark. The various ceasefire programs that are being implemented in various forms in Newark, Trenton and Camden are exactly what we should be talking about.
But it’s broader than that too. The Choice Neighborhood grants that HUD gives out to places like Jersey City and Camden are a form of prevention – creating safe, affordable housing, while encouraging stable and responsible residents. And the grants from the Department of Education for Promise Neighborhoods in the Fairmount section of Newark and Cooper Lanning in Camden are targeted at kids in distressed communities who need better opportunities and a guiding hand. And that’s crime prevention.
But let me tell you something you already know: this is hard work. It is hard for law enforcement officers to work long hours investigating homicides and gang activity and to arrest the people responsible, only to have a new group take over and continue the violence.
It is hard for community groups to attract investment into their neighborhoods and clean up parks so their children can have a safe place to play, only to have drug dealers take over those parks and investors leave because a neighborhood is too dangerous.
It is hard, in a time of real fiscal challenge, to find the money to do what we need and accomplish what we want. Layoffs, tight budgets, reduced endowments – all make it that much more difficult to put boots on the ground and shovels in the ground.
And it is hard to break out of our silos, to try to figure out how other organizations work, and to decipher how people from other disciplines think and approach the same problems from different angles. There are personalities to mesh; priorities to work out; money to tussle over; and – yes – other acronyms to learn.
But this work is too important, the mission too critical, and the stakes too high for any of us to be frustrated by those obstacles.
So today, we will – I hope – make some real strides to overcome them. We will talk about ways to engage the people in our communities – to build their trust so that they are willing to help law enforcement identify and remove the worst offenders from their neighborhoods. We will discuss how law enforcement can improve lines of communication with the people, businesses and other institutions we serve so that we can focus our resources on where they can make the biggest difference. We’ll listen while service providers explain what they need from each other to reinforce their respective goals. And we’ll brainstorm about ways in which to come up with money to make it all just a little bit easier to accomplish.
I don’t know everyone here. But the many I do know come to the table, come to this room, come to this fight with energy, with commitment, with passion, with dedication and with insight. And I also know that everyone who is here understands that developing partnerships with other people and organizations – working for the same goals in the same neighborhoods – provides a new richness, diversity and thoughtfulness to our programs, and dramatically improves our chances of success. We can combat these problems so much more effectively by working together. And I am thrilled that so many of you are willing to join us.
Thank you for coming.14-101
New York Doctor Admits Taking Bribes for Referring Tests to New Jersey Clinical LabRead the Press Release
25th Defendant to Plead Guilty in Connection with Scheme
NEWARK, N.J. – A pediatrician with a New York practice in Staten Island and Brooklyn admitted today he accepted bribes in exchange for test referrals as part of a long-running scheme operated by Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, N.J., its president and numerous associates, New Jersey U.S. Attorney Paul J. Fishman announced.Surender Gorukanti, 46, of Brooklyn, pleaded guilty today before U.S. District Judge Stanley R. Chesler in Newark federal court to an information charging him with one count of accepting bribes.
Including Gorukanti, 25 people – including 14 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.Gorukanti admitted he accepted checks of $1,000 per month as bribes from BLS in return for referring patient blood specimens to BLS.
The bribery count to which Gorukanti pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for June 16, 2014. As part of his guilty plea, Gorukanti agreed to forfeit $14,000, representing the bribes he received from BLS.
The investigation has recovered more than $7 million to date through forfeiture.
U.S. Attorney Fishman credited special agents of the New Jersey FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark; U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Thomas O’Donnell; IRS–Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen; and inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, with the ongoing investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Joseph Minish, Senior Litigation Counsel Andrew Leven, and Jacob T. Elberg, Chief of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark, as well as Assistant U.S. Attorney Barbara Ward of the office’s Asset Forfeiture and Money Laundering Unit.
U.S. Attorney Paul J. Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $535 million in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.
14-102Defense counsel: Thomas Tormey Esq., New York
Gorukanti, Surender InformationFormer Senior Vice President of Marketing at A&P Admits Wire FraudRead the Press Release
NEWARK N.J. – The former senior vice president of marketing at A&P, a U.S. supermarket and liquor store chain, today admitted his role in a scheme to defraud A&P by selling for personal gain event tickets that were intended for A&P’s use, U.S. Attorney Paul J. Fishman announced.
John R. Moritz, 44, of Mason, Ohio, pleaded guilty before U.S. District Judge Kevin McNulty to an information charging him with one count of wire fraud.
According to documents filed in this case and statements made in court:
From December 2010 through December 2011, Moritz worked at A&P, a U.S. supermarket and liquor store chain that is headquartered in Montvale, N.J. He arranged for A&P to purchase thousands of tickets to sporting events, concerts and other shows that were to be used to reward high-performing A&P employees and for other legitimate business purposes. However, Moritz resold more than 7,000 tickets to third parties over the internet, without A&P’s knowledge or consent. Some of these tickets were for the 2011 Super Bowl, the 2011 New York Yankees playoffs and Bon Jovi, Lady Gaga and U2 concerts. He admitted that as a result of his conduct, he fraudulently obtained $1,218,192.
The fraud count carries a maximum potential penalty of 20 years in prison and up to a $250,000 fine. Sentencing is scheduled for July 9, 2014.
U.S. Attorney Fishman credited special agents of the FBI in Newark, under the direction of Special Agent in Charge Aaron T. Ford, for the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorneys Lakshmi Srinivasan Herman of the U.S. Attorney’s Office Economic Crimes Unit in Newark and Evan Weitz of the Asset Forfeiture and Money Laundering Unit.
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Defense Counsel: Lawrence S. Feld Esq. and Paul Silverman Esq. New York
Brooklyn, N.Y., Man Admits Traveling to New Jersey to Violently Extort Divorce Consent from Reluctant HusbandRead the Press Release
TRENTON, N.J. - A Brooklyn, N.Y., man admitted today in Trenton federal court to traveling to New Jersey in order to coerce a Jewish man to give his wife a religious divorce – referred to as a “get” – through threats of violence, U.S. Attorney Paul J. Fishman announced.
Simcha Bulmash, 30, pleaded guilty today before U.S. District Judge Freda L. Wolfson to an information charging him with traveling in interstate commerce to commit extortion. His bail conditions include a $500,000 bond and GPS monitoring.
According to documents filed in this case and statements made in court:
On Oct. 9, 2013, Bulmash and a group of conspirators – including Jay Goldstein, 59, Moshe Goldstein, 31, Avrohom Goldstein, 34, David Hellman, 31, Ariel Potash, 40, Binyamin Stimler, 38, and Sholom Shuchat, 29 – traveled from New York to a warehouse in Edison, N.J., with the intent of forcing a Jewish man to give his wife a “get,” a divorce document which, according to Jewish Law, must be presented by a husband to his wife to effect their divorce.
Bulmash admitted that when he arrived at the warehouse, the group met with an individual who, unbeknownst to them, was an undercover FBI agent posing as the husband’s brother in law. Bulmash admitted that they discussed a plan and prepared to confine, restrain and threaten the victim.
The group was then arrested by a team of FBI agents and charged by criminal complaint – along with rabbis Mendel Epstein, 68, and Martin Wolmark, 55 – in connection with the scheme. Hellman pleaded guilty to an information charging him with traveling in interstate commerce to commit extortion on March 6, 2014. Moshe and Avrohom Goldstein pleaded guilty to the same charge on March 11, 2014. The charges against the remaining alleged conspirators remain pending. All of the defendants reside in Brooklyn, except Potash and Wolmark, who live in Monsey, N.Y.
During his guilty plea proceeding, Bulmash also admitted that on Aug. 22, 2011, he and others went to a residence in Brooklyn where they restrained, assaulted and injured a man in an attempt to extort a divorce from him. That conduct will be considered by the court during sentencing, currently scheduled for July 10, 2014.
Bulmash faces a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, for the investigation leading to today’s guilty plea. He also thanked the Lakewood, N.J., Police Department for their role.
The government is represented by Assistant U.S. Attorneys R. Joseph Gribko and Sarah Wolfe of the U.S. Attorney’s Office in Trenton.
The pending charges and allegations against related defendants are merely allegations, and they are considered innocent unless and until proven guilty.
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Defense counsel: Robert C. Gottlieb Esq., New York
Bulmash, Simcha Information
Tax Return Preparer Indicted for Tax Fraud That Caused More Than $1.6 Million LossRead the Press Release
NEWARK, N.J. - A federal grand jury in Newark today returned a nine-count indictment charging a former Bergen County tax return preparer for his alleged role in filing false federal income tax returns and filing false personal returns, U.S. Attorney Paul J. Fishman announced.
Wayne Dunich-Kolb, 49, formerly of Saddle River, N.J., was charged with aiding and assisting in the filing of false federal income tax returns for tax years 2007, 2008, 2009, 2010 and 2011; and with preparing and signing his own false federal income tax returns for tax years 2007, 2008, 2009 and 2010. Dunich-Kolb’s will make his initial court appearance on March 27, 2014, before U.S. Magistrate Judge James B. Clark III.
According to the indictment:
Dunich-Kolb owned and operated a tax preparation business called Dunich-Kolb LLC, which he ran from his residence in Saddle River. He caused many of his clients to form fictitious partnerships or corporations that existed in name only and had no business purpose other than to falsely reduce the clients’ tax liability.
Dunich-Kolb prepared false and fraudulent business returns for clients’ fictitious businesses by fabricating and inflating business expenses, such as advertising, travel and other miscellaneous expenses, in order to generate false and fraudulent business and partnership losses, which he then used to substantially reduce taxpayers’ taxable income on their individual federal income tax returns.
He falsified clients’ 2007, 2008, 2009, 2010 and 2011 individual federal income tax returns by fabricating and inflating deductions for unreimbursed employee business expenses, including home office, vehicle mileage and fuel expenses.
Dunich-Kolb 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 $1.6 million for 10 clients.
Dunich-Kolb also falsified his own personal federal income tax returns for tax years 2007, 2008, 2009 and 2010. For these tax years, Dunich-Kolb’s client invoices reflected that he charged his clients an annual total of approximately $600,000 to $860,000 per year. Dunich-Kolb claimed approximately zero tax due and owing for tax years 2007 and 2008 and tried to obtain refunds for prior year tax payments that he never made, and substantially offset his tax liabilities for tax years 2009 and 2010 by claiming false credits for prior year tax payments that he never made.
Each of the nine tax counts carries a maximum potential penalty of three years in prison and a $250,000 fine.
U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen, with the investigation leading to the indictment.
The charges and allegations in the indictment are merely accusations and the defendant is presumed innocent unless and until proven guilty.
The government is represented by Assistant U.S. Attorney Shirley U. Emehelu of the U.S. Attorney’s Office Economic Crimes Unit.14-100
Defense counsel: TBA
Dunich-Kolb, Wayne Indictment
Three Camden, N.J., Residents Charged in Conspiracy to Steal Checks from Mail and Defraud Banks in New Jersey, Pennsylvania and DelawareRead the Press Release
CAMDEN, N.J. – A woman and two men from Camden were charged today for their alleged participation in a scheme in which they stole business checks from the U.S. Mail in New Jersey, Pennsylvania and Delaware, altered them, and cashed them using a series of conspirators, U.S. Attorney Paul J. Fishman announced.
Ivory Vernon, 29, was arrested today by Camden County Sheriff’s officers on unrelated charges. She is being charged federally in a 10-count indictment that was unsealed today with bank fraud and conspiracy to commit bank fraud.
The indictment also charges Joseph Reevey, 38, with bank fraud and conspiracy to commit bank fraud; and Ibn Muhammad, 35, with bank fraud, conspiracy to commit bank fraud, and illegal possession of a firearm. Vernon, Reevey, who is in Pennsylvania state custody, and Muhammad, who is in federal custody, are all scheduled to appear before U.S. District Judge Jerome B. Simandle in Camden federal court on April 9, 2014.
According to indictment unsealed today:
From Aug. 6, 2012, through Aug. 1, 2013, Muhammad, Reevey, Vernon and others stole checks from curbside U.S. mailboxes in business industrial parks in New Jersey, Pennsylvania, and Delaware. Reevey and his conspirators would then recruit others to cash the stolen checks. Muhammad and other conspirators would alter the stolen checks so that the name of the “payee” would match the name of the recruited check casher. Reevey, Vernon, Warner and others would travel with the recruited check cashers to a bank, often in rented cars.
Muhammad, Reevey, Vernon and their conspirators cashed or attempted to cash more than 45 stolen and altered business checks worth more than $200,000. The scheme resulted in a total loss of more than $100,000 to the victim banks.Muhammad’s illegal gun possession charge stems from the discovery of a Smith & Wesson revolver and a Browning pistol at his Camden residence when law enforcement authorities executed a search warrant in May of 2013.
On the counts of bank fraud and conspiracy to commit bank fraud, Muhammad, Reevey, and Vernon each face a maximum potential penalty of 30 years in prison and a fine of $1 million, or twice the gross gain or loss resulting from the offense. On the count of illegal possession of a gun, Muhammad faces a maximum potential penalty of 10 years in prison and a fine of $250,000.
U.S. Attorney Fishman credited special agents from the U.S. Postal Inspection Service, Philadelphia Division, under the direction of Inspector in Charge David Bosch; troopers from the N.J. State Police, under the direction of Col. Rick Fuentes; special agents from the Bureau of Alcohol Tobacco, Firearms, and Explosives under the leadership of Acting Special Agent in Charge George Belsky, and officers from the Gloucester Township and Pennsauken Township police departments for the investigation leading to today's arrest.
The government is represented by Assistant U.S. Attorney Matthew T. Smith of the U.S. Attorney’s Office Criminal Division in Camden.
The charges and allegations contained in indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
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Defense counsel:
Muhammad: Lisa Lewis Esq., Camden, N.J.
Reevey: Edward Crisonino Esq., Westmont, N.J.
Vernon: Brian O’Malley Esq., Haddon Heights, N.J.Muhammad, et al., Indictment
Member of Massive Counterfeit Goods Conspiracy Sentenced to 38 Months in PrisonRead the Press Release
NEWARK, N.J. – A member of a massive, international counterfeit goods conspiracy was sentenced today to 38 months in prison for his role in the scheme, U.S. Attorney Paul J. Fishman announced.
Ning Guo, 40, of the People’s Republic of China, previously pleaded guilty before U.S. District Judge Esther Salas to an information charging him with one count of conspiracy to traffic in counterfeit goods and one count of money laundering conspiracy. Judge Salas imposed the sentence today in Newark federal court.
Two other conspirators have already been sentenced, and two await sentencing. Yi Jian Chen, 53, and Hui Huang, 33, both of Brooklyn, each previously pleaded guilty to one count of conspiracy to traffic in counterfeit goods and await sentencing. Jian Zhi Mo, 45, of Flushing, N.Y. and Yuan Feng Lai, 28, of New York City, each previously pleaded guilty to one count of conspiracy to traffic in counterfeit goods and were each sentenced to 14 months of home confinement.
According to documents filed in this case and statements made in Court:
From August 2008 through February 2012, the defendants ran an international counterfeit goods smuggling and distribution conspiracy. The defendants and others imported more than 35 containers of counterfeit goods – primarily cigarettes, handbags, and sneakers – into the United States from China. These goods, if legitimate, would have had a retail value of more than $300 million.
The conspirators sought help in importing counterfeit goods into the United States and used a corporation to import the goods through Port Newark-Elizabeth Marine Terminal in Elizabeth, N.J. This corporation was actually a front company set up by law enforcement to act as an importer. The conspirators imported the counterfeit goods using fraudulent customs paperwork, which, among other things, falsely declared the goods within the containers.
Certain conspirators controlled the importation of the counterfeit goods into the United States. Some conspirators managed the distribution of counterfeit goods once they arrived in the United States. Others paid individuals they believed controlled an importation company with connections at the port. In fact, these individuals were undercover law enforcement agents.
Some conspirators acted as wholesalers for the counterfeit goods, supplying retailers who sold counterfeit goods to customers in the United States. A number of conspirators, including Guo, also engaged in a money laundering conspiracy to disguise and conceal the source of what they believed to be the profits of certain unlawful activity, moving this money through banks in the United States, China, and elsewhere, to disguise the sources of the funds.
Law enforcement introduced several undercover special agents to the conspirators. These undercover agents purported to have connections at the port, which allowed them to obtain containers that were on hold, get them released and pass them through to the conspirators. The conspirators paid the undercover agents more than $900,000 for these “services.”Undercover agents 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.
Guo’s primary role was to transport and store imported counterfeit merchandise for the conspirators after it arrived at the port. He was also involved in the actual importation of the goods from China. Guo communicated with the undercover agents in numerous recorded calls and meetings about importing counterfeit goods from China and clearing the goods through customs. Guo was also involved in an international money laundering scheme through which he and others laundered the proceeds of the counterfeit goods smuggling scheme.
In addition to the prison term, Guo is subject to deportation.
U.S. Attorney Fishman praised special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, and special agents of Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), under the direction of Special Agent in Charge Andrew M. McLees, 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.
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Defense counsel: Richard Willstater Esq., White Plains, N.Y.Pennsylvania Man Charged with Running A Prostitution BusinessRead the Press Release
NEWARK, N.J. – An Allentown, Pa., man previously charged with sex trafficking of a minor was indicted today on additional charges of conspiracy to use an interstate facility in aid of prostitution business, transportation of a minor to engage in prostitution, coercion and enticement to engage in prostitution, and obstruction, U.S. Attorney Paul J. Fishman announced.
The 10-count superseding indictment returned by a federal grand jury against Francisco Torrellas, a/k/a “Francisco Fordham Jr.,” “Dream,” “Daddy,” and “Pretty,” includes one count of conspiracy in connection with the defendant’s operation of a prostitution business; five counts of violating the Travel Act, i.e., using an interstate facility to carry on his prostitution business; one count of transporting a minor to engage in prostitution; one count of coercion and enticement to engage in prostitution; and one count of obstruction of justice. The original count of sex trafficking of a minor on which the defendant was indicted on June 27, 2012, remains in place.
According to the superseding indictment and other documents filed in court:
From November 2010 to February 2013, Torrellas allegedly conspired with others to operate a prostitution business in New Jersey, Pennsylvania and elsewhere. Torrellas managed the business, traveled, and caused prostitute employees, including a minor, to travel interstate for the purpose of engaging in sex acts in exchange for money.
Torrellas used the Internet to post advertisements for sexual services on the website Backpage.com. Torrellas also developed rules for the prostitutes, booked hotel rooms, and, while incarcerated, used the phone to manage, promote, and carry on his prostitution business, specifically causing his conspirators and others to direct the proceeds of the business to his commissary account at the Essex County Correctional Facility. Torrellas also attempted to influence, delay or prevent the testimony of another person or persons in connection with the case against him.
The conspiracy count carries a maximum potential penalty of five years in prison. The Travel Act counts each carry a maximum potential penalty of five years in prison. The counts relating to trafficking and transportation of a minor carry a mandatory minimum penalty of ten years in prison and a maximum penalty of life imprisonment. The count relating to coercion and enticement to engage in prostitution carries a maximum potential penalty of 20 years in prison and the count charging obstruction of justice carries the maximum term that could have been imposed for the offenses charged. The defendant also faces a fine of $250,000 or twice the amount of the gain or loss from the offense for each count of conviction.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; and the Secaucus, Jersey City, and the Allentown, Pa., police departments with the investigation leading to today’s superseding indictment.
The government is represented by Assistant U.S. Attorneys Danielle Corcione and Jenny Kramer of the U.S. Attorney’s Office Criminal Division in Newark.The charges and allegations contained in the superseding indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
14-097Defense counsel: Michael N. Pedicini Esq., Chatham, N.J.
Torrellas, Francisco SIndictment
Newark, N.J., Man Sentenced to 114 Months in Prison for His Role in Armed Robbery and Shooting of Retired Police OfficerRead the Press Release
TRENTON, N.J. — A Newark, N.J., man was sentenced today to 114 months in prison for his role in an armed robbery and shooting of a retired police officer working as an armed money courier, U.S. Attorney Paul J. Fishman announced.
Theodore Lada, 40, previously pleaded guilty before U.S. District Judge Peter G. Sheridan to an information charging him with conspiracy to commit Hobbs Act robbery and Hobbs Act robbery. Judge Sheridan imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:
On May 19, 2011, Lada and James Sodano, 70, of West Orange, N.J., confronted a retired police officer working as an armed money courier for a check cashing service as he was delivering a bag containing $400,000 to a Newark bar. As he exited his car, Lada approached him and the two men exchanged gunfire. The courier fell to his knees and Lada fled.
Sodano approached the courier from behind, shooting him in the jaw. As the victim fell, he fired a shot, hitting Sodano in the leg. Sodano shot him again, hitting the victim in the arm. Sodano then pulled the bag of money from beneath the victim as he was lying face down on the ground. Sodano drove off in his car, but crashed three and a half blocks away. When police arrived, they found Sodano, wearing a bulletproof vest and a pair of gloves, slipping in and out of consciousness, still holding on to the steering wheel. Police found a pool of blood, several weapons, ammunition and the bag containing the $400,000 inside the car. Lada was apprehended nine months later after DNA evidence connected him to the crime scene.
In addition to the prison term, Judge Sheridan sentenced Lada to three years of supervised release and ordered him to pay $375,551.56 in restitution to the victim.
Following a two-and-a-half week trial, a jury convicted Sodano on April 2, 2013, on all three counts charged in the indictment: conspiracy to commit Hobbs Act robbery; Hobbs Act robbery; and possessing, carrying and using a firearm, which was discharged in connection with the robbery. Sodano was sentenced to a total of 468 months in prison and five years of supervised release. He was also ordered to pay $375,551.56 in restitution to the victim.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, for the investigation leading to today’s sentence. He also thanked the Essex County Prosecutor’s Office and the Newark Police Department, for their roles in the case.
The government is represented by Assistant U.S. Attorney Dara Aquila Govan of the U.S. Attorney’s Office Organized Crime/Gangs Unit in Newark.
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Defense counsel: Olubukola O. Adetula Esq., Irvington, N.J.
Law Clerk, Stock Broker Charged in New Jersey with Trading on Inside Information Stolen from Prominent New York Law FirmRead the Press Release
More than $33 Million in Alleged Illegal Trades Netted $5.6 Million Over Four-Year Scheme
NEWARK, N.J. - The managing clerk of the New York office of Simpson Thacher & Bartlett LLP – a prominent, international law firm – and a professional stock broker who worked at Oppenheimer & Co. and Morgan Stanley were arrested today and charged with participating in a multi-year insider trading scheme that allegedly netted more than $5.6 million in illicit profits, New Jersey U.S. Attorney Paul J. Fishman announced.
Steven Metro, 40, of Katonah, N.Y., and Vladimir Eydelman, 42, of Colts Neck, N.J., are both charged by complaint with one count of conspiracy to commit securities fraud and tender offer fraud, as well as multiple counts of securities fraud and tender offer fraud: Metro is charged with nine counts of securities fraud; Eydelman is charged with eight counts of securities fraud; and each defendant is charged with four counts of tender offer fraud. FBI agents arrested Metro in Katonah and Eydelman in Colts Neck this morning. Both men are scheduled to appear this afternoon before U.S. Magistrate Judge Madeline Cox Arleo in Newark federal court.
“These defendants are charged with using confidential information that Metro stole from his employer to reap huge illegal profits,” U.S. Attorney Fishman said. “They allegedly rigged the system by exploiting sensitive information that was not available to other investors. This kind of activity undermines the integrity of our financial markets and weakens investor confidence.”
“As alleged in the complaint, Metro, Eydelman and another engaged in a lengthy insider trading scheme that reaped more than five million in illicit profits,” said FBI Special Agent in Charge Aaron T. Ford. “The FBI is committed to investigating allegations of insider trading and will hold violators accountable to ensure the integrity of the financial markets. We will continue to work with our partners to identify securities fraud so investors maintain a high level of confidence in the markets.”
According to the complaint unsealed today:
Metro, Eydelman, and a third person who subsequently became a cooperating witness – referred to in court documents as “the CW” – engaged in an insider trading scheme that began in 2009. The conspirators invested more than $33 million and reaped more than $5.6 million in illicit profits over the life of the scheme.
Starting in November 1999, Metro worked at the New York office of Simpson Thacher & Bartlett LLP, one of the nation’s premier mergers and acquisitions law firms. During the period of the trading scheme, he was the firm’s managing clerk, responsible for, among other things, filing pleadings on behalf of attorneys. Eydelman was a broker-dealer employed first at Oppenheimer & Co. and most recently by Morgan Stanley, both renowned investment firms.
While at the law firm, Metro repeatedly obtained inside information regarding anticipated corporate mergers and acquisitions on which his firm was working. He disclosed the material, nonpublic information to his friend, the CW. Metro would arrange to meet the CW in person and would disclose inside information, including the stock exchange ticker symbol of the company in which to invest, and the pricing and/or timing of the planned transaction. The CW would write the information on a small piece of paper or napkin.
The CW would then meet with Eydelman, usually the same day, to divulge the stolen information. These meetings usually occurred at an agreed-upon location near the large clock in New York City’s Grand Central Terminal. The CW would show Eydelman the paper or napkin on which the CW had written the ticker symbol of the company whose securities should be purchased. After Eydelman memorized the ticker symbol, the CW then would place the paper or napkin into his mouth and chew it until it was destroyed.
Eydelman purchased securities for himself, family members, friends and clients, including the CW. Eydelman quickly sold the shares and covered any options positions once the relevant deal was publicly announced and the stock price rose.
Over the four-year period, the CW reinvested approximately $7,000 in profits that Metro made on the first deal, and updated Metro on the running balance of his profits from the insider trading scheme. As of October 2013, by which time the conspirators had traded ahead of at least 13 planned corporate transactions, Metro’s share of the profits had reached approximately $168,000.
The complaint specifically identifies the 12 transactions and one uncompleted transaction ahead of which Eydelman, Metro, and the CW traded between February 2009 and February 2013 – as outlined in an appended chart.
The complaint also details a number of recorded meetings among the conspirators. During the course of one meeting with the CW on Jan. 28, 2014, Metro expressed his desire to cash out his share of the illicit profits. Metro stated to the CW, “You gotta try to liberate some cash, somewhere, or I’m going to be freakin’ flat out.” Metro also promised to let the CW know of any planned M&A deals that he came across in the future, stating that although “Right now it’s all been private equity, private equity...I think this year, it’s going to be a good year[.]”
In a meeting on Feb. 6, 2014, Eydelman indicated he would be willing to pay a portion of the cash proceeds owed to Metro. Eydelman stated, “I got seven [thousand]….That’s all I can do, without [my wife] knowing.”
Eydelman came through with the $7,000 in cash for the CW to use to compensate Metro for tipping them inside information. During a recorded meeting with the CW on Feb. 20, 2014, Eydelman handed the CW a small plastic shopping bag with a cigar manufacturer’s logo on it, stating, “Take these cigars, put it to good use.” Eydelman enclosed $7,000 in cash in the cigar bag he handed to the CW.
The conspirators attempted to hide their illegal conduct. In addition to the CW destroying pieces of paper on which he wrote the ticker symbols provided by Metro, Eydelman sent the CW “covering” emails that contained false justifications designed to suggest that their trades in the subject securities were based on research, not inside information.
While Metro relied on the CW to reinvest his illicit profits on his behalf, Eydelman realized substantial personal profits on an ongoing basis from the insider trading scheme and used these unlawful proceeds to purchase a new 2011 Maserati Grand Turismo for $117,700 and to spend tens of thousands of dollars on expensive jewelry. Eydelman also used illicit proceeds to purchase his residence and to pay the mortgage on the property.
The conspiracy count with which Metro and Eydelman are each charged carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the aggregate loss to victims or gain to the defendants. On the substantive securities fraud and tender offer fraud charges, they each face a maximum of 20 years in prison and a $5 million fine. The complaint also seeks the forfeiture of Eydelman’s residence.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, for the investigation leading to today’s arrests and complaint. He also thanked the U.S. Securities and Exchange Commission’s Market Abuse Unit, under the direction of Daniel Hawke. He also thanked the New York FBI, under the direction of Assistant Director in Charge George C. Venizelos, for assistance with the investigation.
The government is represented by Assistant U.S. Attorneys Shirley U. Emehelu of the Economic Crimes Unit of the U.S. Attorney’s Office in Newark, and Joseph R. Gribko of the U.S. Attorney’s Office in Trenton, as well as Marion Percell, Chief of the of the Office’s Asset Forfeiture and Money Laundering Unit.
The charges and allegations contained in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
These charges are 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.14-093
Defense counsel:
Metro: TBA
Vladimir Eydelman: William Silverman Esq., New York
Alleged Insider TradesAPPROX. DATE(S) OF PURCHASES
ANNOUNCEMENT DATE
SECURITY
APPROX. ILLICIT PROFIT
2/17/2009
Sirius XM Radio
$212,814
12/29/2009-1/15/2010
1/18/2010
Brinks Home Security
$773,154
7/8/2010-7/15/2010
7/15/2010
Smithtown Bancorp
$29,010
10/20/2010-10/29/2010
11/1/2010
CNA Surety Corporation
$241,141
4/11/2011-4/12/2011
4/13/2011
Graham Packing Company Inc.
$105,964
1/31/2011-4/19/2011
4/26/2011
SMART Modular Technologies
$1,575,382
4/4/2011-4/21/2011
4/27/2011
Vital Images, Inc.
$39,233
4/29/2011
5/2/2011
International Coal Group, Inc.
$231,276
6/21/2011-8/22/2011
8/23/2011
PharMerica Corp.
$1,517,092
4/16/2012-4/20/2012
5/1/2012
Collective Brands, Inc.
$360,775
5/14/2012-10/1/2012
N/A
“Company A”
N/A
9/20/2012-9/25/2012
9/27/2012
Sealy Corporation
$14,509
1/31/2013-2/15/2013
2/20/2013
Officemax Inc.
$573,332
APPROX. TOTAL ILLICIT PROFITS
$5,673,682
Metro, Steven, and Eydelman, Vladimir Complaint
Bergen County, N.J., Man Pleads Guilty to Making False Report of Kidnapping to U.S. EmbassyRead the Press Release
NEWARK, N.J. — A Bergen County, N.J., man today admitted using the Internet and social media to fabricate a fictitious high school girl, using that fake personality to engage in an online relationship with a teenage male, and then making a false report to a U.S. Embassy that the girl was kidnapped, U.S. Attorney Paul J. Fishman announced.
Andriy Mykhaylivskyy, a/k/a “Andriy Haddad,” 19, of Rutherford, N.J., pleaded guilty today before U.S. District Judge Claire C. Cecchi in Newark federal court to an information charging him with making false statements in a matter within the jurisdiction of the executive branch of the U.S. government.
According to documents filed in this case and statements made in court:
Mykhaylivskyy admitted he used Facebook, Twitter, Skype, text messages, and other electronic means to create a fake online identity for a teenage girl he called “Kate Fulton.” He pretended to be Kate Fulton while he initiated and maintained an electronic relationship with “Individual One,” a then18-year-old New Jersey resident.
On July 2, 2013, Mykhaylivskyy called the U.S. Embassy in Chisinau, Moldova, and reported the false kidnapping of Kate Fulton. Mykhaylivskyy also admitted that he both personally, and as Kate Fulton, informed Individual One that Kate Fulton had been kidnapped. On July 8, 2013, Individual One called the U.S. Embassy in Sofia, Bulgaria, seeking assistance regarding the kidnapping of Kate Fulton, who was allegedly kidnapped while vacationing in Burgas, Bulgaria.
Mykhaylivskyy also admitted to sending tweets from Kate Fulton on June 29, 2013, after she was allegedly kidnapped, including one that read “Someone help me.” During his plea hearing, Mykhaylivskyy acknowledged that he knew at all times that Kate Fulton was not a real person and had not been kidnapped.
Mykhaylivskyy admitted one instance of obstruction of justice. During his August 27, 2013, initial appearance in Newark federal court, he was told not to have contact with witnesses. However, upon arriving at jail later that day, he called and spoke to Individual One and told him Kate Fulton had been arrested in California. During the call, Mykhaylivskyy arranged to meet Individual One in person and asked him to delete both Mykhaylivskyy’s and Kate Fulton’s personal Facebook and Twitter accounts.
The charge to which Mykhaylivskyy pleaded guilty is punishable by a maximum of five years in prison and a statutory maximum fine of $250,000. Sentencing is scheduled for June 25, 2014.
U.S. Attorney Fishman credited the U.S. Department of State’s Diplomatic Security Service (DSS) Office of Protective Intelligence Investigations and DS agents assigned to the DSS New York Field Office for their assistance in the investigation leading to today’s guilty plea. He also thanked members of the FBI Newark Joint Terrorism Task Force for their assistance in the investigation.
The government is represented by Assistant U.S. Attorney Sara F. Merin of the U.S. Attorney’s Office General Crimes Unit in Newark.
14-095Defense counsel: Candace Hom, Assistant Federal Public Defender, Newark
Mykhaylivskyy Information
Newark Man Sentenced to 57 Months in Prison for Scheme to Steal Checks from MailRead the Press Release
Deposited Hundreds of Thousands of Dollars into Personal Accounts
NEWARK, N.J. - A Newark man was sentenced today to 57 months in prison for his role in a scheme to steal personal checks from the U.S. Mail and fraudulently endorse and deposit them into personal checking accounts, U.S. Attorney Paul J. Fishman announced.Karron Hinton-Lovelace, 28, previously pleaded guilty before U.S. District Judge Kevin McNulty to an information charging him with one count of conspiracy to commit bank fraud. Judge McNulty imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Hinton-Lovelace and his conspirators stole blank checks that were sent via U.S. Mail to 122 unsuspecting victims. The defendants fraudulently endorsed the blank checks for a certain sum and deposited those checks into legitimate bank accounts that they opened at the victim banks, which included TD Bank, Bank of America, Capital One Bank, Garden State Community Bank, Hudson City Savings Bank, PNC Bank and Valley National Bank. Before the victims discovered the checks were stolen or the banks discovered the checks were fraudulent, Hinton-Lovelace and his co-conspirators had withdrawn the funds, either via ATMs or by entering the banks and filling out withdrawal slips. U.S. Postal Inspection Service and FBI agents obtained bank video surveillance, which captured many of the fraudulent deposits and withdrawals.
Hinton-Lovelace and his conspirators deposited $1,478,695 in fraudulent checks into y 258 different bank accounts. Their conduct resulted in a $648,194 loss.
In addition to the prison term, Judge McNulty sentenced Hinton-Lovelace to five years of supervised release. As part of his plea agreement, Hinton-Lovelace agreed to pay $648,194 in restitution to the victims.
Several of Hinton-Lovelace’s conspirators have pleaded guilty to conspiracy to commit bank fraud and been sentenced to prison terms for their roles in the scheme. Four defendants were sentenced in April 2013. Constance Bowles, 23, of Newark, was sentenced to 6 months in prison and six months in a halfway house. Garnet Hinton, 24, Union, and Keonnah McLean, 24, Newark, were each sentenced to 23 months in prison. Martell Arline, 23, of Newark, was sentenced to 36 months in prison.
Kurtis Steele, 27, of Irvington, was sentenced to 46 months in prison on May 29, 2013, and Guy Hicks, 51, of Newark, was sentenced to 36 months in prison on Oct. 9, 2013.
U.S. Attorney Fishman credited special agents of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates; and special agents of the FBI under the direction of Special Agent in Charge Aaron T. Ford, for the investigation leading to today’s sentence.
The government is represented by Assistant U.S. Attorney Dara Aquila Govan of the Organized Crime/Gangs Unit in Newark.
14-092
Defense counsel: John Yauch Esq., Assistant Federal Public Defender, NewarkUnion County, N.J., Woman Sentenced to 70 Months in Prison for Fraud Leading to Theft of $7 Million in Charity HIV and Cancer MedicationRead the Press Release
Medicines had been donated to be used for indigent patients
TRENTON, N.J. – A Union County, N.J., woman was sentenced today to 70 months in prison for her role in defrauding a charity program out of more than $7 million in donated HIV and cancer medication by using her access to a company hired to administer the program, U.S. Attorney Paul J. Fishman announced.
Lateefah McKenzie Body, 35, of Linden, N.J., was previously convicted of one count of conspiracy to commit mail fraud and nine counts of mail fraud following a two-week trial before U.S. District Judge Mary L. Cooper, who imposed the sentence today in Trenton federal court.
Another conspirator, Keisha Jackson, 47, of Perth Amboy, N.J., pleaded guilty to conspiracy to commit bank fraud and was sentenced on Dec. 20, 2013, to 51 months in prison.
According to documents filed in this case and the evidence at trial:
A pharmaceutical company donated millions of dollars’ worth of FDA-approved prescription medicines – including for the treatment of HIV and cancer – at no cost to qualified patients experiencing financial difficulties. Jackson, Bryant, and McKenzie Body were all, at various times, employed as customer service representatives at a corporation hired to provide administrative support in operating the donated medicines program. They were responsible for receiving applications for the program, entering the applications into the computer system, and using the computer system to cause the donated medicines to be delivered to the physicians of patients who met certain eligibility criteria, including financial status.
As part of the scheme, McKenzie Body entered approximately 600 fraudulent orders into the company’s system, causing medicines to be delivered to Jackson’s home and other addresses controlled by those involved in the scheme. After McKenzie Body was terminated from the company for unrelated reasons, McKenzie Body enlisted Bryant to take over entering fraudulent orders. Bryant agreed, and entered approximately 950 fraudulent orders, again causing medicines, which could then be resold at a profit, to be delivered to Jackson’s home and other addresses controlled by those involved in the scheme.
In addition to the prison term, Judge Cooper sentenced McKenzie Body to serve three years of supervised release.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorneys Andrew Leven of the Healthcare and Government Fraud Unit and Danielle Corcione of the General Crimes Unit in Newark.14-091
Defense Counsel: James Patton Esq., Livingston, N.J.Three Indicted on Fraud and ID Theft Charges in Multimillion-Dollar International Cybercrime SchemeRead the Press Release
Organization Allegedly Capitalized on Information Hacked
From The Customers of More Than a Dozen Global Financial InstitutionsNEWARK, N.J. – Three alleged members of an international cybercrime, money laundering and identity theft conspiracy were charged in New Jersey today with a scheme to use information hacked from customer accounts held at more than a dozen banks, brokerage firms, payroll processing companies and government agencies in an attempt to steal at least $15 million from American customers, U.S. Attorney Paul J. Fishman announced.
The three defendants – Oleksiy Sharapka, 33, and Leonid Yanovitsky, 39, both of Kiev, Ukraine; and Richard Gundersen, 47, of Brooklyn, N.Y., were indicted by a federal grand jury on charges of conspiracy to commit wire fraud, conspiracy to commit access device fraud and identity theft, and with aggravated identity theft.
According to the Indictment and other documents filed in the case:
Sharapka allegedly directed the conspiracy with the help of Yanovitsky. Gunderson allegedly facilitated the movement of fraud proceeds. Sharapka and Yanovitsky are fugitives. Gundersen will be arraigned on the new charges on a date to be determined.
Conspiring hackers gained unauthorized access to the bank accounts of customers of more than a dozen global financial institutions and businesses, including: Aon Hewitt; Automatic Data Processing Inc.; Citibank N.A.; E-Trade; Electronic Payments Inc.; Fundtech Holdings LLC, iPayment Inc.; JP Morgan Chase Bank N.A.; Nordstrom Bank; PayPal; TD Ameritrade; U.S. Department of Defense, Defense Finance and Accounting Service; TIAA-CREF; USAA; and Veracity Payment Solutions Inc.
After obtaining unauthorized access to the bank accounts, the defendants and conspirators diverted money from them to bank accounts and pre-paid debit cards the defendants controlled. They then implemented a sophisticated “cash out” operation, employing crews of individuals known as “cashers” to withdraw the stolen funds, among other ways, by making ATM withdrawals and fraudulent purchases in New York, Massachusetts, Illinois, Georgia and elsewhere.
As part of the scheme, the defendants stole identities from individuals in the United States, which they used to facilitate the cash out operation, including by transferring money to cards in the names of those stolen identities. They also used some of those identities to file fraudulent tax returns with the IRS seeking refunds.
The defendants and their conspirators laundered the proceeds of the scheme, often through international wire transfer services, to the leaders of the conspiracy overseas.
The government’s ongoing investigation into the organization has so far identified attempts to defraud the victim companies and their customers of more than $15 million.
If convicted, each of the defendants face a maximum potential penalty of 20 years in prison on the conspiracy to commit wire fraud count, five years in prison on the conspiracy to commit access device fraud and identity theft count, and a consecutive term of two years in prison on the aggravated identity theft counts. The wire fraud and identity theft counts also carry a maximum fine of $250,000, or twice the gross amount of pecuniary gain or loss resulting from the offenses. The money laundering conspiracy count carries a maximum fine of $500,000, or twice the value of the monetary instruments involved.
U.S. Attorney Fishman credited the U.S. Secret Service, under the direction of Special Agent in Charge James Mottola; U.S Immigration and Customs Enforcement/Homeland Security Investigations, under the direction of Special Agent in Charge Andrew M. McLees; Department of Defense, Criminal Investigative Service, under the direction of Special Agent in Charge Jeffery D. Thorpe; and IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen, with the ongoing investigation.
The government is represented by Assistant U.S. Attorney Gurbir S. Grewal, Chief of the U.S. Attorney’s Office Economic Crimes Unit.
The charges and allegations contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.
14-090
Defense counsel:
Gundersen: Cynthia H. Hardaway Esq., NewarkSharapka et al. Indictment
Three People Admit Roles in Extensive Tax Refund Check ScamRead the Press Release
NEWARK, N.J. — A Bronx, N.Y., man today admitted his role in conspiring to steal government funds through his involvement in an extensive scheme to fraudulently obtain income tax refund checks issued by the United States, U.S. Attorney Paul J. Fishman announced.
Luis Pena, 31, was the third member of the conspiracy to plead guilty this week; Gloria Rivera, 43, of Bronx, also pleaded guilty today and Lourdes Ortiz, 41, of Bronx, pleaded guilty March 10, 2014. Each defendant pleaded guilty before U.S. Magistrate Judge Michael A. Hammer in Newark federal court to separate informations charging them with conspiracy to commit theft of government property.
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.
- Participants complete Individual Income Tax Return 1040 Forms using the fraudulently obtained information, falsifying wages earned, taxes withheld and other data and always ensuring the fraudulent form generates a tax refund check from the U.S. Treasury.
- They direct the U.S. Treasury Department to mail the fraudulently obtained checks to locations the perpetrators control or can access. In some cases, SIRF perpetrators bribe mail carriers to remove the checks from their mail routes.
- With the checks in hand, they generate cash proceeds by depositing the Fraudulent Treasury Checks into bank accounts that they control.
According to documents filed in these cases and statements made in court:
Pena, Rivera, and Ortiz, each admitted that they knew that the U.S. Treasury checks involved in the conspiracy had been generated by conspirators filing false and fraudulent income tax returns with the IRS in order to obtain refunds to which they were not entitled. All three stated that they knew that the tax refund scheme was intended to, and did, defraud the IRS and the U.S. Treasury. At the time of the conspiracy, Rivera and Ortiz were employed as mail carriers by the U.S. Postal Service.
In 2011, Pena approached Rivera and arranged to direct fraudulent tax refund checks to Rivera’s mail route and have those checks intercepted and retrieved by Rivera in exchange for a cash payment to Rivera of at least $400 per check. After directing the checks to Rivera’s mail route, Pena provided Rivera with identifying information for the fraudulent treasury tax refund checks that he directed to her mail route.
Rivera, however, became unable to work due to illness in September 2011 and was replaced by mail carrier Ortiz on the Flushing, Queens, N.Y., mail route. Rivera approached Ortiz and asked Ortiz to intercept the fraudulent checks in exchange for approximately $200 per fraudulent check. Ortiz agreed.
Using the information provided by Pena, from September 2011 through May 2012, Rivera – or Ortiz on Rivera’s behalf – intercepted from the Flushing mail route the fraudulent checks that corresponded to the information given to Rivera by Pena. In exchange for the intercepted checks, Pena gave Rivera cash payments, which Rivera passed along – in part – to Ortiz.
The fraudulently obtained tax refund checks stolen by Pena, Ortiz, and Rivera totaled $336,647.
Once the stolen checks were returned to Pena, he passed the checks on to other conspirators, many of whom were in Newark, N.J. They cashed the checks, primarily by using bank accounts controlled by conspirators.
The charge to which the defendants pleaded guilty carries a maximum penalty of five years in prison and a fine of up to $250,000, or twice the gross amount of any pecuniary gain or loss. Sentencing for Ortiz is scheduled for July 7, 2014; for Rivera, July 8, 2014, and for Pena, July 9, 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; special agents of the U.S. Postal Inspection Services, under the direction of Inspector in Charge Maria Kelokates; special agents of the U.S. Secret Service, under the direction of Special Agent in Charge James Mottola; and special agents of the U.S. Postal Service - Office of the Inspector General, under the direction of Special Agent in Charge Rafael Medina.
The government is represented by Assistant U.S. Attorney Sara F. Merin of the U.S. Attorney’s Office General Crimes Unit in Newark.
14-089
Defense counsel:
Ortiz: Olubukola Adetula Esq., Irvington, N.J.
Rivera: Elizabeth Smith, Esq., Mendham, N.J.
Pena: Patrick Brackley Esq., New YorkPena Information
Ortiz Information
Rivera Information- 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.
Brooklyn, N.Y., Woman Sentenced to More Than 21 Years in Prison for Shipment of More Than $2.5 Million Worth of Stolen Luxury Vehicles to AfricaRead the Press Release
CAMDEN, N.J. – A Brooklyn, N.Y., woman was sentenced today to 262 months in prison for her role as the leader of a ring responsible for shipping dozens of stolen and carjacked luxury cars and SUVs worth more than $2.5 million from New Jersey to Africa, U.S. Attorney Paul J. Fishman announced.
Hope K. Kantete, 44, was convicted on June 28, 2013, of 10 counts of transportation of stolen vehicles in interstate or foreign commerce and a single count of conspiracy to transport stolen vehicles in interstate or foreign commerce. Kantete was convicted after a three-week trial before U.S. District Judge Robert J. Kugler, who imposed the sentence today in Camden federal court.
According to documents filed in this case and the evidence presented at trial:
The stolen car exportation ring was investigated by a multi-agency task force led by the U.S. Immigration and Customs Enforcement/Homeland Security Investigations (HSI). The investigation revealed that Kantete employed other individuals who were responsible for purchasing stolen and carjacked vehicles from thieves operating in northern New Jersey and New York. Kantete then had individuals “re-tag,” or place new vehicle identification numbers, on the stolen cars and create fraudulent title documents so that the cars could be shipped out of the country. After the documents were created, Kantete arranged to have the cars loaded onto shipping containers and sent to ports in West Africa. The cars could be re-sold in West Africa for at least twice their retail value in the United States.
In addition to the prison term, Judge Kugler sentenced Kantete to three years of supervised release and ordered her to pay restitution of $346,937, based on a loss estimated at $2.5 million to $7 million.
U.S. Attorney Fishman credited special agents of HSI, under the leadership of Executive Associate Director James Dinkins and Special Agent in Charge Andrew M. McLees; and the N.J. State Police, under the direction of Superintendent Col. Rick Fuentes, for the investigation leading to today’s sentencing. He also thanked U.S. Customs and Border Protection; the Waterfront Commission of New York Harbor; Acting Essex County Prosecutor Carolyn Murray, Middlesex County Prosecutor Andrew Carey, Acting Hudson County ProsecutorGaetano T. Gregory, and Acting Union County Prosecutor Grace H. Park, the Essex and Hudson County Sheriff’s Departments, the Newark Police Department, the U.S. Coast Guard Investigative Service and the Port Authority of New York and New Jersey for their roles.
The government is represented by Assistant U.S. Attorney José R. Almonte and James M. Donnelly of the U.S. Attorney’s Office Criminal Division in Newark.14-088
Defense counsel: Brian J. Neary Esq., Hackensack, N.J.
10th Defendant Admits Role in $40.8 Million Mortgage Fraud SchemeRead the Press Release
CAMDEN, N.J. – An Ocean County, N.J., man today admitted his role in a $40.8 million mortgage fraud conspiracy in which he used his position as a loan officer of Wells Fargo Home Mortgage Inc. to get the company to release more than $4.6 million based on fraudulent mortgage loan applications, U.S. Attorney Paul J. Fishman announced.
Robert Serao, 48, of Bayville, N.J., pleaded guilty before U.S. District Judge Joseph E. Irenas in Camden federal court to Count One of an indictment charging him with conspiracy to commit wire fraud. He is the 10th defendant to plead guilty in the case.
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 with Stephen Corba, Charles Harvath, Joseph Witkowski and others 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 closing 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.
Nine of Serao’s conspirators have pleaded guilty to participating in this mortgage fraud conspiracy, including Harvath, Corba, John Siuszko, Michael Williams, William Brown, Mark Kreischer, Crystal Brame, Aku I. Muhammad and George Lachenmayr Jr.
The wire fraud conspiracy charge to which Serao pleaded guilty carries a maximum potential penalty of 30 years in prison and a $1 million fine. Sentencing for Serao is currently scheduled for June 24, 2014.
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 guilty plea.
The pending charges and allegations against any related defendants are merely allegations, and they are considered innocent unless and until proven guilty.
The government is represented by Assistant U.S. Attorney Diana Carrig of the U.S. Attorney’s Office in Camden.
14-087
Defense counsel: Robert A. Weir Jr. Esq. and Edward J. Plaza. Esq. Red Bank, N.J.
Serao Indictment
Twin Brother Pharmacists Each Sentenced to 42 Months in Prison for Defrauding Patients and Insurance Companies of $1.5 MillionRead the Press Release
NEWARK, N.J. – Two pharmacists – twin brothers who previously owned the West Orange Pharmacy – were each sentenced 42 months in prison today for reaping at least $1.5 million in illicit gains by defrauding patients, Medicaid and insurance companies over the past 15 years, U.S. Attorney Paul J. Fishman announced.
Robert and William Carlucci, both 70 and of Florham Park, N.J., previously pleaded guilty before U.S. Magistrate Judge Michael A. Hammer to separate informations charging them with conspiring to commit health care fraud. The sentenced was imposed today by U.S. District Judge Faith Hochberg in Newark federal court.
According to documents filed in this case and statements made in court:
Robert Carlucci, William Carlucci, and another conspirator, Leonard “Lenny” Stefanelli, 49, of East Hanover, N.J., participated in a variety of schemes designed to cheat customers and bilk insurance companies out of at least $1.5 million. Stefanelli pleaded guilty before Judge Hammer on Jan. 24, 2014, to an information charging him with illegally dispensing oxycodone and is scheduled to be sentenced April 30, 2014.
They used a practice they referred to as “TRADE-QUICK” to under-fill prescriptions. Each letter in “TRADE-QUICK” corresponded to a number, beginning with “T” for “1” through “K” for “0.” The conspirators would enter a two-letter code into the West Orange Pharmacy computer system that indicated how much of the prescription they intended to fill. The code “QK” indicated that a prescription for 90 dosage units would instead be filled with 60 dosage units, because the “Q” stood for the number “6” and the “K” stood for the number “0.” After under-filling the prescription, the co-conspirators billed Medicaid and other insurance companies for the fully filled prescription.
Without informing the patients, the conspirators substituted generic drugs for the brand-name drugs prescribed by the patients’ physicians. Then they billed Medicaid and other insurance companies for the full amount of the brand-name drugs. The conspirators entered the prescribing physicians’ phone numbers into the West Orange Pharmacy computer system as a code to indicate that they were utilizing this particular scheme.
The conspirators also filled outstanding refills on a given prescription without the patients’ knowledge and then billed Medicaid and the private insurers for the refills. They entered a dot (“.”) into the West Orange Pharmacy computer system as a code to indicate that they were utilizing this particular scheme.The conspirators would sometimes lose money on a given prescription. On those occasions, they looked through a patient’s profile and found additional costs that they could pass on to Medicaid and other insurance companies. They would submit bills for these additional costs, and they would enter the code “COV” into the West Orange Pharmacy computer system to reflect this scheme.
The conspirators purchased prescription drugs back from their customers and would reuse those drugs to fill other patient prescriptions. They billed Medicaid and other insurance companies for the full amount of the filled prescriptions.
The conspirators purchased prescription drugs from non-licensed wholesalers at a substantial discount to the drugs’ wholesale price, then dispensed these discounted drugs to patients and billed Medicaid and private insurers for the full costs associated with the drugs.
In addition to the prison term, Judge Hochberg sentenced each of the Carlucci brothers to three years of supervised release and fined them $75,000 each.
U.S. Attorney Fishman credited special agents of the DEA Tactical Diversion Squad, under the direction of Special Agent in Charge Carl 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 sentencings. 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.
14-085
Defense counsel:
Robert Carlucci: Ricardo Solano Esq., Newark
William Carlucci: Mark Berman Esq., River Edge, N.J.
Stefanelli: Carlos Ortiz Esq., Morristown, N.J.Plainfield, N.J., Woman Sentenced to 87 Months in Prison for Her Roles as Lookout, Getaway Driver in Armed Bank RobberiesRead the Press Release
NEWARK, N.J. - A Plainfield, N.J., woman was sentenced today to 87 months in prison for playing a role in three armed robberies of banks in Somerset and Middlesex counties, U.S. Attorney Paul J. Fishman announced.
Andrea Dorsey, 54, of Plainfield, N.J., previously pleaded guilty before U.S. District Judge Kevin McNulty to an information charging her with three counts of bank robbery. Judge McNulty imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Claude Williams, 62, of Elizabeth, N.J., was charged on Aug. 16, 2013, in a 17-count indictment with one count of conspiracy to commit bank robbery, seven counts of bank robbery, eight counts of using a firearm in furtherance of a crime of violence, and one count of attempted bank robbery. Those charges remain pending against Williams.
Williams would usually send an accomplice into banks shortly before robbing them. Dorsey admitted she went into banks to gather information for Williams about how many employees were working and served as the getaway driver during the armed robberies of the Financial Resources Federal Credit Union located in Somerset, N.J., on Sept. 26, 2011; the Somerset Savings Bank located in Somerville, N.J., on Nov. 21, 2011; and the Fulton Bank located in Metuchen, N.J., on June 20, 2012.
Williams and Dorsey were arrested July 30, 2012, near a Unity Bank in Somerset. Williams was wearing a bandana and law enforcement found a handgun and white gloves in the car.
In addition to the prison term, Judge McNulty sentenced Dorsey to four years of supervised release and ordered her to pay $59,387 in restitution.
The charges and allegations contained in the indictment against Williams are merely accusations and the defendant is considered innocent unless and until proven guilty.
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. He also thanked the Somerset County Prosecutor’s Office and the Middlesex Borough, Piscataway, Clifton, Metuchen, North Plainfield and Plainfield Police Departments for their roles in the investigation.
The government is represented by Assistant U.S. Attorney Osmar J. Benvenuto of the U.S. Attorney’s Office Criminal Division in Newark.
14-086
Defense counsel: Anthony J. Iacullo Esq., Nutley, N.J.Newark Man Pleads Guilty to 14 Armed Robberies of New Jersey StoresRead the Press Release
NEWARK, N.J. – A Newark man admitted today to committing 14 armed robberies of commercial establishments throughout Union, Essex, Hudson and Bergen counties, U.S. Attorney Paul J. Fishman announced.
Jamar Darby, aka “Rhino,” 27, pleaded guilty before U.S. District Judge William H. Walls to two counts of an indictment charging him with conspiracy to commit Hobbs Act robberies and with brandishing a firearm during one of those robberies.
According to documents filed in this case and statements made in court:
Darby conspired with others to rob commercial establishments as follows:
Pao Da Terra
Newark
Dec. 29, 2012
Newark
Jan. 20, 2013
Newark Community Pharmacy
Newark
Jan. 24, 2013
Linden Stationary
Linden
Feb. 1, 2013
Delta Gas Station
Newark
Feb. 1, 2013
Shoppers Express
Belleville
Feb. 2, 2013
Krauszers
Kearny
Feb. 10, 2013
Krauszers
Bloomfield
Feb. 13, 2013
Pat’s Deli
Newark
Feb. 19, 2013
Smashburger
Paramus
March 16, 2013
Krauszers
Bloomfield
March 29, 2013
South Wood Discount Liquor
Linden
April 17, 2013
Newark Community Pharmacy
Newark
May 1, 2013
Subway Restaurant
Verona
May 20, 2013
Darby and his conspirators robbed each of these establishments at gunpoint, stealing cash, cigarettes and other items. In 13 of the 14 robberies, Darby and his conspirators used zip ties or duct tape to restrain their victims. During the Pat’s Deli robbery on Feb. 19, 2013, Darby and a conspirator restrained several victims with duct tape after threatening one victim with a .45 caliber semi-automatic handgun.
The Hobbs Act conspiracy to which Darby pleaded guilty carries a maximum penalty of 20 years in prison. The charge of brandishing a firearm during a violent crime carries a maximum penalty of life in prison and a mandatory minimum sentence of seven years in prison, which must run consecutively to any other prison term. Each count also carries a maximum $250,000 fine or twice the gross gain or loss arising out of the offense. Sentencing is scheduled for June 17, 2014.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, with the investigation leading to today’s guilty plea. He also thanked the Belleville, Bloomfield, Kearny, Linden, Maplewood, Newark, Paramus, Verona and West Orange Police Departments, along with the N.J. State Police and the Essex County Prosecutor’s Office for their work on this case.
The government is represented by Assistant U.S. Attorneys Jamari Buxton and Rahul Agarwal of the U.S. Attorney’s Office Criminal Division in Newark.
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Defense counsel: Anthony C. Mack Esq., Newark
Darby Indictment
Florida Man Charged in New Jersey with Threatening to Poison Consumer ProductsRead the Press Release
NEWARK, N.J. – Federal charges are filed in Newark against a man who allegedly contacted a consumer products company and claimed he poisoned its products and would return them to store shelves if his demands were not met, New Jersey U.S. Attorney Paul J. Fishman announced today.
Brian Henderson, 49, of Hallendale, Fla., is charged by criminal complaint with two counts of threatening to tamper with a consumer product. Henderson is already in custody on bank robbery charges filed Dec. 19, 2013, in the Southern District of Florida, and will appear in Newark federal court on a date to be determined.
An additional indictment was unsealed today in the Southern District of Florida charging Henderson with a scheme to extort Publix Super Markets Inc., by threatening to bomb its stores.
According to the District of New Jersey complaint made public today and statements made in court:
On July 28, 2013, Henderson contacted the company, headquartered in New Jersey and referred to in court documents as “Company 1,” by sending a message through its online customer care center. In the message, Henderson threatened to place 20 poisoned packages of the company’s products on the shelves of 20 different stores unless he was paid an unspecified sum of money. The message was addressed to the chairman of the board of directors and the company’s chief executive officer.
Henderson sent another message on Aug. 5, 2013, saying:
“I am the angel of death. I have put poison in 20 packages of your products. I will put them back on the shelves unless you pay me what you owe me. Last week I gave you an e-mail address that no longer works. You will have until Thurs 8/8 at 5pm to reply to my new e-mail address or I will replace the products and alert the media. You can handle this quietly and cheaply or publicly and very very expensive [sic].”
The complaint does not allege that Henderson actually poisoned any consumer product.
The second threat was transmitted from an internet protocol address which, at that time, was assigned to the wireless network of a restaurant in Dania, Fla. Security footage retrieved from the restaurant shows an individual believed to be Henderson.
Law enforcement executed a search warrant at Henderson’s residence on Dec. 14, 2013, recovering what appeared to be a draft of an extortion demands.
Each count of threatening to tamper with consumer products carries a maximum potential penalty of five years in prison and a $250,000 fine.
U.S. Attorney Fishman credited special agents of the FBI in New Jersey, under the direction of Special Agent in Charge Aaron T. Ford, and in Florida, under the direction of Special Agents in Charge George Piro in Miami and Paul Wysopal in Tampa, with the investigation leading to today’s charges.
The government is represented by Assistant U.S. Attorneys Daniel V. Shapiro and Andrew Kogan of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
The charges and allegations contained in the complaint are merely accusations and the defendant is considered innocent unless and until proven guilty.
Henderson Complaint
Owner of Roofing Company Sentenced to One Year in Prison for Filing False Income Tax ReturnsRead the Press Release
TRENTON, N.J. - The owner of Kenal Enterprises LLC was sentenced today to one year and one day in prison for filing false income tax returns for several years, U.S. Attorney Paul J. Fishman, District of New Jersey, and Assistant Attorney General Kathryn Keneally of the U.S. Department of Justice, announced.
Kenneth Morton of Pitman, N.J., owner of Kenal (d/b/a) Ken Morton Roofing and Siding, a residential roofing company located in Pitman, previously pleaded guilty before U.S. District Judge Peter G. Sheridan to an information charging him with filing false income tax returns for tax years 2007 through 2009. Judge Sheridan imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:
From early 2007 through late 2009, Morton cashed $3,946,046 of Kenal’s gross receipts at a check cashing agency, the majority of which he did not deposit into his business bank account and did not report on his individual income tax returns. For the 2007, 2008, and 2009 tax years, Morton had unreported gross receipts of $1,343,348; $1,471,430; and $1,131,268, respectively, causing a loss to the IRS of $241,412.
In addition to the prison term, Judge Sheridan sentenced Morton to one year of supervised release and ordered him to pay $241,412 in restitution.
U.S. Attorney Fishman and Assistant Attorney General Keneally credited special agents of IRS – Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen, for the investigation leading to today’s sentence.
The government is represented by Trial Attorneys Jessica Moran and Tino Lisella of the Justice Department’s Tax Division. Additional information about the Tax Division and its enforcement efforts may be found at www.justice.gov/tax.
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Defense counsel: Rocco Cipparone Jr. Esq., Haddon Heights, N.J.