District of New Jersey
Press releases recorded for this federal judicial district.
Essex County, N.J., Man Admits Preparing False Income Tax ReturnsRead the Press Release
NEWARK, N.J. – The owner of a tax preparation business admitted today his role in the preparation of income tax returns with false information, Assistant Attorney General for the Tax Division Kathryn Keneally and U.S. Attorney Paul Fishman announced.
Carlyle Fraser of Maplewood, N.J., owner of Fraser CPA and Taxko Inc., a tax preparation business, pleaded guilty before U.S. District Judge Joel A. Pisano in Trenton federal court to an information charging him with one count of aiding and assisting in the preparation of false individual income tax returns.
According to documents filed in this case and statements made in court:
From 2008 through 2011, Fraser prepared and filed false individual income tax returns for his clients. On April 8, 2011, Fraser prepared a false 2010 individual income tax return for an undercover agent, which claimed false deductions for medical and dental expenses, charitable contributions, unreimbursed employee expenses, tuition, a business loss, and a capital gains loss. In preparing false individual income tax returns for his clients, Fraser caused a tax loss to the IRS of $149,739.
Assistant Attorney General Keneally and U.S. Attorney Fishman credited special agents of IRS – Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen, for the investigation leading to today’s guilty plea.
The count to which Fraser pleaded guilty is punishable by a maximum potential penalty of three years in prison and a fine of $250,000. Sentencing is scheduled for June 25, 2014.
The government is represented by Tax Division Trial Attorneys Jessica Moran and Tino Lisella.
Additional information about the Tax Division and its enforcement efforts may be found at www.justice.gov/tax.
14-030Defense counsel: Thomas A. Ashley Esq., Newark
Fraser, Carlyle Information
Coin Dealer Formerly from Hackensack, N.J., Admits Filing A False Federal Income Tax ReturnRead the Press Release
NEWARK, N.J. – A former Hackensack, N.J., dealer in ancient coins today admitted filing a false federal income tax return for the 2006 tax year, U.S. Attorney Paul J. Fishman announced.
Gantcho Zagorski, 60, pleaded guilty today before U.S. District Judge Esther Salas in Newark federal court to one count of aiding and assisting in the filing of a false tax return.According to documents filed in this case and statements made in court:
Zagorski owned and operated a business that sold ancient coins to domestic and international customers, primarily on the online auction site eBay, from his residence in Hackensack, N.J. Zagorski; his wife; and, at times, his daughter, operated the coin-selling business under the names “Diana Coins,” “Paganecoins,” and “Diana Coins LLC.”
Zagorski admitted he provided histax preparer with false and fraudulent information by substantially understating the amount of gross receipts and sales earned by his business and then caused to be filed with the IRS a false federal income tax return for 2006. Zagorski admitted the 2006 tax return claimed gross receipts and sales of $310,901 when, in fact, the business had generated more than $600,000 in gross receipts and sales for that year.
The tax count to which Zagorski pleaded guilty carries a maximum potential penalty of three years in prison and a $250,000 fine. Sentencing is scheduled for May 12, 2014.
U.S. Attorney Fishman credited special agents of IRS – Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen, Newark Field Office; Department of Homeland Security, Homeland Security Investigations, New York, under the direction of Special Agent in Charge James T. Hayes Jr.; and the FBI, under the direction of Special Agent in Charge Aaron T. Ford, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorneys Maureen Nakly and Leslie Schwartz of the U.S. Attorney’s Office in Newark.
14-031Defense counsel: Assistant Federal Public Defender John Yauch Esq., Newark
Zagorski, Gantcho Indictment
Camden, N.J., Man Sentenced to 100 Months in Prison for Conspiracy to Steal Checks from MailRead the Press Release
CAMDEN, N.J. – A Camden man was sentenced today to 100 months in prison for his role in a scheme in which he and others stole business checks from the mail in New Jersey and Connecticut, altered them and cashed them through a series of conspirators, U.S. Attorney Paul J. Fishman announced.
Michael A. Ingalls, Jr., 36, previously pleaded guilty before Chief U.S. District Judge Jerome B. Simandle to an information charging him with one count of conspiracy to commit bank fraud and one count of possession of stolen mail. Judge Simandle imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
From September 2010 through January 2012, Ingalls and others stole mail containing checks from businesses in Burlington, Camden and Gloucester counties in New Jersey. Ingalls and his conspirators – including Ibn Muhammad, 35, of Camden – would recruit conspirators to cash the stolen checks, altering the name of the payee on the check to match the name of the recruit. Ingalls, Muhammad and the check casher would then travel to a bank to cash the check.
Ingalls, Muhammad and their conspirators cashed or attempted to cash more than 100 stolen and altered business checks worth more than $600,000. The scheme resulted in a total loss of more than $300,000 to the victim banks.
In addition to the prison term, Judge Simandle sentenced Ingalls to serve five years of supervised release and ordered him to pay $361,955.04 in restitution.
Muhammad pleaded guilty to bank fraud and theft of mail and was sentenced to 135 months in prison on July 15, 2013. One of Ingalls’ and Muhammad’s conspirators, Andrew Fortune, 62, of Camden, pleaded guilty to conspiracy to commit bank fraud and was sentenced to 21 months in prison on Dec. 11, 2013.
U.S. Attorney Fishman credited special agents from the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates in Newark, and troopers from the New Jersey State Police, under the direction of Col. Rick Fuentes, with the investigation.
The government is represented by Assistant U.S. Attorneys Matthew T. Smith and Jason M. Richardson of the U.S. Attorney’s Office Criminal Division in Camden.
14-029
Defense counsel: Dennis Wixted Esq., CamdenFormer Official of Pop Warner Admits Stealing Hundreds of Thousands of Dollars from the OrganizationRead the Press Release
TRENTON, N.J. – The former regional director of the Eastern Region of Pop Warner Little Scholars Inc. (Pop Warner) today admitted stealing hundreds of thousands of dollars from the organization and using the funds for his personal benefit, U.S. Attorney Paul J. Fishman announced.
David Marshall, of Jackson, N.J., pleaded guilty today before U.S. District Judge Joel A. Pisano in Trenton federal court to an information charging him with one count of wire fraud.
According the documents filed in this case and statements made in court:
Between 2005 and 2011, Marshall performed work for Pop Warner on a voluntary basis and held various positions. From 2006 through 2011, Marshall was the regional director for the Eastern Region of Pop Warner. He was responsible for handling the finances of the Eastern Region and had access to its bank and credit card accounts. Marshall used his authority to steal hundreds of thousands of dollars from Pop Warner. He improperly used funds from Pop Warner bank accounts to pay off personal debts and make cash withdrawals. Marshall also used a Pop Warner credit card to purchase personal items and other things unrelated to Pop Warner.
The wire fraud count to which Marshall pleaded guilty is punishable by a maximum potential penalty of 20 years in prison and a $250,000 fine. As part of the plea, Marshall agreed to pay restitution to the victim of the offense in an amount that will be determined at sentencing, which is scheduled for June 25, 2014.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Nicholas P. Grippo of the U.S. Attorney’s Office Criminal Division in Trenton.14-028
Defense counsel: Brian P. Reilly Esq., Assistant Federal Public Defender, TrentonMarshall Information
Pharmacist Admits Multiple Sales of Oxycodone Without A Prescription, Agrees to Forfeit $1.5 MillionRead the Press Release
NEWARK, N.J. – The former pharmarcist-in-charge of West Orange Pharmacy today admitted to illegally distributing hundreds of tablets of oxycontin in exchange for thousands of dollars in cash, U.S. Attorney Paul J. Fishman announced.
Leonard “Lenny” Stefanelli, 49, of East Hanover, N.J., pleaded guilty before U.S. Magistrate Judge Michael A. Hammer to an information charging him with illegally dispensing oxycodone. Stefanelli also admitted to conspiring with brothers Robert Carlucci and William Carlucci, both 70, both of Florham Park, N.J., to submit fraudulent bills to health care benefit providers, including Medicare and Medicaid.
Stefanelli agreed forfeit $1.5 million, consisting of illegal profits obtained from his illegal sales of oxycodone and his submission of fraudulent bills to health care benefit providers.
According to documents filed in this and other cases, and statements made in court:
Oxycodone, the active ingredient in brand name pills such as Oxycontin, is a Schedule II controlled substance B meaning that it has a high potential for abuse, a currently accepted medical use with severe restrictions, and abuse of the drug may lead to severe psychological or physical dependence. A pharmacist can only dispense a Schedule II controlled substance when presented with a written prescription from a doctor.
From February 1, 2012, to August 6, 2012, on at least six separate occasions, Stefanelli sold hundreds of tablets of Oxycontin to an individual, without a prescription, in exchange for cash. Each sale took place inside West Orange Pharmacy. For example, on Feb. 8, 2012, Stefanelli sold one bottle of 100-count Oxycontin 30-mg tablets and one bottle of 100-count Oxycontin 15-mg tablets for $1,800.
Between 1992 and October 2012, Stefanelli conspired with Robert Carlucci and William Carlucci to submit fraudulent bills to health care benefit providers, including Medicaid and Medicare, reaping at least $921,634 from his scheme. Robert Carlucci and William Carlucci previously pleaded guilty to committing health care fraud by participating in a variety of schemes designed to cheat customers and bilk insurance companies out of millions of dollars. They are both scheduled to be sentenced on Feb. 27, 2014.
The narcotics distribution charge to which Stefanelli pleaded guilty is punishable by a maximum potential penalty of 20 years in prison and a fine of up to $1,000,000. Sentencing is scheduled for April 30, 2014, before U.S. District Judge Faith S. Hochberg.
U.S. Attorney Fishman credited special agents of the DEA, 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 guilty plea. 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.
14-027
Defense counsel: Carlos Ortiz Esq., Morristown, N.J.
Stefanelli Information
Former Contract Employee for U.S. Citizenship and Immigration Services Convicted in New Jersey for Theft, Sale of FormsRead the Press Release
NEWARK, N.J. — A federal jury returned guilty verdicts late Thursday, Jan. 23, 2014, against a former contract employee for U.S. Citizenship and Immigration Services (USCIS) for stealing hundreds of immigration forms from the warehouse where he worked and selling them for ultimate use as part of a criminal enterprise, U.S. Attorney Paul J. Fishman announced.
Martin Trejo, 47, of Rialto, Calif., was convicted of one count of conspiracy to steal government property and transport it in interstate commerce and one count of transportation of stolen goods in interstate commerce. The jury returned the verdict after less than two hours of deliberation following a one-week trial before U.S. District Judge Faith S. Hochberg in Newark federal court.
According to documents filed in this case and the evidence at trial:
While working as a contract employee for USCIS, Trejo stole hundreds of immigration forms from the warehouse where he worked and sold them to a conspirator. The conspirator then sold the forms to a criminal enterprise that used them to obtain hundreds of driver’s licenses for individuals in the country illegally and living in New Jersey and other states.
The investigation into the wider scheme has resulted in 13 convictions, with prosecutions ongoing.
The conspiracy count carries a maximum potential penalty of five years in prison; the transportation count carries a maximum potential penalty of 10 years in prison. Each count also carries a maximum $250,000 fine. Trejo is scheduled to be sentenced on April 29, 2014.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark; and agents of the Department of Homeland Security, Office of Inspector General, under the direction of Acting Special Agent in Charge Edward Nasiatka of the New York field office, with the investigation.
The government is represented by Assistant U.S. Attorneys Anthony Moscato and David M. Eskew of the U.S. Attorney’s Office Criminal Division in Newark.14-026
Defense counsel: John P McGovern Esq., Newark
Florida Man Arrested, Charged in New Jersey with Sale of Deadly Toxin on Underground Online MarketplaceRead the Press Release
NEWARK, N.J. - A Florida man is expected in court today after federal agents arrested him on Jan. 18, 2014, in LaBelle, Fla., on New Jersey federal charges alleging he sold the potentially deadly toxin abrin through an underground, Internet-based marketplace, New Jersey U.S. Attorney Paul J. Fishman announced.
Jesse William Korff, 19, of LaBelle, was arrested as a result of an investigation by U.S. Immigration and Customs Enforcement, Homeland Security Investigations (HSI) and the FBI. The criminal complaint charges Korff with one count of possession and transfer of a toxin for use as a weapon and one count of smuggling goods from the United States. Korff, who had posted a listing for the sale of the toxin on a website known as “Black Market Reloaded” (BMR), was unaware the customer who responded was an undercover HSI agent.
The defendant is scheduled for an initial appearance and bail hearing this afternoon before U.S. Magistrate Judge Douglas N. Frazier in Fort Myers, Fla.,federal court. He will be brought to New Jersey to appear in Newark federal court on a date to be determined.
“The criminal complaint alleges Jesse Korff was willing to sell a potentially deadly toxin to a stranger over the Internet,” said U.S. Attorney Fishman. “He allegedly peddled the poison on a virtual black market of illegal and dangerous goods, hidden in the shadow of a secretive computer network favored by cybercriminals. Had this been an actual sale to a real customer, the consequences could have been tragic. Fortunately, an undercover law enforcement officer posing as a buyer was able to get a dangerous chemical weapon and its alleged seller off our streets.”“HSI has worked tirelessly with the FBI and other law enforcement partners to combat underground websites such as BMR,” said Andrew McLees, Special Agent in Charge of HSI Newark. “Anyone who can sell abrin, a potential agent for chemical terrorism, must be stopped. The arrest of Korff shows HSI’s commitment to protecting the public from individuals who show a callous disregard for their safety in the interest of making a buck.”
According to the criminal complaint:
Beginning in April 2013, HSI special agents conducted an investigation of illicit sales activity on BMR. The website provides a platform for vendors and buyers to conduct anonymous online transactions involving the sale of a variety of illegal goods, including biological agents, toxins, firearms, ammunition, explosives, narcotics and counterfeit items. Unlike mainstream e-commerce websites, BMR is only accessible via the Tor network – a special computer network designed to enable users to conceal their identities and locations. Transactions on BMR are conducted using Bitcoin, a decentralized form of electronic currency that only exists online.
Korff maintained a seller’s profile on BMR, through which he negotiated the sale of two liquid doses of abrin to the undercover agent. During their online conversations, Korff told the buyer about his delivery methods – concealing vials in a carved-out and re-melted candle – and discussed how much abrin was needed to kill a person of a particular weight and how best to administer the toxin. Korff also assured the buyer that a victim’s death would appear to be a bad case of the flu.
Korff and the buyer agreed on a total purchase price of $2,500 for two doses of the poison. The undercover transferred a deposit – the equivalent of $1,500 in Bitcoin – from a bank account in New Jersey to Korff on Jan. 6, 2014. The pair agreed that the buyer would travel from Canada on Jan. 15, 2014, to retrieve the abrin from a prearranged location. Korff sent the agent pictures of a specific spot at a rest stop approximately 10 miles outside Fort Myers where he planned to leave the package.
On the arranged day, Korff dropped off a fast food bag containing two wax candles at the location. An undercover agent collected the bag and left behind an additional deposit toward the remaining payment. Law enforcement had Korff under surveillance throughout the transaction.
The candles were found to contain vials of liquid containing a detectable amount of abrin. Even small doses of abrin are potentially lethal to humans if ingested, inhaled or injected – causing death within 36 to 72 hours from the time of exposure.
U.S. Attorney Fishman credited special agents of HSI, under the direction of Special Agent in Charge McLees in Newark, and FBI Special Agent in Charge Paul Wysopal, Tampa Division, with leading the ongoing investigation. He also thanked special agents of the FBI in Newark, under the direction of Special Agent in Charge Aaron T. Ford, and HSI in Ft. Myers, under the direction of Special Agent in Charge Susan McCormick, for their work. The U.S. Attorney also recognized the FBI’s Joint Terrorism Task Force, including and along with the U.S. Postal Inspection Service and the Glades County, Hendry County and Lee County Sheriff’s Offices for their assistance. Vital support was provided by the Justice Department’s National Security Division Counterterrorism Section in Washington and the U.S. Attorney’s Office for the Middle District of Florida.
The government is represented by Assistant U.S. Attorney Dennis C. Carletta of the U.S. Attorney’s Office National Security Unit in Newark.
The charges and allegations contained in the complaint are merely accusations and the defendant is presumed innocent unless and until proven guilty.14-024
Korff, Jesse William Complaint
New York-Based Hair Product Companies That Violated Bank Secrecy Act Agree to Pay $15 Million, Make Compliance Reforms in Settlement with New Jersey U.S. AttorneyRead the Press Release
Companies Failed to Report Millions In Cash From Customers
NEWARK, N.J. – Shake-N-Go Fashion Inc., and Model Model Hair Fashion Inc. – wholesale hair product companies based in Port Washington, N.Y. – entered into an agreement today to resolve claims brought by the New Jersey U.S. Attorney’s Office that they enabled the structuring of cash transactions to avoid reporting requirements in violation of the Bank Secrecy Act (BSA), announced U.S. Attorney Paul J. Fishman.
After an investigation conducted by the U.S. Attorney’s Office and U.S. Immigration and Customs Enforcement, Homeland Security Investigations (HSI), the companies – referred to together in court documents as “SNG” – have agreed to forfeit $15 million and to enact a number of compliance reforms as part of the settlement. The settlement agreement and forfeiture complaint were filed today in Newark federal court.
“It doesn’t matter what your business is; you are required to follow the financial reporting requirements of the United States,” said U.S. Attorney Fishman. “Shake-N-Go learned that the hard way, forfeiting millions and enacting stringent compliance reforms as a result of the government’s investigation. Criminals structure cash transactions to hide all manner of illegal activity, and businesses must be vigilant to be sure they are not providing the haven for doing so.”
According to documents filed in this case:
SNG willfully engaged in business practices that permitted customers to conduct cash transactions with SNG of more than $10,000 while avoiding the filing of mandatory forms documenting those transactions with the United States Department of the Treasury.
The BSA requires financial institutions involved in cash transactions in amounts greater than $10,000 to file Currency Transaction Reports (CTRs) for each transaction. Similarly, businesses that receive more than $10,000 in cash in one or related transactions are required to file an IRS 8300 form. Many individuals involved in illegal activities, such as tax evasion and money laundering, are aware of these reporting requirements and take active steps to cause financial institutions and businesses to fail to file the necessary forms. These active steps are usually referred to as “structuring,” which is a violation of the BSA.
Although SNG never knowingly received illicit funds, SNG permitted and enabled its customers and employees to structure millions of dollars in cash transactions into SNG’s bank accounts without the filing of CTRs, broke up customer invoices totaling more than $10,000 and willfully failed to file a single 8300 form prior to the government’s investigation.
In 2012, SNG had over $300 million in gross sales receipts. Of that amount, approximately $80 million was made in the form of cash deposits.
Beginning in 2007, SNG instituted a policy that permitted its customers to purchase hair products by depositing cash directly into SNG’s bank accounts. This policy enabled SNG’s customers to regularly structure cash deposits into SNG’s accounts. SNG’s employees also structured funds into SNG’s accounts after collecting the funds from customers. SNG employees were instructed not to issue an invoice or receipt that exceeded $10,000, even when a customer ordered more than $10,000 in hair products at one time.
In addition to the forfeiture, SNG has agreed to implement a number of remedial measures:
SNG has appointed and will continue to engage a general counsel to oversee and consult on all legal and compliance issues. SNG will also retain a qualified independent consulting firm, as approved by the United States, to oversee the implementation of a BSA compliance program and SNG’s continued compliance with that program and the terms of SNG’s agreement with the United States.
For a two-year period from the date of the filing of the Complaint, SNG will: provide quarterly reports to the United States, to be authored by the independent consulting firm, describing the state of SNG’s compliance program; appoint a qualified individual, approved by the United States, to serve as a senior level executive to oversee all day-to-day compliance issues – removing that responsibility from the Chief Financial Officer; and establish and enforce written policies on how to receive and process cash payments and how to otherwise comply with the BSA, including the timely filing of any and all 8300 forms.
SNG will also implement mandatory employee training on BSA compliance; will not permit its customers to deposit cash directly into accounts controlled by SNG; and will agree to cooperate with any and all future investigations by the United States and/or other state and local authorities.
The $15 million forfeiture amount includes $2,502,218 previously seized by the United States from SNG on June 25, 2013, and an additional $9,497,782 that SNG has surrendered pursuant to the agreement. As part of that nearly $9.5 million, individual shareholders of SNG have contributed $6 million as claw-backs of profit distributions. Recognizing the extensive costs associated with the remedial measures, the United States has agreed to provide a $3 million credit to SNG. However, in the event that SNG knowingly fails to comply with the agreement, SNG has agreed to surrender that $3 million to the United States.
U.S. Attorney Fishman credited special agents from HSI’s El Dorado Task Force, under the direction of Special Agent in Charge James T Hayes Jr., New York Field Office.
The government is represented by Assistant U.S. Attorneys Evan S. Weitz of the U.S. Attorney’s Office Asset Forfeiture and Money Laundering Unit and Aaron Mendelsohn of the office’s Economic Crimes Unit in Newark.14-022
Defense counsel: Alex Lipman Esq., New YorkShake-N-Go Complaint
Shake-N-Go SettlementHudson County, N.J., Man Sentenced to Eight Years in Prison for Distribution of Child PornographyRead the Press Release
NEWARK, N.J. - A Hudson County, N.J., man was sentenced today to 96 months in prison for distributing images and videos of child sex abuse over the Internet, U.S. Attorney Paul J. Fishman announced.
Jonathan Martin, 24, of Jersey City, N.J., and Short Hills, N.J., previously pleaded guilty before U.S. District Judge Stanley R. Chesler to Count One of an indictment charging him with knowing distribution of child pornography. Judge Chesler imposed the sentence today in Newark federal court.
According to documents filed in the case and statements made in court:
Martin admitted that on April 30, 2012, he made images and videos of child sexual abuse that were stored on his home computer available for others to download via an online peer-to-peer file-sharing network. On that date, an undercover law enforcement agent successfully downloaded from Martin 15 images files of child pornography via the file sharing network.
In addition to the prison term, Judge Chesler sentenced Martin to five years of supervised release and ordered him to pay $35,000 in restitution.
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, and the Jersey City Police Department, under the direction of Chief Robert Cowan, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Danielle Alfonzo Walsman of the U.S. Attorney's Office Criminal Division in Newark.
14-023
Defense counsel: Alan Zegas Esq., Chatham, N.J.Warren County, N.J., Man Admits Distributing Images of Child Sexual Abuse over the InternetRead the Press Release
NEWARK, N.J. – A registered sex offender who was formerly employed at a law office in Paterson, N.J., admitted today to distributing images of child sexual abuse over the Internet, U.S. Attorney Paul J. Fishman announced.
Kevin Rease, 33, of Hackettstown, N.J., pleaded guilty today before U.S. District Judge Dennis M. Cavanaugh in Newark federal court to Count One of an indictment charging him with distributing images of child pornography.
According to documents filed in the case and statements in court:
Rease admitted that on Feb. 12, 2013, he made images and videos of child sexual abuse stored on his work computer available for others to download via an online peer-to-peer file sharing network. On that date, an undercover law enforcement agent successfully downloaded videos of child sexual abuse from Rease through the file sharing network.
Rease has a prior federal conviction for transportation of child pornography as well as prior state convictions for luring, sexual assault by sexual contact and endangering the welfare of a child.
As a previously convicted sex offender, the distribution of child pornography count to which Rease pleaded guilty is punishable by a maximum potential penalty of 40 years in prison, a mandatory minimum sentence of 15 years in prison, and a maximum fine of $250,000. Sentencing is currently scheduled for April 28, 2014.
U.S. Attorney Fishman credited special agents of the FBI’s Child Exploitation Task Force, under the direction of Special Agent in Charge Aaron T. Ford in Newark with the investigation leading to the guilty plea.
The government is represented by Assistant U.S. Attorney Danielle Alfonzo Walsman of the U.S. Attorney’s Office Criminal Division.
14-018
Defense counsel: William B. Ware Esq., Chester, N.J.
Rease Indictment
Monmouth County, N.J., Man Charged with Possession of Child PornographyRead the Press Release
TRENTON, N.J. – Special agents of the FBI arrested a Monmouth County man at his home this morning after discovering alleged images of child sexual abuse on his computer, U.S. Attorney Paul J. Fishman announced.
Layne Bracht, 31, of Highlands, N.J., is charged by complaint with one count of possessing child pornography. He made his initial court appearance today before U.S. Magistrate Judge Lois H. Goodman in Trenton federal court and was remanded without bail.
According to documents filed in this case and statements made in court:
On Oct. 28, 2013, Bracht allegedly distributed on the Internet via peer-to-peer file sharing software, through which other users had access, a video and images depicting child sexual abuse. Special agents of the FBI executed a search warrant this morning at his residence in Highlands, seizing digital evidence that contained numerous videos and images depicting child sexual abuse, including material involving prepubescent minors and sadistic or masochistic conduct. The digital evidence seized included three files previously downloaded from Bracht by law enforcement agents working in an undercover capacity on the peer-to-peer network.
In 2006, Bracht was arrested and charged with possession of child pornography, a charge to which he subsequently pleaded guilty. On April 2, 2008, U.S. District Judge Joseph E. Irenas sentenced Bracht to 30 months in prison to be followed by five years of supervised release. As a previously convicted sex offender, Bracht faces a mandatory minimum penalty of 10 years in prison, a maximum potential penalty of 20 years in prison and a $250,000 fine if convicted of the possession offense.
U.S. Attorney Fishman credited special agents of the FBI’s Child Exploitation Task Force, under the direction of Special Agent in Charge Aaron T. Ford in Newark, and the Monmouth County Prosecutor’s Office, under the direction of Acting Prosecutor Christopher Grammicioni, with the investigation leading to today’s arrest.
The government is represented by Assistant U.S. Attorney Fabiana Pierre-Louis of the U.S. Attorney’s Office Criminal Division in Trenton.
14-019Defense counsel: Brian P. Reilly Esq., Assistant Federal Public Defender, Trenton
Bracht Complaint
Essex County, N.J., Man Admits Role in Armed CarjackingRead the Press Release
NEWARK, N.J. – An Essex County, N.J., man today admitted his role in an armed carjacking in Newark on Nov. 8, 2012, U.S. Attorney Paul J. Fishman announced.
Nathaniel Tullies, 20, of East Orange, N.J., pleaded guilty before U.S. District Judge Katharine S. Hayden in Newark federal court to an information charging him with one count of theft of a motor vehicle by force, violence, and intimidation, and one count of use of a firearm in furtherance of a crime of violence.
According to documents filed in this case and statements made in court:
On Nov. 8, 2012, when an individual got out of a 2006 Chevrolet Impala to open a garage door, Tullies and an accomplice got on either side of the car, took it from the victim at gunpoint and drove away. The victim called police, who responded within minutes. A Newark police detective spotted the vehicle and a high-speed chase ensued, ending when the Impala crashed on the shoulder of Routes 1/9, the suspects fled on foot and the detective chased and captured Tullies.
The carjacking charge to which Tullies pleaded guilty is punishable by a maximum potential penalty of 15 years in prison. The firearms charge to which Tullies pleaded guilty is punishable by a minimum consecutive term of seven years in prison and a maximum consecutive term of life in prison. Each of these charges also carries a maximum $250,000 fine.
U.S. Attorney Fishman credited detectives with the Essex County Prosecutor’s Office, under the Direction of Acting Prosecutor Carolyn A. Murray, and investigators in the U.S. Attorney’s Office with the investigation leading to today’s guilty plea. Sentencing is scheduled for April 28, 2014.
The government is represented by Assistant U.S. Attorneys Elizabeth M. Harris and Sara F. Merin of the Criminal Division in Newark.
14-020
Defense counsel: Peter Carter Esq., Assistant Federal Public Defender, Newark
Tullies Information
Deputy Director of Hudson County Correctional Center Charged with Wiretapping Fellow WorkersRead the Press Release
NEWARK, N.J. – The deputy director of the Hudson County Correctional Center surrendered today to law enforcement and was charged by complaint with illegally wiretapping fellow employees, U.S. Attorney Paul J. Fishman announced.
Kirk Eady, 45, of East Brunswick, N.J. is charged by complaint with one count of intentionally intercepting the wire, oral or electronic communications of others. He is expected to make his initial court appearance today before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court.
According to the documents filed in this case and statements made in court:
Between March 2012 and July 2012, Eady used the services of a publically available website to place telephone calls to four Hudson County Correctional Center employees. The website allowed Eady to conceal the telephone numbers from where the calls originated and also call and record two people simultaneously and make it appear as those people, and not Eady, originated the call. Eady recorded these telephone conversations and did not inform the Hudson County Correctional Center employees that he was recording them. Eady admitted to a cooperating witness that he had recorded conversations with three employees.
The illegal interception offense with which Eady is charged is punishable by a maximum potential penalty of five years in prison and a $250,000 fine.
U.S. Attorney Fishman credited agents of the FBI Newark Field Office, under the direction of Special Agent in Charge Aaron T. Ford, with the investigation leading to today’s charges.
The government is represented by Assistant U.S. Attorney David L. Foster of the U.S. Attorney’s Office Special Prosecution’s Division.
14-017
Defense counsel: Peter Willis Esq., Jersey City, N.J.Eady Complaint
Vendor Admits to Conspiring to Pay Bribes of $40,000 to NJ Transit EmployeesRead the Press Release
NEWARK, N.J. – A vendor admitted today to conspiring to pay bribes of approximately $40,000 to NJ Transit employees to obtain snow removal contracts, U.S. Attorney Paul J. Fishman announced.
Edward O’Neill, 53, of Toms River, N.J., pleaded guilty to an information charging him with one count of conspiracy to commit bribery. O’Neill entered his guilty plea before U.S. District Judge William H. Walls in Newark federal court.
According to documents in this case and a related case and statements made in court:
O’Neill was the president of PPW Contracting Inc. (PPW), which provided professional powerwashing and snow removal services for NJ Transit, an agency that received more than $10,000 in federal funds. Thomas Braden, 55, also of Toms River, worked at PPW as its vice president and secretary.
From September 2011 to March 2012, O’Neill and Braden agreed to give, and gave, a cooperating witness (the “CW”) who was an NJ Transit employee, approximately $20,000 in exchange for the CW’s assistance with securing the 2011-2012 snow removal contract for the Trenton, N.J., train station. From September 2012 to April 2013, O’Neill and Braden agreed to give the CW another $20,000, $8,000 of which was to go to an NJ Transit supervisor, in exchange for their assistance with securing the 2012-2013 snow removal contract.
On Dec. 28, 2013, Braden pleaded guilty before U.S. District Judge William H. Walls in Newark federal court to an information charging him with one count of bribery.
The conspiracy to commit bribery charge to which O’Neill pleaded guilty is punishable by a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing for O’Neill is scheduled for April 22, 2014. The bribery charge to which Braden pleaded guilty is punishable by a maximum potential penalty of 10 years in prison and a $250,000 fine. Braden is scheduled to be sentenced on March 25, 2014.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; and the N.J. State Police, under the direction of Col. Joseph R. Fuentes, Superintendent, for the investigation leading to today’s guilty plea. He also thanked the N.J. Attorney General’s Office under the direction of Attorney General John Hoffman and Elie Honig, director of the N.J. Division of Criminal Justice, for their roles in the investigation.
The government is represented by Assistant U.S. Attorney Amy Luria of the U.S. Attorney’s Office Special Prosecutions Division in Newark, and Special Assistant U.S. Attorney Michael A. Monahan, the chief of the Financial and Computer Crimes Bureau, Division of Criminal Justice, in the N.J. Office of the Attorney General.13-014
Defense counsel: Robert L. Galantucci Esq., Hackensack, N.J.
O'Neill, Edward Information
Braden, Thomas InformationTwo Newark, N.J. Men to Appear in Federal Court, Charged with Armed CarjackingsRead the Press Release
NEWARK, N.J. – Two Essex County, N.J., men arrested in connection with two gunpoint carjackings and an attempted carjacking in December 2012 are expected to make their initial appearances today in Newark federal court, U.S. Attorney Paul J. Fishman announced.
Jamie Manning, 28, and Corey Thermitus, 21, both of Newark, are each charged in a superseding complaint with one count of conspiracy to commit theft of a motor vehicle by force, violence and intimidation (carjacking); two counts of carjacking; and one count of attempted carjacking. Additionally, Thermitus is charged with one count of discharging of a firearm in furtherance of a crime of violence, and Manning is charged with one count of brandishing a firearm in furtherance of a crime of violence. Manning and Thermitus are scheduled to appear this afternoonbefore U.S. Magistrate Judge Joseph A. Dickson.
Manning was arrested on Jan. 5, 2013, and has been in custody in Essex County since that time; he was taken into federal custody today to face these charges. Thermitus has been in custody since his arrest by Newark police officers on Dec. 29, 2012, and was previously charged by federal complaint with offenses related to a carjacking he allegedly committed the previous day. A superseding complaint charging both men was recently filed in Newark federal court.
According to documents filed in this case and statements made in court:
During the early morning hours of Dec. 26, 2012, Manning and Thermitus approached two individuals entering a parked 2002, four-door Nissan Altima on a street in Newark. Manning pointed a firearm at one of the victims and both Manning and Thermitus ordered the victims to get out of the car. After robbing and threatening the victims, Manning and Thermitus fled the area in the carjacked vehicle.
On Dec. 28, 2012, Thermitus approached an individual sitting in a 2011, four-door Honda Accord that was parked in the driveway of a home in Newark. Thermitus pointed a firearm at the victim and ordered the victim to get out of the car. After threatening to shoot the victim, Thermitus, Manning and another man fled the area in the victim’s car.
Later that night, Thermitus, Manning and a third man drove in the carjacked Honda Accord to a residential area in Newark. Thermitus and Manning approached two individuals, one of whom was a young child, who were sitting in a parked 2006, four-door Nissan Pathfinder in the driveway of a residence. Thermitus pointed a gun at the driver of the vehicle while Manning approached the rear passenger side of the vehicle, but the driver managed to escape in the car. As the assailants fled in the Honda Accord, Thermitus fired a gun in the direction of an individual who had come outside of a residence to investigate.
The conspiracy count carries a maximum potential penalty of five years in prison. The carjacking and attempted carjacking counts each carry a maximum potential penalty of 15 years in prison. The charge of brandishing a firearm in furtherance of a crime of violence carries a maximum potential penalty of life in prison and a mandatory minimum sentence of seven years in prison, which must run consecutively to any other prison term. The charge of discharging a firearm in furtherance of a crime of violence carries maximum potential penalty of life in prison and a mandatory minimum sentence of 10 years in prison, which must run consecutively to any other prison term. Each count also carries a maximum $250,000 fine.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark; the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Carolyn A. Murray; and the Newark Police Department, under the leadership of Director Samuel A. DeMaio and Chief Sheilah A. Coley with the investigation leading to the charges.
The government is represented by Assistant U.S. Attorney Dara Aquila Govan of the Organized Crime/Gangs Unit in Newark.
The charges and allegations contained in the superseding complaint are merely accusations and the defendants are considered innocent unless and until proven guilty.
14-021Defense counsel:
Corey Thermitus: Assistant Federal Public Defender Peter Carter, Newark
Jamie Manning: Frank Arleo Esq., West Orange, N.J..Thermitus, Corey and Manning, Jamie Superseding Complaint
New Jersey U.S. Attorney’s Office Collects $120.2 Million for Taxpayers in FY 2013Read the Press Release
$57.8 Million in Civil and Criminal Actions, $62.4 Million in Forfeitures
NEWARK, N.J. – U.S. Attorney Paul J. Fishman announced today that the District of New Jersey collected $120,229,018.44 in FY 2013, which includes $57,792, 671.44 in criminal and civil actions, and – working with partner agencies and divisions – it collected an additional $62,436,347in asset forfeiture actions.
The $57.8 million represents collections of $45,157,311.66 in criminal actions and $12,635,359.78 in civil actions. The $62.4 million in forfeited assets brought in by the office and its partners are deposited into the Department of Justice Assets Forfeiture Fund and are used to restore funds to crime victims and for a variety of law enforcement purposes. U.S Attorney Fishman created a stand-alone Asset Forfeiture and Money Laundering Unit in April 2010, which has increased the forfeited funds applied to victim compensation each year.
Every year since I have been U.S. Attorney, the hardworking public servants in our office have collected far more in fines, penalties, asset forfeiture, restitution and settlements than our operating expenses,” said U.S. Attorney Fishman. “Most of that money goes to the general treasury of the United States, the share that belongs to victims of crime is returned to them, and some of it is shared with our state and local law enforcement partners. That is good economics and good for public safety.”
Attorney General Eric Holder announced last week that the Justice Department collected approximately $8.1 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2013. The more than $8 billion in collections in FY 2013 represents nearly three times the appropriated $2.76 billion budget for the 94 U.S. Attorney’s offices and the main litigating divisions in that same period.
“The Department’s enforcement actions help not only to ensure justice is served, but also to deliver a valuable return to the taxpayer,” said Attorney General Holder. “It is critical that Congress provide the resources necessary to match the Department’s mounting caseload. As these figures show, supporting our federal prosecutors is a sound investment.”Fiscal year 2013 is the first year the Justice Department is counting collections as shared totals in any case in which a U.S. Attorney’s Office was assisted by other U.S. Attorney’s Offices or department components, making for uneven office-specific comparisons to previous years. The department’s overall numbers are not affected by the change.
The New Jersey U.S. Attorney’s Office worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional$401,338,597.30in cases pursued jointly with these offices. Of this amount, $56,796.50 was collected in criminal actions and401,281,800.80was collected in civil actions.
The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
Nationwide, the largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals, corporations or both for violations of federal health, safety, civil rights or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.
Many of the District of New Jersey’s largest collections this year arose from the office’s health care practice.
As a result of investigations by the New Jersey U.S. Attorneys’ Office and the Justice Department’s Civil Division, New Jersey-based Par Pharmaceutical Companies Inc. (Par) pleaded guilty in Newark federal court on March 5, 2013, and agreed to pay $45 million to resolve its criminal and civil liability for the company’s promotion of its prescription drug Megace® ES for uses not approved as safe and effective by the Food and Drug Administration (FDA) and not covered by federal health care programs.
This year’s collections also include more than $10.2 million paid to the United States as a result of an agreement between the Cooper Health System (Cooper) and the U.S. Attorney’s Office for the District of New Jersey in which Cooper paid $12.6 million to settle allegations that it violated the federal False Claims Act and New Jersey False Claims Act by making improper payments to physicians under so-called “consulting” and “compensation” agreements as it sought to build its cardiology program. Additionally, $2.3 million went directly to the state of New Jersey for Medicaid as a result of the agreement.
Both cases were investigated by the Department of Health and Human Services, Office of Inspector General. Assistance in the Cooper case was provided by the N.J. Attorney General’s Office. Par was also investigated by the FDA’s Office of Criminal Investigation.
14-015Former President of Vonetex LLC Admits Paying Kickbacks in Connection with TSA Contract for High-Tech Phone SystemsRead the Press Release
TRENTON, N.J. - The former president of Vonetex LLC today admitted that he paid nearly $100,000 in kickbacks to benefit himself under a subcontract to a Transportation Security Administration (TSA) contract for high-tech phone systems.
Neil Metzger, 41, of Leesburg, Va., pleaded guilty before U.S. District Judge Michael A. Shipp to an information charging him with conspiracy to pay kickbacks in connection with a government contract.According to documents filed in this case and statements made in court:
Metzger was the president of Vonetex, a technical services and training company. Unisys, a government contractor, won a contract from the U.S. Department of Homeland Security that included the installation and servicing of high-tech phone services for the TSA. Vonetex was awarded a subcontract through an intermediary company, Izar Associates Inc.
Vonetex was paid, through Izar, for each hour that its employees and contractors billed for work on the contract. James Anderson, 55, of Gainsville, Ga., was a project manager at Unisys who managed work performed pursuant to the contract. Vickie Idoux-Walz, 48, of Gainsville, Ga., was in a romantic relationship with Anderson, but was not an employee of Vonetex, Unisys, or Izar.
Metzger admitted that in November 2008 he agreed to provide kickback payments to Anderson through Idoux-Walz equal to $5 or $10 per hour that each Vonetex employee and contractor billed to the contract.
In December 2008, Metzger entered into a written agreement with Idoux-Walz in which Vonetex agreed to pay Idoux-Walz a fee for consulting services. The agreement also stated that for each hour billed by a Vonetex resource at Unisys, Idoux-Walz was to be given credits which could be used for discounts on additional work or equipment, or redeemed for cash. Each month, Idoux-Walz sent Metzger an invoice based on hours billed by Vonetex employees and contractors, and Metzger periodically sent kickback checks to Idoux-Walz with the understanding that the money represented the kickback payments Metzger had agreed to pay Anderson.
Metzger admitted that he paid a total of approximately $97,850 in kickbacks to Anderson through Idoux-Walz. Metzger also admitted that he made false claims against the government in the form of overbilling in June and July 2010, which resulted in a loss to the government of approximately $100,000.
The count of conspiracy to pay kickbacks in connection with a government contract to which Metzger pleaded carries a maximum potential penalty of five years in prison and a $250,000 fine. Metzger has also agreed to pay the government $100,000 in restitution. Sentencing is scheduled for April 22, 2014.
U.S. Attorney Fishman credited special agents of the U.S. Department of Homeland Security, Office of Inspector General, under the direction of Special Agent in Charge Gregory K. Null, with 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 in Trenton.
14-016
Defense counsel: Michael Sullivan Esq., Morristown, N.J., and Danny Onorato Esq., Washington, D.C.
Metzger, Neil Information
Union County, N.J., Man Admits Distributing Images of Child Sexual AbuseRead the Press Release
NEWARK, N.J.— A Union County, N.J., man today admitted distributing images of child sexual abuse over the Internet, U.S. Attorney Paul J. Fishman announced.
Andrew Johnson, 30, of Cranford, N.J., pleaded guilty before U.S. District Judge Susan D. Wigenton in Newark federal court to an information charging him with one count of distribution of child pornography.
According to documents filed in the case and statements in court:
Johnson admitted that on Dec. 7, 2012, he made available for others to download via an online peer-to-peer file-sharing network images and videos of child pornography that were stored on his home computer. An undercover law enforcement agent successfully downloaded from Johnson one image and 14 videos of child pornography via the file sharing network.
As part of his guilty plea, Johnson agreed to forfeit the computers and computer accessories he used to commit the offense. He will also be required to register as a sex offender.
The count of distributing child pornography to which Johnson pleaded guilty carries a mandatory minimum penalty of five years in prison, a maximum potential penalty of 20 years in prison and a $250,000 fine. Sentencing is currently scheduled for April 22, 2014.
U.S. Attorney Fishman credited special agents of the FBI’s Child Exploitation Task Force, under the direction of Special Agent in Charge Aaron T. Ford in Newark; and the Cranford Police Department with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Danielle Alfonzo Walsman of the U.S. Attorney’s Office Criminal Division in Newark.
14-013
Defense counsel: Lorraine Gauli-Rufo Esq., Assistant Federal Public Defender, Newark
Johnson Information
Somerset County, N.J., Man Admits Tax Fraud; Failed to Report More Than $500,000 in IncomeRead the Press Release
TRENTON N.J. – The owner of pizzeria in Manhattan admitted today to underreporting on his tax returns more than $500,000 in income that he kept for his personal benefit, U.S. Attorney Paul J. Fishman announced.
Amadeus Manata, of Warren, N.J., pleaded guilty before U.S. District Judge Michael A. Shipp in Trenton federal court to an information charging him with one count of subscribing to false personal federal income tax returns.
According to documents filed in this case and statements in court:
For the tax years 2005 through 2007, Manata filed U.S. individual income tax returns in which he claimed to report all of his income from his pizzeria, Pizza Pasta Etc., but which omitted $563,343 in cash he had diverted from the businesses for his personal use. Manata’s intentional failure to disclose true, correct and complete information to the IRS resulted in a tax loss to the United States of approximately $190,712.
As part of his guilty plea, Manata agreed to make full restitution to the IRS for all losses resulting from his filing of false tax returns.
The count of subscribing to false tax returns is punishable by a maximum potential penalty of three years in prison and a $250,000 fine. Sentencing is currently scheduled for April 16, 2014.
U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen, for the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Lakshmi Srinivasan Herman of the U.S. Attorney’s Office Economic Crimes Unit.
14-012
Defense Counsel: Arthur Zucker Esq., Hackensack, N.J.
Manata, Amadeus Information
Pharmacist Charged with Paying More Than $50,000 in Kickbacks to Doctor for Prescription ReferralsRead the Press Release
NEWARK, N.J. – A pharmacist with a compounding pharmacy in Lakewood, N.J., was arrested today and charged with paying more than $50,000 to a Toms River, N.J., physician to induce the doctor to make prescription referrals to the pharmacy, U.S. Attorney Paul J. Fishman announced.
Vladimir Kleyman, 42, of Lakewood, N.J., the president and pharmacist in charge of Prescriptions R US – a compounding pharmacy in Lakewood – was charged with violating the Anti-Kickback Statute by using a middle-man to provide repeated cash payments – totaling at least tens of thousands of dollars – to a N.J. physician over the course of several months. Kleyman appeared before U.S. Magistrate Judge James Clark III in Newark federal court this afternoon.
According to the Complaint unsealed today:
Beginning in February 2013, Kleyman provided one of his employees with at least $50,000 in cash or checks to provide bribes to the physician to refer prescriptions for a compounded pain cream to Prescriptions R US. Pharmacy compounding describes the preparation of medication, using different types and dosages of drugs, in order to provide more personalized medications for patients. The compounded pain cream prepared by Prescriptions R US in this case contains several components, including ketamine (a Schedule III non-narcotic), lidocaine, and diclofenac.
A computer-generated document prepared by Kleyman or someone working with him, and purporting to reflect the names of 63 patients for whom prescriptions for the pain cream had been sent by the bribed physician referenced in the complaint, included at least 33 Medicare beneficiaries for whom Prescriptions R US had received reimbursement from Medicare for prescriptions referrals from the bribed physician. In 2013, Prescriptions R US obtained more than $40,000 from Medicare alone in connection with filling prescriptions for the bribed physician referenced in the complaint – separate and apart from additional money Prescriptions R US obtained from other health care insurance providers.
In a series of meetings in November and December 2013, the unidentified employee received more than $50,000 in cash or checks from Kleyman or Kleyman’s spouse – who also works at Prescriptions R US – with the understanding that the bulk of that money would be used to bribe the physician to make prescription referrals to Prescriptions R US.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; and U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Thomas O’Donnell; and IRS–Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen, with the ongoing investigation leading to today’s charges.The government is represented by Assistant U.S. Attorney Jane Yoon and Senior Litigation Counsel Andrew Leven of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark.
U.S. Attorney Paul J. Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $520 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 charges and allegations contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
14-011Defense counsel: Lisa Mack Esq., Assistant Federal Public Defender, Newark
Kleyman Complaint
Ohio Man Admits Defrauding Charter Flight Company and Other Luxury Brands of More Than $100k in Private Flights, Watches, and Hotel StaysRead the Press Release
NEWARK, N.J. – A resident of Ohio admitted today to defrauding a charter flight company and other luxury brands of more than $100,000 worth luxury goods and services, U.S. Attorney Paul J. Fishman announced.
Christopher L. Henderson, 32, of Akron, Ohio, pleaded guilty before U.S. District Judge William J. Martini in Newark federal court to an information charging him with wire fraud.
According to documents filed in this case and statements made in court:
From May through June of 2013, Henderson and others conspired to fraudulently obtain at least three private charter flights from Jet Aviation, an international business aviation services company, with U.S. headquarters in Teterboro, N.J., which provides charter flight services. Henderson and others also conspired to obtain tens of thousands of dollars in other luxury goods and services, all via sham lines of credit issued to a well-known financial institution, for the defendants’ and others’ use by misrepresenting that they were employees at the financial institution.
On May 5, 2013, an individual using the name “Josh Stevens” called Jet Aviation’s offices in Chicago, Ill. and Van Nuys, Calif., to inquire about its private charter flight services. That individual identified himself as being employed as a senior vice president at a well-known financial institution and provided an email address purporting to be affiliated with the financial institution. A Jet Aviation employee sent a draft Charter Services Agreement to the provided email address. The agreement was signed by “Josh Stevens” and returned to Jet Aviation on May 9, 2013, falsely listing “Josh Stevens” as a senior vice president and Henderson as a vice president of international affairs at the well-known financial institution. The aviation company established an account and a line of credit for $350,000, which the defendants and others used to take four private charter flights.
As a result of their misrepresentations to Jet Aviation, Henderson and others fraudulently obtained private high-end charter flights and limousine car services, with a total approximate value of $175,790, for which Jet Aviation never received payment.Henderson and others made similar misrepresentations about their purported employment at the financial institution to other luxury service providers and obtained approximately $20,000 in luxury watches, sunglasses, and sterling silver and leather business cardholders, and incurred approximately $25,500 in hotel stays at a luxury hotel in Miami.
As a result of the scheme, Henderson fraudulently obtained more than $135,000 in luxury goods and services.The wire fraud charge to which Henderson pleaded guilty is punishable by a maximum potential penalty of 20 years in prison and a fine of $250,000. Sentencing is scheduled for April 15, 2014.
Dante G. Dixon, a co-defendant in this case, pleaded guilty on Dec. 17, 2013, to an information charging him with conspiracy to commit wire fraud. Dixon’s sentencing is scheduled for April 23, 2013.
U.S. Attorney Fishman credited special agents of the Federal Bureau of Investigation, 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 Aaron Mendelsohn 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.
13-010
Defense counsel: Joshua P. Cohn Esq., Saddle Brook, N.J.
Henderson, Christopher Information
Founder of Ukraine-Based Hardcore Child Pornography Website Admits Guilt, Will Be Sentenced to 30 Years in PrisonRead the Press Release
Investigation Led to Conviction of More Than 600 American Subscribers to Illegal Site
NEWARK, N.J. – A Ukrainian man who founded and ran an international hardcore child sexual abuse website today admitted his role in a child exploitation enterprise and agreed to a 30-year prison term, U.S. Attorney Paul J. Fishman announced.
Maksym Shynkarenko, 35, of Kharkov, Ukraine, pleaded guilty before U.S. District Judge William H. Walls in Newark federal court to Count 31 of an indictment charging him with conducting a child exploitation enterprise in connection with a website he operated between 2005 and 2008. Shynkarenko was initially detained in Thailand in January 2009 pending extradition. He was transported to the United States and has been in custody in the United States since making his initial court appearance in June 2012.
The investigation into the website Shynkarenko operated has led to convictions in 47 states of more than 600 American consumers of hardcore images of children being sexually assaulted and abused.
“The guilty plea of Maksym Shynkarenko is the capstone to an operation that has led to the imprisonment of hundreds of offenders who traded in recorded images of horrific child abuse and torture,” U.S. Attorney Fishman said. “Because of today’s technology, the images of that abuse will be available for years. It’s fitting that Shynkarenko will spend the next three decades of his life in a prison cell paying for the pain from which he has profited.”“The HSI investigation leading to today’s plea resulted in convictions of 600 American consumers of child pornography in 47 states, dozens of whom were previously convicted sex offenders,” Andrew McLees, special agent in charge of HSI in Newark, said. “Today’s plea again underscores HSI’s commitment to taking those who distribute and sell graphic images and videos of child pornography off the street. Shynkarenko founded and operated a website that offered subscribers access to thousands of despicable images and videos of child sexual abuse. As we did in this case, HSI and our international law enforcement partners will continue to use every tool at our disposal to track down those who exploit children and bring them to justice.”
According to documents filed in this case and statements made in court:
From at least 2005 through mid-2008, Shynkarenko operated from Ukraine a website that he helped design, and which offered access to thousands of images and videos of child sexual abuse. Subscribers typically paid a fee of $79.99 for a 20-day subscription to the website. Shynkarenko worked in conjunction with other individuals, including an individual from Siberia who helped process credit card payments in a way that disguised the true nature of what was purchased. Shynkarenko and the other individuals operating the website granted access to images and videos of child pornography to subscribers on hundreds of occasions from 2005 to 2008. Shynkarenko said he worked with other individuals who advertised the child pornography website over the Internet under names such as “Illegal.CP” and “Pedo Heaven.”
Agents of U.S. Immigration and Customs Enforcement, Homeland Security Investigations, first located the child pornography website operated by Shynkarenko in October 2005 – based in part on e-mails recovered from the computer of an individual in Long Branch, N.J. At that time, the banner page of the site identified it as “Illegal.CP,” and the page featured more than a dozen images of minors engaged in sexual acts with other minors and adults. That page declared “[n]ow you are in [sic] few minutes away from the best children porn site on the net!” and “[i]f you join this site you will get tons of uncensored forbidden pics . . . forbidden stories, of course, many videos.” The words “join now” appeared at the top and bottom of the page.
An ICE agent, acting in an undercover capacity, purchased a 20-day subscription to the “Illegal.CP” website in October 2005 and the next day received an e-mail that provided a login and a password and indicated that the credit card charges for $79.99 would appear on the subscriber’s credit card bill as “ADSOFT.” Upon accessing the “Illegal.CP” website, the initial page warned subscribers as follows:
FAQ, Please read. “Our site is considered to be illegal in all countries....Even if you ever have problems with police, you can always say that someone had stolen the information from your credit card and used it. It is very difficult to establish that you were the person to pay.”
ICE HSI agents determined that the site contained thousands of what appeared to be images of child sexual abuse, both still images and videos, and that it offered the purchase of additional videos through the website.
Working with the U.S. Attorney’s Office for the District of New Jersey, ICE HSI agents in Newark were able to identify hundreds of individuals who subscribed to the “Illegal.CP” website between November 2005 and February 2006. Those leads, largely developed through agents’ monitoring of the website, led to what became a three-phase investigation: Operation Emissary, Emissary II, and Thin Ice. In late 2006, agents recovered a database of hundreds of additional individuals whose credit cards had been processed while subscribing to the “Illegal.CP” website. During the third phase in 2008, the continued investigation by ICE HSI agents focused more on the operators of the website, including Shynkarenko, and recovered evidence of hundreds of additional individuals who had attempted to subscribe.
The leads, along with master search warrants prepared by the New Jersey U.S. Attorney’s Office, were distributed to ICE HSI offices and U.S. Attorney’s Offices throughout the nation. The investigation has led to the conviction of more than 600 individuals in 47 states, making the investigation one of the most successful child sexual abuse investigations in the nation’s history. A list of the more than 600 American consumers convicted as a result of the investigation and the sentences they received is appended to this release.
The child exploitation enterprise count to which Shynkarenko pleaded guilty carries a maximum potential penalty of life imprisonment and a mandatory minimum sentence of 20 years in prison. Under the terms of the plea agreement, the court will sentence Shynkarenko to a term of 30 years in prison. The count also carries a maximum fine of $250,000 or twice the gross amount of any pecuniary gain derived from the offense. Sentencing is scheduled for April 15, 2014.
U.S. Attorney Fishman credited special agents of ICE HSI, under the direction of Special Agent in Charge Andrew McLees, for the investigation leading to today’s guilty plea. He also thanked the United States Marshals Service, under the direction of U.S. Marshal Juan Mattos Jr., for its work in transporting Shynkarenko from Thailand, as well as acknowledging the important work of Thai authorities. U.S. Attorney Fishman also thanked the numerous ICE HSI offices and U.S. Attorney’s Offices around the country who prosecuted the cases that secured the 600 convictions achieved during Operations Emissary and Operation Thin ICE, and thanked the Department of Justice’s Office of International Affairs and Child Exploitation and Obscenity Section for their important roles. He noted the invaluable assistance provided by MasterCard and Visa officials during the course of the investigation.
The government is represented by Assistant U.S. Attorneys Mark J. McCarren and Danielle Walsman of the U.S. Attorney’s Office in Newark and Assistant U.S. Attorney Harvey Bartle in Trenton.
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Defense counsel: Nicholas Wooldridge Esq. and Arkady Bukh Esq., Brooklyn, N.Y.
Shynkarenko Indictment
Thin Ice - Emissary Offender ListBusiness Owner Charged in $1.2 Million Procurement FraudRead the Press Release
Claimed Her Business Was Owned and Operated by a Service-Disabled Veteran
NEWARK, N.J. – A Bergen County, N.J., woman was arrested this morning on charges that she fraudulently represented her company as a service-disabled veteran-owned small business in order to obtain more than $1.2 million worth of government contracts set aside for disabled veterans, U.S. Attorney Paul J. Fishman announced.
Miriam Friedman, 54, of Teaneck, N.J., surrendered to special agents from the U.S. Department of Veterans Affairs (VA), Office of the Inspector General, as a result of a federal criminal complaint charging her with wire fraud. She is scheduled to make her initial appearance today before U.S. Magistrate Judge James B. Clark III in Newark federal court.
According to the complaint unsealed today:
Friedman is the owner of Office Dimensions Inc., a company in Teaneck that sells furniture and design services to industrial and government customers. Friedman and her husband control Office Dimensions and all its revenues, as well as run the company’s daily operations. Neither served in the U.S. military, but Friedman’s father-in-law is a retired U.S. military veteran.
On Nov. 23, 2009, Friedman certified in a central registry for government contractors that Office Dimensions was a service-disabled veteran-owned small business. In her certification, she allegedly falsely claimed that her father-in-law was the owner and operator, even though he had very little involvement with Office Dimensions and was not service-disabled. Friedman then bid for VA contracts set aside for service-disabled veterans who own their businesses.
From January 2010 through November 2011, the VA paid Office Dimensions more than $1.2 million on fraudulently obtained contracts to which Friedman was not entitled.
The wire fraud count with which Friedman was charged is punishable by a maximum potential penalty of 20 years in prison and a fine of $250,000 or twice the gross loss or gain cause by the offense.
U.S. Attorney Fishman credited special agents of the U.S. Department of Veterans Affairs, Office of the Inspector General, under the direction of Special Agent in Charge Jeffrey G. Hughes; the U.S. General Services Administration, Office of the Inspector General, under the direction of Special Agent in Charge James E. Adams; and IRS - Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen, for the investigation leading to today’s arrest.The government is represented by Assistant U.S. Attorney Scott B. McBride of the U.S. Attorney’s Office’s Health Care and Government Fraud 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.
14-008Defense counsel: Brian J. Neary Esq., Hackensack & Hoboken, N.J.
Friedman Complaint
Pharmacist Arrested in New Jersey, Charged with Assembling Illegal Drug LabRead the Press Release
NEWARK, N.J. – A Colorado man today admitted his role in a conspiracy to transport women across state lines for prostitution in New Jersey and other states, U.S. Attorney Paul J. Fishman announced.
James Roy Smith, 36, a/k/a “Mister Smith,” of Lakewood, Colo., pleaded guilty before U.S. District Judge Stanley R. Chesler to a superseding information charging him with conspiracy to transport women across state lines to work as prostitutes, and transportation of a victim across state lines with the intent that the victim work as a prostitute.
According to documents filed in this case and statements made in court:
From February 2009 through June 27, 2010, Smith conspired to operate a prostitution business in numerous locations around the United States, including New Jersey, New Mexico, Nebraska, and Pennsylvania. The women would be transported between states by air as well as in a Cadillac Escalade registered to Smith’s uncle. In order to attract and locate local customers, the conspirators would place advertisements for escort services on Craigslist as well as Backpage. com.
Smith admitted that in late June 2010, he conspired to transport six women from New Jersey to Philadelphia, Pa., to work as prostitutes. During that time, while checked in at the Econolodge in Elizabeth, N.J., he also caused a victim to be transported between these two states with the intent that the victim work as a prostitute.
The count of interstate transportation for the purpose of engaging in prostitution is punishable by a maximum potential penalty of 10 years in prison and the count of conspiracy to engage in that same offense is punishable by a maximum potential penalty of five years in prison. Both counts are also punishable by a fine of $250,000. Sentencing is scheduled for April 29, 2014.U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, with the investigation leading to today’s guilty plea. He also thanked FBI offices in Omaha, Neb., and Salt Lake City, Utah; the Union County, N.J., Prosecutor’s Office; the Elizabeth, N.J., Police Department; and the Clay County, Neb., Sheriff’s Office for their roles.
The government is represented by Senior Litigation Counsel Leslie F. Schwartz of the U.S. Attorney’s Office Criminal Division in Newark.
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Defense counsel: Brooke M. Barnett Esq., Newark
Smith, James Roy Superseding Information
Colorado Man Pleads Guilty to Transporting Women to Work as ProstitutesRead the Press Release
NEWARK, N.J. – A Colorado man today admitted his role in a conspiracy to transport women across state lines for prostitution in New Jersey and other states, U.S. Attorney Paul J. Fishman announced.
James Roy Smith, 36, a/k/a “Mister Smith,” of Lakewood, Colo., pleaded guilty before U.S. District Judge Stanley R. Chesler to a superseding information charging him with conspiracy to transport women across state lines to work as prostitutes, and transportation of a victim across state lines with the intent that the victim work as a prostitute.
According to documents filed in this case and statements made in court:
From February 2009 through June 27, 2010, Smith conspired to operate a prostitution business in numerous locations around the United States, including New Jersey, New Mexico, Nebraska, and Pennsylvania. The women would be transported between states by air as well as in a Cadillac Escalade registered to Smith’s uncle. In order to attract and locate local customers, the conspirators would place advertisements for escort services on Craigslist as well as Backpage. com.
Smith admitted that in late June 2010, he conspired to transport six women from New Jersey to Philadelphia, Pa., to work as prostitutes. During that time, while checked in at the Econolodge in Elizabeth, N.J., he also caused a victim to be transported between these two states with the intent that the victim work as a prostitute.
The count of interstate transportation for the purpose of engaging in prostitution is punishable by a maximum potential penalty of 10 years in prison and the count of conspiracy to engage in that same offense is punishable by a maximum potential penalty of five years in prison. Both counts are also punishable by a fine of $250,000. Sentencing is scheduled for April 29, 2014.U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, with the investigation leading to today’s guilty plea. He also thanked FBI offices in Omaha, Neb., and Salt Lake City, Utah; the Union County, N.J., Prosecutor’s Office; the Elizabeth, N.J., Police Department; and the Clay County, Neb., Sheriff’s Office for their roles.
The government is represented by Senior Litigation Counsel Leslie F. Schwartz of the U.S. Attorney’s Office Criminal Division in Newark.
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Defense counsel: Brooke M. Barnett Esq., Newark
Smith, James Roy Superseding Information
South Jersey Man Admits Distributing Images of Child Sexual AbuseRead the Press Release
CAMDEN, N.J. – A Gloucester County, N.J., man admitted today that he distributed images of child sexual abuse over the Internet, U.S. Attorney Paul J. Fishman announced.
Gerrett Conover, 48, of Woolwich Township, N.J., pleaded guilty before U.S. District Judge Noel L. Hillman in Camden to Count Three of the indictment against him, distribution of child pornography. Conover has been in custody since his arrest.
According to documents filed in this case and statements made in court:
On Sept. 16, 2012, Conover was intercepted at the United States border on his way from Canada into New York and was found in possession of a laptop containing images of sexually exploited children. Agents obtained a search warrant for Conover’s home in Woolwich Township and seized various computers and other media containing additional images of child sexual abuse. The search also uncovered materials allegedly establishing Conover’s involvement in the Boy Scouts between 1990 and 2000.
At his guilty plea proceeding, Conover admitted that he knowingly distributed images of children engaged in sexually explicit conduct.
The distribution charge to which Conover pleaded guilty is punishable by a mandatory minimum penalty of five years in prison and a maximum potential penalty of 20 years in prison and a $250,000 fine. Sentencing is scheduled for April 15, 2014.
U.S. Attorney Fishman credited special agents of Immigration and Customs Enforcement, Homeland Security Investigations (HSI), under the direction of Special Agent in Charge Andrew M. McLees, with the investigation. He also thanked HSI Offices in Boston; Messina, N.Y.; Los Angeles; and San Bernardino, Calif.; as well as Customs and Border Protection in Ogdensburg, N.Y., for their roles.
The government is represented by Assistant U.S. Attorney Diana Carrig of the U.S. Attorney’s Office Criminal Division in Camden.
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Defense counsel: Jerome Brown Esq., PhiladelphiaConover Indictment
Oklahoma Man Sentenced to One Year in Prison for Stealing $2.8 Million in TextbooksRead the Press Release
NEWARK, N.J. – An Oklahoma man previously employed as a textbook salesman for a New Jersey-based publisher was sentenced today to one year and one day in prison for stealing more than $2.8 million dollars in textbooks from his former employer through an elaborate scheme that involved diverting free educational samples intended for professors, U.S. Attorney Paul J. Fishman announced.
Christopher J. Brock, 45, of Yukon, Okla., previously pleaded guilty before U.S. District Judge Dennis M. Cavanaugh to wire fraud. Judge Cavanaugh imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Brock executed a scheme to defraud his former employer, John Wiley & Sons (Wiley), out of more than $2.8 million worth of textbooks, which he then resold for approximately $450,000. Wiley is based in Hoboken, N.J., and is one of the largest publishers of technical writing in the world, with an estimated market value of approximately $3 billion. A portion of Wiley’s publications are collegiate textbooks, which are distributed to schools and universities.
Brock lived in Oklahoma and was employed by Wiley, first as a higher education publishing representative, and most recently as a district sales supervisor based in Oklahoma. Brock accessed the corporate systems of Wiley — including computers located in New Jersey — and diverted to himself more than 16,000 textbooks and other items he fraudulently designated as free educational samples.
To avoid detection in a review of his employee records within the internal order system, Brock designated both actual and fabricated professors as the purported recipients of the items, and then Brock listed his own home address and other addresses that he controlled as alternate shipping addresses for those professors and directed that the books be shipped to those alternate addresses. This made it appear in the records of Wiley that the free education samples were legitimately going to professors when, in reality, they were being sent to Brock.
Once Brock received the diverted textbooks he sold them to resellers and received payment through PayPal accounts that he controlled. PayPal, in turn, would deposit the funds into bank accounts that Brock controlled.
In total, Brock made approximately $450,000 reselling the textbooks that he stole from Wiley. These textbooks had a retail value of over $2.8 million. The money that Brock earned as a result of the scheme was largely used for personal expenditures, including, among other things, high-end home furnishings and scuba diving equipment.
In addition to the prison term, Judge Cavanaugh sentenced Brock to two years of community service. Restitution will be determined at a later date.
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. U.S. Attorney Fishman also thanked John Wiley & Sons for its cooperation and assistance with the investigation.
The government is represented by Assistant U.S. Attorney Daniel V. Shapiro of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
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Defense counsel: Robert L. Johnston Esq. Oklahoma City, Okla.
Insurance Broker, Former Toms River, N.J., Mayor, Sentenced in Separate Schemes Involving Toms River OfficialsRead the Press Release
TRENTON, N.J. — A New Jersey insurance broker and the former mayor of Toms River, N.J., were each sentenced today for offenses arising from separate schemes involving officials of Toms River and the former insurance broker for the Toms River Regional School District Francis X. Gartland, U.S. Attorney Paul J. Fishman announced.
Frank Cotroneo, 63, of Chester, N.J., an insurance broker with an office in Morristown, N.J., was sentenced to 37 months in prison and ordered to pay more than $12.4 million in restitution to the Toms River School District and in forfeiture to the United States. Cotroneo previously pleaded guilty before former Chief U.S. District Judge Garrett E. Brown Jr., to one count each of bribery and tax evasion arising from his participation in a scheme to pay hundreds of thousands of dollars in bribes to Michael J. Ritacco, 67, of Seaside Park, N.J., the former superintendent for the Toms River Regional School District, in exchange for his official assistance.
Carmine C. Inteso Jr., 47, of Toms River, was sentenced today to six months in prison and six months of house arrest for evading his income tax obligations. Inteso, who was arrested in July 2012 after returning from Afghanistan where he had been working as a contractor, pleaded guilty in December 2012 before U.S. District Judge Joel A. Pisano to one count of tax evasion.
From 2002 through 2007, Inteso held the positions of Township Committee member, mayor, deputy mayor, and councilman for the Township of Toms River, formerly known as Dover Township.
Inteso allegedly took a job in Afghanistan after learning he was the target of the tax investigation and, after returning to the United States, was taken into custody at New York’s John F. Kennedy International airport.
Judge Pisano imposed the sentences today in Trenton federal court.
According to documents filed and statements made in court:Cotroneo admitted that from 2002 to April 2009, he and co-conspirators Gartland and Frank D’Alonzo, a former administrator at the Toms River Regional School District, paid bribes and other benefits to Michael J. Ritacco, who was then the superintendent of the district. The payments were made to allow Cotroneo and Gartland, 72, of Baltimore, Md., – insurance co-brokers for the school district – to obtain and keep the lucrative insurance brokerage contracts with the district. To facilitate the scheme, Ritacco, Gartland and Cotroneo agreed to have Ritacco approve a workers’ compensation insurance contract between Gartland and the school district, which yielded between $500,000 and $600,000 annually in excess fees. Those proceeds were to be used to make hundreds of thousands of dollars in bribes to Ritacco.
Cotroneo also admitted that for tax years 2005 to 2007, he evaded the assessment of hundreds of thousands of dollars of federal income taxes by concealing the illegal proceeds he received from Gartland and others during the course of the bribery scheme.
Ritacco and Gartland were ordered previously to pay $4,336, 987.91 in restitution to the school district. Judge Pisano today ordered Cotroneo to pay $3,275,677.65 in restitution, which represented the loss to the school district while he was an active participant in the scheme. In addition to ordering restitution, the court ordered that Cotroneo forfeit to the United States a sum of $9,126,200.16, which represented the proceeds derived from the scheme. D’Alonzo was ordered to pay $1,625,952.79 in restitution, and also ordered to forfeit a sum of approximately $4.3 million. Gartland was previously ordered to forfeit $11 million, which represented the total proceeds derived from the fraudulent scheme. Prior to his sentencing on Sept. 14, 2012, Ritacco forfeited to the United States $1 million, a 2010 Mercedes Benz, and $8,950 in cash.
In addition to the prison term and payments, Judge Pisano sentenced Cotroneo to serve three years of supervised release.
In a separate and unrelated scheme beginning in 2005 and continuing through 2008, Inteso accepted hundreds of thousands of dollars in payments from Gartland, an insurance broker whose companies provided insurance brokerage services for New Jersey municipal entities including the Brick Township Board of Education and the Township of Toms River. Inteso directed Gartland to make the payments to a company Inteso controlled and that had ceased operating by 2007. Gartland pleaded guilty to charges of mail fraud, conspiracy to defraud the IRS and perjury and was sentenced to 135 months in prison.
Inteso used the funds to pay for his personal expenses and withdrew significant amounts of cash. Despite receiving approximately $291,000 in income from the insurance broker during calendar years 2006, 2007 and 2008, Inteso failed to file personal income taxes for those years.
In addition to the prison term, Judge Pisano sentenced Inteso to serve two 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; and IRS-Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen. The Office of International Affairs in the Justice Department’s Criminal Division and the Diplomatic Security Service’s Regional Security Office in Kabul, Afghanistan provided invaluable assistance in the Inteso case.
The government is represented by Assistant U.S. Attorney Lee M. Cortes Jr., of the U.S. Attorney’s Office Special Prosecutions Division in Newark.14-006
Defense counsel:
Carmine Inteso: Scott A. Krasny Esq., West Trenton, N.J.
Frank Cotroneo: Howard Brownstein Esq., Union City, N.J.Foreign Bribery Charges Unsealed Against Former Chief Executive Officers of Oil Services CompanyRead the Press Release
NEWARK, N.J. — Two former chief executive officers of PetroTiger Ltd. – a British Virgin Islands oil and gas company with operations in Colombia and offices in New Jersey – have been charged for their alleged participation in a scheme to pay bribes to foreign government officials in violation of the Foreign Corrupt Practices Act (FCPA), to defraud PetroTiger, and to launder proceeds of those crimes. In addition, PetroTiger’s former general counsel pleaded guilty to bribery and fraud charges in connection with the same scheme.
U.S. Attorney Paul J. Fishman of the District of New Jersey, Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and Special Agent in Charge Aaron T. Ford of the FBI’s Newark Division made the announcement after the charges and guilty plea were unsealed today.
“Bribery of public officials, whether at home or abroad, corrupts business opportunity and undermines trust in government,” said U.S. Attorney Fishman. “The under-the-table deals alleged in today’s charges are not an acceptable way of doing business.”
“We have said – repeatedly and emphatically – that foreign corruption, whether committed by companies or by the individuals entrusted to run those companies, will not be tolerated. And, our track record in vigorously enforcing the FCPA has shown that message to be undeniably true,” said Acting Assistant Attorney General Raman. “The charges unsealed today against two former CEOs of PetroTiger and the guilty plea announced today of the former general counsel reaffirm our clear message that we will prosecute corruption and fraud wherever we find it. Bribery distorts what should be a level playing field and deprives corporations and governments of funds that should instead be used to strengthen those institutions. Today’s announcement should be a reminder to CEOs and other executives who seek to corrupt the system at the expense of honest businesses: we are not going away.”
“The FBI is committed to pursuing those who disrupt the level playing field to which companies in the U.S. and around the world are entitled,” said FBI Special Agent in Charge Ford. “We will continue to investigate these matters by working with law enforcement agencies, both foreign and domestic, to ensure that both corporations and executives who bribe foreign officials for lucrative contracts are punished.”
According to the charges, former co-CEOs of PetroTiger Joseph Sigelman, 42, of Miami and the Philippines, and Knut Hammarskjold, 42, of Greenville, S.C.; former general counsel Gregory Weisman, 42, of Moorestown, N.J.; and others allegedly paid bribes to an official in Colombia in exchange for the official’s assistance in securing approval for an oil services contract worth roughly $39 million.Hammarskjold was arrested Nov. 20, 2013, at Newark Liberty International Airport. Sigelman was arrested on Jan. 3, 2014, in the Philippines and appeared this afternoon (ChST) in Guam before U.S. Magistrate Judge Joaquin V.E. Manibusan III. Sigelman will have an initial appearance in New Jersey federal court on a date to be determined. Sigelman and Hammarskjold were charged by sealed complaints filed in the District of New Jersey on Nov. 8, 2013, with conspiracy to commit wire fraud, conspiracy to violate the FCPA, conspiracy to launder money and substantive violations of the FCPA.
Weisman pleaded guilty on Nov. 8, 2013, to a criminal information charging one count of conspiracy to violate the FCPA and to commit wire fraud. The charges and guilty plea were also unsealed today.
The charges allege the defendants made three separate payments from PetroTiger’s bank account in the United States to the official’s bank account in Colombia to secure approval from Colombia’s state-owned and state-controlled oil company for a lucrative oil services contract in the country. According to the charges, to conceal the bribes, the defendants first attempted to make the payments to a bank account in the name of the foreign official’s wife for purported consulting services she did not perform. The charges allege that Sigelman and Hammarskjold provided Weisman invoices including her bank account information. The defendants made the payments directly to the official’s bank account when attempts to transfer the money to his wife’s account failed.
In addition, court documents allege that the defendants attempted to secure kickback payments at the expense of PetroTiger’s board members. According to the criminal charges, the defendants were negotiating an acquisition of another company on behalf of PetroTiger, including on behalf of several members of PetroTiger’s board of directors who were helping to fund the acquisition. In exchange for negotiating a higher purchase price for the acquisition, two of the owners of the target company agreed to kick back to the defendants a portion of the increased purchase price. According to the charges, to conceal the kickback payments, the defendants had the payments deposited into Sigelman’s bank account in the Philippines, created a “side letter” to falsely justify the payments, and used the code name “Manila Split” to refer to the payments amongst themselves.
The conspiracy to commit wire fraud count carries a maximum penalty of 20 years in prison and a fine of the greater of $250,000 or twice the value gained or lost. The conspiracy to commit violations of the FCPA count carries a maximum penalty of five years in prison and a fine of the greater of $250,000 or twice the value gained or lost. The FCPA counts each carry a maximum penalty of five years in prison and a fine of the greater of $250,000 or twice the value gained or lost. The conspiracy to commit money laundering count carries a maximum penalty of 20 years in prison and a fine of the greater of $500,000 or twice the value of the property involved in the transaction.
The charges contained in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
The department has worked closely with and has received significant assistance from its law enforcement counterparts in the Republic of Colombia and greatly appreciates their assistance in this matter. The department also thanks the Republic of the Philippines, including the Bureau of Immigration, for its assistance in this matter. Significant assistance was also provided by the Criminal Division’s Office of International Affairs.
The case is being investigated by the FBI’s Newark Division. The case is being prosecuted by Assistant U.S. Attorney Aaron Mendelsohn of the District of New Jersey and Assistant Chief Daniel S. Kahn of the Criminal Division’s Fraud Section.
Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.
14-005
Defense counsel:
Joseph Sigelman: Patrick Civille Esq., Guam (for purposes of initial appearance only)
Knut Hammarskjold: Assistant Federal Public Defender Lori M. Koch Esq., Camden
Gregory Weisman: Michael A. Schwartz Esq., Philadelphia
Sigelman Complaint
Hammarskjold Complaint
Weisman InformationDoctor Admits Taking Bribes in Test-Referrals Scheme with New Jersey Clinical LabRead the Press Release
NEWARK, N.J. – A doctor with a family medicine practice in New Jersey admitted today to accepting 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.
Joel Fischgrund, 60, of Livingston, N.J., pleaded guilty today before U.S. District Judge Stanley R. Chesler in Newark federal court to one count of accepting bribes.
Including Fischgrund, 22 people – 11 of them 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.
According to documents filed in this and related cases and statements made in court:
Fischgrund today admitted he accepted bribes in return for referring patient blood specimens to BLS and was paid $1,500 a month under a sham consulting agreement. As part of the purported agreement with Advantech Sales LLC, he was required to fill out a sheet – titled “Consultant Advisory Board Data Sheet” – that only took minutes to complete. Fischgrund admitted he knew the questions on that sheet had no real value to Advantech and were designed to disguise the bribe payments.
The bribery count to which Fischgrund pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for April 1, 2014. As part of his guilty plea, Fischgrund agreed to forfeit 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 FBI, under the direction of Special Agent in Charge Aaron T. Ford; U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Thomas O’Donnell; IRS–Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen; 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 pleas.
The government is represented by Senior Litigation Counsel Andrew Leven, Assistant U.S. Attorney Joseph Minish and Jacob T. Elberg, Chief of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark, as well as Assistant U.S. Attorney Barbara Ward of the office’s Asset Forfeiture and Money Laundering Unit.
U.S. Attorney 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 $520 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.
14-003Defense counsel: Edward Dauber Esq., Newark
Fischgrund Information
Essex County, N.J., Man Admits Role in “Double-Dipping” SchemeRead the Press Release
NEWARK, N.J. - An Essex County, N.J., man today admitted his role in defrauding Home Depot Inc. out of more than $470,000 through an elaborate “double-dipping” scheme that he committed at various Home Depot locations, including in New Jersey, U.S. Attorney Paul J. Fishman announced.
Daniel Chalet, 28, of Bloomfield, N.J., pleaded guilty before U.S. Magistrate Judge James B. Clark III to an information charging him with conspiracy to commit wire fraud.
According to documents filed in this case and statements made in court:
From March 2009 through June 2012, Chalet and his conspirators routinely purchased various items from Home Depot locations in New Jersey, New York, Massachusetts, Delaware, Maryland, Connecticut and Pennsylvania. The conspirators would assemble two shopping carts containing identical items. They then purchased the items in one cart (Cart 1) and stashed the other cart in the store (Cart 2). They would typically purchase the items in Cart 1 using cash, fraudulently obtained Home Depot store credit, or some combination thereof. Chalet and his conspirators would then leave the store with the items in Cart 1, as well as the receipt for the purchase, leaving Cart 2 inside the store.
The conspirators would return to the store almost immediately with a receipt corresponding to the items in Cart 1 and retrieve Cart 2, which contained the identical set of items. Under the guise that they had forgotten to purchase an item, usually an inexpensive one, Chalet and his conspirators would return to the register with Cart 2, and purchase only the additional small item. They would present the receipt for the items from Cart 1 and deceive the cashier into believing that the items in Cart 2 had already been purchased.
Chalet and his conspirators would later go back to the same Home Depot store or travel to different Home Depot store locations to return the items. In some instances, they presented a receipt for the return, and in other instances, the defendants obtained a refund for store credit without presenting a receipt.
Chalet and his conspirators carried out the scheme hundreds of times at various Home Depot locations, fraudulently obtaining Home Depot store credit and refunds totaling at least $470,511.66.
The conspiracy count to which Chalet pleaded guilty is punishable by a maximum potential penalty of 20 years in prison and a $250,000 fine. Sentencing is scheduled for April 15, 2014.
U.S. Attorney Fishman credited special agents of the U.S. Secret Service, under the direction of Special Agent in Charge James Mottola, for the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Lakshmi Srinivasan Herman of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
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Defense counsel: Richard Roberts Esq., Newark
Chalet, Daniel Information
Owner of New Jersey Debit Card Business Admits Filing False Tax ReturnsRead the Press Release
NEWARK, N.J. – An Orange County, N.Y., man who owned a New Jersey company admitted today to filing false income tax returns, U.S. Attorney Paul J. Fishman announced.
Richard Jackowitz, 60, of Warwick, N.Y., pleaded guilty before U.S. District Judge Susan D. Wigenton in Newark federal court to two counts of an information charging him with filing false tax returns.
According to documents filed in this case and statements made in court:
Jackowitz owned and operated Branded Marketing, a Haskell, N.J., company that sold debit cards. For the 2007 and 2008 tax years, Jackowitz had unreported income from his company of approximately $105,512 and $359, 677, respectively. Jackowitz’s false tax returns caused a loss to the IRS of more than $300,000.
The tax charge to which Jackowitz pleaded is punishable by a maximum potential penalty of three years in prison and a $250,000 fine. As part of his plea agreement, Jackowitz also agreed to pay $319,940 in restitution to the government. Sentencing is scheduled for March 25, 2014.
U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen; and special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, for the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Jenny Kramer of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
13-480
Defense counsel: John D. Williams Esq., Vernon, N.J.
Jackowitz Information
New Jersey Woman Sentenced to 51 Months in Prison for Her Role in Stealing $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 New Jersey woman was sentenced today to 51 months in prison for her role in defrauding a charity program out of more than $7 million in donated HIV and cancer medication, U.S. Attorney Paul J. Fishman announced.
Keisha Jackson, 48, of Perth Amboy, N.J., previously pleaded guilty before U.S. District Judge Mary L. Cooper in Trenton federal court to conspiracy to commit mail fraud.
According to documents filed in this case and statements made in court:
A pharmaceutical company donated millions of dollars’ worth of FDA-approved prescription medicines – including HIV and cancer treatments – at no cost to qualified patients experiencing financial difficulties. Jackson was employed as a customer service representative at a corporation providing administrative support for the donated medicines program.
Jackson conspired with Lateefa McKenzie Body, 35, of Linden, N.J., and others who entered hundreds of fraudulent orders into the company’s system and had the medicines delivered to Jackson’s address and other addresses she controlled. The medicines were then resold, and Jackson received payment for accepting the shipments.
Jackson admitted she understood that the payments were coming from sale of the stolen medications and that hundreds of shipments came to her home.
In addition to the prison term, Judge Cooper sentenced Jackson to serve three years of supervised release.
McKenzie Body was convicted in August 2013, following a jury trial, of one count of conspiracy to commit mail fraud and nine counts of mail fraud. She awaits sentencing.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, with the investigation.
The government is represented by Senior Litigation Counsel Andrew Leven and
Unit Chief Jacob T. Elberg of the U.S. Attorney’s Office Health Care and Government Fraud Unit.13-481
Defense counsel: Pasquale Giannetta Esq., Wayne, N.J.
Camden, N.J., Man Arrested, Charged with Making Fake Green CardsRead the Press Release
CAMDEN, N.J. – A Camden man is charged in a scheme to produce and sell fake government documents after federal agents broke up his alleged fraudulent operation, U.S. Attorney Paul J. Fishman announced today.
Domingo Luna, 33, aka “Morro,” of Camden, N.J., was arrested by special agents of Immigration and Customs Enforcement, Homeland Security Investigations (ICE HSI) on Dec. 12, 2013. A Mexican citizen not legally in the United States, he has been held in ICE administrative custody since that time. Luna was charged federally late yesterday in a criminal complaint with one count of making fake identification documents and one count of producing counterfeit permanent resident, or “green” cards.
Luna appeared this morning before U.S. Magistrate Judge Joel Schneider in Camden federal court and was detained.
According to the criminal complaint and statements made in court:
Federal law enforcement officers learned that a man nicknamed “Morro” was producing and selling false and fraudulent U.S. Social Security cards, permanent residence cards and driver’s licenses from a location in Camden. From early to mid-December 2013, “Morro,” who was later identified as Luna, sold an undercover law enforcement officer two fake social security cards, a fraudulent permanent residence card and a Pennsylvania driver’s license. Luna took pictures of the officer with a digital camera and produced the documents at the Camden address.
On Dec. 12, 2013, law enforcement officers executed a search warrant on Luna’s residence, where they found evidence of a sophisticated fraudulent document-making operation, including computer equipment, a digital camera, a laminating machine and at least 25 fake cards.
The charges of producing a false identification card and green card carry a maximum potential penalty of 15 years and 10 years in prison, respectively. Each charge also carries a maximum $250,000 fine.
U.S. Attorney Fishman credited special agents of ICE HSI, under the direction of Special Agent in Charge Andrew M. McLees, and ICE Enforcement and Removal Operations, under the direction of Newark, N.J., Field Office Director John Tsoukaris, with the investigation leading to today’s arrests.
The government is represented by Assistant U.S. Attorney Matthew T. Smith of the U.S. Attorney’s Office Criminal Division in Camden.
13-479Defense counsel: Assistant Federal Public Defender Tom Young Esq., Camden
Two Elizabeth, N.J., Women Plead Guilty to Operating Counterfeit Check SchemeRead the Press Release
NEWARK, N.J. – Two Elizabeth, N.J., women admitted today to conspiring to commit bank fraud by depositing more than half a million dollars in counterfeit checks into different TD Bank accounts, U.S. Attorney Paul J. Fishman announced.
Latisha White, 28, and Synethia Bland, 30, each pleaded guilty before U.S. District Judge William J. Martini to one count of bank fraud conspiracy in the superseding indictment against them.
According to documents filed in this case and statements made in court:
Between October 2009 and May 2012, White created counterfeit checks on her computer using commercially available check-writing software. White and Bland deposited the counterfeit checks into multiple accounts at TD Bank. In addition, Bland recruited others to use their own accounts or open new accounts to deposit the counterfeit checks.
White and Bland employed a variety of methods to withdraw the fraudulent funds, including making ATM cash withdrawals, submitting cash withdrawal slips and making debit card purchases on merchandise and postal money orders.
White and Bland each admitted they arranged the deposit of more than 150 counterfeit checks into more than 120 different bank accounts. They also each admitted that they deposited counterfeit checks that totaled more than $500,000.
The charge to which White and Bland pleaded guilty carries a maximum potential penalty of 30 years in prison and a maximum fine of $1 million. Sentencing is scheduled for April 24, 2014.
U.S. Attorney Fishman credited special agents of the U.S. Secret Service, under the direction of Special Agent in Charge James Mottola; postal inspectors, under the direction of Inspector in Charge Maria L. Kelokates; and investigators at the Union County Prosecutor=s Office, under the direction of Acting Prosecutor Grace H. Park, and the Morris County Prosecutor’s Office, under the direction of Acting Prosecutor Fredric M. Knapp.
The government is represented by Assistant U.S. Attorney Bohdan Vitvitsky of the U.S. Attorney’s Office Economic Crimes Unit in Newark.13-478
Defense counsel:
Bland: Rubin Sinins Esq., Springfield, N.J.
White: Ruth Liebesman Esq., Paramus, N.J.
Bland, Synethia and White, Latisha Superseding Indictment
Ringleader of International Rhino Smuggling Conspiracy Pleads Guilty in New Jersey to Wildlife Trafficking CrimesRead the Press Release
WASHINGTON – Zhifei Li, the owner of an antique business in China, pleaded guilty today to being the organizer of an illegal wildlife smuggling conspiracy in which 30 rhinoceros horns and numerous objects made from rhino horn and elephant ivory worth more than $4.5 million were smuggled from the United States to China.
The guilty plea was announced by Paul J. Fishman, U.S. Attorney for the District of New Jersey; Robert G. Dreher, the Acting Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice; Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, and Dan Ashe, Director of the U.S. Fish and Wildlife Service (USFWS).
“The brutality of animal poaching, wherever it occurs, feeds the demand of a multibillion-dollar illegal international market,” said U.S. Attorney Fishman. “As a major hub of international commerce through our ports and busy airport, the District of New Jersey plays an important role in curbing the escalation of this devastating trade. Zhifei Li’s conviction is a warning to those who would be lured by the profits of dealing in cruelty.”
Li, 29, of Shandong, China, the owner of Overseas Treasure Finding in Shandong, pleaded guilty today before U.S. District Judge Esther Salas in Newark, N.J., to a total of 11 counts: one count of conspiracy to smuggle and violate the Lacey Act; seven counts of smuggling; one count of illegal wildlife trafficking in violation of the Lacey Act; and two counts of making false wildlife documents.
Li was arrested in Florida in January 2013 on federal charges brought under seal in New Jersey and shortly after arriving in the country. Before he was arrested, he purchased two endangered black rhinoceros horns from an undercover USFWS agent in a Miami Beach hotel room for $59,000 while attending an antique show. Li was arrested as part of “Operation Crash” – a nationwide effort led by the USFWS and the Justice Department to investigate and prosecute those involved in the black market trade of rhinoceros horns and other protected species.
In papers filed in Newark federal court, Li admitted that he was the “boss” of three antique dealers in the United States whom he paid to help obtain wildlife items and smuggle them to him via Hong Kong. One of those individuals was Qiang Wang, aka “Jeffrey Wang,” who was sentenced to 37 months in prison on Dec. 5, 2013, in the Southern District of New York. Li played a leadership and organizational role in the smuggling conspiracy by arranging for financing to pay for the wildlife, purchasing and negotiating the price, directing how to smuggle the items out of the United States, and obtaining the assistance of additional collaborators in Hong Kong to receive the smuggled goods and then smuggle them to him in mainland China.
“The take-down of the Li smuggling ring is an important development in our effort to enforce wildlife protection laws. Rhino horn can sell for more than gold and is just as rare, but rhino horn and elephant ivory are more than mere commodities. Each illegally traded horn or tusk represents a dead animal, poaching, bribery, smuggling and organized crime,” said Acting Assistant Attorney General Dreher. “The Justice Department will continue to vigorously enforce the law designed to protect wildlife. This is a continuing investigation.”
“The illegal trade in rhino horn has devastated the wild population of these magnificent animals; with the real possibility emerging that all sub-species will be extinct in the wild within our lifetimes,” said U.S. Attorney Ferrer. “Additionally, the poaching activities have cost the lives of enforcement rangers and wardens as the traffickers have resorted to greater levels of violence to feed the black market. This case reflects the seriousness with which we regard these activities and our commitment to work collectively to quash the conduct and hold the law-breakers accountable.”“The staggering prices paid for rhino horn by criminals like Zhifei Li and his accomplices ensure that unscrupulous poachers continue to slaughter these animals, and it’s our hope that his conviction serves as a warning to other traffickers of the severe consequences they face,” said Fish and Wildlife Service Director Ashe. “The unparalleled greed of criminal trafficking rings like Li’s fuel the poaching epidemic that is decimating rhinoceros populations in the wild. Regardless of whether the horns he smuggled were sawed off the corpse of a rhino last year or a decade ago, each one represents the death of one of the world’s most endangered animals.”
Rhinoceros are a herbivore species of prehistoric origin and one of the largest remaining mega-fauna on earth. They have no known predators other than humans. All species of rhinoceros are protected under United States and international law. Since 1976, trade in rhinoceros horn has been regulated under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (known as CITES), a treaty signed by over 170 countries around the world to protect fish, wildlife and plants that are or may become imperiled due to the demands of international markets.
In pleading guilty, Li admitted that he sold 30 smuggled, raw rhinoceros horns worth approximately $3 million – approximately $17,500 per pound – to factories in China where raw rhinoceros horns are carved into fake antiques known as Zuo Jiu (which means “to make it as old” in Mandarin. In China, there is a centuries old tradition of drinking from an intricately carved “libation cup” made from a rhinoceros horn. Owning or drinking from such a cup is believed by some to bring good health, and true antiques are highly prized by collectors. The escalating value of such items has resulted in an increased demand for rhinoceros horn that has helped fuel a thriving black market, including recently carved fake antiques.
According to the charges, plea agreement and a detailed joint factual statement filed in in Newark federal court:
The investigation of Li began in November 2011, after a confidential informant sold two raw rhino horns to a middleman at the Vince Lombardi rest stop on the New Jersey Turnpike in an Operation Crash undercover sale. These government-supplied rhino horns were, in turn, sold to a Long Island City antiques dealer who was working for Li.
At Li’s direction, raw rhino horns were hidden by wrapping them in duct tape, hiding them in porcelain vases and falsely describing them on customs and shipping documents, including by labeling them as porcelain vases or handicrafts.
Li purchased 25 raw rhino horns, including 13 endangered black rhinoceros horns weighing approximately 151 pounds, through connections in New York and New Jersey, and another five raw rhino horns weighing at least 20 pounds through an accomplice in Dallas, Texas.
Li sold whole rhino horns to factories where they would be carved into fake antiques. The leftover pieces from the carving process were sold for alleged “medicinal” purposes even though rhino horn is made of compressed keratin, the same material in human hair and nails and has no proven medical efficacy.
Between 2011 and 2013, Li purchased approximately 60 carved ivory items from U.S. auction houses with an approximate market value of $500,000, all of which were smuggled to China at Li’s direction.
Before arriving in Miami, Li sent a text message to the Long Island City antiques dealer saying that he had as much as $500,000 to spend in the U.S. on antiques and rhino horn. When purchasing two rhino horns from an undercover USFWS agent at a Miami Beach hotel, Li told the covert agent that he was interested in buying more rhino horns regardless of quality, as much as the agent could find, and inquired if the horns could be shipped directly to Hong Kong.
In April 2012, after a Dallas-based accomplice purchased a large, eight-pound raw rhino horn for Li in Florida worth more than $140,000, Li sent the dealer an email directing him to cut the horn into two pieces, wrap them in electrical tape, and send them to Hong Kong in separate packages. The email included a photo of the rhino horn with a red line drawn though it indicating where the lengthy horn should be cut.
After Li’s conspirator in Long Island City purchased two raw elephant tusks for Li weighing more than 100 pounds, Li sent instructions by email that the shipper should declare the contents as “automobile parts” and not use the word “tusk” on the shipping documents.
Li smuggled libation cups carved from rhinoceros horns from the U.S. to Hong Kong. Rhino carvings valued as much as $242,500 were sold to Li’s customers in China. In early 2013, one of those customers, Shusen Wei, pleaded guilty in the Southern District of Florida to knowingly buying a smuggled rhino carving from Li.The plea agreement requires Li to forfeit $3.5 million in proceeds of his criminal activity as well as several Asian artifacts. Also, various ivory objects seized by the USFWS as part of the investigation will be surrendered. The maximum potential penalty is 10 years for each of the smuggling counts and five years for each of the other offenses, as well as a $250,000 fine per count, or twice the gross gain or loss from the offense. Sentencing before Judge Salas has been scheduled for April 1, 2014.
The investigation is continuing and is being handled by the U.S. Fish & Wildlife Service’s Office of Law Enforcement, the U.S. Attorney’s Office for the District of New Jersey, the U.S. Attorney’s Office for the Southern District of Florida and the Justice Department’s Environmental Crimes Section.
The government is represented by Assistant U.S. Attorneys Kathleen P. O’Leary and Barbara Ward of the New Jersey U.S. Attorney’s Office Criminal Division and Asset Forfeiture and Money Laundering Unit, Assistant U.S. Attorney Thomas Watts-FitzGerald of the U.S. Attorney’s Office for the Southern District of Florida and Senior Counsel Richard A. Udell of the Justice Department’s Environmental Crimes Section of the Environment and Natural Resources Division.
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Defense counsel: Gary Cutler Esq., New York
Li, Zhifei Superseding Information
Li, Zhifei JFS
Li, Zhifei JFS Exhibits
Li Exhibt 1
Li Exhibit 1a
Li Exhibit 2
Li Exhibit 7
Li Exhibit 10
Li Exhibit 10a
Li Exhibit 11
Li Exhibit 12Ocean County, N.J., Man Sentenced to 20 Years in Prison for Sexually Abusing Toddler, Streaming Assault Live over the InternetRead the Press Release
TRENTON, N.J. – An Ocean County, N.J., man was sentenced today to 20 years in prison for sexually abusing a toddler and streaming footage of the assault over the Internet, U.S. Attorney Paul J. Fishman announced.
Rodford W. Brindley, 68, of Toms River, N.J., previously pleaded guilty before U.S. District Judge Joel A. Pisano to an information charging him with one count of sexual exploitation of a minor. Judge Pisano imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:
Brindley engaged in online chats with someone whom he believed to be a mother living in Ohio, but who was, in fact, an Ohio law enforcement officer. On April 2, 2012, with no encouragement from the officer, Brindley sexually abused a child in his care at his Toms River home and streamed live video of that conduct over the Internet. He was arrested the same day by Ocean County authorities. He has been in custody since the case was adopted federally in May 2012.
In addition to the prison term, Judge Pisano sentenced Brindley to serve five years of supervised release. He is also required to register as a sex offender.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; the Ocean County Prosecutor’s Office, under the direction of Prosecutor Joseph D. Coronato; and the Franklin County Sheriff’s Department in Ohio, for the investigation leading to today’s sentence.
The government is represented by Assistant U.S. Attorney Harvey Bartle, Attorney-in-Charge of the U.S. Attorney’s Office in Trenton.
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Defense counsel: William Cunningham Esq., Brick, N.J.Former Partner in International Law Firm Sentenced to More Than 17 Years in Prison for Sex Trafficking of A Minor, Distributing Images of Child Sexual AbuseRead the Press Release
NEWARK, N.J. – A Bergen County, N.J., man admitted today to engaging in the sex trafficking of a young boy and distributing child pornography over the Internet and was sentenced during the same proceeding to 210 monthsin prison. He was also ordered to pay $1.2 million in restitution to his victims, New Jersey U.S. Attorney Paul J. Fishman announced.
Edward M. De Sear, 67, of Saddle River, N.J., pleaded guilty before U.S. District Judge William J. Martini to a superseding information charging him with one count of sex trafficking of a child and four counts of distributing child pornography. Judge Martini imposed the sentence today in Newark federal court.
At the time of his initial arrest in July 2011 on a federal complaint charging him with distribution of child pornography, De Sear was a partner at the New York office of a prominent international law firm. He was released on bail and taken into custody again in August 2012, when he was charged in an indictment with multiple offenses related to images of children being sexually abused.
According to documents filed in this case and statements made in court:
De Sear admitted that in June 2011, he arranged for a young boy to travel from Paris to Brussels, Belgium, and sexually abused the child. De Sear facilitated the boy’s international travel by, among other means, paying cash to the boy’s father.
On several occasions between May 2010 and February 2011, De Sear also distributed hundreds of video and image files depicting young children being sexually abused, sometimes violently, via a peer-to-peer file-sharing program.
In addition to the prison term and restitution, Judge Martini ordered De Sear to pay a $25,000 fine and sentenced him to a lifetime of supervised release He is also required to register as a sex offender.
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, for the investigation leading to today’s guilty plea and sentencing.
The government is represented by Assistant U.S. Attorneys Shirley U. Emehelu and Leslie F. Schwartz of the U.S. Attorney’s Office Criminal Division in Newark.
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Defense counsel: John Vazquez and Michael Critchley Sr., Esqs., Roseland, N.J.
De Sear, Edward Superseding Information
Englishtown, N.J., Pharmacy Burglar Sentenced to Four Years in Prison for Conspiracy to Distribute Stolen OxycodoneRead the Press Release
TRENTON, N.J. - A Brooklyn, N.Y., man was sentenced today to 48 months in prison for his involvement in a plot to burglarize a pharmacy in Englishtown, N.J., and distribute stolen narcotics, U.S. Attorney Paul J. Fishman announced.
Dzheykhun Avshalumov, 24, previously pleaded guilty before U.S. District Judge Freda L. Wolfson to an information charging him with one count of conspiracy to distribute and possess with intent to distribute oxycodone. Judge Wolfson imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:
The Union Hill-Supremo Pharmacy in Englishtown was burglarized shortly after 4:00 a.m. on June 17, 2012. Avshalumov and his conspirators filled 17 garbage bags and two cardboard boxes with merchandise from the pharmacy, including approximately 1,988 dosage units of methylphenidate, 500 dosage units of hydromorphone, 300 dosage units of Opana (a trade name for oxymorphone) and 3,800 dosage units of oxycodone – all Schedule II controlled substances.
The stock lost by the pharmacy was valued at approximately $350,000. Avshalumov admitted that he stole the drugs, and that he did so knowing they would be distributed.
In addition to the prison term, Judge Wolfson sentenced Avshalumov to three years of supervised release and ordered him to pay $334,722.12 in restitution.
Two of Avshalumov’s conspirators have previously pleaded guilty to this criminal conduct. James Zarbailov pleaded guilty before Judge Wolfson to conspiracy to distribute and possess with intent to distribute oxycodone. Zarbailov was sentenced to 63 months in prison on Nov. 18, 2013. David Mordukhaev pleaded guilty before Judge Wolfson to the same offense, and was sentenced to 65 months in prison on Dec. 11, 2013.
U.S. Attorney Fishman credited special agents of the FBI’s Red Bank Resident Agency, under the direction of Special Agent in Charge Aaron T. Ford in Newark, and law enforcement officers from the Marlboro Township Police Department, under the direction of Police Chief Bruce E. Hall, for the investigation leading to today’s sentence.
The government is represented by Assistant U.S. Attorney John E. Clabby of the U.S. Attorney’s Office Criminal Division in Trenton.13-477
Defense counsel: Michael A. Armstrong Esq., Willingboro, N.J.
New Jersey Doctor Admits Taking Bribes in Test-Referrals Scheme with New Jersey Clinical LabRead the Press Release
NEWARK, N.J. – A New Jersey doctor admitted today to accepting 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.
Glenn Leslie, 59, of Ramsey, N.J., 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 Leslie, 21 people – 11 employees or associates of BLS, and 10 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.
According to documents filed in this and related cases and statements made in court:
During his guilty plea proceeding, Leslie admitted to accepting bribes in return for referring patient blood specimens to BLS, approximately $5,000 a month. Leslie’s referrals alone allowed BLS to collect approximately $380,000 from government and private payors.
The bribery count carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for April 1, 2014. As part of his guilty plea, Leslie also agreed to forfeit the bribes he received from BLS.
The investigation has recovered more than $6.75 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; 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 Special Agent in Charge Shantelle P. Kitchen; 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 pleas.
The government is represented by Senior Litigation Counsel Andrew Leven, Assistant U.S. Attorney Joseph Minish and Jacob T. Elberg, Chief of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark, as well as Assistant U.S. Attorney Barbara Ward of the office’s Asset Forfeiture and Money Laundering Unit.
U.S. Attorney 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 $500 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.
13-473Defense counsel: Michael J. Beatrice Esq., Mahwah, N.J.
Leslie Information
Members of Multi-State Theft Scheme Sentenced in New Jersey for Conspiracy to Sell Stolen PharmaceuticalsRead the Press Release
NEWARK, N.J. – Three Florida men were sentenced today in New Jersey federal court for their roles in conspiring to possess and sell prescription medication taken from stolen tractor trailers, New Jersey U.S. Attorney Paul J. Fishman announced.
Ernesto Romero-Vidal a/k/a “Bemba,” 48, was sentenced to 80 months in prison; Rocke R. Lopez-Batista a/k/a “El Nino,” 28, was sentenced to 40 months in prison; and Ariel Garcia, 40, was sentenced to 18 months in prison.
All three defendants previously pleaded guilty before U.S. District Judge William J. Martini to separate informations charging them with conspiracy to possess stolen prescription medicine. Romero-Vidal also pleaded guilty to three additional counts of conspiring to receive and sell stolen goods, including pharmaceuticals belonging to drugmakers Bayer, Perrigo and Sandoz Inc.
According to documents filed in this case and statements made in court:
During their guilty plea proceedings, Romero-Vidal, Lopez-Batista and Garcia admitted that from September 2009 through October 2009, they conspired with others to possess prescription respiratory medicine manufactured by Mylan Inc. that was taken from a stolen tractor trailer in Tampa, Fla. on Sept. 8, 2009.
On October 20, 2009, Tapanes and a conspirator delivered samples of the stolen prescription medicine to a confidential source in Elizabeth, N.J. Nine days later, Tapanes and Garcia delivered a tractor trailer containing the stolen medicine to a confidential source. Later that same day, Tapanes, Lopez-Batista, and Garcia were present at a meeting in Garcia’s home during which the confidential source provided them with a cash payment of $140,000 for the stolen medicine. Romero-Vidal received a payment of $4,000 from the confidential source in connection with his role for brokering this sale.
Romero-Vidal also admitted he received approximately $3,500 for brokering the sale of medication stolen from a Bayer product distribution center in Olive Branch, Miss. on March 23, 2009, and $5,000 as partial payment towards the delivery of stolen Perrigo products – stolen along with a tractor trailer in Dallas on March 3, 2010 – to New Jersey.
He also admitted participating in the sale of Sandoz Inc., prescription respiratory medicine to two separate groups of buyers. The Sandoz products were stolen along with another tractor trailer in Chambersburg, Pa., on Dec. 2, 2009.
In addition to the prison term, Judge Martini sentenced each defendant to pay $264,900 in restitution. The judge also ordered Garcia to serve three years of supervised release, and Lopez-Batista and Romero-Batista each to serve a year of supervised release.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen; and detectives of the North Bergen Police Department, under the direction of Chief Robert J. Dowd, with the investigation.
The government is represented by Senior Litigation Counsel Leslie Faye Schwartz and Assistant U.S. Attorney Jane H. Yoon of the U.S. Attorney’s Office Criminal Division in Newark.
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Defense counsel:
Romero-Vidal: Robert Olejar Esq., Randoph, N.J.
Lopez-Batista: Pasquale Giannetta Esq., Wayne, N.J.
Garcia: Chester Keller, First Assistant Federal Public Defender, NewarkTrenton Man Admits 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 today admitted possessing three firearms, including a loaded semi-automatic rifle and a loaded revolver, U.S. Attorney Paul J. Fishman announced.
Isaiah Harris, 26, pleaded guilty before U.S. District Judge Michael A. Shipp in Trenton federal court to an information charging him with one count of being a convicted felon in possession of firearms and ammunition.
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.
The firearms charge to which Harris pleaded guilty carries a maximum potential penalty of 10 years in prison and a $250,000 fine. Sentencing is scheduled for March 25, 2014.
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.13-471
Defense counsel: Assistant Federal Public Defender Lisa Van Hoeck Esq., Trenton
Harris, Isaiah Information
Trenton Man Admits 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 today admitted possessing three firearms, including a loaded semi-automatic rifle and a loaded revolver, U.S. Attorney Paul J. Fishman announced.
Isaiah Harris, 26, pleaded guilty before U.S. District Judge Michael A. Shipp in Trenton federal court to an information charging him with one count of being a convicted felon in possession of firearms and ammunition.
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.
The firearms charge to which Harris pleaded guilty carries a maximum potential penalty of 10 years in prison and a $250,000 fine. Sentencing is scheduled for March 25, 2014.
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 Jeff Gray; 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.13-471
Defense counsel: Assistant Federal Public Defender Lisa Van Hoeck Esq., Trenton
Harris, Isaiah Information
Resident of Florida and Ohio Admits Defrauding Charter Flight Company and Others of Hundreds of Thousands of DollarsRead the Press Release
NEWARK, N.J. - A resident of Florida and Ohio today admitted his role in defrauding a charter flight company and other merchants of hundreds of thousands of dollars in luxury goods and services, U.S. Attorney Paul J. Fishman announced.
Dante G. Dixon, 45, of Miami, Fla., and Akron, Ohio, pleaded guilty before U.S. District Judge William J. Martini in Newark federal court to an information charging him with conspiracy to commit wire fraud.According to documents filed in this case and statements made in court:
From May through June of 2013, Dixon and others conspired to fraudulently obtain at least three private charter flights from Jet Aviation, an international business aviation services company, with U.S. headquarters in Teterboro, N.J., which provides charter flight services. Dixon and others also conspired to obtain tens of thousands of dollars in other luxury goods and services, all via sham lines of credit issued to a well-known financial institution, for the defendants and others’ use by misrepresenting that they were employees at the financial institution.
On May 5, 2013, an individual using the name “Josh Stevens” called Jet Aviation=s offices in Chicago, Ill., and Van Nuys, Calif., to inquire about its private charter flight services. That individual identified himself as being employed as a senior vice president at a well-known financial institution and provided an email address purporting to be affiliated with the financial institution. A Jet Aviation employee sent a draft Charter Services Agreement to the provided email address. The agreement was signed by “Josh Stevens” and returned to Jet Aviation on May 9, 2013, falsely listing “Josh Stevens” as a senior vice president and Dixon as a vice president at the well-known financial institution. The aviation company established an account and a line of credit for $350,000, which the defendants and others used to take four private charter flights.
As a result of their misrepresentations to Jet Aviation, Dixon and others fraudulently obtained private high-end charter flights and limousine car services, with a total value of $175,790, for which Jet Aviation never received payment.
Dixon and others made similar misrepresentations about their purported employment at the financial institution to other luxury service providers and obtained approximately $20,000 in luxury watches, sunglasses, and sterling silver and leather business cardholders, and approximately $25,500 in hotel stays at a luxury hotel in Miami.
As a result of their scheme, Dixon and others fraudulently obtained more than $220,000 in luxury goods and services.The conspiracy to commit wire fraud to which Dixon pleaded guilty is punishable by a maximum potential penalty of 20 years in prison and a fine of $250,000. Sentencing is scheduled for April 23, 2014.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, for the investigation leading to today=s guilty plea.
The government is represented by Assistant U.S. Attorney Aaron Mendelsohn 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: Lorraine Gauli-Rufo Esq., Verona, N.J.Dixon, Dante Information
Resident of Florida and Ohio Admits Defrauding Charter Flight Company and Others of Hundreds of Thousands of DollarsRead the Press Release
NEWARK, N.J. - A resident of Florida and Ohio today admitted his role in defrauding a charter flight company and other merchants of hundreds of thousands of dollars in luxury goods and services, U.S. Attorney Paul J. Fishman announced.
Dante G. Dixon, 45, of Miami, Fla., and Akron, Ohio, pleaded guilty before U.S. District Judge William J. Martini in Newark federal court to an information charging him with conspiracy to commit wire fraud.According to documents filed in this case and statements made in court:
From May through June of 2013, Dixon and others conspired to fraudulently obtain at least three private charter flights from Jet Aviation, an international business aviation services company, with U.S. headquarters in Teterboro, N.J., which provides charter flight services. Dixon and others also conspired to obtain tens of thousands of dollars in other luxury goods and services, all via sham lines of credit issued to a well-known financial institution, for the defendants and others’ use by misrepresenting that they were employees at the financial institution.
On May 5, 2013, an individual using the name “Josh Stevens” called Jet Aviation=s offices in Chicago, Ill., and Van Nuys, Calif., to inquire about its private charter flight services. That individual identified himself as being employed as a senior vice president at a well-known financial institution and provided an email address purporting to be affiliated with the financial institution. A Jet Aviation employee sent a draft Charter Services Agreement to the provided email address. The agreement was signed by “Josh Stevens” and returned to Jet Aviation on May 9, 2013, falsely listing “Josh Stevens” as a senior vice president and Dixon as a vice president at the well-known financial institution. The aviation company established an account and a line of credit for $350,000, which the defendants and others used to take four private charter flights.
As a result of their misrepresentations to Jet Aviation, Dixon and others fraudulently obtained private high-end charter flights and limousine car services, with a total value of $175,790, for which Jet Aviation never received payment.
Dixon and others made similar misrepresentations about their purported employment at the financial institution to other luxury service providers and obtained approximately $20,000 in luxury watches, sunglasses, and sterling silver and leather business cardholders, and approximately $25,500 in hotel stays at a luxury hotel in Miami.
As a result of their scheme, Dixon and others fraudulently obtained more than $220,000 in luxury goods and services.The conspiracy to commit wire fraud to which Dixon pleaded guilty is punishable by a maximum potential penalty of 20 years in prison and a fine of $250,000. Sentencing is scheduled for April 23, 2014.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, for the investigation leading to today=s guilty plea.
The government is represented by Assistant U.S. Attorney Aaron Mendelsohn 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: Lorraine Gauli-Rufo Esq., Verona, N.J.Dixon, Dante Information
Ocean County, N.J., Woman Sentenced to Two Years in Prison for Bankruptcy FraudRead the Press Release
TRENTON, N.J. - An Ocean County, N.J., woman was sentenced today to 24 months in prison for concealing from a bankruptcy trustee profits she had made on a Ponzi scheme investment, U.S. Attorney Paul J. Fishman announced.
Marjorie Parise, 51, of Manahawkin, N.J., previously pleaded guilty before U.S. District Judge Freda L. Wolfson to one count of bankruptcy fraud. Judge Wolfson imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:
In 2003, Parise and her husband invested approximately $115,750 with a company known as Global Trading Investments LLC and received in return profits totaling $429,154.91. However, the owners of Global Trading were operating a Ponzi scheme and the profits that Parise received were actually the investments of other individuals. Global Trading subsequently filed for Chapter Seven bankruptcy protection.
On Aug. 24, 2006, a judgment was entered against Parise requiring her to return the profits she had made from her investments in the scheme. Parise instead took numerous steps to fraudulently conceal a significant amount of funds and assets from the trustee, including making false statements and omissions during a deposition in the bankruptcy proceeding.
From Sept. 14, 2006, through Dec. 8, 2006, she also withdrew at least $455,850 in cash from the bank accounts that had not been disclosed to the trustee. Parise made 67 currency withdrawals, none of which exceeded the $10,000 threshold for the filing of Currency Transaction Reports. In November 2006, Parise transferred ownership of her residence from her name only to the names of both her and her husband and increased the home equity line of credit on the home.
On July 7, 2008, Parise filed for individual Chapter Seven bankruptcy protection. On her bankruptcy petition, she fraudulently failed to report millions of dollars in real estate holdings plus hundreds of thousands of dollars in personal assets.
In addition to the prison term, Judge Wolfson sentenced Parise to three years of supervised release and ordered her to pay $353,404 in restitution.
U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen in Newark, for the investigation.
The government is represented by Assistant U.S. Attorney R. Joseph Gribko of the U.S. Attorney=s Office in Trenton.
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Defense counsel: Michael Pinsky Esq., Haddon Township, N.J.New Jersey Ophthalmologist Admits Lying to Federal Agents During Fraud Investigation About Reuse of Lucentis VialsRead the Press Release
NEWARK, N.J. - An ophthalmologist with a medical practice in Englewood, N.J., admitted today to lying to federal agents during a health care fraud investigation into the reuse of single-use vials of prescription Lucentis medication for multiple patients, U.S. Attorney Paul J. Fishman announced.
Bernard J. Fowler, 68, of Mahwah, N.J., pleaded guilty to an information charging him with making false statements to federal agents with the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG). He entered his plea before U.S. District Judge Susan D. Wigenton in Newark federal court.
According to documents filed in this case and statements made in court:
Fowler was a licensed and board-certified ophthalmologist, operating his own medical practice called Retina Vitreous Consultants, when he was interviewed by HHS-OIG special agents on July 27, 2011. Fowler no longer operates the practice.
During his guilty plea, Fowler admitted that in 2008 and 2009, he had administered injections from one vial of Lucentis to more than one patient on multiple occasions, but told the investigating agents that he had not. Fowler admitted he knew the statement was false and he intended to deceive the agents.
In addition to the potential health risks of reusing single-use vials on multiple individuals, such reuse can generate fraudulent billings to patients and insurers based on the approximately $2,000 cost of a full vial.
The false statements charge carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gain or loss caused by the offense. Sentencing is scheduled for March 24, 2014.
U.S. Attorney Fishman credited special agents of HHS-OIG, under the direction of Special Agent in Charge Thomas O’Donnell, and the FBI, under the direction of Special Agent in Charge Aaron T. Ford, for the investigation leading to the guilty plea.
The government is represented by Assistant U.S. Attorneys Scott B. McBride and R. David Walk of the U.S. Attorney’s Office’s Health Care and Government Fraud Unit.
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Defense counsel: David M. Laigaie Esq., PhiladelphiaFowler, Bernard Information
New Jersey Doctor Sentenced to More Than 11 Years for Writing Illegal Oxycodone Prescriptions in Drug Distribution ConspiracyRead the Press Release
Also Ordered to Pay Approximately $630,000 in Fines and Forfeiture
NEWARK, N.J. - An internal medicine specialist who wrote illegal prescriptions for oxycodone was sentenced today to 136 months in prison for his role in a conspiracy that put tens of thousands of prescription pills on the streets for resale, U.S. Attorney Paul J. Fishman announced.
Michael Durante, 59, of Montclair, N.J., was previously convicted at trial of 16 of the 17 counts in the superseding indictment against him: one count of conspiracy to distribute oxycodone and 15 counts of unlawful distribution of the drug. The jury returned the verdict on the second day of deliberations following a nearly three-month trial before U.S. District Judge Stanley R. Chesler. Judge Chesler imposed the sentence today in Newark federal court.
According to the evidence at trial:
Between July 2009 and March 2011, Durante sold prescriptions for more than 80,000 oxycodone pills to patients who were engaged in drug trafficking. The street-level redistribution of the pills prescribed by Durante was accomplished primarly by two “crews,” one headed by Andre Domando, 49, of Belleville, N.J., and the other by Dennis Abato, 61, of Lakewood, N.J., who each had a stable of patients they brought to Durante’s medical practice in Nutley, N.J. Durante gave them prescriptions for large quantities of oxycodone that would ultimately be sold through the redistribution network.
Recordings played at trial illustrated Durante’s understanding of the illegal distribution he facilitated. For example, in an February 2011 recording, Durante said he knew Domando was reselling the prescriptions for a large profit, stating, “I just know because my friend does the same thing you do. He sells these for a thousand to twelve hundred dollars a bottle.” Durante, referring to prescriptions he provided to Domando over the previous week, then stated “[s]o two last week, four this week – you should have six thousand dollars in your pocket,” adding, “I know what people do with these things. You gotta have at least twelve, fifteen thousand dollars a month of income here.”
Durante was also captured on tape accepting $300 from Domando in exchange for prescriptions, as well as $100 for an extra prescription he sold to an undercover agent. At trial, a witness testified that he delivered envelopes of cash to Durante in exchange for extra prescriptions.
Additionally, Durante falsified medical records in the files of the patients who received the oxycodone prescriptions. For example, Durante falsely documented physical exams, including blood pressure and heart rates, of a patient who was in Florida at the time of Durante’s purported exam. Durante repeatedly omitted from the progress notes for patients many of the additional prescriptions he had sold, or falsely wrote that prescriptions had been provided to replace lost prescriptions – including one note that a dog may have eaten replacement prescriptions he provided to Domando.
In addition to the prison term, Judge Chesler sentenced Durante to three years of supervised release and ordered him to pay $629,461 in restitution. Durante is also required to pay a $4,000 fine. Judge Chesler sentenced Domando to 48 months in prison in November 2013. Abato awaits sentencing.
U.S. Attorney Fishman credited the New Jersey DEA Tactical Diversion Squad, made up of DEA special agents, diversion investigators and intelligence analysts; FBI and IRS-Criminal Investigation special agents; and law enforcement officers from the Essex County Sheriff’s Department and the Elizabeth, Clinton Township (Hunterdon County), Toms River and Newark Police Departments with the investigation.The government is represented by Assistant U.S. Attorneys Anthony Mahajan and Osmar J. Benvenuto of the U.S. Attorney’s Office Criminal Division, and Marion Percell of the Office’s Asset Forfeiture and Money Laundering Unit, in Newark.
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Defense counsel: Cathy Fleming and Harold Ruvoldt Esqs., New YorkMorris County, N.J., Doctor Admits Taking Cash Kickbacks for Patient ReferralsRead the Press Release
NEWARK, N.J. – A Morris County, N.J., doctor practicing internal medicine admitted today to taking cash kickbacks for making referrals to a diagnostic testing lab in Orange, N.J., U.S. Attorney Paul J. Fishman announced.
Mahesh Patel, 64, of Florham Park, N.J., a board-certified physician, pleaded guilty before U.S. District Judge Claire C. Cecchi in Newark to an information charging him with soliciting and receiving more than $6,000 in illegal cash kickbacks for patient referrals in violation of the federal health care anti-kickback statute.
Patel is the 15th individual to be convicted in connection with the government’s ongoing investigation of illegal payments made by Orange Community MRI LLC (Orange MRI), a diagnostic testing facility, U.S. Attorney Paul J. Fishman announced.
According to documents filed in this case and statements made in court:
Patel operated his own medical practice in Orange. From 2010 through November 2011, Patel agreed to take cash payments from Orange MRI in exchange for MRI scans he referred to the diagnostic testing facility. Patel admitted to receiving cash on a per-patient basis for nearly two years, and that on one of the occasions on which he received cash, Oct. 13, 2011, he received $375 in exchange for his prior referral of Medicare and Medicaid patients.
The anti-kickback charge carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gain or loss caused by the offense. Sentencing is scheduled for April 8, 2014.Twelve health care providers, including Patel, have agreed to forfeit $360,510 in illegal cash kickbacks. Also, Ashokkumar Babaria, 63, of Moorestown, N.J., Orange MRI’s former medical director, agreed to forfeit his revenue from corrupt referrals, which the government estimates is in excess of $2 million. Chirag Patel, 38, of Warren, N.J., Orange MRI’s former executive director, also agreed to forfeit $89,180 in corrupt gains.
U.S. Attorney Fishman credited special agents of the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Tom O’Donnell, who investigated the case with criminal investigators from the U.S. Attorney’s Office.The government is represented by Assistant U.S. Attorneys Deputy Chief Joseph Mack and Scott B. McBride of the U.S. Attorney’s Office’s Health Care and Government Fraud Unit in Newark.
U.S. Attorney Paul J. Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $500 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.
13-472Defense counsel: Robert J. Cleary Esq. and William C. Komaroff Esq., New York
Patel, Mahesh Information
New Jersey Attorney and Tax Preparer Admit Roles in $30 Million Mortgage Fraud SchemeRead the Press Release
NEWARK, N.J. — A New Jersey attorney and a tax preparer today admitted their roles in a long-running, large-scale mortgage fraud that caused losses of more than $30 million, U.S. Attorney Paul J. Fishman announced.
Michael Rumore, 55, of Toms River, N.J., and Kenneth Jones, 64, of Elizabeth, N.J., both pleaded guilty before U.S. District Judge Esther Salas in Newark federal court to informations charging them with conspiracy to commit bank fraud. Jones also pleaded guilty to aiding and abetting the filing of false and fraudulent tax returns.
According to documents filed in this case and statements made in court:
From 2006 to 2010, Rumore, Jones and numerous others engaged in two related mortgage fraud conspiracies through a company called Premier Mortgage Services (PMS). The conspirators targeted properties in low-income areas of New Jersey. After recruiting “straw buyers,” they used a variety of fraudulent documents, some of them created by Jones, to make it appear as though the straw buyers possessed far more assets and earned far more income than they actually did.
The conspirators then submitted these fraudulent documents as part of mortgage loan applications to financial institutions. Relying on these fraudulent documents, financial institutions provided mortgage loans for the subject properties. The conspirators then split the proceeds from the mortgages among themselves at closing time, including at closings presided over by Rumore. The closings went forward through the use of fraudulent settlement statements (HUD-1s), which hid the true sources and destinations of the mortgage funds provided by financial institutions. The straw buyers had no means of paying the mortgages, and many of the properties entered into foreclosure proceedings. The conspirators defrauded financial institutions out of more than $30 million.
The conspirators each performed different roles in the scheme. Michael Rumore was an attorney licensed in New Jersey and served as the settlement agent on mortgage loans brokered by other conspirators. Rumore used his status as an attorney to further the fraudulent scheme, including by convening closings, receiving funds from lenders, and preparing HUD-1s that purported to reflect the sources and destinations of funds for mortgages on subject properties B when in fact, the HUD-1s were neither true nor accurate. Rumore disbursed mortgage loan proceeds directly to PMS and other conspirators, including amounts not reflected on the HUD-1s. Rumore received a fee for each fraudulent loan in which he participated.
Jones, a tax preparer, created numerous false documents used in the scheme. When contacted by loan officers, Jones would create fraudulent verifications of employment for straw buyers, which claimed falsely that the straw buyers were employed by certain businesses. Jones included his own phone numbers on the verifications of employment, so that when financial institutions called to verify the information, Jones would answer and confirm the false statements. Jones received a fee for each fraudulent document that he created. Jones also engaged in a separate scheme in his capacity as a tax preparer, to which he also pleaded guilty. Jones would inflate the deductible expenses to which his clients were purportedly entitled, obtaining larger tax refunds for his clients than they should have received.
The bank fraud conspiracy count to which Rumore and Jones pleaded guilty is punishable by a maximum potential penalty of 30 years in prison and a fine of $1 million. The aiding and abetting false tax returns to which Jones pleaded guilty is punishable by a maximum potential penalty of three years in prison and a $250,000 fine. Sentencing is scheduled for March 31, 2014.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, and special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen, for the investigation leading to today’s guilty plea. Fishman also thanked the Social Security Administration-Office of Inspector General, under the direction of Special Agent in Charge Edward Ryan, for its participation in the investigation.
The government is represented by Assistant U.S. Attorneys Rahul Agarwal of the U.S. Attorney’s Office Special Prosecutions Division and Zach Intrater of the Criminal Division.
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:
Rumore: Donna Newman Esq., Westfield, N.J., and New York
Jones: Hassan Abdellah Esq., Elizabeth, N.J.Rumore Information
Jones Information