District of New Jersey
Press releases recorded for this federal judicial district.
Burlington County Man Admits Producing Images of Child Sexual AbuseRead the Press Release
CAMDEN, N.J. – A Burlington County, N.J., man today admitted his role in producing images of child sexual abuse, U.S. Attorney Paul J. Fishman announced.
David Clark, 49, of Southampton, N.J., pleaded guilty before U.S. District Judge Joseph H. Rodriguez in Camden federal court to an information charging him with three counts of producing child pornography. Clark’s detention was continued.
According to documents filed in this case and statements made in court:
From 2004 through March 9, 2011, Clark employed, used, persuaded, induced, enticed or coerced three separate minor victims to engage in sexually explicit conduct for the purpose of producing a visual depiction of such conduct. Clark was charged federally in October 2011 by criminal complaint. Under terms of the plea agreement, Clark will be sentenced to 30 years in prison and a lifetime term of supervised release. Sentencing is scheduled for Feb. 4, 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; investigators with the Burlington County Prosecutor's Office, under the direction of Prosecutor Robert D. Bernardi; and detectives with the N.J. State Police, under the direction of Col. Rick Fuentes, and the N.J. Regional Computer Forensic Laboratory with the investigation leading to today's guilty plea.
The government is represented by Assistant U.S. Attorney Jacqueline M. Carle of the Criminal Division in Camden.
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Defense counsel: Lori M. Koch Esq., Assistant Federal Public Defender, Camden
Clark Information
Alleged Hacker Indicted in New Jersey for Data Breach Conspiracy Targeting Government Agency NetworksRead the Press Release
NEWARK, N.J. – The New Jersey U.S. Attorney’s Office has charged an alleged hacker in the United Kingdom with breaching thousands of computer systems in the United States and elsewhere – including the computer networks of federal agencies – to steal massive quantities of confidential data, U.S. Attorney Paul J. Fishman announced.
The federal indictment, filed in Newark federal court, charges Lauri Love, 28, of Stradishall, England, with one count of accessing a U.S. department or agency computer without authorization and one count of conspiring to do the same. An investigation led by the U.S. Army Criminal Investigation Command-Computer Crime Investigative Unit and the FBI in Newark revealed that Love allegedly illegally infiltrated U.S. government computer systems – including those of the U.S. Army, U.S. Missile Defense Agency, Environmental Protection Agency and National Aeronautics and Space Administration – resulting in millions of dollars in losses.
Law enforcement authorities in the United Kingdom, including investigators with the Cyber Crime Unit of the National Crime Agency (NCA), announced today that they arrested Love at his residence Friday, Oct. 25, 2013, in connection with an ongoing investigation by the NCA. Love was previously charged in New Jersey by federal complaint, also unsealed in connection with his arrest. He also is charged in a criminal complaint in the Eastern District of Virginia with alleged conduct related to other intrusions.
“According to the indictment, Lauri Love and conspirators hacked into thousands of networks, including many belonging to the United States military and other government agencies,” said U.S. Attorney Fishman. “As part of their alleged scheme, they stole military data and personal identifying information belonging to servicemen and women. Such conduct endangers the security of our country and is an affront to those who serve.”
According to the indictment unsealed in Newark federal court:
Between October 2012 and October 2013, Love and fellow conspirators sought out and hacked into thousands of computer systems. Once inside the compromised networks, Love and his conspirators placed hidden “shells” or “back doors” within the networks, which allowed them to return to the compromised computer systems at a later date and steal confidential data. The stolen data included the personally identifying information (PII) of thousands of individuals, some of whom were military servicemen and servicewomen, as well as other nonpublic material.
“Computer intrusions present significant risks to national security and our military operations,” said Daniel Andrews, director of the U.S. Army Criminal Investigation Command’s Computer Crime Investigative Unit. “The borderless nature of Internet-based crime underscores the need for robust law enforcement alliances across the globe. We appreciate the bilateral support of the National Crime Agency in bringing cyber criminals to justice.”
“This investigation shows the necessity and value of strong partnerships among law enforcement agencies worldwide in the fight against cyber criminals,” said FBI Special Agent in Charge Aaron T. Ford. “Cybercrime knows no boundaries, and without international collaboration, our efforts to dismantle these operations would be impossible.”
Love and his conspirators planned and executed the attacks in secure online chat forums known as internet relay chats, or “IRC.” They communicated in these chats about identifying and locating computer networks vulnerable to cyber attacks and gaining access to and stealing massive amounts of data from those networks. They also discussed the object of the conspiracy, which was to hack into the computer networks of the government victims and steal large quantities of non-public data, including PII, to disrupt the operations and infrastructure of the United States government.
To gain entry to the government victims’ computer servers, Love and conspirators often deployed what is known as a “SQL injection attack.” Structured Query Language is a type of programing language designed to manage data held in particular types of databases; the hackers identified vulnerabilities in SQL databases and used those vulnerabilities to infiltrate a computer network. They also exploited vulnerabilities in a web application platform that some of the targeted agencies used known as “Coldfusion.” Like SQL Injection attacks, this method of hacking allowed the conspirators to gain unauthorized access to secure databases of the victims. Once the network was infiltrated, Love and his conspirators placed malicious code, or malware, on the system. This malware created a “back door” or “shell,” leaving the system vulnerable and helping Love and the conspirators maintain access to the network.
The intrusions identified in the indictment are as follows:
Date
Organization
Location
Type of Attack
Data Involved
Army Corps - Engineer Research and Development Center
Vicksburg, Miss.
ColdFusion
demolition and disposal of military facilities
Oct. 6, 2012
Army Corps
Vicksburg, Miss.
ColdFusion
natural resource management
Oct. 6-9, 2012
U.S. Army – Network Enterprise Technology Command
Aberdeen Proving Ground, Md.
SQL Injection
PII (more than 1,000 individuals)
Oct. 7,8, 2012
U.S. Army – Army Contracting command
Redstone Arsenal, Ala.
SQL Injection
nonpublic competitive acquisition bid data and attachments
Oct. 9, 2012
U.S. military – Plans and Analysis Integration Office
Aberdeen Proving Ground, Md.
ColdFusion
defense program budgeting data
October 2012
U.S. Department of Defense – Missile Defense Agency
not specified in indictment
ColdFusion
PII (more than 4,000 individuals)
Dec. 23, 2012
Army Corps - Engineer Research and Development Center
Vicksburg, Miss.
ColdFusion
not specified in indictment
Jan. 11, 2013
U.S. Army War College – Strategic Studies Institute
Carlisle, Pa.
ColdFusion
not specified in indictment
July 10, 2013
National Aeronautics and Space Administration
not specified in indictment
ColdFusion
PII of numerous NASA employees
Jan. 3, 2013
Environmental Protection Agency - Federal Facilities Environmental Stewardship and Compliance Assistance Center
Newark, Del.
ColdFusion
non-PII personnel data
Love and his conspirators took steps to conceal their identities and illegal hacking activities. To mask their IP addresses, the conspirators used “proxy” and “tor” servers to launch the attacks. They also frequently changed their nicknames in online chat rooms, using multiple identities to communicate with each other.
If convicted, the defendant faces a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense, on each of the two counts with which he is charged.
U.S. Attorney Fishman credited special agents of the U.S. Army Criminal Investigation Command - Computer Crime Investigative Unit, under the direction of Director Andrews, and the FBI in Newark, under the direction of Special Agent in Charge Ford, with the investigation leading to the indictment. Fishman also recognized the important work of the U.S. Department of Defense, Office of Inspector General Defense Criminal Investigative Service, under the direction of Special Agent in Charge Jeffrey Thorpe, Cyber Field Office; EPA Office of Inspector General, under the direction of Michael Daggett, Deputy Assistant Inspector General for Investigations; the NASA Office of Inspector General, Computer Crimes Division; and U.S. Department of Energy, Office of Inspector General, Deputy Inspector General for Investigations under the direction of John Hartman, in this case.
The government is represented by Assistant U.S. Attorney Nicholas P. Grippo of the U.S. Attorney’s Office Criminal Division in Trenton.The charges and allegations contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Information on the charges in the Eastern District of Virginia can be obtained from the U.S. Attorney’s Office for that district at 703-842-4050 or by email at [email protected]
Love Indictment
13-417Salesman of Roofing Company in South Jersey Admits Filing False Income Tax ReturnsRead the Press Release
TRENTON, N.J. – A salesman for a South Jersey roofing company, pleaded guilty today to filing false income tax returns for 2007 and 2008, U.S. Attorney Paul J. Fishman, District of New Jersey, and Assistant Attorney General Kathryn Keneally of the U.S. Department of Justice, announced.
Keith Brown, a salesman for Kenal (d/b/a Ken Morton Roofing and Siding) a residential roofing company located in Pitman, N.J., pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton federal court to an information charging him with filing false income tax returns for tax years 2007 and 2008.
According to documents filed in this case and statements made in court:
From early 2007 through the end of 2008, Brown received 10 percent commission on each roofing job that he sold. A portion of this commission was paid to him by payroll check, the amounts of which were reported on his W-2 forms, Wage and Tax Statements. Brown, however, received the majority of his commissions in cash, which were not reported on the W-2s issued to him. Brown failed to report the cash portion of his commissions when he filed his tax returns for tax years 2007 and 2008.
For the 2007 and 2008 tax years, Brown had unreported income of $236,302 and $278,453, respectively. The result of Brown’s filing false tax returns caused a loss to the IRS of $141,382.
The tax charge to which Brown pleaded guilty is punishable by a maximum potential penalty of three years in prison, a maximum fine of $250,000, and restitution to the IRS. Sentencing is scheduled for Feb. 4, 2014.
Assistant Attorney General for the Tax Division Keneally and U.S. Attorney Fishman credited special agents of IRS B Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen, for their work in the investigation of the case.
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.
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Defense counsel: Bruce Cassidy Esq., Princeton, N.J.Brown, Keith Information
Retired Radio Personality Charged in New Jersey with Attempted Transportation of A Minor for Illegal Sexual ActivityRead the Press Release
NEWARK, N.J. – A retired radio personality was arrested today for attempting to transport a 7-year-old girl from Bergen County, N.J., to St. Croix, U.S. Virgin Islands, for the purpose of sexually abusing the girl, New Jersey U.S. Attorney Paul J. Fishman announced.
David Herman, 77, of Airmont, N.Y., and St. Croix, was arrested by special agents of the U.S. Department of Homeland Security, Immigration and Customs Enforcement, Homeland Security Investigations (ICE HSI) at the airport in St. Croix, where he expected to meet the child. He is scheduled to appear tomorrow, Oct. 25, 2013, before U.S. Magistrate Judge George W. Cannon for an initial appearance in St. Croix federal court.
According to documents filed in this case:
Beginning in November 2012, Herman initiated a series of chats on a Web site with an undercover officer from the Bergen County Prosecutor’s Office in New Jersey. Herman believed that he was communicating with a 36-year-old single mother with a 6-year-old daughter.
Over the course of the following months, Herman had multiple telephone and online communications with the officer during which he indicated his desire to engage in sexual activity with the officer’s fictitious daughter. Herman also attempted to arrange illegal sexual encounters with the child in New York and Bergen County, N.J.
In early 2013, Herman told the undercover that he would like to fly the pair down to spend a few days with him in St. Croix so that he could engage in sexual activity with the daughter. On Sept. 30, 2013, Herman purchased airline tickets for them to fly from LaGuardia Airport to St. Croix.
The count of attempting to transport a minor in interstate commerce with the intent that the minor engage in illegal sexual activity is punishable by a mandatory minimum of 10 years in prison and a maximum penalty of life in prison. The 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 McLees in Newark and Special Agent in Charge Angel M. Melendez in San Juan, Puerto Rico; and detectives of the Bergen County Prosecutor’s Office, under the direction of Prosecutor John L. Molinelli, with the investigation leading to today’s arrest.
The government is represented by Assistant U.S. Attorneys Francisco J. Navarro and Cari Fais of the U.S. Attorney’s Office General Crimes Unit in Newark.
The charges and allegations contained in the complaint are merely accusations, and the defendant is considered innocent unless and until proven guilty.
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Herman, David Complaint
President of New Jersey-Based Textile Company Charged with Defrauding Investors in the United States and People’s Republic of ChinaRead the Press Release
Phony Investment Schemes Allegedly Made More than $10 Million
NEWARK, N.J. – The president of a purported textile wholesale distributor headquartered in Hackensack, N.J., was arrested at home early this morning by special agents of the FBI and the U.S. Treasury Department for allegedly defrauding investors in the United States and the People’s Republic of China (PRC) of more than $10 million in investment fraud schemes, New Jersey U.S. Attorney Paul J. Fishman announced.
Sara Rong Liu, 52, of Mahwah, N.J., is charged by complaint with one count of wire fraud. She is expected to appear this afternoon before U.S. Magistrate Judge Michael A. Hammer in Newark federal court.
According to the complaint unsealed today:
Liu is the president of Westone Inc., a company purportedly involved in the wholesale distribution of textiles as well as interior design. From approximately October 2010 through October 2013, Liu falsely represented to victim investors, among other things, that Westone had been awarded a lucrative $156.6 million contract by the New York City Department of Design and Construction Fund (NYC DDC).
The NYC DDC never awarded the defendant or her company any such contract.
In 2011, Liu told investors there was a problem with the contract that required Westone to pay certain fees before the NYC DDC would release contract payments to the defendant and her company.
To support her false claims, Liu created, or caused to be created, a number of fictitious contracts, emails and other documents, including documents purportedly from, among others: the NYC DDC, which stated she had been awarded the contract to provide “Design, Construction, and Construction Support Services for the Design, Manufacture, and Supply of Good Quality Home & Office Interior Textile Products and Finishing” in and around the New York metropolitan area; the Federal Reserve Bank of New York; the Treasury Department; the FBI; and the U.S. Attorney’s Office for the Southern District of New York, among others. Liu emailed a number of these documents to the victim investors from whom she solicited funds. She characterized the funds as short-term loans, which would be repaid immediately upon the release of the first contract payment of $52.2 million from the NYC DDC.Investors gave Liu millions. Between approximately October 2010 and February 2012, Liu obtained approximately $530,000 from a single investor located in Virginia. The victim wired most of that money into an account controlled by the defendant in New Jersey.
In another scheme, Liu told victim investors that she stood to receive more than $17 million from a deceased uncle’s estate in the PRC, but first had to pay taxes related to her uncle’s estate before she could receive the money. Liu represented to investors that if they helped her to pay the taxes, she would share the inheritance with them.
In all, the defendant obtained more than approximately $10 million in illegitimate proceeds from victim investors located both in the United States and the PRC.
The wire fraud count carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gain or loss resulting from the crime.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, and the United States Treasury Department, Office of the Treasury Inspector General for Tax Administration, under the direction of Special Agent in Charge Robert Geary, Washington Field Division, with the investigation leading to the arrest and charges.
The government is represented by Deputy Chief Gurbir Grewal and Assistant U.S. Attorney Aaron Mendelsohn of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
The charges and allegations contained in the complaint are merely accusations and the defendant is presumed innocent unless and until proven guilty.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.
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Defense counsel: Assistant Federal Public Defender Lisa Mack Esq., Newark
Liu, Sara Complaint
Internist Sentenced to Six Months in Prison, Plus Home Confinement, for Taking Cash Kickbacks for Patient ReferralsRead the Press Release
NEWARK, N.J. – A Somerset County doctor practicing internal medicine at Newark Community Health Center, where she was formerly the clinical director, was sentenced today to six months in prison and five months of home confinement for receiving cash kickbacks for diagnostic testing referrals of her patients, U.S. Attorney Paul J. Fishman announced.
Padma Siripurapu, 46, of Belle Mead, N.J., previously pleaded guilty before U.S. District Judge Claire C. Cecchi to an information charging her with one count of soliciting and receiving more than $50,000 in illegal cash kickbacks for patient referrals in violation of the federal health care anti-kickback statute. Judge Cecchi imposed the sentenced today in Newark federal court.
According to documents filed in this case and statements made in court:
From 2009 through December 2011, Siripurapu agreed with representatives of the diagnostic center Orange Community MRI LLC (Orange MRI) that Orange MRI would pay her a set amount of cash for every MRI, CAT scan, ultrasound, echocardiogram, and DEXA scan she referred. Siripurapu referred patients for more than a thousand of these tests during that time period and was paid a per-test amount for those referrals.
Siripurapu admitted that on Nov. 2, 2011, she received $3,600 in cash from a government informant at her doctor’s office in Newark in exchange for referrals. On Nov. 17, 2011, again at her office in Newark, Siripurapu received another kickback for patient referrals, this time $3,450 in cash.
In addition to the prison term and home confinement, Judge Cecchi sentenced Siripurapu to two years of supervised release, fined her $30,000 and ordered her to pay forfeiture of $51,200.Siripurapu is the 12th person in the government’s investigation of Orange MRI and its corrupt referring doctors to plead guilty. On Oct. 15, 2013, a 13th defendant, Chikezie Onyenso, 55, an internist and pediatrician with a medical practice in Irvington, N.J., was convicted by a jury of conspiring to violate the federal health care anti-kickback statute and with violating the statute in connection with the same money-for-patients scheme. Onyenso took tens of thousands of dollars in exchange for patient referrals. The jury deliberated for two days after a three-week trial before Judge Cecchi. Sentencing is scheduled for January 31, 2014.
Ten health care providers have pleaded guilty to receiving kickbacks and have agreed to forfeit $339,905 in illegal kickbacks from Orange MRI. The two other defendants, Ashokkumar Babaria, Orange MRI’s former medical director, and Chirag Patel, Orange MRI’s former executive director, have agreed to forfeit their corrupt gains. Babaria agreed to forfeit his revenues traceable to corrupt referrals, which the government has estimated could reach as much as $2 million. Patel has forfeited $89,180. The remaining defendants charged in the investigation are charged by complaints or indictments at this time.
U.S. Attorney Fishman credited special agents of the U.S. Department of Health and Human Services, Office of the Inspector General, under the direction of Special Agent in Charge Tom O’Donnell, as well as criminal investigators with the U.S. Attorney’s Office’s criminal investigator program, for the investigation leading to today’s sentencing.
The case is being prosecuted by Assistant U.S. Attorneys Scott B. McBride and Joseph Mack, deputy chief, of the U.S. Attorney’s Office’s Health Care and Government Fraud Unit.
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Defense counsel: Bruce A. Levy Esq. and Lawrence S. Lustberg Esq., Newark
Former Hudson County, N.J., Teacher Pleads Guilty to Distributing Images of Child Sexual Abuse over the InternetRead the Press Release
TRENTON, N.J. – A former substitute teacher at a private school in Jersey City, N.J., today admitted to distributing images of child sexual abuse over the Internet, U.S. Attorney Paul J. Fishman announced.
Guy West, 45, of Jersey City, pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton federal court to an information charging him with one count of distribution of child pornography. West was working as a permanent substitute teacher who regularly taught and supervised children between the ages of 2 and 14 at the time of his January 2013 arrest.
According to documents filed in the case and statements made during West’s guilty plea proceeding:
West admitted that on Dec. 18, 2012, he made images and videos of child pornography available that were stored on his home computer for others to download via a peer-to-peer file-sharing network. On that date, an undercover law enforcement agent successfully downloaded 120 images and 24 videos of child sexual abuse from West via the file-sharing network.
As part of his guilty plea, West agreed to forfeit the computers and computer accessories he used to commit the offense.
The count of distributing child pornography to which West 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 scheduled for Feb. 4, 2014.
U.S. Attorney Fishman credited special agents of the FBI, Newark Division’s Child Exploitation Task Force, under the direction of Special Agent in Charge Aaron T. Ford in Newark; officers of the Jersey City Police Department, under the direction of Chief of Police Robert Cowan; and the Hudson County Prosecutor’s Office, under the direction of Acting Prosecutor Gaetano T. Gregory 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 General Crimes Unit in Newark.
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Defense counsel: Nace Naumoski Esq., Roseland, N.J.
West, Guy Information
Owners of Tax Preparation Business Arrested in Delaware, Charged with Filing Thousands of Phony Tax ReturnsRead the Press Release
TRENTON, N.J. – The two owners of a tax preparation business that claimed millions of dollars in fraudulent tax refunds on behalf of inmates at various New Jersey prisons were arrested this morning in Laurel, Del., U.S. Attorney Paul J. Fishman announced.
Special agents of the IRS-Criminal Investigations (IRS-CI) arrested Kamal J. James, aka “Bro Messiah Aziz El,” and Crystal G. Hawkins, aka “Sis. Crystal Gabri El,” at Hawkins’ residence on a criminal complaint charging them with one count of conspiracy to defraud the United States. The pair operated Release Refunds, a purported tax preparation business – previously based in Brick, N.J., and now in Seaford, Del. – through which they solicited New Jersey prison inmates as clients and then filed thousands of fraudulent tax returns on their behalf. James’ and Hawkins’ conduct allegedly resulted in hundreds of thousands of dollars in illicit profits and an actual tax loss of approximately $1.7 million.
James and Hawkins appeared in Trenton federal court this afternoon before U.S. Magistrate Judge Douglas E. Arpert. During the proceeding, the government alleged that marijuana plants and a firearm were found in the Laurel home during the arrests. James was detained following the proceeding and Hawkins is expected to be released on a $250,000 bond.
According to the complaint unsealed today:
Between October 2011 and October 2013, James and Hawkins conspired to defraud the United States out of millions of dollars by creating and filing income tax returns that were based on bogus income and withholding information. James and Hawkins used their purported tax preparation business as a vehicle to carry out the scheme.
To execute the scheme, James and Hawkins sent Release Refunds “promotional” flyers to inmates at various New Jersey prisons offering tax return preparation services. The pair asked inmates interested in Release Refunds’ services to provide basic identification information and to sign Income Tax Returns and other IRS documents, but not to include any information about their income or withholdings. James and Hawkins then filled in the missing income information on the return forms, fabricating the inmates’ earnings to trigger fraudulent and inflated refunds.
During the course of the investigation, an undercover IRS-CI agent posing as an inmate in a New Jersey prison submitted a completed Release Refunds form and sent it to James and Hawkins. They then sent the “inmate” blank income tax forms and other IRS documents and instructions to sign the documents. James and Hawkins did not request any financial information from the undercover agent before preparing three fraudulent tax returns – including false income information that James and Hawkins provided – to be filed on behalf of the agent for tax years 2010 through 2012. The fraudulent returns resulted in several thousand dollars in refunds and a $1,485 fee for the defendants.
In total, James and Hawkins caused approximately 2,432 fraudulent tax returns to be filed during the relevant time period, claiming approximately $4,402,288 in improper refunds, of which the United States paid approximately $1,779,910.16.
If convicted, the defendants face a maximum potential penalty of 10 years in prison and a $250,000 fine, or twice the amount of the gain or loss from the offense.U.S. Attorney Fishman credited special agents of IRS-CI, under the direction of Special Agent in Charge Shantelle P. Kitchen, with the investigation.
The government is represented by Assistant U.S. Attorneys Nicholas P. Grippo and Jennifer Davenport of the U.S. Attorney’s Office Criminal Division in Trenton and Trial Attorney Tino Lisella of the Justice Department’s Tax Division. Assistant U.S. Attorney Sarah Wolfe represented the government at today’s proceeding.The charges and allegations contained in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
13-411
Defense counsel:Kamal J. James: Bruce Throckmorton Esq., Trenton
Crystal G. Hawkins: Assistant Federal Public Defender Andrea Bergman Esq., Trenton
James, Kamal et al. Complaint
Owner of Allied Components LLC Admits Transmitting Military Blueprints to India Without A LicenseRead the Press Release
Also Provided Faulty Aircraft Parts to Department of Defense
Grounded 47 F-15 FightersTRENTON, N.J. – The owner and general manager of Allied Components LLC, a Sparta, N.J., company that supplies defense hardware items to the U.S. Department of Defense (DoD), today admitted that he e-mailed to India sensitive military technical data and provided faulty aircraft parts to the DoD, U.S. Attorney Paul J. Fishman announced.
Robert Luba, 47, of Sparta, pleaded guilty today before U.S. District Judge Joel A. Pisano to an information charging him with one count of making a false claim upon the DoD by providing non-conforming “wing-pins,” manufactured in India, for the F-15 fighter aircraft, when he had contracted to provide a U.S.-made product. He also pleaded guilty to one count of violating the Arms Export Control Act for transmitting information about a component of a nuclear-powered submarine to India without the approval of the U.S. Department of State.
“The conduct admitted by Luba shows a callous disregard for the safety of our armed forces,” U.S. Attorney Fishman said. “By recklessly providing sub-standard parts for sophisticated weapons systems and sharing sensitive information with a foreign state, Luba not only jeopardized the lives of men and women on the front lines of our national defense, he put all Americans at risk, all in the name of making a buck.”“The Defense Criminal Investigative Service is committed to protecting the integrity of the Defense acquisition process from personal and corporate avarice,” Craig Rupert, Special Agent in Charge, DCIS Northeast Field Office, said. “Ensuring U.S. taxpayers’ dollars and preventing contract fraud is in our nations’ interest and remains a priority.”
“HSI takes the illegal export of defense items very seriously, as they are crucial to the protection of our national security,” Andrew McLees, special agent in charge of HSI Newark, said. “We will continue to work with DCIS and other federal partners to ensure the safety of our U.S. military and homeland.”
According to documents filed in the case and statements made in Court:
Luba was the owner and general manager of Allied Components, which had contracts to supply the DoD with defense hardware items and spare parts. In July 2011, Luba signed a Military Critical Technical Data Agreement certifying that he acknowledged his responsibilities under applicable U.S. export control laws.
In October 2011, Luba began a business relationship with a company, One Source USA LLC. Luba used One Source USA as a source of defense hardware items and spare parts, which Allied Components would in turn provide to the DoD. Luba’s principle contact at One Source USA was Hannah Robert. Luba learned that Robert and One Source USA manufactured their defense hardware items and spare parts at a production facility in India. Luba admitted that he provided these foreign-made defense items to the DoD under contracts in which he had promised to supply American-made products.
On Feb. 7, 2012, Luba submitted a bid for a contract with the DoD to supply American-made wing pins for use in the F-15 combat aircraft and was awarded the contract. On April 2, 2012, Luba received an international Federal Express delivery of the wing pins from India at his Sparta residence. Despite knowing that the wing pins were made in India, Luba shipped these foreign-made wing-pins to the DoD and accepted payment for them.
On Oct. 10, 2012, the DoD contacted Luba with an urgent e-mail, reporting that the wing pins under this contract, and a second contract with Allied Components, were not of the hardness required under the contract. Luba e-mailed Robert requesting a certification of the materials used in the manufacture of the wing pins, as well as inspection records, to provide to the DoD. One Source USA sent Luba material certifications and inspection records for the wing pins, which listed only a New Jersey address for the company. On Oct. 12, 2012, Luba sent these false and misleading certifications and inspection records to a contracting officer at the DoD.
The U.S. Air Force ultimately grounded 47 F-15 fighter aircraft for inspection and repair as a result of the non-conforming wing pins, resulting in a loss to the government of about $166,000.Luba also admitted that he had a contact in India associated with One Source USA with whom he communicated in connection with Allied Components’ business with the DoD. Luba would e-mail this contact — identified in court papers only as “R.P.” — technical data for spare parts needed by the DoD so that R.P. and Robert could decide how much they would charge, and Luba could decide whether he could bid on the DoD contracts. The technical blueprints that Luba e-mailed to R.P. in India included technical data protected under the export control laws. Luba failed to obtain the necessary license from the U.S. Department of State in connection with these e-mails. These e-mails included a the technical drawing for a hardware item known as the “Torpedo Tube, Open Breech Door, Gagging Collar A,” for installation in a nuclear-powered military submarine.
Robert, the owner of One Source, was indicted on Oct. 10, 2013, by a federal grand jury on separate charges of conspiring to violate and violating the Arms Export Control Act. The indictment alleges that Robert used the password-protected website of a Camden County, N.J., church to transmit the blueprints for hundreds of defense hardware items to her conspirator in India, without the church’s knowledge. Robert’s arraignment on those charges will take place on Oct. 28, 2013, at 12:00 p.m., before Judge Pisano in Trenton. Robert is on home detention pending trial.
Count One of the information to which Luba pleaded guilty is punishable by a maximum penalty of five years in prison and a $250,000 fine. Count Two is punishable by a maximum penalty of 20 years in prison and a $1 million fine. As part of his plea agreement, Luba also agreed to pay back approximately $173,000 to the U.S. Department of Defense, which includes the cost of repair for the grounded F-15s. Sentencing is currently scheduled for Feb. 19, 2014. Luba was released on an unsecured appearance bond.
The Arms Export Control Act prohibits the export of defense articles and defense services without first obtaining a license from the U.S. Department of State and is one of the principal export control laws in the United States.
U.S. Attorney Fishman credited special agents of the U.S. Department of Defense, Defense Criminal Investigative Service Northeast Field Office, under the leadership of Special Agent in Charge Craig W. Rupert, and special agents of the Department of Homeland Security, Homeland Security Investigations, Counter Proliferation Investigations, under the supervision of Special Agent in Charge Andrew M. McLees, 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 Criminal Division in Trenton.
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Defense counsel: John P. McDonald Esq., Somerville, N.J.Luba Information
Ocean County, N.J., Man Sentenced to 13 Years in Prison for Distributing Infant Child PornographyRead the Press Release
TRENTON, N.J. – An Ocean County, N.J., man was sentenced today to 13 years in prison for using a computer in his home to distribute images of child pornography, including images of infants, U.S. Attorney Paul J. Fishman announced.
Arthur Frazer Jr., 35, of Lanoka Harbor, N.J., previously pleaded guilty before U.S. District Judge Joel A. Pisano in Trenton federal court to an information charging him with one count of distribution of child pornography.
According to documents filed in this case and statements made in court:
Frazer admitted distributing images of infant child pornography via email using a home computer in December 2010. He also admitted to possessing more than 600 images of child pornography on his computer and accessories, which were seized from his residence in February 2012. Frazer acknowledged that among the images of child pornography he possessed and distributed were images which depicted minors engaging in sexually explicit conduct with other minors and adults, including material portraying sadistic or masochistic conduct or other depictions of violence. Frazer was previously charged by complaint with distribution of child pornography in February 2012 and has been in custody since his arrest.
In addition to the prison term, Judge Pisano sentenced Frazer to seven years of supervised release and ordered him to pay restitution of $7,000.
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 today’s sentencing.
The government is represented by SpecialAssistant U.S. Attorney Joseph Muoio of the U.S. Attorney’s Office Criminal Division in Trenton.
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Defense Counsel: Andrea Bergman Esq., Assistant Federal Public Defender, Trenton
Former Bristol-Myers Squibb Executive Sentenced to Prison for Trading on Inside InformationRead the Press Release
TRENTON, N.J. – A former executive with global pharmaceuticals giant Bristol-Myers Squibb Co. (BMS) was sentenced today to a year and a day in prison for trading on inside information regarding a public company that BMS was in the process of acquiring, U.S. Attorney Paul J. Fishman announced.
Robert Ramnarine, 46, of East Brunswick, N.J., previously pleaded guilty before U.S. District Judge Anne E. Thompson to an information charging him with securities fraud. Judge Thompson imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:Ramnarine was employed by BMS from 1997 to August 2012. From March 2008 on, he held a variety of high-level, executive positions at the company, including director of Pensions and Savings Investments (March 2008-June 2011), executive director of Pensions and Savings Investments (June 2011-July 2012) and assistant treasurer for Capital Markets (July 2012-August 2012). As a result of holding these positions, Ramnarine was involved in evaluating potential acquisition targets for BMS, including publicly traded companies, and was privy to inside company information concerning such transactions. He was legally banned from disclosing confidential information and material, nonpublic information he learned through his employment or from using such information for his personal benefit or the benefit of others.
During May and June 2012, Ramnarine traded on material, nonpublic information regarding the company’s anticipated acquisition of Amylin Pharmaceuticals Inc., a publicly traded company. The material, nonpublic information available to Ramnarine enabled him to reap substantial profits by engaging in lucrative trading in stock options of Amylin shortly before BMS announced its plans to acquire Amylin in late June 2012. As part of his plea, Ramnarine admitted for purposes of sentencing that his relevant criminal conduct includes $311,361 in illicit gains he made from trading in stock options of Amylin and several other BMS acquisition targets – ZymoGenentics Inc. and Pharmasset Inc., a company for which BMS submitted a bid through a confidential auction process, but which was subsequently acquired by Gilead Sciences.
In addition to the prison term, Judge Thompson sentenced Ramnarine to serve two years of supervised release and ordered him to pay a $10,000 fine. Ramnarine also forfeited $324,777 to the U.S. Securities and Exchange Commission (SEC).U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, with the investigation leading to today’s sentence. He also thanked the SEC’s Market Abuse Unit and Philadelphia Regional Office, under the direction of Daniel M. Hawke, for its assistance, and Bristol-Myers Squibb Co., for its cooperation during the investigation.
The government is represented by Deputy Chief Gurbir S. Grewal and Assistant U.S. Attorney Mala Ahuja Harker 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: Douglas R. Jensen Esq., New York
Passaic County Man Sentenced to Prison for Role in Long-running, International Counterfeit Goods Trafficking SchemeRead the Press Release
NEWARK, N.J. – A Passaic County, N.J., man was sentenced today to a year and a day in prison for participating for several years in an international conspiracy to sell counterfeit sneakers and bedding smuggled from the People’s Republic of China (PRC) into the United States, U.S. Attorney Paul J. Fishman announced.
Aref Abuhadba, 50, of Totowa, N.J., previously pleaded guilty before U.S. District Judge Dennis M. Cavanaugh to an information charging him with one count of conspiring to traffic in counterfeit goods. Judge Cavanaugh imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:From 2003 through 2010, Abuhadba and others conspired to import counterfeit Nike sneakers and counterfeit Walt Disney-brand comforters and blankets from the PRC for resale in the United States. Abuhadba worked in concert with a conspirator in the PRC, who acted as a middleman between the manufacturers of counterfeit goods in the PRC and Abuhadba in the United States, purchasing the goods and arranging for them to be shipped to various ports of entry within the United States. Once the containers arrived, other conspirators arranged for them to be delivered to warehouses and other locations controlled by Abuhadba, who would then distribute the counterfeit goods to customers.
Abuhadba was also responsible for collecting money from customers and wiring the proceeds of the scheme to the conspirators. For his participation, Abuhadba received a fee of up to $42,000 for each container that was successfully imported into the United States. If a container was seized by law enforcement, Abuhadba was sometimes responsible for a portion of the costs of the goods in the seized container.
According to emails reviewed by law enforcement during the investigation, in late 2008, a number of containers with contents valued at millions of dollars were seized by U.S. Customs and Border Protection (CBP). On Sept. 17, 2008, CBP agents inspected a container at Los Angeles/Long Beach Seaport in Long Beach, Calif., destined for Abuhadba in New Jersey. There were more than 10,000 pairs of counterfeit Nike Air Force One sneakers – bearing various Nike trademarks – in the container. The cost of the goods seized was approximately $200,000, with an approximate retail value of $1.5 million. Following the 2008 seizures, Abuhadba exchanged numerous e-mails with the PRC conspirator discussing the seizures and encouraged the PRC conspirator to send false letters to CBP stating that the seized containers were delivered by mistake and were not intended for Abuhadba.
In addition to the prison term, Judge Cavanaugh sentenced Abuhadba to serve two years of supervised release. During his guilty plea proceeding, Abuhadba presented the government with a check for $200,000, representing his ill-gotten gains from his involvement in the conspiracy. He was also ordered to pay an additional $25,000 fine.
U.S. Attorney Fishman praised special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, for the investigation leading to today’s sentence.
The government is represented by Deputy Chief Gurbir S. Grewal of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
13-406Defense counsel: Edward Bilinkas Esq., Randolph, N.J., and Peter V. Ryan Esq., Newark
California Man Admits Role in Distributing Millions of Dollars’ Worth of Untaxed CigarettesRead the Press Release
CAMDEN, N.J. – A California man today admitted his role in a conspiracy to distribute untaxed contraband cigarettes from New Jersey to California, U.S. Attorney Paul J. Fishman announced today.
Jia Yongming, 45, of Monterey Park, Calif., pleaded guilty before U.S. District Judge Noel L. Hillman in Camden federal court to Count One of an Indictment charging him with conspiracy to ship, transport, receive, possess, sell, distribute and purchase more than 3.7 million untaxed cigarettes.
Yongming was arrested and charged in February 2011 along with Yazhou Wu, 29, of Diamond Bar, Calif., and Johnny Chan Koon Ha, 36, of Corona, Calif. Also charged was Ricky Le, 52, of Diamond Bar, Calif., who is currently not in the United States. Ha has since pleaded guilty and is awaiting sentencing. Wu fled after his initial appearance in court, and his whereabouts are currently unknown.
According to documents filed in this case and statements made in court:
Most states, including California, require a stamp to be placed on packs of cigarettes indicating the appropriate state tax has been paid. From May 2009 through May 2011, California imposed a tax of $0.87 on each pack of cigarettes. As part of an FBI undercover investigation, the cigarettes, which had been shipped to Port Newark, N.J., from China, were taken by truck to the conspirators in California, where undercover FBI agents delivered them to the defendants and received payment of $225,000. The money paid to the FBI agents was their commission for delivering a total of five loads of cigarettes. The state of California lost more than $2 million in taxes as a result of this conspiracy.
The charge to which Yongming pleaded guilty is punishable by a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for Jan. 29, 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 HSI-ICE, under the direction of Special Agent in Charge Andrew McLees, for the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorneys Dara Aquila Govan and Jonathan W. Romankow of the U.S. Attorney’s Office Organized Crime/Gangs Unit in Newark.
13-407Defense counsel: Thomas F.X. Dunn Esq., Glen Rock, N.J.
Yongming, Jia Indictment
Former Part-Owner of Litigation Funding Company Sentenced to 30 Months in Prison for Defrauding Business Partners in $869,492 Kickback ConspiracyRead the Press Release
NEWARK, N.J. – The former part-owner and underwriter for New York-based litigation funding company The Law Funder LLC was sentenced today to 30 months in prison for participating in a kickback scheme that defrauded his former business partners of $869,492, U.S. Attorney Paul J. Fishman announced.
Mathew Sheldon, 39, of New York, previously pleaded guilty before U.S. District Judge Dennis M. Cavanaugh to a superseding information charging him with conspiracy to commit wire fraud through the deprivation of honest services. Judge Cavanaugh imposed the sentence today in Newark federal court.
According to documents filed in this case and statements in court:
The Law Funder, which extends loans to plaintiffs in pending civil litigation, did business with Montclair Funding Group LLC (MFG) – at one time headquartered in Union City, N.J. – and its owner, Rory Donadio, 43, of New York. MFG was a broker between plaintiffs seeking advances against potential recoveries in pending litigation and private entities such as Law Funder. In exchange for a broker’s fee, MFG would, among other things, gather necessary information and documents in support of funding opportunities so Law Funder could evaluate whether to fund a case and for how much. Sheldon was a 25 percent owner in Law Funder and supervised the underwriting process for the company.
Sheldon admitted that from February 2005 through July 2009, he conspired with Donadio to design and execute a secret kickback scheme. Sheldon would offer certain of Law Funder’s investment opportunities to MFG in exchange for personally receiving a portion of each broker’s commission Law Funder paid MFG. Sheldon and Donadio agreed to conceal their fee-splitting arrangement from Law Funder and Sheldon’s three partners. The kickback scheme resulted in $869,492 in fraudulent payments to Sheldon, which were paid by wire transfer and other means.
Sheldon also admitted that he and Donadio concealed the scheme by using code, such as “Giants” or the letter “G” in records referring to related transactions. He acknowledged he regularly communicated with Donadio to identify the coded transactions and calculate the amount payable to Sheldon pursuant to the kickback scheme.
In addition to the prison term, Judge Cavanaugh sentenced Sheldon to three years of supervised release, ordered him to pay $869,492 in restitution and forfeit $869,492.Donadio also has pleaded guilty in connection with the scheme and awaits sentencing.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, and inspectors of the U.S. Postal Inspection Service, Newark Division, under the direction of Maria L. Kelokates, with the investigation leading to today’s sentence.
The government is represented by Assistant U.S. Attorneys Joseph B. Shumofsky, Mala Ahuja Harker and Jenny Kramer of the U.S. Attorney’s Office Economic Crimes Unit, and Evan Weitz of the Office’s Asset Forfeiture and Money Laundering Unit.
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: Patrick N. McMahon Esq., Assistant Federal Public Defender, Newark
Bergen County, N.J. Man Sentenced to 100 Months in Prison for Separate Fraud ScemesRead the Press Release
Former Investment Advisor ran Multimillion-dollar Ponzi Scheme,
Swindled Elderly, Disabled WidowCAMDEN, N.J. – A Bergen County, N.J., man who claimed to run New Jersey-based hedge funds using a secret computer program to invest in foreign currency was sentenced today to 100 months in prison for defrauding victims of millions of dollars, conning an elderly, disabled widow out of her life savings and evading his tax obligations, U.S. Attorney Paul J. Fishman announced.
George Sepero, 40, of Glen Rock, N.J., previously pleaded guilty to a superseding information charging him with wire fraud conspiracy, wire fraud and tax evasion before Chief U.S. District Judge Jerome B. Simandle in Camden federal court. Sepero has been remanded to federal custody since July 16, 2012, after violating the conditions of his supervised release through a continuing pattern of fraud.
“George Sepero stole millions in a Ponzi scheme and perpetrated a monstrous fraud on an elderly woman who was the definition of vulnerable,” said U.S. Attorney Fishman. “Blowing fortunes of other people’s money, he continued to commit scam after scam until he was locked up. It is fair that he spend his next years away from the society he victimized.”
According to documents filed in this case and statements made in court:
The Currency Investment Scheme
Beginning in 2009, Sepero – along with conspirators Carmelo Provenzano, 31, of Garfield, N.J., and Daniel Dragan, 43, of Lebanon, N.J. – claimed to run a series of hedge funds in New Jersey, luring investors with the prospect of extraordinary profits in foreign currency trading. The trio made numerous misrepresentations and omissions to induce their victims to invest in Caxton Capital Management and ACCP Pro Consulting Inc. Sepero claimed that he and his conspirators owned and controlled a proprietary computer algorithm for trading foreign currencies; that they had used the algorithm to achieve returns of more than 170 percent in the prior two years; and that any investment funds would be highly liquid and could be withdrawn on days’ notice.
Investors sent the defendants a total of more than $3.5 million. Sepero and the others invested little or no money in foreign currency or any other investment vehicle, instead diverting the vast majority of victims’ investments to pay prior victims in Ponzi-scheme style and to finance extravagant personal expenditures.
Sepero and his conspirators spent investor money on credit card bills averaging $25,000 per month; bar tabs of $18,241, including a $4,000 tip; $14,034 on separate nights at Drai’s Hollywood nightclub in Los Angeles; and flights to Paris and elsewhere. Sepero bought a custom Ford pickup truck for more than $80,000.
The defendants emailed victims fake statements showing their principal had been invested in the foreign currency markets and was achieving substantial results. Many of these e-mails were purportedly sent by an individual named “Mel Tannenbaum,” a fictional character of Provenzano’s invention.
The defendants also e-mailed to several investors screen shots of a computer-based trading program, which they claimed represented the investors’ funds being traded in the currency markets. In reality, the shots reflected trading in fictional accounts set up by the conspirators to dupe investors.
Provenzano and Dragan have also pleaded guilty before Judge Simandle and await sentencing.
The Annuity Account Scheme
Sepero worked as a financial planner at a financial institution for several years, but was fired in 2006 because of investigations into his churning of clients’ accounts. While at the institution, Sepero took control of the annuity account of one of his clients – an elderly, paraplegic woman with dementia – which was her sole means of providing for her retirement and nursing expenses.
After his termination, Sepero lied to the woman and her family, telling them he was still authorized to manage the annuity account. When his victim had money to add to the account, Sepero directed her to give him checks made payable to his company Casa Nostra Enterprises. Instead of transferring the money to the annuity account, Sepero spent it on his own expenses: credit card and other bills, mortgage payments and car payments, among other things.
To hide the fraud, Sepero fabricated a bogus account statement showing that the annuity account was worth more than $700,000, when, for the period covered by the statement, it actually contained $16.57.
Sepero placed recorded phone calls to the administrator of the annuity account, during which he impersonated both his victim’s son and her husband. Her husband died more than three years before Sepero made the calls.
Sepero also pleaded guilty to tax evasion for the tax year 2010, as he derived income from his fraudulent activities, but did not file a tax return and deposited his victims’ money into his companies’ accounts.
In addition to the prison term, Judge Simandle sentenced Sepero to three years of supervised release and ordered him to pay restitution of $4,985,361. In imposing the sentence, Judge Simandle considered Sepero’s criminal behavior while out on supervised release in this case.
According to the government:
During his supervised release, Sepero engaged in a fraudulent “lease to own” agreement with his tenant at the Maywood, N.J., property Sepero was using to secure his bail. When the tenant became suspicious of the arrangement and discovered Sepero’s pending charges, Sepero fabricated an email from PNC Mortgage that made it appear there was a legitimate sale agreement.
Prior to his remand, Sepero also used a relative’s credit card to run up more than $9,000 in unauthorized charges.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, and special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen, for the investigation. He also thanked the Commodity Futures Trading Commission’s New York Regional Office, under the direction of David Meister.
The government is represented by Unit Chief Christopher Kelly and Assistant U.S. Attorney Zach Intrater of the U.S. Attorney’s Office Economic Crimes Unit and Evan Weitz of the Office’s Asset Forfeiture 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.13-404
Defense counsel: John Weischel Esq., Hackensack, N.J.Hudson County Contractor Admits Paying $65,000 in Bribes to Bayonne Official for Government-Funded ProjectsRead the Press Release
TRENTON, N.J. - A Hudson County, N.J. man today admitted his role in paying bribes to a Bayonne public official for the public official’s assistance in securing projects funded by the U.S. Department of Housing and Urban Development, U.S. Attorney Paul J. Fishman announced.
Joseph Arrigo, 45, of Bayonne, N.J., pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton federal court to an information charging him with one count of paying bribes totaling approximately $65,000 to a Bayonne official who served as the director of Bayonne’s Department of Community Development. Arrigo also pleaded guilty to one count of theft and conversion of government funds in the amount of $40,000, and one count of submitting a false tax return for tax year 2011.
According to documents filed in this case and statements made in court:
Arrigo was the owner of Shadow Contracting LLC, a general contracting company in Bayonne. The Bayonne Department of Community Development (CBDCD) was a government agency that received funds from the U.S. Department of Housing and Urban Development (HUD) under a federal program that provided grants of up to $20,000 to low-income families to rehabilitate their homes and to repair conditions that were considered to affect their health and safety, and their homes’ accessibility, energy efficiency or code compliance. The CBDCD also provided these HUD funds under the same federal program to nonprofit organizations for the same purpose. A Bayonne public official served as the director of the CBDCD and was responsible for reviewing applications for HUD grant funds from the City of Bayonne and awarding such funds to qualified applicants.
In September 2010, the public official solicited cash payments from Arrigo in exchange for the public official’s assistance in awarding HUD grant funds from the City of Bayonne to Arrigo as the owner of Shadow Contracting. From September 2010 to February 2013, Arrigo made cash payments to the public official totaling approximately $65,000 in exchange for the public official’s assistance in awarding HUD grant funds from Bayonne to Arrigo that totaled approximately $426,000.
In September 2011, Arrigo assisted another contractor by supplying with a bid on behalf of Shadow Contracting that was higher than the contractor’s bid to enable the other contractor to obtain HUD grant funds from the City of Bayonne. The contractor then submitted the two bids to the CBDCD and, as a result of his collusion with Arrigo, the contractor fraudulently obtained $20,000 in HUD grant funds from the CBDCD. In December 2011, Arrigo caused the same contractor to provide Arrigo with a bid that was higher than Arrigo’s bid for the purpose of obtaining HUD grant funds from Bayonne. Arrigo submitted the contractor’s bid along with his own to the CBDCD and, as a result, fraudulently obtained another $20,000 in HUD grant funds from the CBDCD.
Arrigo also made and subscribed a U.S. Individual Tax Return, Form 1040, for tax year 2011, which he did not believe to be true and correct as to every material matter, including approximately $151,993 in unreported income.
The bribery and theft of government funds charges to which Arrigo pleaded guilty carry maximum potential penalties of 10 years in prison and maximum fines of $250,000. The charge of filing a false tax return, to which Arrigo pleaded guilty, carries a maximum potential penalty of three years in prison and a fine of $250,000. Sentencing is currently scheduled forFeb. 3, 2014.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark; special agents of the U.S. Department of Housing and Urban Development, Office of the Inspector General, under the direction of Special Agent in Charge Christina Scaringi; and special agents of IRS - Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen in Newark, with the continuing investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Jacques S. Pierre of the U.S. Attorney=s Special Prosecutions Division and Assistant U.S. Attorney Steven G. Sanders of the office’s Appeals Division.
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Defense counsel: Charles J. Uliano Esq., West Long Branch, N.J.
Arrigo, Joseph Information
Genovese Crime Family Associate Admits Racketeering Conspiracy and Tax EvasionRead the Press Release
NEWARK, N.J. – An Ocean County, N.J. man who is a reputed associate of the Genovese Crime Family today admitted his role in a racketeering conspiracy and tax evasion scheme and agreed to forfeit $400,000 to the United States, U.S. Attorney Paul J. Fishman announced.
John Breheney, a/k/a “Fu,” 49, of Little Egg Harbor, N.J., pleaded guilty before U.S. District Judge Claire C. Cecchi to an information charging him with conspiracy to violate the Racketeer Influenced and Corrupt Organizations, or RICO, statute, by participating in the activities of the Genovese Crime Family of La Cosa Nostra through a pattern of racketeering activity and through the collection of unlawful debt.
Breheney and 11others alleged to be members or associates of the Genovese Crime Family were arrested on May 22, 2012, and charged by complaint. The racketeering activities consisted of engaging in an illegal sports betting business conducted, in part, through an offshore website, and cargo theft. Breheney admitted that he earned income through his criminal activities and then concealed this income from the IRS by making false tax returns and failing to pay taxes on this income.
According to documents filed in this case and statements made court:
Breheney was an associate of the Genovese Crime Family of La Cosa Nostra. This alleged criminal enterprise through smaller groups, sometimes referred to as “crews,” that engaged in a variety of criminal activities in northern New Jersey and elsewhere. Each crew was headed by a “captain,” “capo,” or “skipper.” Each captain’s crew consisted of “soldiers” and “associates.” The captain was responsible for supervising the criminal activities of his crew and providing the crew with support and protection. In return, the captain often received a share of the crew’s earnings.Joseph Lascala, 81, of Monroe, N.J., was an alleged “capo” and a made member of the Genovese Crime Family, directing various criminal activities of a group of associates referred to in the criminal complaint as the “Lascala Crew.” These activities included the theft of goods and cargo, the receipt of stolen property in interstate commerce, extortion, illegal gambling, and the collection of unlawful debt. Breheney reported to Lascala and his underlings.
Members and associates of the Lascala Crew and others conspired with individuals who owned and operated an offshore website to run an illegal gambling business that operated in northern New Jersey and elsewhere.
High-level associates of the Lascala Crew, such as Breheney, acted as “agents” of the business. Before the advent of computerized betting, these agents would be referred to as “bookmakers” or “bookies.” Through the use of a username and password, the agents accessed the Website and tracked the bets or wagers placed by bettors. This “electronic portfolio” was referred to as the agent’s “package.” After bettors received their own username and password from the agent or sub-agent, they placed bets, usually on sporting events. The bettors, however, did not use a credit card to either access the website or to pay gambling losses or to receive gambling winnings. Instead, the bettors either paid money for losses to, or received money for winnings from, the agent, such as Breheney, his sub-agent, or their conspirators in New Jersey. If a bettor was unable or unwilling to repay gambling losses, then the agent or sub-agent converted these losses in debts that the bettor was required to repay. The agent or sub-agent often tacked exorbitant amounts of interest onto these debts and they used extortionate means to collect these debts, including the express or veiled threat that the agent, sub-agent, or their co-conspirators had the backing of the Genovese Crime Family.The Lascala Crew also profited by operating social clubs in northern New Jersey and elsewhere where members and associates profited through card games and other illegal games of chance. In addition, they also profited by engaging in cargo theft and the receipt and sale of stolen goods in interstate commerce.
Breheney admitted that he conspired with this criminal enterprise to engage in a pattern of racketeering activity, including illegal gambling and theft from interstate shipments, and the collection of unlawful debt. He also admitted that he failed to report approximately $101,166 in taxable income that he had received in 2007 and thus cheated the IRS out of approximately
$30,982 in taxes in that year. Finally, Breheney agreed to a forfeiture money judgment of $400,000, representing money he had derived through his participation in the racketeering activities.The racketeering count to which Breheney pleaded guilty is punishable by a maximum potential penalty of 20 years in prison and $250,000 fine, and the tax evasion charge is punishable by up to five years in prison and a $250,000 fine. Sentencing is scheduled for Feb. 5, 2014.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark; the Special Investigations Unit of the Bayonne Police Department, under the direction of Chief Ralph Scianni; special agents of IRS-Criminal Investigation under the direction of Special Agent in Charge Shantelle P. Kitchen; the N.J. State Police, under the direction of Col. Rick Fuentes; and the Monmouth County Prosecutor’s Office, under the direction of Acting Prosecutor Christopher Gramiccioni, with the investigation leading to today’s arrests. He also thanked the Waterfront Commission of New York Harbor, the U.S. Department of Labor, and the N.J. State Commission of Investigation, for their significant contributions to the investigation.
The government is represented by Assistant U.S. Attorneys Serina M. Vash, of the National Security Unit, and Anthony Moscato of the Organized Crime/Gangs Unit in Newark.
As for other alleged members of the Lascala Crew, the charges and allegations contained in the Complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
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Defense Counsel: Anthony J. Pope, Jr. Esq. NewarkBreheney Information
Camden County Man Sentenced to 63 Months in Prison for Illegal Sale of 14 GunsRead the Press Release
CAMDEN, N.J. – A Camden County, N.J., man was sentenced today to 63 months in prison for selling guns without a license and illegally possessing firearms, U.S. Attorney Paul J. Fishman announced.
Eric J. Reed, 45, of Pennsauken, N.J., previously pleaded guilty before U.S. District Judge Renée Marie Bumb in Camden federal court to an information charging him with one count of dealing firearms without a license and one count of transferring a firearm to a previously convicted felon.
According to documents filed in this case and statements made in court:
Between May 2012 and August 15, 2012, Reed bought 14 firearms – five pistols, seven handguns and two rifles – from Pennsylvania gun shops and gun shows, which he then transferred for resale to his nephew, Ammie Steward, a/k/a “Beav,” a/k/a “B,” 38, of Pennsauken, a previously convicted felon who served a substantial prison term for manslaughter. Steward then resold the firearms.
Reed purchased the firearms in Pennsylvania after fraudulently obtaining a Pennsylvania driver’s license, then sold the weapons to a witness cooperating with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). Reed also admitted to using a power tool to obliterate the serial numbers on the 14 guns. A number of the firearms were sold along with ammunition magazines and seven of the guns were sold along with high-capacity magazines. On at least one occasion, Reed purchased and gave to Steward for resale a firearm (a Kel Tec PLR-16 .223-cal. pistol) along with a box of ammunition. On a separate occasion, Reed purchased and then transferred to Steward for resale a rifle with a bayonet. All 14 weapons are now in the custody of law enforcement.
In addition to the prison term, Judge Bumb sentenced Reed to serve three years of supervised release. Steward has pleaded guilty to related charges and awaits sentencing.
U.S. Attorney Fishman credited special agents of the ATF, under the direction of Special Agent in Charge Thomas J. Cannon, with the investigation leading to today’s guilty plea. He also thanked the Pennsauken Police Department, under the direction of Chief John J. Coffey.
The government is represented by Assistant U.S. Attorney Matthew T. Smith of the U.S. Attorney’s Office in Camden.13-402
Defense counsel: Ralph Jacobs Esq., Philadelphia
Pennsylvania Man Admits Conspiring with Alleged Members of Organized Crime Family and Others in Fraud SchemeRead the Press Release
CAMDEN, N.J. – A West Reading, Pa., man admitted he conspired to defraud FirstPlus Financial Group Inc. (FPFG), a Texas-based financial services company allegedly targeted for extortionate takeover and looting by a group led by alleged Lucchese organized crime family member Nicodemo S. Scarfo, U.S. Attorney Paul J. Fishman announced.
Cory Leshner, 30, pleaded guilty before U.S. District Judge Robert B. Kugler in Camden federal court to a superseding information charging him with conspiracy to commit wire fraud.
According to documents filed in this case and statements made in court:
Leshner and 12 others – including Scarfo, an alleged member of the Lucchese La Cosa Nostra (LCN) crime family, and Salvatore Pelullo, an alleged associate of the Lucchese and Philadelphia LCN families – were variously charged in a November 2011 indictment with a racketeering conspiracy, including acts of securities fraud, wire fraud, mail fraud, bank fraud, extortion, interstate travel in aid of racketeering, money laundering and obstruction of justice. The indictment charged that FPFG was targeted for extortionate takeover and looting by a group of the conspirators. A substantial part of the enterprise’s activities occurred in New Jersey, including communications and the transfer of money into and out of the state. Cory Leshner admitted that he joined the conspiracy in April 2007.
Leshner admitted that he assisted Scarfo and Pelullo in managing family trusts and limited liability companies on behalf of Scarfo and Pelullo as part of the scheme to defraud FPFG. Leshner said that Pelullo directed Leshner in the use of various bank accounts through which Pelullo received hundreds of thousands of dollars between July 2007 and April 2008 as part of the scheme. The money included the proceeds of the fraud that Pelullo allegedly received as part of a fraudulent “consulting” agreement between his shell company, Seven Hills Management, and codefendant William Maxwell, a Texas attorney who served as “special counsel” to FPFG as part of the scheme. The money also involved proceeds received from the fraudulent sale of Scarfo and Pelullo’s worthless companies to FPFG in 2007. The receipt of the fraudulent proceeds often occurred in the form of wire transfers from accounts in Pennsylvania to accounts in New Jersey.
Leshner also said that he was a law school student during the scheme. Leshner graduated from law school in 2010 and became an attorney in Pennsylvania in 2011. As part of his plea agreement, Leshner agreed to notify the Pennsylvania Supreme Court of his guilty plea and to accept any disciplinary action brought by disciplinary officials as a result of the guilty plea and sentence. Leshner also agreed to not seek the reinstatement of his license to practice law while serving any sentence of imprisonment imposed in the case.
Nicodemo S. Scarfo, Pelullo, and five other defendants charged in November 2011 – including attorneys William Maxwell, David Adler, Gary McCarthy, and Donald Manno, as well as John Maxwell – are scheduled for trial beginning Oct. 28, 2013. Todd Stark, also charged in the indictment, previously pleaded guilty to providing ammunition to Scarfo and Pelullo, convicted felons.
The conspiracy count to which Cory Leshner pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for Jan. 17, 2014.
U.S. Attorney Fishman praised special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark; the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, under the direction of Acting Special Agent in Charge Cheryl Garcia, New York Region; and the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Thomas J. Cannon in Newark. He also thanked the FBI under the direction of Special Agent in Charge Edward J. Hanko in Philadelphia for its vital assistance and the U.S. Securities and Exchange Commission for its role.
The government is represented by Assistant U.S. Attorneys Steven D’Aguanno and Howard Wiener, of the New Jersey U.S. Attorney’s Office Organized Crime/Gangs Unit and Criminal Division in Camden, and Trial Attorney Adam Small of the Organized Crime and Gang Section of the Justice Department’s Criminal Division.
With respect to the defendants awaiting trial, the charges and allegations contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
13-398Defense counsel: Rocco C. Cipparone Jr., Esq., Haddon Heights
Leshner Superseding Information
Mercer County, N.J., Man Sentenced to Four Years for His Role in Trenton, N.J., Narcotics RingRead the Press Release
TRENTON, N.J. – A Mercer County, N.J., man was sentenced today to 48 months in prison for his role in a conspiracy to distribute oxycodone pain pills, U.S. Attorney Paul J. Fishman announced.
Giuseppe A. Scordato, 48, of Hamilton, N.J, previously pleaded guilty before U.S. District Judge Michael A. Shipp in Trenton federal court to an information charging him with one count of conspiracy to distribute and possess with intent to distribute oxycodone.
According to documents filed in this case and statements made in court:
Between November 2011 and July 2012, Scordato obtained oxycodone-based prescription pain pills from Joseph A. “JoJo” Giorgianni, Mary Manfredo and Charles Hall III. Scordato obtained the pills from two locations: Giorgianni’s business – JoJo’s Steakhouse – and “Giordianni’s Clubhouse,” which was located next to the steakhouse. Scordato would sell those pills and remit the proceeds to Giorgianni and Manfredo at JoJo’s Steakhouse in exchange for a portion of the proceeds from those sales.In addition to the prison term, Judge Walls sentenced Scordato to serve three years of supervised release and fined him $2,000.
U.S. Attorney Fishman credited special agents of the FBI’s Trenton Resident Agency, Newark Field Office, under the direction of Special Agent in Charge Aaron T. Ford, for the investigation leading to today’s guilty pleas.The government is represented by Assistant U.S. Attorneys Eric W. Moran and Matthew J. Skahill of the U.S. Attorney’s Office Special Prosecutions Division in Trenton and Camden, respectively.
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Defense counsel: Scott Krasny Esq., West Trenton, N.J.Former NBA Player and CEO of the George Group Convicted on All Counts in $2 Million Ponzi SchemeRead the Press Release
TRENTON, N.J. – C. Tate George, former NBA basketball player and the CEO of purported real estate development firm The George Group, was convicted today on all counts on which he was indicted in connection with his role in orchestrating a $2 million investment fraud scheme, U.S. Attorney Paul J. Fishman announced.
The jury deliberated four hours before convicting George, 45, of Newark, of four counts of wire fraud after a three-week trial before U.S. District Judge Mary L. Cooper. George was immediately remanded into federal custody to await sentencing, which is scheduled for Jan. 16, 2014.According to documents filed in this case and evidence presented at trial:
George, a former player for the New Jersey Nets and Milwaukee Bucks professional basketball teams, held himself out as the CEO of The George Group and claimed to have more than $500 million in assets under management. He pitched prospective investors, including several former professional athletes, to invest with the firm and told them their money would be used to fund The George Group’s purchase and development of real estate development projects, including projects in Connecticut and New Jersey. George represented to some prospective investors that their funds would be held in an attorney trust account and personally guaranteed the return of their investments, with interest.
Based on George’s representations, investors invested more than $2 million in The George Group between 2005 and 2011, which he deposited in both the firm’s and his personal bank account. Instead of using investments to fund real estate development projects as promised, George used the money from new investors to pay existing investors in Ponzi-scheme fashion, as well as paying for his daughter’s Sweet 16, extensive renovations on his New Jersey home (that has since been foreclosed), the mortgage on a New Jersey home, the mortgage on a Florida home, taxes to the IRS, and traffic tickets. The defendant gave money to family members and friends. He also spent $2,905 for a reality video about himself (a “sizzle reel” for “The Tate Show,” is available on YouTube). The George Group had virtually no income-generating operations.
Each of the wire fraud counts on which he was convicted is punishable by a maximum potential penalty of 20 years in prison and a $250,000 fine.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; postal inspectors of the USPIS, under the direction of Postal Inspector in Charge Maria L. Kelokates; and criminal investigators with the U.S. Attorney’s Office, with the investigation leading to today’s conviction.
The government is represented by Assistant U.S. Attorneys Joseph B. Shumofsky and Zach Intrater 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.13-401
Defense counsel:
David E. Schafer Esq., and Andrea Bergman Esq., Assistant Federal Public Defenders, TrentonFormer Global Wealth Management Firm Employee Admits Insider Trading ChargesRead the Press Release
TRENTON, N.J. – A former employee of a global wealth management firm admitted today to passing on material, nonpublic information concerning Gilead Sciences, Inc.'s (Gilead) $11 billion acquisition of New Jersey-based Pharmasset Inc. (Pharmasset), U.S. Attorney Paul J. Fishman announced.
Kevin Dowd, 38, of Boca Raton, Fla., pleaded guilty before U.S. District Judge Anne E. Thompson in Trenton federal court to an information charging him with conspiracy to commit securities fraud.
According to documents filed in this case and statements made in court:
Dowd was a registered representative of a global wealth management firm (identified as “Brokerage Firm A” in court documents) in the firm’s Aventura, Fla., branch office and held the titles of second vice president and financial advisor. He joined the firm in 2005 and worked there through late October 2012. The Aventura branch’s largest customer was a member of Pharmasset’s board of directors. The Pharmasset board member informed his advisors at the Aventura branch that Pharmasset was in the process of being acquired by a large pharmaceutical company and that the acquisition price was going to be in the high $130s per share.
On Nov. 21, 2011, Gilead publicly announced that it had entered into an agreement with Pharmasset to acquire the company for $11 billion, or $137 per share in cash. The purchase price represented an approximately 89 percent premium over Pharmasset’s closing price of $72.67 on Nov. 18, 2011. In response to the announcement, Pharmasset’s stock price increased to $134.14 per share at the close of trading on Nov. 21, 2011.
On Nov. 18, 2011, prior to the public announcement of the Pharmasset acquisition, Dowd tipped conspirator “J.F.”, a childhood friend, about the impending Pharmasset acquisition, knowing that J.F. was going to trade on the material, nonpublic information. Immediately following the tip, J.F. purchased approximately $196,000 worth of Pharmasset stock. J.F. then also tipped conspirator “E.B.”, who purchased 100 highly speculative “out-of-the-money” call options in Pharmasset within minutes of J.F.’s purchase of Pharmasset stock.
On Nov. 21, 2011, after the public announcement of the Pharmasset acquisition, J.F. and E.B. liquidated the positions in Pharmasset they had acquired Nov. 18, 2011. J.F. netted an illegal profit of $163,621 based on Dowd’s tip. Trades placed by E.B. resulted in an illegal profit of $544,706 from the sale of Pharmasset options. Dowd admitted that his personal gain from passing along the material, nonpublic information was $35,000.Dowd faces a maximum potential penalty of five years in prison and a fine of $250,000. Sentencing is scheduled for Jan. 15, 2014.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, with the investigation leading to today’s guilty plea. He also thanked the U.S. Securities and Exchange Commission’s Market Abuse Unit and Philadelphia Regional Office, under the direction of Daniel M. Hawke for its assistance.
The government is represented by Deputy Chief Gurbir S. Grewal and Assistant U.S. Attorney Mala Ahuja Harker 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: Peter Willis Esq., Jersey City, N.J.Dowd Information
Bulgarian Citizen Extradited to U.S. to Face Indictment Charging Sale of Stolen Payment Card Data, Accounting Firm HacksRead the Press Release
Two Schemes Allegedly Caused More Than $56 Million in Losses
NEWARK, N.J. – Vanyo Minkov, 31, a citizen of the Republic of Bulgaria, is expected to appear in Newark federal court today following his extradition to face charges that he orchestrated two international conspiracies – to sell stolen payment card data and to file bogus tax returns using hacked information – that resulted in approximately $56 million in losses, New Jersey U.S. Attorney Paul J. Fishman announced.
As charged in the federal indictment, Minkov acquired stolen credit and debit card information and sold it online. He is also charged with hacking into the networks of multiple accounting firms to steal 2011 year tax filings from the firms’ clients, then using that information to file returns in their names the following year.
The U.S. Secret Service (USSS) and the IRS led an investigation coordinated with the Sofia, Bulgaria Office of the USSS, the FBI and Bulgarian law enforcement to identify and arrest Minkov in Bulgaria. He has been in the custody of Bulgarian authorities since his arrest in late May 2013 and was extradited to the United States on Sept. 27, 2013.
According to documents filed in this case:
Between July 2011 and April 2013, Minkov participated in a scheme in which he sold stolen credit and debit card numbers and related personal identifying information online for profit. Minkov had multiple sources of the stolen data, including through the use of ATM skimming operations using specialized equipment to steal debit card information and PIN codes. Minkov obtained and sold stolen payment card data for more than 100,000 accounts during the course of the conspiracy. The losses caused by the scheme are currently estimated at approximately $50 million.
Some of the purchasers of the data paid using international money transfers sent from New Jersey.
Minkov also orchestrated a tax refund scheme, in which he and his co-conspirators hacked into the networks of multiple accounting firms and stole the firm’s clients’ tax filings for tax year 2011. Minkov and his conspirators then used the stolen information to file false and fraudulent tax returns for the 2012 tax year in the names of the accounting firms’ clients. Because Minkov used the previous returns, the fraudulent filings are more difficult to detect. To date, the IRS has identified approximately over $6 million in fraudulent claims made to the IRS in connection with the scheme.
The maximum potential penalties for each count are as follows:
Count
Violation
Maximum Potential Penalty
Conspiracy to commit wire fraud
30 years; $1 million fine or twice the gain or loss from the offense
2
Conspiracy to defraud the government with respect to claims
10 years; $250,000 fine or twice the gain or loss from the offense
3
Conspiracy to commit fraud and related activity in connection with identification documents, authentication features, and information
15 years; $250,000 fine or twice the gain or loss from the offense
4
Conspiracy to commit fraud and related activity in connection with computers
5 years; $250,000 fine or twice the gain or loss from the offense
U.S. Attorney Fishman credited special agents of the USSS, Newark Field Office, under the direction of Special Agent in Charge James Mottola, and the IRS, under the direction of Special Agent in Charge Shantelle P. Kitchen, for the ongoing investigation leading to the charges. U.S. Attorney Fishman also thanked the FBI, the Justice Department’s Office of International Affairs in Washington and the Supreme Cassation Prosecutor’s Office of the Republic of Bulgaria and its law enforcement partners for their extraordinary support.
The government is represented by Assistant U.S. Attorney Andrew S. Pak of the Computer Hacking and Intellectual Property Section of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
The charges and allegations contained in the indictment are merely accusations and the defendant is considered innocent unless and until proven guilty.
13-397Minkov Indictment
Ten Indicted in $200 Million International Credit Card Fraud ConspiracyRead the Press Release
NEWARK, N.J. – Ten individuals who allegedly participated in one of the largest credit card fraud schemes ever charged by the Justice Department now face a 25-count indictment charging additional crimes, New Jersey U.S. Attorney Paul J. Fishman announced.
Nine of the defendants charged in the indictment unsealed today were previously charged by complaint in February 2013 in connection with the scheme, which allegedly caused more than $200 million in losses. A 10th defendant, Amar Singh, is charged for the first time in this indictment. The complaint charged 18 defendants with bank fraud conspiracy, alleging their participation in a scheme to fabricate more than 7,000 false identities to obtain tens of thousands of credit cards. Many of those defendants have since pleaded guilty to related charges. The indictment announced today adds wire fraud charges against seven of the defendants with pending cases.
The charged defendants are as follows:
Name
Age
Residence
Counts Charged
Status
59
Iselin, N.J.
1- bank fraud conspiracy
15,16, 22- wire fraud
detained
Ijaz Butt
54
Hicksville, N.Y.
1- bank fraud conspiracy
17,18,19- wire fraud
detained
Khawaja Ikram
40
Staten Island, N.Y.
1- bank fraud conspiracy
20, 21, 23- wire fraud
bailed
Azhar Ikram
40
Howard Beach, N.Y.
1- bank fraud conspiracy
14, 24, 25- wire fraud
detained
Vinod Dadlani
50
Lyndhurst, N.J.
1- bank fraud conspiracy
2, 3, 9,10- wire fraud
bailed
Vijay Verma
46
Iselin, N.J.
1- bank fraud conspiracy
4, 6, 11- wire fraud
bailed
Tarsem Lal
74
Iselin, N.J.
1- bank fraud conspiracy
5, 7, 8, 12,13- wire fraud
bailed
Habib Chaudhry
45
Valley Stream, N.Y.
1- bank fraud conspiracy
at large
Muhammad Naveed
36
Flushing, N.Y.
1- bank fraud conspiracy
at large
Amar Singh
62
Floral Park, N.Y.
1- bank fraud conspiracy
at large
According to documents filed in this case and statements made in court:
The scheme involved a three-step process. The defendants would make up a false identity by creating fraudulent identification documents and a fraudulent credit profile with the major credit bureaus. Then they would pump up the credit of the false identity by providing false information about that identity’s creditworthiness to those credit bureaus. Finally, they borrowed or spent as much as they could, based on the phony credit history, but did not repay the debts – causing more than $200 million in confirmed losses to businesses and financial institutions.
The scope of the criminal fraud enterprise required the conspirators to construct an
elaborate network of false identities. Across the country, the conspirators maintained more than 1,800 “drop addresses,” including houses, apartments and post office boxes, which they used as the mailing addresses for the false identities.
The conspiracy to commit bank fraud charge, and each of the wire fraud charges, carries
a maximum potential penalty of 30 years in prison and a $1 million fine.
U.S. Attorney Fishman praised special agents of the FBI’s Cyber Division, under the
direction of Special Agent in Charge Aaron T. Ford in Newark; postal inspectors, under the direction of Postal Inspector in Charge Maria L. Kelokates; and special agents of the U.S. Secret Service, under the direction of Special Agent in Charge James Mottola. He also thanked the U.S. Social Security Administration, Office of the Inspector General, for its role in the investigation.
The government is represented by Assistant U.S. Attorneys Daniel V. Shapiro and Zach Intrater of the U.S. Attorney’s Office Economic Crimes Unit and Barbara Ward of the office’s Asset Forfeiture Unit in Newark.The charges and allegations contained in the indictment are merely accusations and the defendants are considered innocent unless and until proven guilty.
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 is 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:
Babar Qureshi: Samuel Deluca Esq., Jersey City, N.J.
Ijaz Butt: Kenneth Kayser Esq., Livingston, N.J.
Khawaja Ikram: Neil Duffy III Esq., Union, N.J.
Azhar Ikram: Steve Zissou Esq., Bayside, N.Y.
Vinod Dadlani: Patrick Papalia Esq., Hackensack, N.J.
Vijay Verma: Gerald Krovatin Esq., Newark, N.J.
Tarsem Lal: Paul Condon, Esq. Jersey City, N.J.Qureshi, Babar et al. Indictment
New Jersey U.S. Attorney Paul J. Fishman Announces Hiring Grants for Law Enforcement and School Safety OfficersRead the Press Release
Funds Will Hire School Resource Officers and Fund Critical Law Enforcement Positions
NEWARK, N.J. – U.S. Attorney Paul J. Fishman, in conjunction with the U.S. Department of Justice Office of Community Oriented Policing Services (COPS), today announced funding awards for the District of New Jersey.
The grantees and amount awarded include:
Recipient
Total Officers Awarded
Estimated Award Amount
5
$625,000
Bridgeton, City of
3
$375,000
Camden County Police Department
10
$2,262,950
Paterson, City of
10
$1,672,510
Westampton, Township of
1
$125,000
“In the wake of past tragedies, it's clear that we need to be willing to take all possible steps to ensure that our kids are safe when they go to school,” said Attorney General Eric Holder. “These critical investments represent the Justice Department’s latest effort to strengthen key law enforcement capabilities, and to provide communities with the resources they need to protect our young people. Especially in a time of increased challenges and limited budgets, our top priority must always be the safety and well-being of our children.”
Overall the COPS Office funded awards to 263 cities and counties, aimed at creating 937 law enforcement positions. More than $125 million will be awarded nationally, including nearly $45 million to fund 356 new school resource officer positions.
“In a time of diminished resources, it is more important than ever that we do all we can to ensure public safety,” said U.S. Attorney Fishman. “Local law enforcement often is required to hold the front line while taking the most painful cuts. I am pleased to join in announcing the Justice Department’s support of these departments and the admirable job their officers are doing to protect our communities.”
“The COPS Office is pleased to assist local law enforcement agencies throughout the country address their most critical public safety issues,” said Joshua Ederheimer, Acting Director of the COPS Office. “Funding from this year’s program will allow many cities and counties to apply new sworn personnel to issues related to violent crime, property crime, and school safety.”The COPS Hiring Program offers grants to state, local and tribal law enforcement agencies to hire or rehire community policing officers. The program provides the salary and benefits for officer and deputy hires for three years.
Grantees for the 2013 hiring program were selected based on their fiscal needs, local crime rates, and their community policing plans. There was an additional focus this year on agencies requesting assistance in developing school safety programs that would include the hiring of a school resource officer. School resource officer positions funded by the COPS Office are sworn law enforcement positions that work within a school district or facility, interacting directly with school administrators and students.
The COPS Office is a federal agency responsible for advancing community policing nationwide. Since 1995, COPS has awarded over $14 billion to advance community policing, including grants awarded to more than 13,000 state, local, and tribal law enforcement agencies to fund the hiring and redeployment of approximately 125,000 officers and provide a variety of knowledge resource products including publications, training, and technical assistance.
For the entire list of grantees and additional information about the 2013 COPS Hiring Program, visit the COPS website at www.cops.usdoj.gov.
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Loan Officer and Straw Purchaser Admit Roles in Multimillion-Dollar Mortgage FraudRead the Press Release
CAMDEN, N.J. – A loan officer and a straw purchaser today admitted they conspired to defraud financial institutions as part of a multimillion-dollar mortgage fraud scam to make illegal profits on over-developed condominiums in the Wildwood, N.J., area, U.S. Attorney Paul J. Fishman announced.
Michelle Martinez, 49, of Brick, N.J., and Dana Rummerfield, 47, of Los Angeles, Calif., each pleaded guilty before U.S. District Judge Jerome B. Simandle in Camden federal court. Martinez pleaded guilty to an information charging her with conspiracy to commit wire fraud. Rummerfield pleaded guilty to an information charging him with one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering.
According to documents filed in this case and statements made in court:
Conspirators identified homes in Wildwood and Wildwood Crest, N.J., and recruited straw buyers to purchase those properties at inflated rates. The straw buyers had good credit scores, but lacked the financial resources to qualify for mortgage loans. Martinez created fraudulent loan applications that contained false information about the straw buyers’ employment, income, assets and intended use of the properties. Martinez’s actions were designed to make the straw buyers appear more creditworthy than they actually were in order to induce the lenders to make the loans.
Martinez and her conspirators caused fraudulent mortgage loan applications in the name of the straw buyers, including the supporting documents, to be submitted to mortgage brokers that the brokers knew were false. Once the loans were approved and the mortgage lenders sent the loan proceeds in connection with real estate closings, Martinez’ conspirators took a portion of the proceeds, having funds wired or checks deposited into various accounts they controlled from the fraudulent mortgage loans and/or lines of credit on several properties. They also distributed a portion of the proceeds to other members of the conspiracy for their respective roles.
Rummerfield and others falsified his loan application with respect to his employment, income, and assets in order to cause the lender to make a loan to Rummerfield for a property he was purchasing in Wildwood Crest, N.J. Rummerfield took a portion of the fraudulent mortgage proceeds by having a check totaling $100,000 deposited into an account for Hot House Properties, a company he controlled.
The wire fraud conspiracy charge carries a maximum potential penalty of 30 years in prison and a $1 million fine. The money laundering conspiracy carries a maximum potential penalty of 10 years in prison and a $250,000 fine. Martinez and Rummerfield are scheduled to be sentenced on March 12, 2014.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark; and IRS – Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen, Newark field office, with the investigation leading to today’s guilty pleas.
The government is represented by Assistant U.S. Attorney Jacqueline M. Carle of the U.S. Attorney’s Office Criminal Division in Camden.
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Defense counsel:
Michelle Martinez: Paul A. Sarmousakis Esq., Avalon, N.J.
Dana Rummerfield: David Shapiro Esq., PhiladelphiaMartinez Information
Rummerfield InformationAlleged Gang Leader Arrested in Connection with Camden Drug Trafficking OperationRead the Press Release
CAMDEN, N.J. – Special agents of the Drug Enforcement Administration Camden High Intensity Drug Trafficking Areas (HIDTA) Task Force arrested an alleged gang leader in Camden this morning for his charged involvement with an illegal drug trafficking operation, U.S. Attorney Paul J. Fishman announced.
Tyrone Tyson, 38, is charged by criminal complaint with knowingly and intentionally distributing, and possessing with the intent to distribute, 100 grams or more of a mixture or substance containing heroin. He is expected to appear this afternoon before U.S. Magistrate Judge Joel Schneider in Camden federal court.
According to the complaint unsealed today:
In late July 2013, members of the Camden HIDTA Task Force conducted an investigation into Tyson’s drug trafficking activities – using surveillance, undercover officers, confidential informants, audio recordings and controlled drug purchases – which revealed Tyson was selling heroin in the area of 153 North 32nd Street in Camden. During the investigation, Tyson sold heroin to an undercover law enforcement agent on two occasions.
Tyson is a leader of the “Fruit Town Brims” set of the Bloods street gang and controls the gang’s activities in New Jersey.
The count with which Tyson is charged carries a minimum potential penalty of five years in prison and a maximum potential penalty of 40 years in prison and a $5 million fine, subject to enhancements based on criminal history and other factors.
U.S. Attorney Fishman credited special agents of the New Jersey DEA, under the direction of Special Agent in Charge Carl J. Kotowski; Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge Andrew M. McLees; the Camden County Prosecutor’s Office, under the direction of Prosecutor Warren W. Faulk; the Gloucester County Prosecutor’s Office, under the direction of Prosecutor Sean F. Daulton; and the Burlington County Prosecutor’s Office, under the direction of Prosecutor Robert D. Bernardi, with the investigation leading to today’s arrest.
He also thanked officers of the Camden County Sheriff’s Department, the Delaware River Port Authority Police, the Gloucester City Police Department, the Westampton New Jersey Police Department, the Monroe Township Police Department and the Washington Township Police Department for taking part in the investigation and the arrest.The government is represented by Special Assistant U.S. Attorney Ira Slovin of the U.S. Attorney’s Office Criminal Division in Camden.
The charges and allegations contained in the complaint are merely accusations, and the defendant is considered innocent unless and until proven guilty.
This case was developed through the work of the Camden Collaborative Crime Commission (C-4). Every federal, state and local law enforcement agency and prosecutor’s office responsible for combating drug trafficking, gang activity and violent crime in Camden has come together in one location to share intelligence, develop investigative strategies and support the investigative and prosecutorial efforts of its partners. C-4 has merged the individual missions of the various law enforcement agencies into a single strategic attack on drug trafficking and drug-related violent crime. Such intense coordination greatly enhances the law enforcement community’s ability to correctly identify and successfully prosecute the most dangerous criminals in one of our nation’s most dangerous cities.
13-393Defense counsel: Assistant Federal Public Defender Lisa M. Koch Esq., Camden
Tyson Complaint
U.S. Attorney General Recognizes New Jersey U.S. Attorney’s Office with Two Director’s AwardsRead the Press Release
NEWARK, N.J. – New Jersey U.S. Attorney Paul J. Fishman announced today that Assistant U.S. Attorney Norman J. Gross and Health Care and Government Fraud Unit Chief Jacob T. Elberg are two of 154 Department of Justice members recognized by Attorney General Eric Holder and Executive Office for U.S. Attorneys (EOUSA) Director H. Marshall Jarrett with a 2013 Director’s Award.
The New Jersey recipients were awarded at a ceremony this afternoon in the U.S. Attorney’s Office in Newark.
“I am proud to celebrate these extremely talented members of our staff,” said U.S. Attorney Fishman. “And I’m delighted that the Department of Justice recognizes the important contributions our Office makes to law enforcement nationwide.”
In a personalized letter to the recipients, Attorney General Holder thanked the recipients for their “exceptional efforts to promote the fair and impartial administration of justice for all Americans.”
“Each day the members of the US Attorneys’ community go to work for the citizens of this country with one goal in mind – to do everything they can to protect the rights of all Americans,” said EOUSA Director Jarrett. “I am continually humbled by their resiliency, dedication and unparalleled work ethic to accomplish this noble mission. Today’s awardees exemplify what it truly means to be a patriot and it is an honor to recognize them for their extraordinary service.”Gross was honored with the Director’s Award for Superior Performance as an Assistant United States Attorney – Appellate for his outstanding appellate advocacy in United States v. Duka. Among many issues argued in this high profile terrorism appeal was the constitutionality of the Foreign Intelligence Surveillance Act (FISA), as amended by the Patriot Act. This first impression issue, heard before U.S Court of Appeals for the Third Circuit, was critical to the Department’s continued efforts to protect against terrorism.
As a result of Gross’ work, defendants’ convictions were affirmed, FISA was upheld, and the Third Circuit established favorable precedent that Department of Justice attorneys will rely on for years to come. Gross’s advocacy was commended at oral argument by the Honorable Theodore H McKee, Chief Judge of the U.S. Court of Appeals for the Third Circuit, who praised him for acting “in the best spirit of professionalism…in representing the government as its attorney.”
Elberg was honored with the Director’s Award for Superior Performance as an Assistant United States Attorney - Criminal. Over the course of three years, Elberg worked tirelessly to investigate and prosecute Maxim Healthcare Services, Inc., resulting in a Deferred Prosecution Agreement and the recovery of more than $150 million on behalf of Medicaid programs nationwide – the largest settlement ever for home health care fraud. His efforts also led to the felony conviction of nine individuals – including three senior executives – in six states.
As a result of Elberg’s synthesis of scores of witnesses and tens of thousands of documents, as well as his remarkable coordination of the nationwide investigation, Elberg and his law enforcement partners were able to take a complaint alleging fraud by individuals at a single office in New Jersey and reveal a nationwide healthcare fraud scheme involving hundreds of offices and a more than $61 million fraud.
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Bergen County, N.J., Man Charged with Distributing Images of Child Sexual Abuse over the InternetRead the Press Release
NEWARK, N.J. – Special agents of the U.S. Department of Homeland Security, Immigration and Customs Enforcement, Homeland Security Investigations (ICE HSI) arrested a Bergen County man at his home this morning after discovering alleged child pornography on his computer, U.S. Attorney Paul J. Fishman announced.
Joshua Babilonia, 23, of Fair Lawn, N.J., is charged by complaint with one count of distributing images of child sex abuse over the Internet. Babilonia appeared this afternoon before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court and was released on a $50,000 bond. He is subject to electronic monitoring and is to have no access to children as a condition of his release.According to the criminal complaint unsealed today:
On May 27, 2012, Babilonia distributed videos depicting child sexual abuse on the Internet via peer-to-peer file sharing software, through which other users had access. Special agents of the ICE HSI executed a search warrant on Sept. 13, 2012, at his residence in Fair Lawn, seizing digital evidence that contained numerous videos depicting child sexual abuse, including material involving prepubescent minors and sadistic or masochistic conduct. The digital evidence seized included three files previously downloaded from Babilonia by law enforcement agents working in an undercover capacity on the peer-to-peer network.
Babilonia faces a mandatory minimum penalty of five years in prison, a maximum potential penalty of 20 years in prison, and a maximum $250,000 fine.U.S. Attorney Fishman thanked special agents of ICE HSI, under the direction of Special Agent in Charge Andrew M. McLees in Newark, for the investigation.
The government is represented by Assistant U.S. Attorney Danielle M. Corcione of the U.S. Attorney’s Office General Crimes Unit in Newark.
The charge and allegations contained in the Complaint are merely accusations, and the defendant is considered innocent unless and until proven guilty.
13-392Defense counsel: Assistant Federal Public Defender Patrick McMahon Esq., Newark
Babilonia, Joshua Complaint
Newark Man Charged in 19-Count Indictment with Multiple Armed Robberies of New Jersey StoresRead the Press Release
NEWARK, N.J. – A federal grand jury today returned a 19-count indictment against a Newark, N.J. man this morning in connection with a series of commercial establishment robberies in Union, Essex, and Bergen Counties, U.S. Attorney Paul J. Fishman announced.
Jamar Darby (a/k/a Rhino) 26, is charged with one count of conspiring to commit a Hobbs Act robbery, nine substantive counts of Hobbs Act robbery, and nine counts of using a firearm during a crime of violence.
Darby was previously arrested on a criminal complaint charging him with committing a Hobbs Act robbery and using a firearm during a crime of violence in connection with the robbery of a Subway Restaurant in Verona.
According to the indictment and other documents filed in this case:
On May 20, 2013, Darby and two other individuals allegedly entered a Subway Restaurant in Verona wearing dark hoodies, face masks, and gloves. Darby and another individual each brandished a handgun. After Darby and another robber restrained a Subway employee with plastic zip ties, Darby and his co-conspirators emptied the cash registers and fled.
The indictment also charges Darby in connection with the following robberies between December 2012 and May 2013:
Linden Stationary
Linden
Feb. 1, 2013
Newark
Feb. 1, 2013
Shoppers Express
Belleville
Feb. 2, 2013
Krauszers
Bloomfield
Feb. 13, 2013
Pat’s Deli
Newark
Feb. 19, 2013
Smashburger
Paramus
March 16, 2013
Krauszers
Bloomfield
March 29, 2013
South Wood Discount Liquor
Linden
April 17, 2013
Darby allegedly brandished a handgun in all of the robberies, and he and his conspirators stole cash, cigarettes, and other items from their victims.
The Hobbs Act charges each carry a maximum penalty of 20 years in prison. The charge of brandishing a firearm during a crime of violence carries a maximum penalty of life in prison and a mandatory minimum sentence of seven years in prison for the first offense, which must run consecutively to any other prison term. For each subsequent offense, the charge of brandishing a firearm during a crime of violence carries a mandatory minimum sentence of 25 years in prison, which must run consecutively to any other prison term. Each count also carries a maximum fine of $250,000 or twice the gross gain or loss arising out of the offense.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, with the investigation leading to today’s indictment. He also thanked the Belleville, Bloomfield, Kearny, Linden, Maplewood, Newark, Paramus, Verona and West Orange Police Departments, along with the N.J. State Police and the Essex County Prosecutor’s Office for their work on this case.
The government is represented by Assistant U.S. Attorneys Jamari Buxton and Rahul Agarwal of the U.S. Attorney’s Office Criminal Division in Newark.
The charge and allegations contained in the indictment are merely accusations and each defendant is considered innocent unless and until proven guilty.
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Defense Counsel: Carl Herman Esq., West Orange, N.J.
Darby Indictment
New Jersey-Based Financial Advisor Sentenced to 27 Months in Prison for Defrauding Elderly InvestorsRead the Press Release
TRENTON, N.J. – A Somerset County, N.J.-based financial advisor was sentenced today to 27 months in prison for stealing $138,000 from two elderly investors and funding his lavish lifestyle with money he claimed to be investing in conservative securities and his business, U.S. Attorney Paul J. Fishman announced.
Ralph A. Saviano, 72, of Bridgewater, N.J., previously pleaded guilty before U.S. District Judge Freda L. Wolfson in Trenton federal court to an information charging him with wire fraud.
According to documents filed in this case and statements made in court:
Saviano, an investment advisor who had worked in the financial industry for more than 40 years, targeted clients through his association with Centaurus Financial Inc., and later through Saviano Financial Group (SFG), from as early as July 2007 through October 2012.During this time, Saviano had approximately 300 clients, many of whom were unsophisticated investors between the ages of 60 and 85, whom he had known for many years and who trusted his financial experience and advice. Saviano admitted he targeted clients he knew were about to receive significant amounts of cash, such as maturing certificates of deposit (CDs), and proposed that they invest those funds in low-risk investments or in his business, SFG. Saviano said he would use these “business loans” solely for business expenses.
Saviano admitted that in May 2012, an 85-year-old client gave him approximately $63,000 from a mature CD that she was told would be invested in two investment funds. Saviano accompanied the client to her bank to redeem the CD and instructed her make the proceeds from the CD payable to him. In June 2012, another of Saviano’s clients – 80 years old and suffering from cancer – gave Saviano approximately $75,000 she inherited from a recently deceased relative, making the check payable to “Cash” with the words “financial investment” in the memo field.
Instead of doing as he claimed, Saviano used the funds to repay prior “loans” from other clients in Ponzi-scheme fashion, and to pay for various personal expenses, including: at least $33,000 for granite countertops and other home improvements, $18,000 in cash payments to himself and family members, $10,000 in personal mortgage and rent payments, and thousands more in jewelry, clothing, a family vacation to Aruba and a theater donation.
At the plea hearing on June 5, 2013, Judge Wolfson entered a consent judgment and order of forfeiture in the amount of $699,926.51, which constitutes the proceeds Saviano obtained from his known investor victims as a result of his offense.
In addition to the prison term, Judge Wolfson sentenced Saviano to three years of supervised release and ordered restitution of $699,926.51.
In a parallel investigation, the U.S. Securities and Exchange Commission on Sept. 6, 2013, issued an order instituting settled administrative proceedings against Saviano. In its order, the SEC barred Saviano from association with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization. It also barred him from participating in any offering of a penny stock, including: acting as a promoter, finder, consultant, agent or other person who engages in activities with a broker, dealer or issuer for purposes of the issuance or trading in any penny stock, or inducing or attempting to induce the purchase or sale of any penny stock.U.S. Attorney Fishman praised special agents of the FBI, under the direction of Aaron T. Ford in Newark, for the investigation leading to today’s sentence. He also thanked the SEC’s New York office for its assistance with the investigation.
The government is represented by Assistant U.S. Attorney Aaron Mendelsohn of the U.S. Attorney’s Office Economic Crimes Unit and Evan Weitz of the office’s Asset Forfeiture and Money Laundering Unit in Newark.
If you believe you are a victim of or otherwise have information concerning this alleged scheme, you are encouraged to contact the FBI at 973-792-3000.
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.
13-390
Defense counsel: Eric R. Breslin Esq., Newark, N.J
New Jersey Leaders and Members of Violent, International Street Gang Indicted for Racketeering ConspiracyRead the Press Release
Plainfield-based Gang Allegedly Supported the Enterprise with Murder, Extortion, Plots to Kill Witnesses and a Law Enforcement Officer, and Sexual Assault
NEWARK, N.J. – Three former leaders of a New Jersey branch of the violent international street gang “La Mara Salvatrucha” – including its founding member – are charged with racketeering and murder in an indictment that also charges 11 other alleged members of the gang with related crimes, U.S. Attorney Paul J. Fishman announced today.
Santos Reyes-Villatoro, a/k/a “Mousey,” allegedly founded the “Plainfield Locos Salvatruchas” (PLS) – a subset, or “clique” – of La Mara Salvatrucha in the 1990s and served as its leader until his arrest in 2009 for attempted murder. Also known as MS-13, La Mara Salvatrucha is composed largely of Salvadorans and Salvadoran immigrants. Two other former leaders of the local PLS clique, Mario Oliva, a/k/a “Zorro,” and Roberto Contreras, a/k/a “Demonio,” are also charged in a 26-count indictment returned by a federal grand jury.
In all, the indictment charges 14 alleged members of the gang with racketeering conspiracy and a host of other violent crimes.
“The indictment describes an extraordinarily dangerous criminal enterprise whose entire reason for being revolves around imposing its leaders’ will through violence and intimidation,” U.S. Attorney Fishman said. “They have inflicted on the people of Plainfield and surrounding areas a reign of terror, backed up by physical assaults and murders. No community should have to endure such lawlessness.”
“The brazenness of the conduct charged in today’s indictment is deeply troubling,” Acting Union County Prosecutor Grace H. Park said. “The defendants allegedly showed no reluctance to react to perceived or real slights with immediate and reckless violence – and when they were caught, they plotted to retaliate against those who they believed to be responsible. Combatting gang-related crimes in Plainfield and all of our communities is one of the top priorities of this office, and it is reflected in today’s charges against the leaders of a particularly violent criminal enterprise.”
The federal indictment, which charges members of PLS with a racketeering conspiracy, four murders, multiple conspiracies to commit murder, extortion, robbery and a variety of other crimes, is the culmination of a three-year investigation that started in the Union County Prosecutor’s Office and expanded to include other local, state and federal agencies, including the Department of Homeland Security and the FBI. Among those named in the indictment are individuals who were arrested and charged with state crimes in the summer of 2011. Today’s indictment incorporates many of the acts charged at the state level and adds additional criminal activity uncovered during the subsequent investigation.
All but one of the defendants are currently in custody; Walter Yovany-Gomez remains at large. Those in custody are scheduled to make their initial appearances later today before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court.
According to the indictment:
The PLS clique was founded in the mid-1990s by Reyes-Villatoro and operated in New Jersey in Union, Somerset and Middlesex counties. Reyes-Villatoro served as “first word,” or leader, of the group until he was arrested in 2009 and charged with attempted murder. The first word is responsible for “greenlighting,” or authorizing, all murders committed by members of the clique.
Reyes-Villatoro relinquished the position to his “second word,” or deputy, Oliva, who held the position until he allegedly murdered a member of MS-13 in February 2010 and fled New Jersey. Contreras then took over. He is implicated in the sexual assault with Oliva of two underage girls.
The indictment charges numerous violent acts committed by PLS members as part of the racketeering conspiracy, some of which targeted members of rival gangs, such as the Latin Kings and the 18th Street gang, and some of which targeted MS-13 members perceived as being disloyal.
Among the charges are four gang-related murders:- Feb. 8, 2009, Julian Moz-Aguilar, a/k/a “Humilde,” allegedly murdered a Latin King (described in the indictment as Victim 5) at Reyes-Villatoro’s instruction;
- Feb. 27, 2010, Oliva and another MS-13 member allegedly murdered a member of MS-13 (Victim 10) who had been previously “greenlighted” by Oliva;
- Nov. 11, 2010, Hugo Palencia, a/k/a “Taliban,” allegedly instructed another MS-13 member to fire a gun at a rival gang member, which resulted in the death of another individual (Victim 11) near a high school in Plainfield, N.J.; and
- May 8, 2011, Cruz Flores, a/k/a “Bruja,” and Walter Yovany-Gomez, a/k/a “Cholo,” allegedly murdered an individual (Victim 15) because they believed the person was associating with the rival 18th Street gang.
“Today, HSI and our law enforcement partners have struck a serious blow to the core of this gang organization,” Andrew McLees, special agent in charge of ICE, Homeland Security Investigations (ICE-HSI) Newark, said. “MS-13 gang members and their associates are serious career criminals who have a callous disregard for human life. HSI is determined to remove the MS-13 menace from New Jersey’s communities.”
“Today’s indictment is the result of a long-term, multi-agency investigation,” Aaron T. Ford, FBI special agent in charge in Newark, said. “Dedicated personnel from agencies at all levels of government worked in unison to combat this dangerous and violent criminal enterprise. This cooperation is, and will continue to be, a critical factor for successfully defending threats that endanger the citizens of New Jersey.”
In 2011, law enforcement arrested a number of PLS members in Plainfield. While detained at the Union County Jail, PLS members plotted to retaliate against those they believed were responsible for their arrest, including witnesses, law enforcement and fellow gang members they suspected were cooperating with the government. PLS members allegedly sought revenge against a Plainfield detective involved in the case by planning to firebomb the residence of the detective’s mother.
Six defendants – Reyes-Villatoro, Oliva, Julian Moz-Aguilar, Hugo Palencia, Cruz Flores, and Walter Yovany-Gomez – are charged with murder in aid of racketeering, which is punishable by a mandatory sentence of life in prison. The charge is a death penalty-eligible offense subject to a decision by the U.S. Attorney General. A complete chart outlining the counts per defendant and maximum potential penalties is attached, as is a chart outlining the overt acts charged in the indictment.
U.S. Attorney Fishman credited special agents of ICE-HSI, under the direction of Special Agent in Charge McLees; and the FBI, under the direction of Special Agent in Charge Ford. Fishman specifically thanked the Union County Prosecutor’s Office, under the direction of Acting Prosecutor Park, for long, close collaboration on the case. He also thanked the Somerset County Prosecutor’s Office, under the direction of Prosecutor Geoffrey D. Soriano; and the Middlesex County Prosecutor’s Office, under the direction of Acting Prosecutor Andrew C. Carey, for their roles. He also acknowledged the U.S. Attorney’s Offices for the Eastern District of Virginia and the District of Maryland for their assistance in the ongoing investigation.
The government is represented by Assistant U.S. Attorneys James M. Donnelly and Andrew J. Bruck of the U.S Attorney’s Office Organized Crime/Gangs Unit in Newark.
The charges and allegations contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
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Maximum Penalties
U.S. v. Reyes-Villatoro, et al.Count
Charge
Defendants
Maximum Penalty
Racketeering Conspiracy
Reyes-Villatoro, Santos, 40
Oliva, Mario, 26
Contreras, Roberto, 25
Moz-Aguilar, Julian, 26
Palencia, Hugo, 21
Garcia, Jose, 21
Portillo-Fuentes, Ruben, 21
Ramirez, Esau, 22
Mejia, Kelvin, 21
Mejia, Franklin, 22
Orellana-Carranza, Julio, 25Life in prison
(Reyes-Villatoro, Oliva, Moz-Aguilar, Palencia, Flores, and Yovany-Gomez)20 years
2.
(all other defendants)Murder in Aid of Racketeering (Victim 5)
Reyes-Villatoro
Moz-AguilarDeath eligible; mandatory life sentence
3.Use of Firearm in Violent Federal Crime (Victim 5)
Reyes-Villatoro
Moz-AguilarLife in prison; 10-year mandatory minimum
4.Murder Resulting from Federal Firearm Crime (Victim 5)
Reyes-Villatoro
Moz-AguilarDeath eligible
5.Assault with a Dangerous Weapon in Aid of Racketeering (Victim 6, Victim 7)
Reyes-Villatoro
K. Mejia20 years
6.Use of Firearm in Violent Federal Crime (Victim 6, Victim 7)
Reyes-Villatoro
K. Mejia20 years; 10-year mandatory minimum
7.Threat to Commit Sexual Assault (Victim 8, Victim 9)
Oliva
Contreras5 years
8.Murder in Aid of Racketeering (Victim 10)
Oliva
Death eligible; mandatory life sentence
9.Use of Firearm in Violent Federal Crime (Victim 10)
Oliva
Life in prison; 10-year mandatory minimum
10.Murder Resulting from Federal Firearm Crime (Victim 10)
Oliva
Death eligible
11.Accessory After the Fact to Murder in Aid of Racketeering (Victim 10)
Contreras
15 years
12.Murder in Aid of Racketeering (Victim 11)
Palencia
Death eligible; mandatory life sentence
13.Use of Firearm in Violent Federal Crime (Victim 11)
Palencia
Life in prison; 10-year mandatory minimum
14.Murder Resulting from Federal Firearm Crime (Victim 11)
Palencia
Death eligible
15.Murder-for-Hire Conspiracy
Garcia
Palencia10 years
16.Interstate Travel with Intent to Commit Murder-for-Hire
Garcia
10 years
17.Assault with a Dangerous Weapon in Aid of Racketeering (Victim 14)
Garcia
20 years
18.Conspiracy to Commit Murder in Aid of Racketeering (Victim 15)
Flores, Cruz, 27
Yovany-Gomez, Walter, 29
K. Mejia10 years
19.Murder in Aid of Racketeering (Victim 15)
Flores
Yovany-GomezDeath eligible; mandatory life sentence
20.Conspiracy to Commit Murder in Aid of Racketeering
Orellana-Carranza
Garcia
K. Mejia10 years
21.Assault with a Dangerous Weapon in Aid of Racketeering (Victim 18)
Portillo-Fuentes
20 years
22.Assault with a Dangerous Weapon in Aid of Racketeering (Victim 19, Victim 20)
K. Mejia
F. Mejia20 years
23.Use of Firearm in Violent Federal Crime (Victim 19, Victim 20)
K. Mejia
F. MejiaLife in prison; 10-year mandatory minimum
24.Conspiracy to Distribute Cocaine
K. Mejia
F. Mejia20 years
25.Conspiracy to Commit Murder in Aid of Racketeering (Victim 22)
K. Mejia
F. Mejia10 years
26.Conspiracy to Commit Murder in Aid of Racketeering (Victim 16, Victim 22, Victim 23)
Romero-Aguirre, Jose, 26
Orellana-Carranza
Garcia
Portillo-Fuentes
Ramirez
K. Mejia
F. Mejia10 years
The maximum fine upon conviction of Count 24 is $1 million. For each of the other counts, the maximum fine upon conviction is $250,000.
Overview of Overt Acts
U.S. v. Reyes-Villatoro, et al.Overt Acts
Counts
(if also charged separately from Count 1)Date
Act
a-b
Before November 2009
Reyes-Villatoro becomes First Word; Oliva becomes Second Word
c
From December 2008 through November 2009
Reyes-Villatoro orders collection of “rent” from inactive gang members
d
Dec. 5, 2008
Palencia, Kelvin Mejia, and other MS-13 members shoot at Latin Kings
e-f
Jan. 25, 2009
Reyes-Villatoro orders unidentified MS-13 member to shoot at two members of Latin Kings
g-i
2-4
Feb. 8, 2009
Reyes-Villatoro orders Moz-Aguilar to murder Victim #5 (Christian Tigsi)
j-l
5-6
Oct. 31, 2009
Reyes-Villatoro drives Kelvin Mejia to house in North Plainfield, where Mejia fires at rival gang members
m-n
After Oct. 31, 2009, but before Feb. 27, 2010
Oliva becomes First Word; Contreras becomes Second Word
o
After Oct. 31, 2009, but before Feb. 27, 2010
Oliva orders collection of “rent” from inactive gang members
p-q
7
After Oct. 31, 2009, but before Feb. 27, 2010
Oliva and Contreras sexually assault two teenage girls to establish their dominance in gang
r-v
8-11
Feb. 27, 2010 and after
Oliva and one of his soldiers shoots and kills Victim #10 (Jessica Montoya). Contreras helps both perpetrators relocate to Maryland afterwards
w
After Feb. 27, 2010
Contreras becomes First Word
x
After Feb. 27, 2010
Contreras orders “greenlighting” of MS-13 member believed to be cooperating in investigation of Jessica Montoya’s murder. (Individual is not killed.)
y
After Feb. 27, 2010
Contreras orders collection of “rent” from inactive gang members
z
Oct. 31, 2010
Unidentified MS-13 members evade law enforcement by hiding in a Plainfield apartment (which is later the scene of the murder in Overt Act mm)
aa-cc
12-14
Nov. 10-11, 2010
Palencia orders unidentified MS-13 member to shoot teenager as he walks home from school with a group of other kids. MS-13 member shoots at group, kills another kid in the crowd, Victim #11 (Spencer Cadogan)
dd-ee
gg15-16
December 2010 through
Jan. 10, 2011Garcia recruits MS-13 members in the Washington, D.C., area to travel to New Jersey to participate in a murder-for-hire.
ff
Jan. 9, 2011
Unidentified MS-13 members murder Victim #12 (Andres Chach) in front of Pueblo Viejo (Note: this murder is not charged substantively)
hh
After Jan. 10, 2011, but before Jan. 31, 2011
Contreras passes information to Palencia about the murder of Victim #12
ii
May 7, 2011
Portillo shoots Victim #13 in Plainfield, using the same gun that was used four months earlier to kill Victim #12
jj-kk
17
May 8, 2011
Garcia assaults Victim #14
ll
May 2011
MS-13 assigns killing “missions” to certain members of the gang
mm-nn
18-19
May 8, 2011 and after
Flores and Yovany-Gomez murder Victim #15 (Julio Matute-Amaya); Mejia helps Yovany-Gomez flee New Jersey
oo-pp
May 11, 2011
Portillo, Moz-Aguilar, and Ramirez conspire to threaten and collect “rent” from inactive member of MS-13
qq
June 4, 2011
Franklin Mejia attacks Victim #17, who is supposedly associating with 18th Street gang
rr-tt
20
June 11, 2011
Orellana-Carranza seeks to complete his “mission”; conspires with Garcia and Kelvin Mejia
uu
21
June 15, 2011
Portillo attacks Victim #18 with machete
vv
22-23
June 15, 2011
Kelvin Mejia and Franklin Mejia rob two victims in Green Brook Park in Plainfield
ww
June 24, 2011
Orellana-Carranza, Ramirez, and Franklin Mejia plot to kill owner of underground liquor store
xx
June 28, 2011
Kelvin Mejia and Franklin Mejia threaten to kill individual they believe is cooperating with law enforcement
yy-zz
24
June 30, 2011 through July 2, 2011
Kelvin Mejia and Franklin Mejia arrange cocaine sales
aaa-ddd
25
July 2, 2011
Kelvin Mejia and Franklin Mejia plot to kill Victim #22 after he tries to protect Victim #17 (see Overt Act qq)
eee
July 4, 2011
Garcia and Kelvin Mejia plot to rob owner of underground liquor store to raise bail money
fff
July 2011
Franklin Mejia and Ramirez plot to kill Plainfield detective
ggg
26
July – August 2011
Kelvin Mejia, Franklin Mejia, Garcia, Ramirez and Orellana-Carranza plot to kill witnesses from inside Union County Jail
hhh-jjj
26
Aug. 1-2, 2011
Ramirez calls Romero-Aguirre from inside Union County Jail to plan witness retaliation plots
Reyes-Villatoro, Santos et al. Indictment
Saddle River Valley Bank Agrees to $8.2 Million Penalty for Money Laundering ViolationsRead the Press Release
NEWARK, N.J. – Saddle River Valley Bank (SRVB) today agreed to pay an $8.2 million penalty to settle claims that it violated federal anti-money laundering laws, U.S. Attorney Paul J. Fishman, District of New Jersey; Department of the Treasury Financial Crime Enforcement Network Director Jennifer Shasky Calvery; and Comptroller of the Currency Thomas J. Curry announced.
SRVB agreed to resolve civil claims brought by the U.S. Department of Justice in connection with violations of the Bank Secrecy Act (BSA), which requires financial institutions to maintain programs designed to detect and report suspicious activity that might be indicative of money laundering and other financial crimes. In addition to the combined monetary penalty of $8.2 million, the bank has agreed to a number of related regulatory actions.
The complaint alleged that SRVB failed to maintain an effective anti-money laundering program and processed transactions involving at least $4.1 million in violation of federal money laundering laws. While a joint investigation by the U.S. Attorney’s Office and the Office of the Comptroller of the Currency (OCC) was underway, the majority of the assets of SRVB were acquired by another financial institution. The proceeds of that acquisition, plus all other assets of the bank, which are currently valued at approximately $9.2 million, were held pending the outcome of the investigation. SRVB has agreed to settle the government’s allegations with a combined penalty of $8.2 million of the remaining $9.2 million and has separately agreed with the OCC to cease operation and to dissolve its charter.
According to the complaint:
Beginning at least as early as 2000, numerous federal agencies, including the Department of State, the Department of the Treasury, the Federal Reserve Bank, and the IRS, began issuing public warnings to United States financial institutions about the increased money laundering threat present in Mexico. These warnings were also available through industry-wide advisories. It was believed that the proceeds of narcotics sales in the United States were being disproportionately laundered and transferred through banking institutions in Mexico. Many of these warnings also discussed the specific money laundering risks associated with “casas de cambio,” (CDCs), which are non-bank currency exchange businesses located in Mexico and elsewhere.
Beginning in June 2009, SRVB began servicing what would ultimately become four CDCs, including three CDCs in Mexico and one in the Dominican Republic. SRVB voluntarily severed its relationship with the CDCs by May 2011, but only after processing at least $1.5 billion in transactions on behalf of the CDCs. SRVB’s anti-money laundering program related to the CDCs was deficient in several key areas
SRVB failed to:
• appropriately monitor at least $1.5 billion in transactions conducted on behalf of the CDCs;
• properly detect and report suspicious activity occurring within the CDC accounts and file Suspicious Activity Reports on a timely basis;
• conduct sufficient enhanced due diligence on the CDCs;
• have a BSA officer or other personnel with sufficient experience to operate an AML program;
• provide adequate training to its employees concerning anti-money laundering;
• retain qualified periodic independent testers for its anti-money laundering program, as required by the BSA.
After a joint investigation by the U.S. Attorney’s Office for the District of New Jersey and the OCC, SRVB agreed to an assessed civil monetary penalty by the OCC of $4. 1 million for the deficiencies in its anti-money laundering program. SRVB has agreed to a concurrent civil monetary penalty by FinCEN of $4.1 million, to be satisfied by one payment to the U.S. Treasury Department on behalf of both actions by the OCC and FinCEN. SRVB also agreed to surrender and forfeit an additional $4.1 million to the United States to resolve the investigation conducted by the U.S. Attorney’s Office for the District of New Jersey and the OCC, for a total penalty of $8.2 million.
U.S. Attorney Fishman credited special agents from the Department of Homeland Security, Homeland Security Investigations and thanked Counsel Elizabeth Ratliff and Noelle Kurtin of the OCC, as well as former Trial Attorney Joseph Markel of the Department of Justice, Asset Forfeiture and Money Laundering Section.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 is 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.
The government is represented by Assistant U.S. Attorneys Evan S. Weitz of the Asset Forfeiture and Money Laundering Unit and Aaron Mendelsohn of the Economic Crimes Unit of the U.S. Attorney’s Office in Newark.
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Defense counsel: Nicolas Bourtin Esq., New York
SRVB Settlement
SRVB ComplaintOwner of Roofing Company Admits to Filing False Income Tax ReturnsRead the Press Release
TRENTON – The owner of Kenal Enterprises LLC admitted today to filing false income tax returns for several years, U.S. Attorney Paul J. Fishman, District of New Jersey, and Assistant Attorney General Kathryn Keneally of the U.S. Department of Justice, announced.
Kenneth Morton of Pitman, N.J., owner of Kenal (d/b/a Ken Morton Roofing and Siding), a residential roofing company located in Pitman, pleaded guilty before U.S. District Judge Mary L. Cooper in Trenton federal court an information charging him with filing false income tax returns for tax years 2007 through 2009.
According to documents filed in this case and statements made in court:
From early 2007 through late 2009, Morton cashed $3,946,046 of Kenal’s gross receipts at a check cashing agency, the majority of which he did not deposit into his business bank account and did not report on his individual income tax returns. For the 2007, 2008, and 2009 tax years, Morton had unreported gross receipts of $1,343,348; $1,471,430; and $1,131,268, respectively, causing a loss to the IRS of $241,412.
Morton faces a maximum potential penalty of three years in prison and a fine of $250,000, along with restitution to the IRS. Sentencing is scheduled for Jan. 6, 2014.
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 government is represented by Trial Attorneys Jessica Moran and Tino Lisella of the Justice Department’s Tax Division. Additional information about the Tax Division and its enforcement efforts may be found at www.justice.gov/tax.
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Defense counsel: Robert H. Williams Esq., Haddonfield, N.J.
Morton, Kenneth Information
West Orange, N.J., Woman Admits Stealing Nearly $100,000 from an Elderly Woman Living on Social SecurityRead the Press Release
TRENTON, N.J. – A West Orange, N.J., woman who defrauded an elderly victim of almost $100,000 – by taking the victim’s Social Security payments and secretly applying for a reverse mortgage on the victim’s home – admitted her crimes today in Trenton federal court, U.S. Attorney Paul J. Fishman announced.
Shawn L. Craig, 47, pleaded guilty to two counts of an information: mail fraud and filing false personal federal income tax return for 2011 by not disclosing income including money fraudulently obtained from her victim. Craig entered her guilty plea before U.S. District Judge Michael A. Shipp.
According to documents in this case and statements made in court:
In November 2010, Craig entered into a general power of attorney with the victim, an elderly woman, to serve as her attorney-in-fact. In that position, Craig was trusted to act in the victim’s best interest and to arrange for the payment of the victim’s living expenses.
After gaining access to the victim’s bank accounts, Craig diverted a portion of the victim’s funds for her own benefit and the benefit of her family, including to pay her automobile insurance; purchase a bar and bar stools; make a tuition payment; and pay for entertainment at the Wachovia Center in Philadelphia. At the time Craig made those purchases, the funds in the victim’s accounts consisted primarily of the victim’s Social Security benefits.
In December 2010, Craig submitted an application in the victim’s name to a commercial lender for a reverse mortgage on the victim’s residence in East Orange. When the victim refused to sign a specific power of attorney permitting the closing of the reverse mortgage to go forward, Craig forged the victim’s signature on the document and presented it to the title agent at the title agent’s office in Morristown, N.J.
Craig used the money from the reverse mortgage to purchase items at retail establishments including Gucci, Coach, Nike, Apple, Footlocker and various other shoe stores; pay for meals and entertainment at restaurants, liquor stores and other establishments, including the Taj Mahal in Atlantic City, N.J., the Staples Center in Los Angeles and Amazing LA Tours in Santa Monica, Calif.; fund travel to, and stays at, hotels in New Jersey, California and Florida; and pay personal bills, including automobile insurance, gas and electric, cell phone and cable bills.
In June 2011, Craig was notified that the general power of attorney had been revoked, so she transferred the victim’s funds to a new bank account. In all, Craig misused approximately $99,000 of the victim’s funds.
Craig also admitted that she caused a tax preparer to prepare and electronically file with the IRS a false and fraudulent personal income tax return for tax year 2011, by not disclosing as income the funds that she had fraudulently obtained from the victim.
The mail fraud charge carries a maximum potential penalty of 20 years in prison and a $250,000 fine. The tax charge carries a maximum potential penalty of three years in prison and a $250,000 fine. In addition, the plea agreement requires Craig to make restitution to the victim. Sentencing is scheduled for Jan. 2, 2014.
U.S. Attorney Fishman credited special agents of the United States Department of Housing and Urban Development, Office of Inspector General, Northeast Region; the FBI, under the direction of Special Agent in Charge Aaron T. Ford; IRS – Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen; and Social Security Administration, Office of Inspector General, under the direction of Special Agent in Charge Edward J. Ryan.
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Defense counsel: Thomas R. Ashley Esq., Newark, N.J.
Craig Information
Two North Jersey Women Admit Roles in Scheme to Defraud Banks and Credit Card Companies Out of Millions of DollarsRead the Press Release
NEWARK, N.J. – Two members of a large-scale and sophisticated identity theft scheme today admitted their roles in defrauding banks and credit card companies out of millions of dollars, U.S. Attorney Paul J. Fishman announced.
Rita S. Kim, 49, of Fort Lee, N.J., and Hyon-Suk Chung, a/k/a “Clara,” 50, of North Bergen, N.J., each pleaded guilty before U.S. District Judge Katharine S. Hayden to Count One of a Second Superseding Indictment charging them with conspiracy to commit mail and wire fraud.
According to documents filed in this case and statements made in court:
Kim and Chung conspired with Sang-Hyun Park, a/k/a “Jimmy,” and others to defraud banks and credit card companies. Park obtained Social Security cards beginning with the prefix “586,” which were issued by the United States to individuals, usually from China, who were employed in American territories, such as Guam. The individuals from China who were issued these Social Security numbers never established credit files or scores in the United States – these Chinese identities were essentially blank slates with no corresponding credit files or scores. Kim and Chung engaged in the fraudulent build-up of credit scores associated with these Chinese identities by adding them as authorized users to their credit card accounts in exchange for a fee from Park and his associates.
Kim and Chung admitted they received information related to the Chinese identities necessary for the credit build-up from Park’s associates, such as Sung-Sil Joh, a/k/a “Jenny,” and Young-Hee Ju, a/k/a “Stephanie.” Joh and Ju have pleaded guilty in connection with their roles in the scheme and await sentencing.
By attaching the Chinese identities to their credit card accounts, Kim and Chung increased the credit scores associated with the Chinese identities to between 700 and 800. Kim and Chung each admitted that they created credit scores for approximately 100 Chinese identities. They also acknowledged that their criminal conduct caused credit card companies and other lenders $2,047,651 in losses.
Kim and Chung each face a maximum potential penalty of up to 60 months in prison and will be ordered to pay restitution and forfeiture of more than $2 million. Sentencing for both Kim and Chung is scheduled for Jan. 8, 2014.
Park, Kim, Chung, and more than 50 other individuals were charged in this scheme on Sept. 16, 2010. To date, more than 50 defendants have pleaded guilty and two remain at large. Park pleaded guilty on Jan. 9, 2012, related to his role in the enterprise and is awaiting sentencing.
U.S. Attorney Fishman praised special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark; IRS – Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen; and the U.S. Department of Homeland Security’s Immigration and Customs Enforcement Homeland Security Investigations, under the direction of Special Agent in Charge Andrew M. McLees; and the Bergen County Prosecutor’s Office, under the direction of Prosecutor John L. Molinelli and the Office’s Chief of Detectives, Steven Cucciniello, for their work leading to today’s plea.
The government is represented by Assistant U.S. Attorneys Anthony Moscato of the U.S. Attorney’s Office Organized Crime/Gangs Unit and Jane Yoon of the Criminal Division in Newark.
As for other members of the Park Criminal Enterprise, the charges and allegations contained in the complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
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Defense Counsel:
Kim: Stephen N. Dratch Esq., Livingston, N.J.
Chung: Thomas Ambrosio Esq., Lyndhurst, N.J.Attorney Paul W. Bergrin Sentenced to Life in Prison for Murder Conspiracy and Racketeering OffensesRead the Press Release
NEWARK, N.J. – A New Jersey lawyer who turned his law firm and related corporations into a racketeering enterprise was sentenced today in Newark federal court to life in prison, U.S. Attorney Paul J. Fishman announced.
Paul W. Bergrin, 57, of Nutley, N.J., was convicted in March 2013, following a jury trial, of all 23 counts on which he was tried – including conspiracy to murder a witness and other racketeering, cocaine and prostitution offenses.
The jury returned the verdict after two months of trial before U.S. District Judge Dennis M. Cavanaugh, who also imposed sentence today.
“Paul Bergrin’s betrayal of the people he once served, the court and the rule of law was stunning,” said U.S. Attorney Fishman. “Each criminal choice he made was a step toward life in prison. After all he did to elude punishment for his clients - including orchestrating the murder of witnesses - he could not avoid facing justice for his own crimes.”
According to documents filed in this case, evidence at trial and statements made in court:
Through his law firm, Bergrin conspired to tamper with witnesses, distribute cocaine and facilitate drug trafficking, prostitution and bribery, among other things. He conspired to murder witnesses to protect the drug trafficking enterprise, one of whom was shot to death to prevent him from testifying in court.
As a result of his conviction, Bergrin faced a mandatory sentence of life in prison on each of the following counts: count three, violent crimes in aid of racketeering; count 12, conspiring to murder a federal witness to prevent his testimony at an official proceeding; and count 13, aiding and abetting the murder of a federal witness to prevent testimony at an official proceeding. He also faced a maximum term of life in prison on three other counts.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; IRS – Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen; and the Drug Enforcement Administration’s New Jersey Division – under the direction of Special Agent in Charge Carl J. Kotowski, with the investigation.
The government is represented by Deputy Chief John Gay and Assistant U.S. Attorney Joseph N. Minish of the U.S. Attorney’s Office Criminal Division; and Steven Sanders of the office’s Appeals Division in Newark.13-384
Defense counsel: Pro se; Lawrence Lustberg, Bruce Levy, Amanda Protess Esqs. (standby), Newark
Two Union County, N.J., Women Indicted in Phony Check SchemeRead the Press Release
NEWARK, N.J. – Two Union County, N.J., women were indicted by a federal grand jury today for their roles in a wide-ranging counterfeit check scheme, U.S. Attorney Paul J. Fishman announced.
Synethia Bland, 29, and Latisha White, 28, both of Elizabeth, N.J., were charged with one count of conspiracy to commit bank fraud and three counts of bank fraud, all of which caused losses of at least $400,000.According to the indictment and other documents filed in this case:
Between October 2009 and May of 2012, Bland and White created more than 150 counterfeit checks, most or all of which were in amounts of less than $5,000. Bland and White recruited numerous individuals who either held bank accounts at TD Bank or would be willing to open a new account at that bank. Bland and White induced them to participate in their scheme by promising to share some of the proceeds.
After obtaining the cooperation of an account holder, Bland and White would deposit one of their counterfeit checks into that person’s bank account. Within a day or two of such a deposit, and before the bank realized that the deposited check was counterfeit, Bland and White would arrange to draw down the funds credited by the deposit. Funds were drawn through ATM withdrawals, cash withdrawals at banks and the purchase of money orders and merchandise.
Bland and White orchestrated the deposits of more than $600,000 in counterfeit checks into more than 120 different bank accounts. Among such deposits were the deposits of counterfeit checks in the amounts of $4,529 on July 12, 2010; $4,865 on Feb. 13, 2012, and $4,725 on May 2, 2012.
Each of the four charges is punishable by a maximum potential penalty of 30 years in prison and a fine of $1 million.
The charges and allegations contained in the indictment and complaints are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
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 U.S. Postal Inspection Service Inspector in Charge Maria L. Kelokates; investigators at the Union County Prosecutor’s Office under the direction of Acting Prosecutor Grace H. Park; and investigators at 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.
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Defense counsel:
Bland: Rubin Sinins Esq., Springfield, N.J.
White: Ruth M. Liebesman Esq., Paramus, N.J.Bland, Synethia et al Indictment
Trenton, N.J., Man Convicted at Trial on Federal Weapons ChargeRead the Press Release
TRENTON, N.J. – A federal jury in Trenton, N.J., today convicted a Trenton man for illegally carrying a loaded shotgun as a convicted felon, U.S. Attorney Paul J. Fishman announced.
The government is represented by Assistant U.S. Attorney R. Joseph Gribko and Special Assistant U.S. Attorney Joseph Muoio of the U.S. Attorney’s Office Criminal Division in Trenton.
The jury returned a guilty verdict against Tyreek Harrington, 27, following a three-day trial before U.S. District Judge Freda L. Wolfson. Harrington was convicted of the first count in the indictment against him: being a convicted felon in possession of a loaded, sawed-off shotgun. Harrington was not convicted on the second count, involving possession of a revolver.
According to documents filed in this case, statements made in court, and the evidence at trial:
In the early morning of April 20, 2012, officers from the New Jersey State Police and Trenton Police Departments were conducting surveillance in the area of Spring and Passaic Streets in Trenton when Harrington was observed in an alley handling a sawed-off shotgun.
The felon in possession count carries a maximum potential penalty of 10 years in prison and a $250,000 fine. Sentencing is scheduled for Jan. 6, 2014.
U.S. Attorney Fishman credited special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Thomas J. Cannon; the Trenton Police Department, under the direction of Director Ralph Rivera; and the New Jersey State Police’s Crime Suppression North Unit, under the direction of Colonel Rick Fuentes, Superintendent, for the investigation leading to the conviction.
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Defense counsel: John S. Furlong Esq., West Trenton, N.J.Four Men Charged in Counterfeit Sports Jersey Scheme on Wildwood BoardwalkRead the Press Release
NEWARK, N.J. – Two Atlantic County men were arrested today on charges that they participated in a multi-year conspiracy to traffic in counterfeit merchandise, including professional sports teams’ jerseys, U.S. Attorney Paul J. Fishman announced.
Brett Strothers, 32, of Egg Harbor Township, N.J,, and his brother Evan Strothers, 28, of Mays Landing, N.J., were arrested at their homes this morning by agents of U.S. Immigration and Customs Enforcement, Homeland Security Investigations, on a complaint charging both men with conspiracy to traffic in counterfeit goods. Both men are scheduled to appear before U.S. Magistrate Cathy L. Waldor in Newark federal court today. Also charged in the complaint were Joseph Cuozzo, 44, a United States Citizen residing in Thailand, and Haresh Aildasani, 27, an Indian Citizen residing in the People’s Republic of China (PRC).
According to the Complaint:
From 2010 to 2012, Brett and Evan Strothers purchased large quantities of counterfeit National Basketball Association (NBA) and National Football League (NFL) sports jerseys, which they used as prizes in several different basketball and football tossing amusement park games they operated on the Wildwood and North Wildwood boardwalk. The games enticed customers to pay for the chance to win a purported authentic NBA or NFL jersey by shooting basketballs into a hoop or tossing footballs through a target at various stands.
Brett and Evan Strothers purchased the counterfeit sports jerseys from, among others, Couzzo, who operated as a middleman between the defendants and Aildasani, who manufactured the jerseys in the PRC and sold them to numerous customers.
Between 2010 and 2012, the defendants Brett and Evan Strothers allegedly purchased at least 16,700 counterfeit NBA and NFL jerseys from defendant Cuozzo, who in turn purchased the jerseys from defendant Aildasani and kept a portion of money for himself. The Manufacturer Suggested Retail Price for authentic versions of these jerseys is estimated at approximately $4 million.
The count with which the defendants are charged carries a maximum penalty of 10 years in prison and a fine of up to $2 million, or twice the gross amount of gain or loss sustained by any victim.
U.S. Attorney Fishman credited special agents of HSI, under the direction of Special Agent in Charge Andrew M. McLees in Newark, with the investigation leading to today’s arrests. He also thanked officers of U.S. Customs and Border Protection, under the direction of Director of New York Field Operations Robert E. Perez their role in the case.
The government is represented by Assistant U.S. Attorney Josh Hafetz of the U.S. Attorney’s General Crimes Unit in Newark.
The charges and allegations contained in the Complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
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Strothers, Brett et al. Complaint
Exhibit 1 PhotoFormer Department of Veterans Affairs Official Admits Fraud Taking $1.2 Million in KickbacksRead the Press Release
TRENTON, N.J. – A former Department of Veterans Affairs (VA) employee who worked as a supervisory engineer at the VA’s campus in East Orange, N.J., today admitted accepting more than $1.2 million in kickback payments in connection with VA contracts awarded to companies with which he had relationships, and to engaging in a scheme to defraud the VA by claiming one of those companies was owned by a service-disabled veteran when it was not, New Jersey U.S. Attorney Paul J. Fishman announced.
Jarod Machinga, 43, of Hopewell, N.J., pleaded guilty today to an information charging him with one count of honest services wire fraud, one count of wire fraud and one count of engaging in a monetary transaction in criminally derived property. Machinga entered his guilty plea before U.S. District Judge Mary L. Cooper in Trenton federal court.
“When trusted with the important work of serving and honoring our nation’s veterans, Jarod Machinga took the opportunity to serve himself,” said U.S. Attorney Fishman. “Taking more than $1 million in kickbacks – including money meant for service-disabled veteran-owned businesses – not only violates the law, it violates our sense of decency.”
“Jarod Machinga’s criminal behavior violated the public trust, betrayed the best interests of disabled veteran entrepreneurs and besmirched the reputations of the overwhelming majority of the employees in the Department of Veterans Affairs who are dedicated to serving veterans,” said Department of Veterans Affairs Inspector General George Opfer. “We will spare no effort to protect the interests of veterans and taxpayers in identifying and prosecuting those who seek to criminally enrich themselves by virtue of their employment.”
According to documents filed in this case and statements made in court:
In his position as a supervisory engineer, Machinga had the authority and influence to direct certain VA construction contracts to particular companies. Machinga partnered with a person – identified in the information as “Individual 1” – to set up three companies that could be used to obtain VA work, then directed more than $6 million worth of VA construction projects to those companies. Machinga admitted he accepted approximately $1,277,205 in kickbacks in exchange for his official action and influence between 2007 and July 2012.
Congress has established a program through which certain VA contracts are reserved for small businesses that are owned and controlled by service-disabled veterans. One of Individual 1’s companies entered into such a contract with the VA after Machinga falsely represented to the VA that it was a service-disabled veteran-owned small business – even though Individual 1 was not a veteran. Machinga then used his official position and influence at the VA to award such a contract to Company 1. The company was paid more than $3 million by the VA in connection with the contract.
Machinga also admitted that for many of the projects awarded to Individual 1’s companies, he recruited other contractors to perform the work so the companies were able to keep the money paid to them without having to incur the expense of actually completing the projects.
The two wire fraud counts each carry a maximum potential penalty of 20 years in prison and a $250,000 fine or twice the gross gain or loss from the offense. The monetary transaction count carries a maximum potential penalty of 10 years in prison and a fine equal to the greatest of: $250,000, twice the pecuniary gain or loss or not more than twice the amount of the criminally derived property involved in the transaction. Sentencing is scheduled for Jan. 15, 2014.
U.S. Attorney Fishman praised special agents of the Department of Veterans Affairs, Office of Inspector General, under the direction of Special Agent in Charge Jeffrey Hughes; 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, for their work leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorneys Vikas Khanna of the U.S. Attorney’s Office Special Prosecutions Division and Peter Gaeta of the U.S. Attorney’s Office Asset Forfeiture and Money Laundering Unit in Newark.
13-380Defense counsel: Fortunato N. Perri Jr., Philadelphia
Machinga Information
Essex County, N.J., Man Sentenced to 10 Years in Prison for Illegal Weapons DealingRead the Press Release
NEWARK, N.J. – An Essex County, N.J., man was sentenced today to 120 months in prison for weapons charges in connection with a year-long investigation by the FBI Safe Streets Task Force that led to the confiscation of 45 guns from the streets of Newark, East Orange and Irvington, U.S. Attorney Paul J. Fishman announced today.
Randy Andrew, 36, of Irvington, N.J., was previously convicted by a federal jury of one count each of trafficking firearms and conspiracy to traffic firearms and three counts of possession of a firearm by a convicted felon. The jury returned a verdict after a one-week trial before U.S. District Judge William Walls in Newark federal court.According to documents filed in this case and the evidence at trial:
Andrew and seven others (all of whom have since pleaded guilty) were arrested in 2011 on charges of trafficking in firearms without a license. The FBI Safe Streets Task Force led an operation – for more than a year – to recover firearms in an effort to stem gun violence and take weapons off the streets of Newark and surrounding areas. Agents directed and supervised a “sting operation” using a confidential informant to purchase firearms from illegal gun brokers and dealers. The operation yielded 45 illicit firearms, including several assault rifles, machine pistols, shotguns and semi-automatic handguns.
Andrew was selling firearms out of a laundromat in Irvington. On five separate occasions between May and July 2010, he met with the informant to discuss the purchase of assault weapons. On May 10 and 19 and June 9, 2010, Andrew sold firearms to the informant. On June 1 and July 12, 2010, he attempted to sell assault weapons to the informant, but his supplier could not provide the guns.
In addition to the prison term, Judge Walls sentenced Andrew to serve two years of supervised release.
U.S. Attorney Fishman credited the FBI special agents and local detectives and investigators from the FBI’s Safe Streets Task Force, which operates under the direction of FBI Special Agent in Charge Aaron T. Ford in Newark, with the investigation. The Safe Streets Task Force comprises the FBI, the Essex County Prosecutor’s Office, the Essex County Sheriff’s Office, the Essex County Corrections Department and the Newark, East Orange and Jersey City Police Departments.
The government is represented by Assistant U.S. Attorneys Adam N. Subervi and Amy D. Luria of the U.S. Attorney’s Office Criminal Division.
13-378Defense counsel: Paul Casteleiro Esq., Hoboken, N.J.
Contractor Admits Paying Bribe to Get Federal ContractsRead the Press Release
CAMDEN, N.J. – A principal of a Pennsylvania construction company pleaded guilty today to paying bribes to the representative of a general contractor to secure contracts for federally subsidized construction projects in New Jersey and Pennsylvania, U.S. Attorney Paul J. Fishman announced today.
Alex Rabinovich, 57, of Richboro, Pa., pleaded guilty before U.S. District Judge Joseph H. Rodriguez in Camden federal court to Count Four of an eight-count indictment, which charged a conspiracy to make payoffs to a contractor’s representative for receiving favorable treatment when bidding on federal construction projects.
According documents filed in this case and statements made in court:
The defendant and his conspirators were charged with paying cash to a prime contractor’s representative to improperly obtain subcontracts on federally funded construction projects. Between November 2009 and January 2013, Rabinovich and other conspirators paid a Philadelphia contractor’s representative to get “last looks” at other competitors’ bids. This allowed Sands Mechanical of Bristol, Pa., to successfully underbid other subcontractors. A total of $46,200 in bribes/kickbacks was owed for 10 subcontracts awarded to Sands Mechanical. By the summer of 2012, approximately $15,000 was still outstanding for the last two contracts. On two occasions, in November and December 2012, Rabinovich was caught on videotape giving a total of $4,156 in cash to the contractor’s representative to pay down the amounts still due and owing.
Conspiracy to bribe a prime contractor is punishable by a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for Jan. 8, 2014.
Seven other defendants have previously pleaded guilty to various charges in the indictment ranging from collecting kickbacks, arson and aggravated assault.
Fishman credited special agents of the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, under the direction of Acting Special Agent-in-Charge Cheryl Garcia; the Department of Labor-Wage and Hour Division, under the direction of George Ference, regional administrator; Naval Criminal Investigative Service, under the direction of Assistant Special Agent in Charge Jeremy Gauthier, Northeast field office; and the Air Force Office of Special Investigations, under the direction of Special Agent Seth Neville, Detachment Commander, Joint Base McGuire-Dix-Lakehurst with the investigation leading to today’s guilty plea.
The government is represented by Senior Litigation Counsel V. Grady O’Malley of the U.S. Attorney’s Office Organized Crime/Gangs Unit in Newark.
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Defense counsel: Lawrence Krasner Esq., Philadelphia
Rabinovich Indictment
Atlantic City Man Admits Conspiring with Alleged Members of Organized Crime Family and Others in Fraud SchemeRead the Press Release
CAMDEN, N.J. – An Atlantic City, N.J., man admitted he conspired to defraud FirstPlus Financial Group Inc. (FPFG), a Texas-based financial services company allegedly targeted for extortionate takeover and looting by a group led by alleged Lucchese organized crime family member Nicodemo S. Scarfo, U.S. Attorney Paul J. Fishman announced.
John Parisi, 52, pleaded guilty before U.S. District Judge Robert B. Kugler in Camden federal court to a superseding information charging him with conspiracy to commit wire fraud.
According to documents filed in this case and statements made in court:
Parisi and 12 others – including his cousin, Nicodemo S. Scarfo, an alleged member of the Lucchese La Cosa Nostra (LCN) crime family, and Salvatore Pelullo, an alleged associate of the Lucchese and Philadelphia LCN families – were variously charged in a November 2011 indictment with a racketeering conspiracy, including acts of securities fraud, wire fraud, mail fraud, bank fraud, extortion, interstate travel in aid of racketeering, money laundering and obstruction of justice. The indictment charged that FPFG was targeted for extortionate takeover and looting by a group of the conspirators. A substantial part of the enterprise’s activities occurred in New Jersey, including communications and the transfer of money into and out of the state. John Parisi admitted that he joined the conspiracy in April 2007.
Parisi managed a family trust and a limited liability company on behalf of Scarfo as part of the scheme to defraud FPFG. Parisi said Scarfo, his cousin, directed Parisi in the use of various bank accounts through which Scarfo received hundreds of thousands of dollars between July 2007 and April 2008 as part of the scheme. As alleged in the indictment, the money involved proceeds of the fraud that Scarfo allegedly received as part of a fraudulent “consulting” agreement between his shell company, Learned Associates, and one controlled by Pelullo. The money also involved proceeds received from the fraudulent sale of Scarfo and Pelullo’s worthless companies to FPFG in 2007. The receipt of the fraudulent proceeds often occurred in the form of wire transfers from accounts in Pennsylvania to accounts in New Jersey.
Parisi also said that beginning in February 2008 he assisted Scarfo and his then-fiancée, Lisa Marie Scarfo, obtain a mortgage for a $715,000 house in Egg Harbor Township, N.J., that the Scarfos intended to purchase. Lisa Marie Scarfo pleaded guilty on Sept. 17, 2013, to a conspiracy to make a false mortgage loan application in connection with the purchase of the Egg Harbor Township house.
Scarfo, Pelullo, and six other defendants charged in November 2011 – including attorneys William Maxwell, Cory Leshner, David Adler, Gary McCarthy, and Donald Manno, as well as John Maxwell – are scheduled for trial beginning Oct. 28, 2013. Todd Stark, also charged in the indictment, previously pleaded guilty to providing ammunition to Scarfo and Pelullo, convicted felons.
The conspiracy count to which Parisi pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for Jan. 17, 2014.
U.S. Attorney Fishman praised special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark; the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, under the direction of Acting Special Agent in Charge Cheryl Garcia, New York Region; and the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Thomas J. Cannon in Newark. He also thanked the FBI under the direction of Special Agent in Charge Edward J. Hanko in Philadelphia for its vital assistance and the U.S. Securities and Exchange Commission for its role.
The government is represented by Assistant U.S. Attorneys Steven D’Aguanno and Howard Wiener, of the New Jersey U.S. Attorney’s Office Organized Crime/Gangs Unit and Criminal Division in Camden, and Trial Attorney Adam Small of the Organized Crime and Gang Section of the Justice Department’s Criminal Division.
With respect to the defendants awaiting trial, the charges and allegations contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
13-381Defense counsel: Lisa Evans Lewis Esq., Camden
Parisi, John Superseding Information
Wife of Nicodemo S. Scarfo Admits Conspiring with Him and Others to Defraud A Mortgage Lender to Buy Their HouseRead the Press Release
CAMDEN, N.J. – The wife of a reputed mob figure today admitted she conspired to defraud a mortgage lender in order to buy a $715,000 house in Egg Harbor Township, N.J., U.S. Attorney Paul J. Fishman and Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division announced.
Lisa Marie Scarfo, 34, of Elmer, N.J., pleaded guilty before U.S. District Judge Robert B. Kugler in Camden federal court to a superseding information charging her with conspiracy to make false statements for the purpose of influencing the actions of the bank on her mortgage loan application.
According to documents filed in this case and statements made in court:
In November 2011, Lisa Marie Scarfo and 12 others – including her husband, Nicodemo S. Scarfo, an alleged member of the Lucchese La Cosa Nostra (LCN) crime family, and Salvatore Pelullo, an alleged associate of the Lucchese and Philadelphia LCN families – were variously charged in a 25-count indictment with a racketeering conspiracy including acts of securities fraud, wire fraud, mail fraud, bank fraud, extortion, interstate travel in aid of racketeering, money laundering and obstruction of justice. The indictment charged that FirstPlus Financial Group Inc. (FPFG), a Texas-based financial services company, was targeted for extortionate takeover and looting by a group of the conspirators. A substantial part of the enterprise’s activities occurred in New Jersey, including communications and the transfer of money into and out of the state.
Lisa Marie Scarfo admitted that she joined the mortgage fraud conspiracy in January 2008 when she worked with her then-fiancé, Nicodemo S. Scarfo, and others to secure a $500,000 mortgage from St. Edmond’s Federal Savings Bank to purchase the Egg Harbor Township house. Drossner previously pleaded guilty and admitted that at the direction of Pelullo, he created false tax returns to help Lisa Marie Scarfo qualify for a mortgage for the house. The indictment alleges that Nicodemo S. Scarfo used money looted from FPFG for the $215,000 down payment on the house. The false tax returns, which exaggerated Lisa Marie Scarfo’s income so that she could qualify for the mortgage without naming her then-fiancé Scarfo, were used to secure the mortgage.
After the FPFG scheme was shut down by federal law enforcement in May 2008, the Scarfos were unable to pay the mortgage and the house ultimately went into foreclosure. It was sold by the bank in 2010.
Nicodemo S. Scarfo, Pelullo, and eight other defendants charged in November 2011 – including attorneys William Maxwell, Cory Leshner, David Adler, Gary McCarthy, and Donald Manno – are scheduled for trial beginning Oct. 28, 2013. Todd Stark, also charged in the indictment, previously pleaded guilty to providing ammunition to Scarfo and Pelullo, convicted felons.
The conspiracy count to which Lisa Marie Scarfo pleaded guilty is punishable by a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for Jan. 10, 2014.
U.S. Attorney Fishman praised special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark; the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, under the direction of Acting Special Agent in Charge Cheryl Garcia, New York Region; and the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Thomas J. Cannon in Newark. He also thanked the FBI under the direction of Special Agent in Charge Edward J. Hanko in Philadelphia for its vital assistance and the U.S. Securities and Exchange Commission for its role.
The government is represented by Assistant U.S. Attorneys Steven D’Aguanno and Howard Wiener, of the New Jersey U.S. Attorney’s Office Organized Crime/Gangs Unit and Criminal Division in Camden, and Trial Attorney Adam Small of the Organized Crime and Gang Section of the Justice Department’s Criminal Division.
With respect to the defendants awaiting trial, the charges and allegations contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
13-374Defense counsel: Richard Sparaco Esq., Cherry Hill, N.J.
Scarfo Superseding Information
Two Plead Guilty in International $200 Million Credit Card Fraud ConspiracyRead the Press Release
NEWARK, N.J. – A New York man today admitted his role in one of the largest credit card fraud schemes ever charged by the Justice Department following the guilty plea of another conspirator last week, New Jersey U.S. Attorney Paul J. Fishman announced.
Qaiser Khan, 49, of Valley Stream, N.Y., pleaded guilty today before U.S. Magistrate Judge Madeline Cox Arleo in Newark federal court. Khan pleaded guilty to an information charging him with one count of conspiracy to commit bank fraud. Shafique Ahmed, 52, of Floral Park, N.Y., pleaded guilty before U.S. Magistrate Judge Cathy L. Waldor in Newark on Sept. 11, 2013, to an information charging conspiracy to commit bank fraud.
According to documents filed in this case and statements made in court:Khan and Ahmed were originally charged in February 2013 as part of a conspiracy to fabricate more than 7,000 false identities to obtain tens of thousands of credit cards. Members of the conspiracy doctored credit reports to pump up the spending and borrowing power associated with the cards. They then borrowed or spent as much as they could, based on the phony credit history, but did not repay the debts – causing more than $200 million in confirmed losses to businesses and financial institutions.
The scheme involved a three-step process in which the defendants would make up a false identity by creating fraudulent identification documents and a fraudulent credit profile with the major credit bureaus; pump up the credit of the false identity by providing false information about that identity’s creditworthiness to those credit bureaus; finally, run up large loans.
The scope of the criminal fraud enterprise required Khan, Ahmed and their conspirators to construct an elaborate network of false identities. Across the country, the conspirators maintained more than 1,800 “drop addresses,” including houses, apartments and post office boxes, which they used as the mailing addresses of the false identities.
Khan and Ahmed admitted they helped obtain credit cards in the name of third parties – many of which were fictional – then directed the credit cards to be mailed to addresses controlled by members of the conspiracy. They also admitted they knew the cards would be used fraudulently at businesses.
The charges to which Khan and Ahmed pleaded guilty carry a maximum potential penalty of 30 years in prison and a $1 million fine, or twice the gain or loss caused by the offense.The defendants are both scheduled for sentencing before U.S. District Judge Anne E. Thompson as follows: Khan on Jan. 6, 2014, and Ahmed on Oct. 30, 2013.
U.S. Attorney Fishman praised special agents of the FBI’s Cyber Division, under the direction of Special Agent in Charge Aaron T. Ford, for the investigation leading to the guilty pleas, as well as postal inspectors, under the direction of Postal Inspector in Charge Marie L. Kelokates, and special agents of the U.S. Secret Service, under the direction of Special Agent in Charge James Mottola. He also thanked the U.S. Social Security Administration for its role in the investigation.
The government is represented by Assistant U.S. Attorneys Daniel V. Shapiro and Zach Intrater of the U.S. Attorney’s Office Economic Crimes Unit and Barbara Ward of the office’s Asset Forfeiture and Money Laundering 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:
Khan: Christopher Adams Esq., Roseland, N.J.
Ahmed: Joseph Giaramita Esq., BrooklynKhan, Qaiser Information
Ahmed, Shafique InformationTwo Men Sentenced to Prison for Roles in Large-Scale Identity Theft Ring and Tax EvasionRead the Press Release
NEWARK, N.J. – Two men were sentenced to prison terms today for their respective roles in a large-scale and sophisticated identity theft scheme, U.S. Attorney Paul J. Fishman announced.
Sang-Kyu Seo, 63, of Palisades Park, N.J., was sentenced to three years in prison and Young-Woo Ji, 39, Bayside, N.Y., was sentenced to 65 months in prison by U.S. District Judge Katharine S. Hayden in Newark federal court.Seo previously pleaded guilty before Judge Hayden to a five-count information that charged him with conspiracy to unlawfully produce identification documents and false identification documents, aggravated identity theft, conspiracy to commit wire fraud, conspiracy to commit bank fraud, and tax evasion.
Ji previously pleaded guilty before Judge Hayden to an information charging him with conspiracy to commit wire fraud affecting financial institutions and bank fraud, aggravated identity theft and false claims.
According to documents filed in this case and statements made in court:
The Seo Conspiracy
Seo was the owner and operator of Hang Jin Yi Inc., d/b/a Hwangini, a salon located in North Bergen, N.J., and Pier 7 Corporation, a purported small business located in Palisades Park. Seo conspired with Sang-Hyun Park, a/k/a “Jimmy,” and others to obtain a Social Security card beginning with the prefix “586” for another individual. These “586” Social Security cards were issued by the United States to individuals, usually from China, who were employed in American territories, such as Guam. Park is alleged to have been the leader of a criminal organization headquartered in Bergen County, N.J. that obtained, brokered, and sold identity documents to customers for the purpose of committing credit card fraud, bank fraud, tax fraud, and other crimes. Park pleaded guilty on Jan. 9, 2012, to his role in the enterprise and is awaiting sentencing.The Park Criminal Enterprise engaged in the fraudulent “build up” of credit scores associated with the Chinese identities. They did so by adding the Chinese identity as an authorized user to the credit card accounts of various coconspirators who received a fee for this service – members of the enterprise’s credit build-up teams. By attaching the Chinese identities to these existing credit card accounts, the teams increased the credit scores associated with the Chinese identities to between 700 and 800. The members of the build-up teams knew neither the real person to whom the identity belonged nor virtually any of the customers who had purchased the identities.
After building up the credit associated with these identities, Park and his conspirators directed, coached, and assisted the customers in opening bank accounts and obtaining credit cards. Park and his conspirators then used these accounts and credit cards to commit fraud. In particular, Park relied on several collusive merchants who possessed credit card processing, or swipe, machines. For a fee, known as a “kkang fee,” these collusive merchants charged the fraudulently obtained credit cards, although no transaction took place. After receiving the money into their merchant accounts from the credit cards related to these fraudulent transactions, the collusive merchants gave the money to Park and his coconspirators, minus their kkang fee.Seo admitted that he obtained a 586 Social Security card and counterfeit driver’s licenses through Park for a family member, who then used this identity to “bust out” credit cards.
Seo also admitted that he gave his corporate and personal credit cards to Park for the purpose of busting out these maxed out credit cards. In furtherance of this conspiracy, Park and his conspirators issued worthless checks, drawn on bank accounts that had been established using the 586 identities, as payment toward the balances on Seo’s credit cards. Before the banks and credit card companies realized that these checks were bogus, Park and his conspirators charged Seo’s credit cards through collusive merchants or used them to purchase merchandise.
Seo also admitted that in mid-2007, with the assistance of a loan broker, he fraudulently obtained a $100,000 commercial loan on behalf of Pier 7. Seo admitted that he and the loan broker made false statements to obtain the loan, including falsely representing that his business’ annual revenue was approximately $620,000.
Seo admitted that he committed tax evasion by issuing checks to himself and others, representing income derived through the operation of Hwangini, and then failing to report this income on his personal tax returns. Seo admitted that on or about April 15, 2008, he filed an individual income tax return for tax year 2007. This return declared that his taxable income for calendar year 2007 was approximately $197 and the amount of tax due and owing was approximately $19. Seo admitted that this return failed to include $304,848 in additional taxable income that he had received in 2007, having an additional tax of $81,643. He was arrested on Sept. 16, 2010, and released on $250,000 bail.
The Ji Conspiracy
Ji conspired with Park and others to defraud banks, credit card companies, and other lenders. Ji admitted that in February 2008, he traveled to Illinois and used a 586 Social Security card belonging to a person with the initials F.C., to fraudulently obtain driver’s licenses.Ji admitted that he used the F.C. identity to fraudulently obtain credit cards. He then used these credit cards, in the name of F.C., to fraudulently build up credit scores and credit histories for Park’s customers who had obtained 586 identities from the Park Criminal Enterprise.
Ji also admitted that he used the F.C. identity to establish a merchant account for ZZ Entertainment, Inc., a completely fictitious business. By establishing this account, Ji obtained a credit card processing machine and thereafter served as a “collusive merchant” for the Park Criminal Enterprise. Ji acknowledged that between Oct. 5, 2008, and Oct. 20, 2008, he charged $50,000 in fraudulent credit card charges through his ZZ Entertainment Corp. account and then shared portions of this fraud with Park. In total, Ji caused more than $400,000 in financial losses to banks, credit card companies and others.
Ji admitted that he used the 586 identities that he had obtained from Park to file fraudulent tax returns with the IRS. Ji admitted that he used these identities, together with fraudulent W-2 Forms, to claim hundreds of thousands of dollars in tax refunds. He was arrested on Sept. 16, 2010 and released on a $250,000 bail.
In addition to the prison term, Judge Hayden sentenced Seo to three years of supervised release and ordered him to pay $1.2 million in restitution. She sentenced Ji to three years of supervised release and ordered him to pay $187,874 in restitution.
U.S. Attorney Fishman praised special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark; IRS – Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen; U.S. Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge Andrew M. McLees; and the Bergen County Prosecutor’s Office, under the direction of Prosecutor John L. Molinelli and the Office’s Chief of Detectives Steven Cucciniello, for the investigation leading to today’s sentence.
The government is represented by Assistant U.S. Attorney Anthony Moscato of the U.S. Attorney’s Office Organized Crime/Gangs Unit in Newark.
As for other members of the Park Criminal Enterprise, the charges and allegations contained in the Complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
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Defense counsel: Wanda M. Akin Esq., Newark
Registered Sex Offender Charged with Traveling to and from New Jersey to Assault A MinorRead the Press Release
FBI Seeks Additional Victims, Information
CAMDEN, N.J. – A registered sex offender who allegedly traveled between New Jersey, New York and Pennsylvania to sexually assault a girl younger than 13 on more than one occasion is expected to appear this afternoon to face a federal charge in Camden federal court, U.S. Attorney Paul J. Fishman announced.
Joseph Anthony Caracciolo, aka “Joseph Crillo,” aka “Joseph Grillo,” 47 – believed to have resided in Massachusetts, California, Virginia, Connecticut, Florida and New York – was arrested in New York on Aug. 28, 2013. He is currently being held on related state charges filed by the Atlantic County Prosecutors Office. The U.S. Attorney’s Office for the District of New Jersey is adopting the case for federal criminal prosecution.
Caracciolo is charged by federal criminal complaint with travelling in interstate commerce for the purpose of engaging in illicit sexual conduct with a minor. He is to appear this afternoon before U.S. Magistrate Judge Karen M. Williams.
The FBI and the U.S. Attorney’s Office are seeking additional information from the public in order to identify other potential victims.
According to documents filed in this case:
During a period between May and August 2012, Caracciolo traveled from New York to New Jersey and from New Jersey to Pennsylvania in order to sexually assault a 12-year-old girl.
In intercepted communications, Caracciolo acknowledged paternity of a child born to the victim. The exchanges were monitored by law enforcement with the victim’s consent.
The count with which Caracciolo is charged carries a maximum potential penalty of 30 years in prison and a $250,000 fine.
According to the Department of Justice National Sex Offender Public Website, Caracciolo has been in violation of his sex offender registration requirements since August 2005.
Individuals with information concerning Caracciolo are asked to contact the FBI’s tip line at 1-800-CALL-FBI. Information can also be provided to the nearest FBI field office or filed electronically at https://tips.fbi.gov.
U.S. Attorney Fishman credited special agents of the Newark FBI Safe Streets Task Force, under the direction of Special Agent in Charge Aaron T. Ford in Newark; the U.S. Marshals Service New York/New Jersey Regional Fugitive Task Force; the Atlantic County Prosecutor’s Office, under the direction of James P. McClain; and the Egg Harbor Township Police Department, under the direction of Chief Michael J. Morris, with the investigation.
The government is represented by Assistant U.S. Attorneys Justin C. Danilewitz and Matthew T. Smith of the U.S. Attorney’s Office Criminal Division in Camden.
The charge and allegations contained in the complaint are merely accusations and the defendant is presumed innocent unless and until proven guilty.13-372
Defense counsel: Assistant Federal Public Defender Thomas Young Esq., Camden
Caracciolo, Joseph Anthony Complaint
Appeals Court Upholds Constitutionality of New Jersey Sports Betting BanRead the Press Release
NEWARK, N.J. – The United States Court of Appeals for the Third Circuit issued a precedential opinion today upholding a federal statute that prevents the state of New Jersey from legalizing sports betting in its casinos and racetracks.
The opinion concludes that professional sports leagues have standing to sue to stop the spread of state-sponsored sports gambling – as provided by the 1992 federal Professional and Amateur Sports Protection Act (PASPA) – and that the act itself is constitutional.
The United States of America intervened in the matter to defend the constitutionality of PASPA. New Jersey U.S. Attorney Fishman argued the United States’ position before the District Court and the Third Circuit Court of Appeals.
“We are gratified that the Court of Appeals agreed with the United States’ position that Congress acted constitutionally when it enacted PASPA,” said U.S. Attorney Fishman. “The government’s argument was not whether sports gambling should be legalized or is good policy. The government argued and the Court of Appeals agreed that Congress had the constitutional authority to make uniform national policy and not to leave it to the decisions of individual states.”
On Aug. 7, 2012, the National Collegiate Athletic Association, the National Basketball Association, the National Football League, the National Hockey League and Major League Baseball filed suit against New Jersey’s governor, director of the Division of Gaming Enforcement, and executive director of the Racing Commission after New Jersey amended its constitution. The amendment permitted the legislature to legalize, with limited exceptions, wagering at casinos and racetracks throughout the state on the results of professional, college and amateur sports.
The Sports Leagues’ suit sought to enjoin the implementation of state-sponsored gambling in New Jersey. U.S. District Judge Michael A. Shipp found that the Sports Leagues had standing to bring their action, rejected constitutional challenges to PASPA and entered judgment against New Jersey. Today’s decision by the Third Circuit Court of Appeals affirmed the District Court’s judgment.13-376
Georgia Man Charged with Traveling from New York to New Jersey to Have Sexual Contact with A Minor, Distributing Child PornographyRead the Press Release
TRENTON, N.J. – A Georgia man living in Long Island, N.Y., was charged today with traveling from New York to New Jersey for the purpose of having sexual contact with a minor and with distributing child pornography, U.S. Attorney Paul J. Fishman announced.
Richard J. Simone Jr., 23, of Acworth, Ga., is charged by complaint with one count of traveling across state lines for the purpose of engaging in illicit sexual conduct with a minor and one count of distribution of child pornography. Simone made his initial court appearance today before U.S. Magistrate Judge Lois H. Goodman and was detained pending a bail hearing on Friday, Sept. 20, 2013.
According to the criminal Complaint filed today in Trenton federal court:
Beginning in July 2013, an undercover special agent of Homeland Security Investigations, Department of Homeland Security, began communicating via the internet with Simone. Over the course of July, August, and September, Simone and the undercover agent engaged in numerous, graphic communications over the internet regarding Simone having sex with the undercover agent’s fictitious 9-year-old daughter and fictitious minor babysitter. During an online conversation in August 2013, Simone sent nine images of child pornography to the undercover agent. On Sept. 13, 2013, Simone traveled from Long Island, where he was living, to Monmouth County, N.J., for the purpose of having sex with the undercover agent’s fictitious daughter and babysitter. Simone was arrested upon his arrival at the location in Monmouth County where he and the undercover agent had arranged to meet prior to the sexual conduct.
The charge of traveling with the purpose of engaging in illicit sexual conduct with a minor carries a maximum potential penalty of 30 years in prison and a $250,000 fine. The charge of distribution of child pornography carries a mandatory minimum of five years, a maximum penalty of 20 years, and a $250,000 fine.
U.S. Attorney Fishman credited agents of Homeland Security Investigations, under the direction of Special Agent in Charge Andrew McLees in Newark, and the West Long Branch Borough Police Department, under the direction of Chief of Police Lawrence L. Mihlon, for the investigation leading to today’s complaint. He also thanked HSI New York; U.S. Customs and Border Protection, and the Monmouth County Prosecutor’s Office, for their assistance with the investigation.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys’ Offices and the Child Exploitation and Obscenity Section (CEOS) in the Justice Department’s Criminal Division, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The government is represented by Harvey Bartle, attorney in charge of the U.S. Attorney’s Trenton Office.The charges and allegations contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
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Defense counsel: Andrea Bergman, Assistant Federal Public Defender, Trenton
Simone Complaint