District of New Jersey
Press releases recorded for this federal judicial district.
Jersey City Police Officer Charged with Cigarette Cargo Theft and Scheme to Rob Drug CourierRead the Press Release
NEWARK, N.J. – A Jersey City, N.J., police officer appeared in Newark federal court this afternoon to face charges that he stole more than 600,000 cigarettes from a trailer and conspired to rob $20,000 from a drug courier, U.S. Attorney Paul J. Fishman announced.
Mario Rodriguez, 39, of Jersey City, is charged by complaint with one count of cargo theft and one count of conspiracy to commit Hobbs Act extortion under color of official right. He appeared this afternoon before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court and was released on a $250,000 bond and confined to home incarceration with electronic monitoring. The complaint also charges Anthony Roman, 48, also of Jersey City, with the conspiracy. Roman was arrested at home Aug. 2, 2013, and appeared in court the same day. He was released on a $250,000 bond.
According to the complaint:
The Cargo Theft
On July 3, 2013, Rodriguez and an individual working for the FBI as a confidential informant (CI) drove to a warehouse in Secaucus, N.J., to break into a trailer and steal cigarettes they planned to sell to the CI’s associate for $5,000. Law enforcement agents had parked the trailer there and established surveillance of the area.
Rodriguez used bolt cutters to cut the lock off of the trailer, and he and the CI loaded 50 cases containing approximately 600,000 cigarettes and six televisions from the trailer into their vehicle. As they drove the stolen items to a parking lot in Staten Island, N.Y., Rodriguez made several phone calls seeking buyers for the TVs.
The pair met the CI’s associate – actually an undercover officer – in the parking lot to get the $5,000 payment for the cigarettes. Rodriguez kept $3,000 of the cash and three of the TVs.
The Extortion
On July 10, 2013, Rodriguez and the CI met in New Jersey with undercover law enforcement agents and discussed the possibility of robbing a drug courier – actually another undercover officer. Later that month, the group met again in Staten Island to discuss the plan. The undercover officers told Rodriguez the courier would be delivering cocaine to them that day in a Jersey City mall parking lot in exchange for a $20,000 payment, after which Rodriguez would steal the money. Rodriguez called Roman to help him with the robbery.
Rodriguez and Roman drove a Toyota RAV-4 truck to the location on July 24, 2013, where law enforcement agents had established surveillance and staged the car containing $20,000 cash in a plastic bag. Rodriguez and Roman robbed the woman they thought was a drug courier of the money after identifying themselves as law enforcement officers – which Roman is not – and pretending to arrest the CI.
Later that day, Rodriguez, the CI and the undercover met in a hotel room at a Pennsylvania casino to split the cash.
The cargo theft and conspiracy to commit Hobbs Act Extortion charges carry a maximum potential penalty of 10 and 20 years in prison, respectively. Both counts also carry a maximum fine of $250,000.
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 Jersey City Police Department, under the direction of Acting Chief Joseph Connors; the Hudson County Prosecutor’s Office, under the direction of Acting Prosecutor Gaetano T. Gregory; and criminal investigators of the U.S. Attorney’s Office with the investigation leading to the charges. He also thanked the Bayonne Police Department, Waterfront Commission of New York Harbor, IRS-Criminal Investigation, U.S. Department of Labor Office of Inspector General, and the N.J. State Commission of Investigation for their significant contributions to the investigation.
The government is represented by Assistant U.S. Attorney Jonathan W. Romankow of the U.S. Attorney’s Office Organized Crime/Gangs 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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Defense counsel:
Mario Rodriguez: Brian J. Neary Esq., Hackensack, N.J.
Anthony Roman: Daniel Welsh Esq., Jersey City, N.J.Rodriguez, Mario et al. Complaint
Two Essex County, N.J., Men Sentenced to Long Prison Terms for Armed Robbery of Jewelry StoreRead the Press Release
NEWARK, N.J. – Two Essex County, N.J., men were sentenced to prison today for the armed robbery of the Golden Palace jewelry store in Orange, N.J., U.S. Attorney Paul J. Fishman announced.
U.S. District Judge William J. Martini sentenced Antonio Moore, 45, of Newark, to 188 months in prison. Moore previously pleaded guilty to an indictment charging him with one count of Hobbs Act robbery and one count of using a firearm in furtherance of that robbery. Judge Martini sentenced Charles Madison, 42, also of Newark, to 150 months in prison. Madison previously pleaded guilty to an information charging him with aiding and abetting the Hobbs Act robbery and for being a felon in possession of a firearm. A third defendant, David Williams, pleaded guilty in January 2013 and awaits sentencing.According to documents filed in this case and statements made in Newark federal court:
On Aug. 6, 2012, Moore and Williams robbed the store at gunpoint, while Madison served as the getaway driver. During the robbery, Moore punched an employee of the Golden Palace in the head, restrained that employee and a co-worker with duct tape and telephone cord and took approximately $120,000 in jewelry from the store’s display cases. Law enforcement pulled over Madison’s pickup truck approximately an hour after the robbery and found dozens of pieces of gold jewelry scattered across the back seat of the truck.
In addition to the prison terms, Judge Martini sentenced each defendant to serve three years of supervised release.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, with the investigation. Fishman also thanked the Orange Police Department and the New Jersey State Police for their investigation and assistance.
The government is represented by Assistant U.S. Attorney Andrew J. Bruck and Chief David E. Malagold of the U.S. Attorney’s Office Organized Crime/Gangs Unit in Newark.
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Defense counsel:
Moore: Mark A. Berman Esq., River Edge, N.J.
Madison: Michael V. Calabro Esq., NewarkSouth Jersey Man Sentenced to One Year in Prison for Stealing Father’s Benefit Checks for 22 Years After His DeathRead the Press Release
CAMDEN, N.J. – A South Jersey man who hid his father’s death from authorities to continue getting his Social Security payments was sentenced today to 12 months in prison for stealing more than $200,000 in retirement savings benefits paid out to the deceased, U.S. Attorney Paul J. Fishman announced.
Michael Shelton, 66, of Pennsauken, N.J., previously pleaded guilty before U.S. District Judge Jerome B. Simandle to an information charging him with one count of theft of government funds. Judge Simandle imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
Shelton admitted that when his father died in March of 1990, he intentionally did not notify the Social Security Administration (SSA), as he was obligated to do, so that he could continue to receive his father’s SSA retirement checks. The SSA discovered the death in June of 2012, at which time the deceased was receiving $977 in monthly retirement benefits.
After his father had died, Shelton set up a direct deposit for the checks into a PNC Bank account in his father’s name. Shelton acknowledged he accessed that account at various times and used the money to pay for personal expenses. Shelton admitted that from March 1990 to July 2012, he collected $204,606 to which he was not entitled.
In addition to the prison term, Judge Simandle sentenced Shelton to three years of supervised release and ordered him to pay $204,606 in restitution to the Social Security Administration. Shelton was also ordered to pay restitution of $204,606.
U.S. Attorney Fishman credited special agents of the Social Security Administration – Office of the Inspector General, under the direction of Special Agent in Charge Edward J. Ryan, with the investigation leading to today’s sentence.
The government is represented by Assistant U.S. Attorney Jason M. Richardson of the U.S. Attorney’s Office Criminal Division in Camden.
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Defense counsel: Thomas Young Esq., Assistant Federal Public Defender, CamdenFormer Mortgage Broker and Bank Officer Sentenced to One Year in Prison for Conspiring to Defraud Bank in Connection with $1.48 Million LoanRead the Press Release
TRENTON, N.J. – A former mortgage broker and bank officer was sentenced today to 12 months in prison for his role in conspiring to commit bank fraud in order to secure a $1.48 million residential real estate loan, U.S. Attorney Paul J. Fishman announced.
James Cockinos, 58, of Englewood Cliffs, N.J., previously pleaded guilty before U.S. District Judge Freda L. Wolfson to an information charging him with one count of conspiracy to commit bank fraud. Cockinos defrauded Washington Mutual Bank (later acquired by JPMorgan Chase) in New York, for the purpose of securing a $1.48 million residential loan. Judge Wolfson imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:
Cockinos was the owner/president of Federated Mortgage Company of America (FMCA). He was also a member of the Board of Directors at Mariner’s Bank. Cockinos, through FMCA, served as the mortgage broker on a residential loan with Washington Mutual Bank, F.A., in an application dated April 19, 2007. The borrower, identified as Individual Two in the complaint, applied for the loan at the request of a spouse identified as Individual One in the complaint. There was no co-borrower on the loan.
The loan was for the purpose of purchasing for $1.9 million a property located in Englewood Cliffs. Cockinos was responsible for obtaining certain information from Individual Two for purposes of completing the loan application. At the time that Individual Two signed the loan application, Individual Two did not review the contents of the application, which included information regarding the purpose of the property and Individual Two’s employment, income, and assets.
The application contained false statements concerning Individuals Two’s employment, income and assets. Cockinos also indicated in the application that he obtained the information from Individual Two through a face-to-face interview, when in fact, no such interview took place.
The application indicated that Individual Two had $400,000 in a joint checking account at Mariner’s Bank in New Jersey, when, in fact, Cockinos and Individual One caused $350,000 to be temporarily deposited into the joint account for the purpose of misrepresenting that amount as Individual Two’s assets. Cockinos also directed a Mariner’s Bank employee to falsely verify that there was $350,000 in the joint account for the prior two months, when in fact, there were significantly less funds in the account over the prior two months.
Washington Mutual ultimately approved a loan of $1.48 million and wired the loan amount to Individual Two’s closing attorney on June 17, 2007. On Sept. 25, 2008, JPMorgan Chase acquired the banking operations of Washington Mutual Bank. Between Nov. 2, 2010 and Jan. 10, 2011, Individual Two defaulted on the loan. JP Morgan initiated foreclosure proceedings. The Englewood Cliffs property was sold on March 16, 2012, leaving JPMorgan Chase with a loss of more than $500,000 on the defaulted loan.
In addition to the prison term, Judge Wolfson sentenced Cockinos to two years of supervised release, fined him $5,000 and ordered him to pay $513,882 in restitution.
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 Federal Deposit Insurance Corporation., Office of Inspector General, New York Region, under the direction of Special Agent in Charge A. Derek Evans; and criminal investigators from the U.S. Attorney’s Office in Newark, with the investigation leading to today’s sentence.
The government is represented by Assistant U.S. Attorney Zahid N. Quraishi of the U.S. Attorney’s Office Special Prosecutions Division in Newark.
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Defense counsel: Edward J. Plaza Esq., Red Bank, N.J.Former Citibank Employee Who Bilked Former Salomon Brothers Former Partner Out of $1.3 Million Gets 54 Months in PrisonRead the Press Release
Former Assistant Also Failed to Pay More Than $250,000 in Taxes
NEWARK, N.J. – A former Citibank employee was sentenced today to 54 months in prison for stealing more than $1.3 million from William Salomon, a 98-year-old former managing partner of Salomon Brothers, which was later acquired by Citibank, U.S. Attorney Paul J. Fishman announced.
Karen Febles, 48, of Wallington, N.J., who worked as an executive assistant for Citibank, helping Salomon with his personal and professional finances, was previously convicted by a jury of bank fraud, four counts of wire fraud, three counts of money laundering, and two counts of tax evasion, after a one-week trial before U.S. District Judge William J. Martini. Judge Martini imposed the sentence today in Newark federal court.
According to documents filed in this case and the evidence at trial:
From at least 2000 through September 2011, Febles worked as an executive assistant for Citibank in New York City. Her duties included assisting Salomon with his finances. As part of her employment, Febles had exclusive control over Mr. Salomon’s bank accounts and routinely prepared and negotiated checks on his behalf. Febles was terminated by Citibank in September 2011.Between 2007 and September 2011, at least $1.3 million of Mr. Salomon’s funds went from his bank accounts directly into Febles’ 21 bank accounts, including two accounts that she maintained for her minor son. A review of hundreds of checks written by Febles revealed that the checks had been altered by Febles – after they had been signed by Mr. Salomon – to add additional sums of money. Once issued, Febles negotiated many of these checks, in cash, for the altered amount.
At the same time that more than $900,000 in checks and almost $400,000 cash went from Mr. Salomon’s bank accounts into Febles’ accounts, Febles spent hundreds of thousands of dollars on luxury purchases. These included, in just a five-month period in 2011, $52,720 in cash for a 2011 Range Rover; $34,650 in cash for a Mercedes-Benz; $43,200 in cash for one year’s rent of a three-bedroom home in Clifton, N.J.; and more than $45,000 in cash for six months’ rent on two apartments in Palisades Park, N.J. Febles’ purchases also included more than $115,000 on vacation and travel expenses; $56,000 rent on a four-bedroom home in Mahwah, N.J.; more than $20,000 on other automobile payments; and more than $20,000 on personal expenses, including entertainment, meals, travel, and clothing. During this time, Febles never earned more than $50,000 per year in take-home pay from Citibank.
In addition to the evidence of Mr. Salomon’s money going into Febles’ bank accounts and the evidence of Febles’ expenditures, the evidence at trial also established that Febles transferred hundreds of thousands of dollars that she stole from Mr. Salomon from her accounts into custodial bank accounts that she maintained for her minor son. The jury found that Febles transferred these funds to her son in order to conceal her bank and wire frauds.
In the tax years 2009 and 2010, Febles failed to disclose to the IRS any of the money that she stole from Mr. Salomon. In those two years, she claimed tax refunds of $14,839 and $9,293, respectively. Had Febles disclosed the money that she stole from Mr. Salomon on her tax returns in 2009 and 2010, she would have owed almost $70,000 to the United States in 2009 and more than $200,000 to the United States in 2010.
In addition to the prison term, Judge Martini sentenced Febles to three years of supervised release and ordered forfeiture and restitution of $1,154,911. She was also ordered to surrender $38,000 in cash she had put toward her bail.
U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen in Newark, and 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.
The government is represented by Assistant U.S. Attorneys Aaron Mendelsohn of the Economic Crimes Unit and Evan Weitz of the Asset Forfeiture and Money Laundering Unit of the U.S. Attorney’s Office 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.
13-316Defense counsel: Edward J. McQuat and Richard Langweber, New York
Stars of ‘Real Housewives of New Jersey’ Television Series Indicted on Fraud and Tax ChargesRead the Press Release
NEWARK, N.J. – Two of the stars of the Bravo television show “The Real Housewives of New Jersey” were charged today in a conspiracy to defraud lenders and illegally obtain mortgages and other loans as well as allegedly hiding assets and income during a bankruptcy case, U.S. Attorney Paul J. Fishman announced.
Teresa Giudice, 41, and her husband, Giuseppe “Joe” Giudice, 43, both of Towaco, N.J., were charged with conspiracy to commit mail and wire fraud, bank fraud, making false statements on loan applications and bankruptcy fraud in a 39-count indictment returned today by a federal grand jury. The indictment also charges Giuseppe Giudice with failure to file tax returns for tax years 2004 through 2008, during which time he allegedly earned nearly $1 million
“The indictment returned today alleges the Guidices lied to the bankruptcy court, to the IRS and to a number of banks,” U.S. Attorney Fishman said. “Everyone has an obligation to tell the truth when dealing with the courts, paying their taxes and applying for loans or mortgages. That’s reality.”
“The Federal Deposit Insurance Corporation Office of Inspector General is pleased to join the United States Attorney for the District of New Jersey and our law enforcement colleagues in announcing this indictment today,” Special Agent in Charge A. Derek Evans said. “We are committed to our partnerships with federal, state, and local law enforcement to address mortgage fraud cases throughout the country. The American people need to be assured that their government is working to ensure integrity in the financial services and housing industries and that those involved in criminal misconduct that undermines that integrity will be held accountable.
“The privilege of living well in the United States carries certain real responsibilities, including filing tax returns when required and paying the correct amount of tax,” Shantelle P. Kitchen, Special Agent in Charge, IRS-Criminal Investigation, Newark Field Office, said. “Today’s indictment alleges the Giudices did not live up to their responsibilities by failing to file tax returns, falsifying loan applications and concealing assets in their bankruptcy petition. The reality is that this type of criminal conduct will not go undetected and individuals who engage in this type of financial fraud should know they will be held accountable.”
According to the Indictment:
From September 2001 through September 2008, Giuseppe and Teresa Giudice allegedly engaged in a mail and wire fraud conspiracy in which they submitted to lenders fraudulent mortgage and other loan applications and supporting documents in order to obtain mortgages and other loans. The Giudices falsely represented on loan applications and supporting documents that they were employed and/or receiving substantial salaries when, in fact, they were either not employed or not receiving such salaries.
For example, in September 2001, Teresa Giudice applied for a mortgage loan of $121,500 for which she submitted a loan application that falsely claimed that she was employed as an executive assistant. She also submitted fake W-2 Forms and fake paystubs purportedly issued by her employer. The indictment also charges specific instances where the Giudices committed bank fraud and loan application fraud in the course of obtaining loans from several banks.
On Oct. 29, 2009, the Giudices filed a petition for individual Chapter 7 bankruptcy protection in U.S. Bankruptcy Court in Newark. Over the next few months, they filed several amendments to the bankruptcy petition. As part of the bankruptcy filings, the Giudices were required to disclose to the United States Trustee, among other things, assets, liabilities, income, and any anticipated increase in income. The indictment alleges that the Giudices intentionally concealed businesses they owned, income they received from a rental property, and Teresa Giudice’s true income from the television show “The Real Housewives of New Jersey,” website sales, and personal and magazine appearances. The Giudices concealed their anticipated increase in income from the then-upcoming Season Two of the Bravo television show. The Giudices are charged with multiple counts of bankruptcy fraud for concealing and making false oaths and declarations about the assets and income during their bankruptcy case.
The indictment also alleges that during tax years 2004 through 2008, Giuseppe Giudice received income totaling $996,459, but did not file tax returns for those years.
The conspiracy to commit mail and wire fraud count carries a maximum potential penalty of 20 years of in prison and a $250,000 fine. The bank fraud and loan application fraud counts each carry a maximum potential penalty of 30 years in prison and a $1 million fine. The bankruptcy fraud counts each carry a maximum penalty of five years in prison and a $250,000 fine. The failure to file a tax return counts each carry a maximum penalty of one year in prison and a $100,000 fine.
U.S. Attorney Fishman credited special agents of the Federal Deposit Insurance Corporation, Office of Inspector General, New York Region, under the direction of Special Agent in Charge A. Derek Evans; special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen; and Region 3 U.S. Trustee Roberta DeAngelis and the Newark office of the U.S. Trustee, with the investigation which led to today’s indictment.
The government is represented by Assistant U.S. Attorneys Jonathan W. Romankow and Rachael Honig of the U.S. Attorney’s Office, Criminal Division in Newark.
The charges and allegations contained in the indictment are merely accusations, and the defendants are considered innocent unless and until proven guilty
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Defense counsel:
Giuseppe Giudice: Miles Feinstein Esq., Paterson
Teresa Giudice: Henry E. Klingeman Esq., NewarkGiudice, Giuseppe and Teresa Indictment
Doctor Sentenced to 57 Months in Prison for Oxycodone Distribution ConspiracyRead the Press Release
Several Co-Defendants Sentenced Last Week
TRENTON, N.J. – A doctor who admitted writing illegal prescriptions for oxycodone was sentenced today to 57 months in prison for participating in a conspiracy to distribute the medication illegally, U.S. Attorney Paul J. Fishman announced.
Jacqueline Lopresti, 52, of Fair Haven, N.J., previously pleaded guilty before Judge Freda L. Wolfson in Trenton federal court to an information charging her with one count of conspiracy to distribute oxycodone.Lopresti was the second doctor convicted in connection with this large oxycodone distribution conspiracy. Last week, Dr. Hassan Lahham was sentenced to 108 months in prison by Judge Wolfson in connection with his involvement in the same scheme. Also last week, two co-defendants, Christopher Erwin, 49, of Barnegat, N.J., and Stephen Sampson, 52, of Manahawkin, N.J., were sentenced by Wolfson to 188 months and 96 months in prison, respectively, for their roles in the conspiracy. In total, 28 people have been charged and convicted in this oxycodone distribution conspiracy.
According to documents filed in this case and statements made in court:
Oxycodone is the active ingredient in brand name pills such as Oxycontin, Roxicodone and Percocet. It is a Schedule II controlled substance – meaning that it has a high potential for abuse, a currently accepted medical use with severe restrictions, and abuse of the drug may lead to severe psychological or physical dependence.In 2009, Lopresti issued prescriptions to co-conspirators for drugs containing oxycodone, outside the usual course of medical practice and not for any legitimate medical purpose. The prescriptions were filled at various pharmacies located in and around Monmouth, Ocean, and Atlantic counties, N.J., and redistributed by others.
Erwin and Sampson were the leaders of a large-scale oxycodone distribution ring which used doctors, specifically Lopresti and Lahham, to collect prescriptions for oxycodone for which there is no medical necessity. Erwin and Sampson visited these physicians themselves and paid the physicians for medically unnecessary oxycodone prescriptions in their names and in the names of other people. Erwin and Sampson acquired the oxycodone for further distribution.
Erwin and Sampson transported various co-defendants, including: including Christopher Keosseian, 48, of Belmar; Joseph Keosseian, 46, of Belmar; James Baker, 51, of Forked River; Alex Bushman, 47, of Manahawkin; Heather Dockery, 28, of Barnegat; Wendy Galati, 45, of Toms River; Edward Gural, 37, of Barnegat; Donald Johnson, 32, of Barnegat; Bryan Lewicki, 36, of Barnegat; Gregory Mann, 50, of Surf City; Carter Nies, 36, of Barnegat; Jonathan Puggi, 35, of Little Egg Harbor; Henry Shubert, 43, of Waretown; Kyle Skora, 33, of Toms River; Crescenzo Terranova, 51, of Little Egg Harbor; and Robert Walton, III, 55, of Manahawkin; and others in multiple vehicles to various physicians and to the pharmacies afterwards. Erwin and Sampson trusted some of the defendants and paid some of the defendants to recruit and bring customers to the doctors as well as directed some of the defendants when to transport customers to the physicians and the pharmacies and which customers to transport.
In addition to the prison term, Judge Wolfson sentenced Lopresti to three years of supervised release, ordered to her to forfeit $465,000, and fined her $5,000.
U.S. Attorney Fishman credited U.S. Attorney Fishman credited the Drug Enforcement Administration's New Jersey Division, under the direction of Special Agent in Charge Carl J. Kotowski, along with the special agents, diversion investigators, task force officers, detectives and intelligence analysts of the Atlantic City Resident Office, Camden Resident Office Diversion Group, Seaside Heights Police Department, Barnegat Police Department, Ship Bottom Police Department, N.J. and the N.J. DEA Tactical Diversion Squad, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney R. Joseph Gribko of the U.S. Attorney’s Office in Trenton.
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Defense counsel:
Lopresti: Joseph Hayden Esq., Roseland, N.J.
Erwin: James R. Murphy Esq., Princeton, N.J.
Sampson: Richard Sparaco Esq., Cherry Hill, N.J.Three New Jersey Men Sentenced to Prison or Probation for Stealing $1.4 Million from New York-Based Defense ContractorRead the Press Release
Employees’ Pensions & Life Insurance Policies Looted
TRENTON, N.J. – A former insurance agent for a New York-based defense contractor and his two friends were sentenced today to prison terms or probation for stealing $1.4 million from the company, U.S. Attorney Paul J. Fishman announced.
Daniel Tumminia, 51, of Millstone, N.J., and Michael Feuer, 49, of Freehold, N.J., were each sentenced to one year in prison; Dennis Mannarino, 46, of Manalapan, N.J., was sentenced to three years of probation.
All three defendants previously pleaded guilty before U.S. District Judge Joel A. Pisano to separate informations charging them with conspiracy to commit wire fraud. Judge Pisano imposed the sentences today in Trenton federal court.
According to documents filed in this case and statements made in court:
Fastener Dimensions (Fastener) was a New York-based manufacturer and distributor of aircraft, aerospace, and military components and hardware. Tumminia was an insurance agent for Massachusetts Mutual Life Insurance Co. (MassMutual) who represented Fastener and its president as an agent for MassMutual, handling all pension and profit sharing accounts and life insurance policies for Fastener’s employees.From July 2004 through August 2010, Tumminia and his two friends – Feuer, a practicing attorney from 1990 through 2001 and the owner of Cypress Lawn Care, a landscaping company in New Jersey; and Mannarino, the owner of J&D Italian Specialty Meats, delicatessens located in New Jersey and New York – enriched themselves by diverting life insurance premium payments and pension and profit sharing checks belonging to Fastener’s employees into bank accounts that they controlled. In April 2008, Feuer incorporated and listed himself as the registered agent and officer of MassMutual Contracting Corp., a limited liability company that never performed any services for Fastener or any other clients, but was created by Feuer and Tumminia solely to falsely represent to Fastener that it was the real MassMutual. Feuer and Tumminia deposited $574,279 from Fastener into the MassMutual Contracting Corp. bank account.
Tumminia, Feuer and Mannarino conducted 133 transactions, including interstate wire transfers, totaling $1,437,542, in deposits into bank accounts that they controlled. They then used the diverted funds for personal expenditures, including rent, cable, and utility and grocery bills.
As part of their guilty pleas, Tumminia, Feuer, and Mannarino have agreed to make full restitution for all losses resulting from their crimes to the employees of Fastener Dimensions. Tumminia has agreed to forfeit $1,198,278 to the United States. Feuer has agreed to forfeit $115,963 and Mannarino has agreed to forfeit $10,000.
In addition to the prison terms, Judge Pisano sentenced Tumminia and Feuer sentenced to two years of supervised release.U.S. Attorney Fishman credited special agents of the FBI working out of the Red Bank resident agency, under the direction of Special Agent in Charge Aaron T. Ford, with the investigation leading to today’s sentences.
The government is represented by Assistant U.S. Attorney Aaron Mendelsohn of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.
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Defense counsel:
Tumminia: Jeffrey Tomei Esq., New York, and Denise Kalland Esq., West Palm Beach, Fla.
Feuer: Louis Klieger Esq., New York
Mannarino: Arthur Aidala Esq., New YorkRussian National Pleads Guilty in $1 Million Trading Account Hack, Securities Fraud SchemeRead the Press Release
NEWARK, N.J. – A Russian national living in New York admitted today that he conspired with others to hack into retail brokerage accounts and execute sham trades, U.S. Attorney Paul J. Fishman announced.
Petr Murmylyuk, 33, of Brooklyn, N.Y., pleaded guilty before U.S. District Judge Esther Salas in Newark federal court to an information charging him with conspiracy to commit securities fraud.
According to documents filed in the case and statements made in court:
Murmylyuk admitted that he participated in a conspiracy to steal from online trading accounts at Scottrade, E*Trade, Fidelity, Schwab and other brokerage firms. Members of the conspiracy first gained unauthorized access to the online accounts of brokerage firm customers. The conspirators then used stolen identities to open additional accounts – referred to in the Information as “Profit Accounts” – at other brokerage houses. They then caused the victims’ accounts to make unprofitable and illogical securities trades with the Profit Accounts, leading to losses in the victims’ accounts and gains in the Profit Accounts. One version of the fraud involved causing the victims’ accounts to sell options contracts to the Profit Accounts, then to purchase the same contracts back minutes later for many times the price.
The members of the conspiracy recruited foreign nationals visiting, studying, and living in the United States to open bank accounts into which illegal proceeds could be deposited. The conspirators then caused the proceeds of the sham trades to be transferred from the Profit Accounts into those accounts, where the stolen money could be withdrawn. The scheme caused combined losses to Scottrade, E*Trade, Fidelity, Schwab and other affected brokerage firms of approximately $1 million.
The charge to which Murmylyuk pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is currently scheduled for Nov. 12, 2013.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge Andrew McLees; and IRS – Criminal Investigations, New York Field Office, under the direction of Special Agent in Charge Toni M. Weirauch, with the investigation leading to today’s guilty plea. He also thanked the U.S. Securities and Exchange Commission’s Philadelphia Regional Office, under the leadership of its Regional Director Daniel M. Hawke, and the Justice Department’s Computer Crime and Intellectual Property Section for their assistance in the investigation, as well as the Manhattan District Attorney’s Office, under the direction of District Attorney Cyrus R. Vance Jr., for its contributions and cooperation in coordinating the parallel investigations.
The government is represented by Assistant U.S. Attorney Christopher J. Kelly, Deputy Chief of the 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: Bradley L. Henry Esq., New YorkMurmylyuk Information
Man Who Entered U.S. Illegally Charged with Sex Trafficking and StalkingRead the Press Release
NEWARK, N.J. – A man who entered the United States from Honduras illegally appeared today in federal court on charges of sex trafficking and stalking, U.S. Attorney Paul J. Fishman announced.
Hermen Zuniga Castro, 30, a/k/a “Helmer Zuniga,” “Herman Zuniga,” and “Helmer Mendoza,” of Honduras, was charged by criminal complaint for attempted sex trafficking and stalking. He appeared in the Middle District of Pennsylvania on July 11, 2013, where he was arrested by U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HIS) following his release from the custody of the Bureau of Prisons after being incarcerated for illegal entry after deportation. He appeared before U.S. Magistrate Judge Michael Hammer in Newark federal court.
According to documents filed in this case and statements made in court:In June 2007, Zuniga began stalking and threatening the victim – identified in court papers only as “E.M.,” – while they were both living in Honduras. In November 2007, E.M. left Honduras and was smuggled into the United States by Zuniga, fearing he would kill her family, including her son. For the next two years, Zuniga forced the victim to work as a housekeeper and as a prostitute in Texas. During this time, Zuniga also terrorized the victim by repeatedly raping, beating, and threatening her. Zuniga told the victim that his ultimate plan was to take her to Houston to work as a prostitute. In October 2009, Zuniga branded the victim by carving the letter “H” into the left side of her abdomen with a knife.
The victim was finally rescued in November 2009, when Zuniga Castro was arrested for a traffic violation in Cleburne, Texas, and subsequently charged with illegal re-entry in the Northern District of Texas. He was sentenced to 14 months in prison and in February 2011 was deported to Honduras.
Shortly after arriving back in Honduras, Zuniga contacted the victim’s family and eventually obtained the victim’s telephone number in the United States. On one occasion, the victim received a telephone call from her mother with Zuniga standing next to her mother, threatening to kill the victim if she did not answer his telephone calls. Soon afterward, the victim began received threatening telephone calls from Zuniga on a daily basis. During the calls, he would threaten to come to the United States, transport the victim to Houston, where he would force her to earn money for him by becoming a prostitute.
In September 2011, Zuniga told the victim that he was en route to New Jersey from Honduras to get her. Early on the morning of Oct. 11, 2011, Zuniga called the victim and told her that he was at Newark Penn Station. He was apprehended by federal agents and arrested.
The count of attempted sex trafficking is punishable by a maximum statutory penalty of life in prison and a mandatory minimum statutory penalty of 15 years in prison. It also carries a maximum fine of $250,000 and a mandatory minimum term of five years of supervised release. The maximum penalty for stalking is five years in prison and a mandatory minimum term of three years of supervised release.
U.S. Attorney Fishman credited special agents of U.S. Immigration and Customs Enforcement (ICE) Homeland Securities Investigations, under the direction of Special Agent in Charge Andrew M. McLees, with the investigation leading to today’s charges. Zuniga Castro was ordered detained.The government is represented by Assistant U.S. Attorneys Shana W. Chen of the Economic Crimes Unit and Elizabeth M. Harris of the OC/Gangs Unit in Newark.
The charges and allegations contained in the complaints are merely accusations and the defendant is considered innocent unless and until proven guilty.
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Zuniga Complaint
Five Indicted in New Jersey for Largest Known Data Breach ConspiracyRead the Press Release
Hackers Targeted Major Payment Processors, Retailers and Financial Institutions Around the World
NEWARK, N.J. – A federal indictment made public today in New Jersey charges five men with conspiring in a worldwide hacking and data breach scheme that targeted major corporate networks, stole more than 160 million credit card numbers, resulted in hundreds of millions of dollars in losses and is the largest such scheme ever prosecuted in the United States.
New Jersey U.S. Attorney Paul J. Fishman announced the charges today along withSpecial Agent in Charge James Mottola of the U.S. Secret Service (USSS), Criminal Investigations, Newark Division and Acting Assistant Attorney General for the Department of Justice’s Criminal Division Mythili Raman. The USSS led the investigation of the indicted conspiracy.
The defendants allegedly sought corporate victims engaged in financial transactions, retailers that received and transmitted financial data and other institutions with information they could exploit for profit. The defendants are charged with attacks on NASDAQ, 7-Eleven, Carrefour, JCP, Hannaford, Heartland, Wet Seal, Commidea, Dexia, JetBlue, Dow Jones, Euronet, Visa Jordan, Global Payment, Diners Singapore and Ingenicard. It is not alleged that the NASDAQ hack affected its trading platform.
“This type of crime is the cutting edge,” U.S. Attorney Fishman said. “Those who have the expertise and the inclination to break into our computer networks threaten our economic well-being, our privacy, and our national security. And this case shows there is a real practical cost because these types of frauds increase the costs of doing business for every American consumer, every day. We cannot be too vigilant and we cannot be too careful.”
“The defendants charged today were allegedly responsible for spearheading a world-wide hacking conspiracy that victimized a wide array of consumers and entities, causing hundreds of millions of dollars in losses,” Acting Assistant Attorney General Raman said. “Despite substantial efforts by the defendants to conceal their alleged crimes, the Department and its law enforcement counterparts have cracked this extensive scheme and are seeking justice for its many victims. Today’s indictment will no doubt serve as a serious warning to those who would utilize illegal and fraudulent means to steal sensitive information online.”
“As is evident by this indictment, the Secret Service will continue to apply innovative techniques to successfully investigate and arrest transnational cyber criminals,” said Special Agent in Charge Mottola of the Newark Field Office. “While the global nature of cyber-crime continues to have a profound impact on our financial institutions, this case demonstrates the global investigative steps that U.S. Secret Service Special Agents are taking to ensure that criminals will be pursued and prosecuted no matter where they reside.”
According to the second superseding indictment unsealed today in Newark federal court and other court filings:
The five men each served particular roles in the scheme. Vladimir Drinkman, 32, of Syktyykar and Moscow, Russia, and Alexandr Kalinin, 26, of St. Petersburg, Russia, each specialized in penetrating network security and gaining access to the corporate victims’ systems. Roman Kotov, 32, of Moscow, also a hacker, specialized in mining the networks Drinkman and Kalinin compromised to steal valuable data. The hackers hid their activities using anonymous web-hosting services provided by Mikhail Rytikov, 26, of Odessa, Ukraine. Dmitriy Smilianets, 29, of Moscow, sold the information stolen by the other conspirators and distributed the proceeds of the scheme to the participants.
Kalinin and Drinkman were previously charged in New Jersey as “Hacker 1” and “Hacker 2” in a 2009 indictment charging Albert Gonzalez, 32, of Miami, in connection with five corporate data breaches – including the breach of Heartland Payment Systems Inc., which at the time was the largest ever reported. Gonzalez is currently serving 20 years in federal prison for those offenses. The U.S. Attorney’s Office for the Southern District of New York today announced two additional indictments against Kalinin: one charges him in connection with hacking certain computer servers used by NASDAQ and a second indictment, unsealed today, charged Kalinin and another Russian hacker, Nikolay Nasenkov, with an international scheme to steal bank account information by hacking U.S.-based financial institutions. Rytikov was previously charged in the Eastern District of Virginia with an unrelated scheme. Kotov and Smilianets have not previously been charged publicly in the United States.
Drinkman and Smilianets were arrested at the request of the United States while traveling in the Netherlands on June 28, 2012. Smilianets was extradited Sept. 7, 2012, and remains in federal custody. He will appear in District of New Jersey federal court to be arraigned on the superseding indictment on a date to be determined. Drinkman is in custody in the Netherlands pending an extradition hearing. Kalinin, Kotov and Rytikov remain at large. All of the defendants are Russian nationals except for Rytikov, who is a citizen of Ukraine.
The Attacks
The five defendants conspired with others to penetrate the computer networks of several of the largest payment processing companies, retailers and financial institutions in the world, stealing the personal identifying information of individuals. They took user names and passwords, means of identification, credit and debit card numbers and other corresponding personal identification information of cardholders. Conservatively, the conspirators unlawfully acquired more than 160 millioncard numbers through hacking.The initial entry was often gained using a “SQL injection attack.” SQL, or 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. Once the network was infiltrated, the defendants placed malicious code, or malware, on the system. This malware created a “back door,” leaving the system vulnerable and helping the defendants maintain access to the network. In some cases, the defendants lost access to the system due to companies’ security efforts, but were able to regain access through persistent attacks.
Instant message chats obtained by law enforcement reveal the defendants often targeted the victim companies for many months, waiting patiently as their efforts to bypass security were underway. The defendants had malware implanted in multiple companies’ servers for more than a year.The defendants used their access to the networks to install “sniffers,” which were programs designed to identify, collect and steal data from the victims’ computer networks. The defendants then used an array of computers located around the world to store the stolen data and ultimately sell it to others.
Selling the Data
After acquiring the card numbers and associated data – which they referred to as “dumps” – the conspirators sold it to resellers around the world. The buyers then sold the dumps through online forums or directly to individuals and organizations. Smilianets was in charge of sales, vending the data only to trusted identity theft wholesalers. He would charge approximately $10 for each stolen American credit card number and associated data, approximately $50 for each European credit card number and associated data and approximately $15 for each Canadian credit card number and associated data – offering discounted pricing to bulk and repeat customers. Ultimately, the end users encoded each dump onto the magnetic strip of a blank plastic card and cashed out the value of the dump by either withdrawing money from ATMs or making purchases with the cards.
Covering Their Tracks
The defendants used a number of methods to conceal the scheme. Unlike traditional Internet service providers, Rytikov allowed his clients to hack with the knowledge he would never keep records of their online activities or share information with law enforcement.
Over the course of the conspiracy, the defendants communicated through private and encrypted communications channels to avoid detection. Fearing law enforcement would intercept even those communications, some of the conspirators attempted to meet in person.
To protect against detection by the victim companies, the defendants altered the settings on victim company networks to disable security mechanisms from logging their actions. The defendants also worked to evade existing protections by security software.
As a result of the scheme, financial institutions, credit card companies and consumers suffered hundreds of millions in losses – including more than $300 million in losses reported by just three of the corporate victims – and immeasurable losses to the identity theft victims in costs associated with stolen identities and false charges.
The maximum potential penalties for each defendant per count are as follows:
Count(s)Defendants
Violation
Maximum Penalty/Count
All
Conspiracy to gain unauthorized access to computers
5 years; $250,000 fine or twice the gain or loss from the offense
2
All
Conspiracy to commit wire fraud
30 years; $1 million fine or twice the gain or loss from the offense
3-8
Drinkman
Kalinin
Kotov
SmilianetsUnauthorized access to computers
5 years; $250,000 fine or twice the gain or loss from the offense
9-11
Drinkman
Kalinin
Kotov
SmilianetsWire fraud
30 years; $1 million fine or twice the gain or loss from the offense
U.S. Attorney Fishman credited the special agents of the U.S. Secret Service, Criminal Investigations, under the direction of Director Pierson, and special agents from the Newark Division, under the direction of Special Agent in Charge James Mottola, for the ongoing investigation leading to today’s charges.
The government is represented by Erez Liebermann, Deputy Chief of the New Jersey U.S. Attorney’s Office Criminal Division; Assistant U.S. Attorney Gurbir Grewal of the Computer Hacking and Intellectual Property Section of the Office’s Economic Crimes Unit; and Trial Attorney James Silver of the Department of Justice’s Computer Crime and Intellectual Property Section in Washington.
U.S. Attorney Fishman thanked the Department’s Office of International Affairs in Washington for their extraordinary support, as well as public prosecutors with the Dutch Ministry of Security and Justice and the National High Tech Crime Unit of the Dutch National Police. Fishman also acknowledged the U.S. Attorney’s Offices in the District of Kansas and the Northern District of Georgia for their valuable contributions in the development of the prosecution.
The charges and allegations contained in the indictment are merely accusations and the defendants are considered innocent unless and until proven guilty.
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Defense counsel:
Vladimir Drinkman: Bart Stapert Esq., Amsterdam, Netherlands (for Netherlands-based proceedings)
Dmitriy Smilianets: Bruce Provda Esq., Queens, N.Y.Drinkman, Vladimir et al., Indictment
Two More Arrested in Ongoing Probe of Armed Phone Store Robberies in Paramus and Woodbridge, N.J.Read the Press Release
NEWARK, N.J. – FBI special agents arrested two men in Brooklyn, N.Y., this morning in connection with armed robberies of T-Mobile stores in Paramus and Woodbridge, N.J., U.S. Attorney Paul J. Fishman announced.
Unique Randolph, 26, and Sulayman Graham, 30, both of Brooklyn, are charged in separate criminal complaints with one count each of committing a Hobbs Act robbery. Randolph is also charged with one count of using a firearm in furtherance of that robbery. Both defendants are scheduled to appear today before U.S. Magistrate Judge Michael A. Hammer in Newark federal court.
According to the two criminal complaints unsealed today and other documents filed in connection with this case:
The FBI has been investigating a series of armed robberies in Bergen, Middlesex and Union Counties, as well as other locations, between May 2012 and January 2013 – including armed robberies of T-Mobile stores in Linden, Woodbridge and Paramus, N.J. Four other N.Y. men – Terrell McQueen, Leonard Arrington, Carl Williams and Eric Williams (no relation) – were previously arrested and indicted in connection with this investigation. The charges against those four defendants remain pending.
On Jan. 16, 2013, Randolph and another man entered the T-Mobile store in Paramus, N.J. After tying up two employees and a customer and forcing them to lie on the floor, the men forced a third employee, at gunpoint, to fill two laundry bags with more than 70 cell phones. Afterward, the men left the employee tied up on the floor with the others.
During the robbery, a UPS employee walked into the store and was forced at gunpoint to join the restrained group.
On Oct. 2, 2012, Arrington entered a T-Mobile store in Woodbridge, carrying a gun, along with another man. After locking the front door, the men took the employees to the back of the store and tied them up, then stole approximately 40 cell phones. One of the robbers then called the getaway driver, Graham, who drove them away in a Land Rover. McQueen, Eric Williams and others delivered the stolen phones to the same Brooklyn store.
The charges of Hobbs Act robbery carry a maximum potential penalty of 20 years in prison. The charge of use of a firearm in furtherance of a crime of violence carries a maximum potential penalty of life in prison and a mandatory minimum sentence of seven years, which must run consecutively to one another and to any other prison term. Each of the counts also carries a maximum fine of $250,000.
U.S. Attorney Fishman praised special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, with the investigation leading to the arrest and charges. He also thanked the Linden and Woodbridge Police Departments in New Jersey, as well as the New York City and Nassau County Police Departments and the Kings County District Attorney’s Office in New York for their excellent work in this case.
The government is represented by Assistant U.S. Attorneys Osmar J. Benvenuto and Nicholas P. Grippo of the U.S. Attorney’s Office General Crimes Unit in Newark.The charges and allegations contained in the complaints and indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
13-307Graham Complaint
Randolph ComplaintNew Jersey Doctor Faces New Charges He Took Kickbacks, Failed to File TaxesRead the Press Release
NEWARK, N.J. – A federal grand jury returned an indictment today against a Livingston, N.J., physician with medical practices in Verona and East Orange, N.J., for allegedly conspiring to receive thousands of dollars in cash kickbacks in exchange for referrals and for failing to file tax returns on nearly $1 million in income, U.S. Attorney Paul J. Fishman announced.
Yash Khanna, 71, a family physician and the owner and operator of Family Medicine & Pediatrics, LLC, in East Orange, and West Essex Medical Group, PA, in Verona, is charged in the six-count superseding indictment with one count of conspiracy to violate the federal health care Anti-Kickback Statute, two separate counts alleging substantive violations of the Anti-Kickback Statute and three counts of willfully failing to file a federal tax return.
Khanna was originally arrested on a complaint in December 2011 and indicted in May 2012 on one count of violating the Anti-Kickback Statute in relation to a two-year scheme to receive cash kickbacks in exchange for his diagnostic testing referrals to Orange, N.J.-based Orange Community MRI. The new charges allege a conspiracy lasting at least three years and that he failed to file tax returns for approximately $1 million in income – including the kickback income – from 2008 through 2010.
According to the superseding indictment:
From at least as early as 2009 through December 2011, Khanna conspired with Orange MRI to solicit and receive cash kickbacks from the facility in return for referring patients for diagnostic tests such as MRIs and CAT scans. Khanna and Orange MRI representatives negotiated the value of kickbacks that Orange MRI would pay him per test he referred, and they were paid for a period of at least three years.
Specifically, Khanna and Orange MRI’s executive director agreed Khanna would be paid $50 for every MRI referral of a Medicare or Medicaid patient and $75 for every MRI referral of a patient with private health insurance.
Khanna also failed to file federal tax returns for 2008, 2009, and 2010, even though he earned considerable income – including illegal income – during that time period: approximately $381,000 in 2008, $400,000 in 2009 and $214,000 in 2010.
The conspiracy and kickback charges each carry a maximum potential penalty of five years in prison and a $250,000 fine, or twice the loss caused by the offense. The tax charges each carry a maximum potential penalty of a year in prison and a $100,000 fine, or twice the loss caused by the offense.
U.S. Attorney Fishman credited special agents of the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Thomas O’Donnell, and IRS-Criminal investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen, with the investigation leading to today’s charges.
The government is represented by Assistant U.S. Attorney Scott B. McBride and Deputy Chief Joseph G. Mack of the U.S. Attorney’s Office Health Care and Government Fraud Unit.
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Defense counsel: Christopher L. Patella Esq.; Bayonne, N.J.
Khanna Superseding Indictment
Doctor Admits Accepting $1.8 Million in Bribes for Test Referrals to New Jersey Clinical LaboratoryRead the Press Release
NEWARK, N.J. – A Morris County, N.J., doctor today admitted accepting $1.8 million in bribes to refer millions of dollars in business to Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, N.J., as part of a long-running scheme operated by the lab, its president, and numerous associates, U.S. Attorney Paul J. Fishman announced.
Frank Santangelo, 43, of Boonton, N.J., pleaded guilty before U.S. District Judge Stanley R. Chesler in Newark federal court to an information charging him with violating the Travel Act, money laundering and failing to file tax returns.
“Patients should be able to trust that their doctors are prescribing only tests that are necessary and are recommending providers who are best qualified to perform those tests,” U.S. Attorney Fishman said. “In pleading guilty today to the charges against him, Dr. Santangelo admitted he violated that trust. He committed the type of fraud that drives up the cost of health care and compromises patient care.”“The investigation of Dr. Santangelo is another sad story of a doctor putting his greed ahead of his oath of fidelity to his patients,” FBI New Jersey Special Agent in Charge Aaron T. Ford said. “The plea today is a direct result of the joint efforts of Health and Human Services-Office of Inspector General, United States Postal Inspection Service, Internal Revenue Service, and Federal Bureau of Investigation, who remain committed to protecting the American public from those who would abuse the health care needs of innocent patients for their own financial gain.”
According to documents filed in this and other cases and statements made in court:
Santangelo, who has offices in Montville, N.J., and Wayne, N.J., received more than $1.8 million in bribe payments from BLS for referrals for which the lab was paid more than $6 million by Medicare and various insurance companies. After receiving more than $800,000 from BLS through sham lease agreements and sham service agreements between 2006 and 2010, Santangelo began receiving bribes from BLS through a third party – often tens of thousands of dollars a month – totaling more than $1 million between 2010 and his arrest in April 2013.
Santangelo acknowledged the authenticity of text messages between himself and BLS president and part owner David Nicoll in which Santangelo referred to ordering unnecessary tests to increase referrals to BLS in exchange for bribes. In one text message conversation, Santangelo said he and another doctor had “put our heads together and added a significant amount of testing…. The testing is 90 percent legit.” Santangelo detailed his plan to send $1 million per month in blood testing referrals to BLS by increasing the number of blood tests being ordered, including medically unnecessary tests.
In another text message conversation, David Nicoll wrote to Santangelo about the status of their referral agreement, stating that BLS “really can’t afford the 40-50,000 [dollars] a month if the girls aren’t going to be drawing any blood,” to which Santangelo responded by stating, “U no u can count on me!” and “I never let u down!”
He also pleaded guilty to money laundering, admitting that he used another individual in an attempt to hide the bribes from BLS, and to failing to file tax returns from 2009-2011 and pay taxes owed during that time period.
On April 9, 2013, federal agents arrested David Nicoll, 39, of Mountain Lakes, N.J.; Scott Nicoll, 32, of Wayne, N.J., a senior BLS employee and David Nicoll’s brother; and Craig Nordman, 34, of Whippany, N.J., a BLS employee and the CEO of Advantech Sales LLC – an entity used by BLS to make illegal payments. They were charged by federal complaint with the bribery conspiracy, along with the BLS company and Santangelo. Last month, David and Scott Nicoll and four other associates of BLS pleaded guilty to charges related to their involvement. So far, nine employees or associates of BLS, and four physicians have pleaded guilty to their roles in the bribery scheme.
“When a doctor prescribes a medical test, patients should feel confident that it is in their best interest,” said Thomas O’Donnell, Special Agent in Charge, Office of Inspector General, Department of Health and Human Services, New York region. “But when that doctor accepts more than a million dollars in bribes as Dr. Santangelo did, he jeopardizes patient-doctor trust, his patients’ health, and the integrity of the Medicare program, and will be prosecuted accordingly.”
The bribery count to which Santangelo pleaded guilty is punishable by a maximum potential penalty of five years in prison and a $250,000 fine. He also faces a maximum potential penalty of 20 years in prison and a $500,000 fine on the money laundering charge, or twice the gross gain or loss from the offense, and a maximum potential penalty of one year in prison and a $100,000 fine on the tax charge. Sentencing for Santangelo is scheduled for Oct. 24, 2013.
Santangelo has also agreed to forfeit more than $1.8 million. The investigation has so far recovered more than $2 million through forfeiture.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Tom O’Donnell; IRS–Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen, and the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, with the ongoing investigation leading to today’s guilty pleas.
The government is represented by Senior Litigation Counsel Andrew Leven, Assistant U.S. Attorney Joseph Minish, and Jacob T. Elberg, Chief of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark, as well as Assistant U.S. Attorney Barbara Ward of the office’s Asset Forfeiture and Money Laundering Unit.
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Defense counsel: Thomas Ambrosio Esq., Lyndhurst, N.J.
Santangelo Information
Staten Island, N.Y., Man Sentenced to 114 Months in Prison for Jewelry Store RobberyRead the Press Release
TRENTON, N.J. – A Staten Island, N.Y., man was sentenced today to 114 months for his role in the robbery of Blue Stove Antiques in Fair Haven, N.J., on June 2, 2012, U.S. Attorney Paul J. Fishman announced.
Robert A. Fiolka, 69, previously pleaded guilty before U.S. District Judge Freda L. Wolfson to an information charging him with Hobbs Act robbery and use of a firearm in furtherance of a crime of violence. Judge Wolfson imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:
Fiolka entered Blue Stove Antiques in Fair Haven at approximately 9:30 a.m., on June 2, 2012, wearing a hat and flesh-colored face mask and brandishing a handgun. Fiolka approached the store owner, pointed the handgun at him and demanded that he open the store’s safe. After the owner opened the safe, Fiolka ordered him to the ground and then proceeded to empty the safe’s contents into a satchel that he had with him. After filling the bag with the safe’s contents, Fiolka exited the store with approximately $200,000 worth of jewelry.
In addition to the prison term, Judge Wolfson sentenced Fiolka to five years of supervised release and ordered him to pay $200,000 in restitution.
U.S. Attorney Fishman credited special agents with the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, with the investigation leading to today’s sentence; he also thanked the Colts Neck Police Department, Fair Haven Police Department, Old Bridge Police Department, Wall Township Police Department, and the Monmouth County Prosecutor’s Office for their roles in the case.
The government is represented by Assistant U.S. Attorney Fabiana Pierre-Louis of the Criminal Division in Trenton.
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Defense counsel: John W. Mitchell Esq., New York, and Jerome A. Ballarotto Esq., TrentonSix People Charged in Connection with Large-Scale Stolen Identity Refund Fraud SchemeRead the Press Release
NEWARK, N.J. – Six people allegedly involved in an extensive scheme to obtain millions of dollars through fraudulently obtained refund checks issued by the U.S. Treasury were charged today for their involvement in the scam, U.S. Attorney Paul J. Fishman announced.
Julio C. Concepcion, 48; Angel L. Concepcion-Vasquez, 29; Jose R. Zapata, 65; and Reyes Flores-Perez, 29, all of Passaic, N.J.; and Romy E. Quezada, 22, of Lake Mary, Fla., were arrested this morning by special agents of IRS-Criminal Investigation, postal inspectors from the U.S. Postal Inspection Service, and special agents of the U.S. Secret Service. A sixth defendant, Freddy Gabino-Martinez, 24, of Passaic, remains at large. Concepcion, Concepcion-Vasquez, Gabino-Martinez, and Zapata are charged with conspiracy to steal government funds, Flores-Perez is charged with transferring false identification documents, and Quezada is charged with theft of government funds.
The four defendants arrested in New Jersey are expected to make their initial appearances this afternoon before U.S. Magistrate Judge Michael Hammer in Newark federal court. Quezada was arrested in Florida and will make her initial appearance in Orlando federal court.
According to the criminal Complaints unsealed today:
Background on Stolen Identify Refund Fraud
Stolen Identity Refund Fraud (SIRF) is a common type of fraud committed against the United States government that results in more than $2 billion a year in losses to the U.S. Treasury. SIRF schemes generally share a number of hallmarks:
- SIRF perpetrators obtain personal identifying information, including Social Security numbers and dates of birth, from unwitting individuals, who often reside in the Commonwealth of Puerto Rico.
- SIRF perpetrators complete Form 1040 tax returns using the fraudulently obtained information and falsifying wages earned, taxes withheld, and other data, always ensuring that the fraudulent tax return generates a refund.
- They direct the U.S. Treasury Department to mail refund checks to locations that the perpetrators control or can access.
- With the fraudulently obtained refund checks in hand, SIRF perpetrators generate cash proceeds by depositing the checks into bank accounts that they control.
The Investigation
From October 2009 through December 2012, Concepcion, Concepcion-Vasquez, Gabino-Martinez, and Zapata engaged in a SIRF scheme that resulted in more than $2.5 million in losses to the U.S. Treasury. The conspirators obtained fraudulent tax refund checks, then deposited them into bank accounts that they controlled, often in the name of “dummy” corporations created to facilitate the scheme. They then transferred hundreds of dollars to others, including Concepcion’s wife, his children, and his children’s companions. Quezada is charged with depositing fraudulent treasury checks into an account that she opened and controlled, and Flores-Perez is charged with transferring fraudulent identification documents, including fake driver’s licenses and Social Security cards, used to further the SIRF scheme.
The conspiracy charge and the theft of government funds charge are punishable by a maximum potential penalty of 10 years in prison. The transfer of fraudulent documents charge is punishable by a maximum potential penalty of 15 years in prison. All charges are also punishable by a fine of up to $250,000, or twice the gain or loss caused by the offense.U.S. Attorney Fishman credited special agents of the IRS-Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen; postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates; special agents of the U.S. Secret Service, under the direction of Special Agent in Charge James Mottola; and the Passaic County Prosecutor’s Office, under the direction of Prosecutor Camelia M. Valdes, with the investigation leading to today’s arrests and charges.
The government is represented by Assistant U.S. Attorney Andrew J. Bruck of the U.S. Attorney’s Office Organized Crime/Gangs Unit in Newark.
The charges and allegations contained in the Complaints are merely accusations, and the defendants are considered innocent unless and until proven guilty.
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Defense counsel:
Concepcion: Paulette Pitt Esq., Perth Amboy, N.J.
Concepcion-Vasquez: Rubin Sinins Esq., Newark
Zapata: Elizabeth Smith Esq., Mendham, N.J.
Flores-Perez: John Whipple Esq., Chatham, N.J.Concepcion, Julio et al., Complaint
Flores-Perez,Reyes Complaint
Quezada, Romy ComplaintShipping Corporations Sentenced to $10.4 Million Monetary Penalty for Environmental Crimes on Four ShipsRead the Press Release
WASHINGTON – Two shipping firms based in Germany and Cyprus were sentenced today to a $10.4 million monetary penalty for felony obstruction of justice charges and violating the Act to Prevent Pollution from Ships related to the deliberate concealment of vessel pollution from four ships that visited ports in New Jersey, Delaware and Northern California, the U.S. Attorney’s Offices in New Jersey and Delaware, the Department of Justice Environment and Natural Resources Division and the U.S. Coast Guard announced.
Columbia Shipmanagement (Deutschland) GmbH (CSM-D), a German corporation, and Columbia Shipmanagement Ltd. (CSM-CY), a Cypriot company, were sentenced to pay a $10.4 million criminal penalty, $2.6 million of which will be directed to the National Fish and Wildlife Foundation to fund community service projects selected to help restore the coastal environment of New Jersey and Delaware hit by Hurricane Sandy. The remaining $7.8 million is designated as a criminal fine. The companies were also placed on four years of probation, during which they will be subject to the terms of an environmental compliance plan that requires outside audits by an independent company and oversight by a court-appointed monitor. The shipping firms admitted that four of their ships (three oil tankers and one container ship) had intentionally bypassed required pollution prevention equipment and falsified the oil record book, a required log regularly inspected by the U.S. Coast Guard. The case is the largest vessel pollution settlement in either New Jersey or Delaware.
The companies previously pleaded guilty before U.S. District Judge Susan D. Wigenton on March 21, 2013, to six counts involving three vessels in New Jersey and four counts involving one ship in Delaware. The counts consist of violations of the Act to Prevent Pollution from Ships for failing to maintain an accurate oil record book, obstruction of justice and making false statements.
According to documents filed in this case and statements made in court:The investigation into the M/T King Emerald was launched on May 7, 2012, after several crew members provided cell phone photos and other evidence to Coast Guard officers conducting a routine inspection. The King Emerald was engaged in various types of illegal discharges of bilge waste dating back to at least 2010. The defendants admitted that illegal discharges of both sludge and oily bilge waste were discharged at night off the coast of Central America, including a discharge within the Exclusive Economic Zone of Costa Rica where a national park is located. The ship’s second engineer previously pleaded guilty and was sentenced in Newark on April 3, 2013, to two years of probation.
The Delaware investigation began in October 2012 after several crew members of the M/T Nordic Passat provided the Coast Guard with a thumb drive containing photographs and video showing how illegal discharges had been sent overboard through the ship’s sewage system. They also alleged that sludge had been put into the ship’s cargo tanks and that logs showing sludge had been incinerated onboard had been falsified. The charges involving the M/V Cape Maas stem from a whistleblower report to the Coast Guard when the ship visited the port in San Francisco. The whistleblower provided a video showing the operation of the oily water separator pumping overboard without the use of the oil content monitor to detect and prevent oil from being illegally discharged.
Violations on a fourth ship, the M/T Cape Taft, which was anchored in New York waters and destined for New Jersey, were uncovered just weeks before the March plea, after the ship disclosed problems to CSM-D. An internal investigation revealed that the ship’s oily water separator had been used improperly for some time. Instead of sensing a sample of overboard discharges, it was instead flushed with fresh water by the crew. The ship’s oil record book was revised by CSM-D to reveal 16 instances where it was false. The defendants cooperated with the investigation and provided the government with video replays of the oil content monitor showing when the crew had “tricked” the sensor with fresh water.
This prosecution was made possible through the combined efforts of the U.S. Coast Guard Districts 1, 5 and 11; Coast Guard Sectors New York, Delaware Bay, and San Francisco; Coast Guard Investigative Service; Coast Guard Office of Maritime and International Law; and Coast Guard Office of Investigation and Analysis.
The government is represented by Assistant U.S. Attorney Kathleen P. O’Leary in New Jersey; Senior Counsel Richard Udell and Trial Attorney Stephen Da Ponte of the Environmental Crimes Section of the U.S. Department of Justice Environment and Natural Resources Division; and Edmond Falgowski, Assistant U.S. Attorney in Delaware. Assistance was also provided by the U.S. Attorney’s Office for the Northern District of California.
13-305Defense counsel: Thomas L. Mills Esq., Washington, D.C.
Leader of Irvington, N.J., Gang Sentenced to More Than 27 Years in Prison for Crack Cocaine Distribution ConspiracyRead the Press Release
NEWARK, N.J. – The leader of the Irvington, N.J., Brick City Brims set of the Bloods street gang was sentenced to 325 months in prison today for his involvement in a large-scale conspiracy to distribute more than 280 grams of crack cocaine, U.S. Attorney Paul J. Fishman announced.
Mark Manasse, a/k/a “M-Ease,” 28, of Irvington, previously pleaded guilty before U.S. District Court Judge Jose L. Linares to one count of a superseding indictment, charging him with knowingly and intentionally conspiring to distribute 280 grams or more of the drug. Judge Linares imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Manasse was a leader of the Bloods street gang known as the Brick City Brims, who were distributing significant amounts of crack cocaine in and around the city of Irvington and elsewhere from February 2010 through April 2011. Manasse and his conspirators controlled the drug trafficking in and around the areas of 18th Street and Columbia Avenue in Irvington. Manasse maintained control of drug trafficking in these areas through the use of violence and intimidation.
Manasse and more than a dozen others were arrested on April 19, 2011, by special agents with U.S. Immigration and Customs Enforcement, Homeland Security Investigations (ICE HSI) along with officers of the N.J. State Police and Irvington Police Department.
During the investigation, federal agents used a confidential source who was able to infiltrate the gang. Federal agents identified two cell phones Manasse used to conduct his narcotics trafficking activity and obtained court orders authorizing interception of drug-related phone calls. The agents intercepted thousands of calls during which Manasse discussed, orchestrated and directed the distribution of drugs. The calls also showed that Manasse directed, ordered and participated in acts of violence in order to maintain and protect the drug trafficking activity of the Brick City Brims in Irvington.
In addition to the prison term, Judge Linares sentenced Manasse to five years of supervised release. As a special condition of the supervised release, Judge Linares also banned Manasse from associating with any known street gang or organized crime members.
U.S. Attorney Fishman credited special agents of ICE HSI in Newark, under the direction of Special Agent in Charge Andrew M. McLees; the New Jersey State Police, under the direction of Superintendent Col. Joseph R. Fuentes; the Irvington Police Department, under the direction of Deputy Chief of Police Dwayne Mitchell, Senior Law Enforcement in Charge and Director Joseph Santiago; and the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Carolyn A. Murray.
The government is represented by Assistant U.S. Attorney Michael H. Robertson of the U.S. Attorney’s Office Criminal Division in Newark.13-304
Defense counsel: Kathleen M. Theurer Esq., Jersey City, N.J.
Director of Operations of North Bergen, N.J., Housing Authority Sentenced to 46 Months in Prison for ExtortionRead the Press Release
NEWARK, N.J. – The director of operations for the Housing Authority of the Township of North Bergen, N.J., was sentenced today to 46 months in prison for extorting employees of a maintenance company contracted by the authority, U.S. Attorney Paul J. Fishman announced.
John T. Kennell, 50, of North Bergen, previously pleaded guilty before U.S. District Judge Jose L. Linares to an information charging him with extortion under color of official right and by fear of economic harm. Judge Linares imposed the sentence today in Newark federal court.
According to documents filed in the case and statements made in court:
While the director of operations for the NBHA, Kennell used his official position to extort cash payments from employees of a company that provided repair and grounds maintenance services. Kennell, who supervised the employees of the company working for the Authority, accepted cash payments in amounts ranging from $100 to $400 from employees for, among other things, securing additional paid vacation days for these employees. Kennell assisted in securing these additional paid vacation days by falsely reporting to the company that the employees were working at the NBHA, when they were, in fact, traveling outside of the United States. Between February 2008 and June 2011, the company compensated employees for approximately 80 days of unauthorized vacation, totaling $12,498, because of Kennell’s actions.Kennell accepted $2,000 to $2,500 in payments for his official assistance in this fraud. He also accepted cash payments of $50 to $100 from an undocumented alien employee of the company for permitting that employee to twice change the alias that employee was using to continue working. Using his position of authority, as well as the threat of termination of employment, Kennell also regularly extorted the employees of the company – sometimes as frequently as twice a month – for cash payments in amounts ranging from $10 to $20 per employee.
In addition to the prison term, Judge Linares sentenced Kennell to three years of supervised release and ordered him to pay a $5,000 fine.U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, and special agents of U.S. Department of Housing and Urban Development Office of Inspector General, under the direction of Special Agent in Charge Cary A. Rubenstein, and criminal investigators from the U.S. Attorney’s Office in Newark, with the investigation leading to today’s sentence.
The government is represented by Assistant U.S. Attorney Lee M. Cortes Jr. of the U.S. Attorney’s Office Special Prosecutions Division in Newark.
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Defense Counsel: Arthur R. Carmano Esq., Englewood, N.J.Albanian National Sentenced to Nine Years in Prison for Robbing Two TD Banks in Passaic and Bergen CountiesRead the Press Release
NEWARK, N.J. – An Albanian national who was living in Clifton, N.J., was sentenced today to 108 months in prison for robbing two TD Bank branches while armed with a gun in late 2011, U.S. Attorney Paul J. Fishman announced.
Arlind Hyseni, 31, also known as “Shpend Mazari” and “Luie Belushi,” previously pleaded guilty to an information charging him with two counts of bank robbery. One of the robberies occurred on Nov. 2, 2011, in Clifton in Passaic County, N.J., and the other on Dec. 30, 2011, in Wallington in Bergen County, N.J.
Hyseni pleaded guilty before U.S. District Judge Esther Salas. He was initially charged as Mazari, but admitted at his plea hearing that Hyseni is his real name. Judge Salas imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
On Nov. 2, 2011, Hyseni entered a TD Bank in Clifton armed with a handgun and disguised with a baseball cap and a mask covering the lower part of his face. He ordered two bank employees to go to the vault and turn over cash, which they placed into a dark nylon bag.
Hyseni left the bank with the money, which included several “bait” bills and a dye pack. Hyseni discarded the money a short distance from the scene after the dye pack exploded.
On Dec. 30, 2011, Hyseni entered a TD Bank in Wallington shortly after it opened. He vaulted over the teller counter wearing a mask and armed with a handgun. He again ordered bank employees to go to the vault and hand over cash before fleeing with the money.
In addition to the prison term, Judge Salas sentenced Hyseni to serve three years of supervised release. Hyseni was also ordered to pay $20,715 in restitution.
In arguing for an increased sentence, the government noted Hyseni was convicted in absentia in Albania of robbery resulting in death and illegal possession of military weapons and sentenced to 25 years in prison.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, and Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Andrew M. McLees, with the investigation.
The government is represented by Assistant U.S. Attorney Mala Ahuja Harker of the U.S. Attorney’s Office Criminal Division in Newark.
13-302Defense counsel: Assistant Federal Public Defender David Holman Esq., Newark
New York Doctor Sentenced to Nine Years in Prison for Oxycodone Distribution and ConspiracyRead the Press Release
TRENTON, N.J. – A physician who wrote illegal prescriptions for oxycodone was sentenced today to 108 months in prison for his participation in a conspiracy to illegally distribute the medication, U.S. Attorney Paul J. Fishman announced.
Dr. Hassan Lahham, 55, of New York, previously pleaded guilty before U.S. District Judge Freda L. Wolfson in Trenton federal court to Count One of an Indictment charging him with conspiring to distribute oxycodone.
According to documents filed in this case and statements made in court:Since January 2009, Lahham issued prescriptions to co-conspirators for drugs containing oxycodone, outside the usual course of medical practice and not for any legitimate medical purpose. The prescriptions were filled at various New Jersey pharmacies located in and around Monmouth, Ocean, and Atlantic counties and redistributed by others. Lahham wrote the prescriptions in exchange for cash payments, and knew the pills were to be redistributed.
Oxycodone, the active ingredient in brand name pills such as Oxycontin, Roxicodone and Percocet, is a Schedule II controlled substance – meaning that it has a high potential for abuse, a currently accepted medical use with severe restrictions, and abuse of the drug may lead to severe psychological or physical dependence.
In addition to the prison term, Judge Wolfson sentenced Lahham to three years of supervised release.U.S. Attorney Fishman credited the Drug Enforcement Administration’s New Jersey Division under the direction of Special Agent in Charge Carl J. Kotowski, along with the Special Agents, Diversion Investigators, Task Force Officers, Detectives and Intelligence Analysts of the Atlantic City Resident Office; Camden Resident Office Diversion Group; Seaside Heights Police Department; Barnegat Police Department; Ship Bottom Police Department; and the N.J. DEA Tactical Diversion Squad, with the investigation leading to today’s sentence.
The government is represented by Assistant U.S. Attorneys R. Joseph Gribko and Fabiana Pierre-Louis of the U.S. Attorney’s Office in Trenton.
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Defense counsel: Frank P. Arleo Esq., West Orange, N.J.
New York Doctor Sentenced to Nine Years in Prison for Oxycodone Distribution and ConspiracyRead the Press Release
TRENTON, N.J. – A physician who wrote illegal prescriptions for oxycodone was sentenced today to 108 months in prison for his participation in a conspiracy to illegally distribute the medication, U.S. Attorney Paul J. Fishman announced.
Dr. Hassan Lahham, 55, of New York, previously pleaded guilty before U.S. District Judge Freda L. Wolfson in Trenton federal court to Count One of an Indictment charging him with conspiring to distribute oxycodone.
According to documents filed in this case and statements made in court:Since January 2009, Lahham issued prescriptions to co-conspirators for drugs containing oxycodone, outside the usual course of medical practice and not for any legitimate medical purpose. The prescriptions were filled at various New Jersey pharmacies located in and around Monmouth, Ocean, and Atlantic counties and redistributed by others. Lahham wrote the prescriptions in exchange for cash payments, and knew the pills were to be redistributed.
Oxycodone, the active ingredient in brand name pills such as Oxycontin, Roxicodone and Percocet, is a Schedule II controlled substance – meaning that it has a high potential for abuse, a currently accepted medical use with severe restrictions, and abuse of the drug may lead to severe psychological or physical dependence.
In addition to the prison term, Judge Wolfson sentenced Lahham to three years of supervised release.U.S. Attorney Fishman credited the Drug Enforcement Administration’s New Jersey Division under the direction of Special Agent in Charge Carl J. Kotowski, along with the Special Agents, Diversion Investigators, Task Force Officers, Detectives and Intelligence Analysts of the Atlantic City Resident Office; Camden Resident Office Diversion Group; Seaside Heights Police Department; Barnegat Police Department; Ship Bottom Police Department; and the N.J. DEA Tactical Diversion Squad, with the investigation leading to today’s sentence.
The government is represented by Assistant U.S. Attorneys R. Joseph Gribko and Fabiana Pierre-Louis of the U.S. Attorney’s Office in Trenton.
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Defense counsel: Frank P. Arleo Esq., West Orange, N.J.
Hudson County, N.J., Man Convicted of Sexually Abusing Sleeping Woman on Domestic FlightRead the Press Release
NEWARK, N.J. – A Hudson County, N.J., man was convicted by a federal jury today of sexually abusing a sleeping woman aboard a flight from Phoenix to Newark Liberty International Airport last summer, U.S. Attorney Paul J. Fishman announced.
Bawer Aksal, 49, of North Bergen, N.J., was convicted of one count of sexual abuse and one count of abusive sexual contact following a five-day trial before U.S. District Judge Jose L. Linares in Newark federal court. The jury deliberated seven hours before returning its guilty verdicts.According to documents filed in this case and the evidence presented at trial:
Aksal was a passenger on a United Airlines flight from Phoenix to Newark on August 20, 2012. He was sitting in the middle seat in a row of three seats. Neither Aksal, the victim, who was seated in the window seat, nor the passenger in the aisle seat knew each other. Before take-off, the victim texted a friend complaining about Aksal’s arm encroaching into her seating area.
About one hour before landing, the aisle passenger looked to his right and saw Aksal half into the victim’s seat, with his body against the victim’s, his right arm around the back of her and his left hand beneath a sweater that was draped over her. The victim awoke to find Aksal’s hands inside her shirt and shorts and struggled out of his grasp. The aisle passenger observed her jolting awake. The aisle passenger and the victim both gathered their belongings and headed to the back of the plane to report what happened to the flight attendants.
Aksal was detained upon arrival in Newark and arrested by agents of the FBI. He now faces a maximum potential sentence of life in prison and a $250,000 fine. Sentencing before Judge Linares is scheduled for Oct. 23, 2013.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, and the Port Authority Police Department, under the direction of Superintendent Michael Fedorko, with the investigation leading to today’s conviction.
The government is represented by Assistant U.S. Attorneys Danielle Alfonzo Walsman and Robert Frazer of the U.S. Attorney’s Office Criminal Division in Newark.The federal government has exclusive jurisdiction over all sexual abuse cases that occur in American airplanes, as such events are outside the jurisdiction of any state.
13-299Defense counsel: Robert J. Degroot Esq., Newark
Hudson County, N.J., Man Convicted of Sexually Abusing Sleeping Woman on Domestic FlightRead the Press Release
NEWARK, N.J. – A Hudson County, N.J., man was convicted by a federal jury today of sexually abusing a sleeping woman aboard a flight from Phoenix to Newark Liberty International Airport last summer, U.S. Attorney Paul J. Fishman announced.
Bawer Aksal, 49, of North Bergen, N.J., was convicted of one count of sexual abuse and one count of abusive sexual contact following a five-day trial before U.S. District Judge Jose L. Linares in Newark federal court. The jury deliberated seven hours before returning its guilty verdicts.According to documents filed in this case and the evidence presented at trial:
Aksal was a passenger on a United Airlines flight from Phoenix to Newark on August 20, 2012. He was sitting in the middle seat in a row of three seats. Neither Aksal, the victim, who was seated in the window seat, nor the passenger in the aisle seat knew each other. Before take-off, the victim texted a friend complaining about Aksal’s arm encroaching into her seating area.
About one hour before landing, the aisle passenger looked to his right and saw Aksal half into the victim’s seat, with his body against the victim’s, his right arm around the back of her and his left hand beneath a sweater that was draped over her. The victim awoke to find Aksal’s hands inside her shirt and shorts and struggled out of his grasp. The aisle passenger observed her jolting awake. The aisle passenger and the victim both gathered their belongings and headed to the back of the plane to report what happened to the flight attendants.
Aksal was detained upon arrival in Newark and arrested by agents of the FBI. He now faces a maximum potential sentence of life in prison and a $250,000 fine. Sentencing before Judge Linares is scheduled for Oct. 23, 2013.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, and the Port Authority Police Department, under the direction of Superintendent Michael Fedorko, with the investigation leading to today’s conviction.
The government is represented by Assistant U.S. Attorneys Danielle Alfonzo Walsman and Robert Frazer of the U.S. Attorney’s Office Criminal Division in Newark.The federal government has exclusive jurisdiction over all sexual abuse cases that occur in American airplanes, as such events are outside the jurisdiction of any state.
13-299Defense counsel: Robert J. Degroot Esq., Newark
Three Involved in the Kidnapping and Murder of Atlantic City Woman Plead GuiltyRead the Press Release
CAMDEN, N.J. – Three Atlantic City, N.J., residents today admitted their roles in the kidnapping and death of a 20-year-old Atlantic City woman, U.S. Attorney Paul J. Fishman announced.
Shameria Smith, 26, Aziz Sanders, 20, and Deshawn Hicks, 21, each pleaded guilty before U.S. District Judge Joseph H. Rodriguez to separate, one-count informations charging them with use of a firearm, and aiding and abetting the use of a firearm, in furtherance of a crime of violence – specifically, the Hobbs Act robbery and kidnapping that resulted in the death of Nadirah Ruffin.
According to documents filed in this case and statements made in court:On March 23, 2011, D.H. met with Isiah Ruffin (no relation to the victim) in the courtyard area of a housing complex on North Maryland Avenue, a section of Atlantic City known as “Back Maryland,” to talk to Isiah Ruffin about a dispute between Isiah Ruffin and Victim One. After a brief conversation, D.H. viciously assaulted Isiah Ruffin, knocking Isiah Ruffin unconscious and robbing him of cash. When Isiah Ruffin regained consciousness, D.H. assaulted Isiah Ruffin again. As a result of the assault, Isiah Ruffin was treated at the Atlantic City Medical Center for a possible concussion and facial lacerations. After Isiah Ruffin was released from the hospital, Smith and Sanders visited Isiah Ruffin, during which time Isiah Ruffin told Smith that D.H. had assaulted him.
To retaliate, Smith planned to enter Victim One’s house and assault and rob Victim One of illegal drugs and money. Sanders agreed to help Smith execute her plan and recruited Hicks to participate. Smith supplied the gun, duct-tape and handcuffs.
On March 26, 2011, Smith, Sanders, and Hicks entered Victim One’s house and duct-taped Victim One and four other victims, including Nadirah Ruffin, who were present. While in the house, Sanders and Hicks took money from Victim One, some of which Victim One had earned from selling illegal drugs. They took money from another victim, as well as marijuana that the victim was planning to sell. Sanders and Hicks admitted to taking more than $500 dollars and 50 bags of marijuana from the house.
During the robbery, Nadirah Ruffin recognized Smith’s voice. Smith ordered Sanders to punch Nadirah Ruffin. After Sanders hit Nadirah Ruffin, Smith punched her because she did not think Sanders had hit her hard enough. As the three defendants were leaving the residence, Smith told Sanders and Hicks to take Nadirah Ruffin from the residence. Smith, Sanders and Hicks then placed Nadirah Ruffin into a green van. They drove to the Clementon area and eventually to Philadelphia. Smith said that because she was a mother she could not kill Nadirah Ruffin. Smith placed the gun near Sanders and told him that they were not leaving until someone else killed Nadirah Ruffin. Sanders and Hicks took Nadirah Ruffin to the banks of the Schuylkill River, where Sanders shot her in the head, killing her. Her body was dumped in the river.
The charges to which Smith, Sander and Hicks pleaded guilty carry a maximum potential penalty of life imprisonment and a fine of $250,000. Sentencing for Smith and Sanders is scheduled for Oct. 22, 2013, and Hicks is scheduled for Oct. 23, 2013.
Other defendants
Henry Ruffin and Ronnie Ruffin (no relation to Nadirah Ruffin) both pleaded guilty to failing to tell FBI special agents who interviewed them that they know Smith, Sanders and Hicks were involved in the home invasion and kidnapping. Henry Ruffin is scheduled to be sentenced Sept. 17, 2013, and Ronnie Ruffin is scheduled to be sentenced Sept. 19, 2013.
On April 3, 2012, Isiah Ruffin, pleaded guilty to providing false statements to investigators about the home invasion and kidnapping. He is scheduled to be sentenced Oct. 23, 2013.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; the Atlantic County Prosecutor’s Office and the Atlantic City Police Department, for the investigation leading to the guilty pleas.
The government is represented by Assistant U.S. Attorneys Jason M. Richardson and Matthew T. Smith of the U.S. Attorney’s Office Criminal Division in Camden, assisted by Assistant U.S. Attorney David Feder of the U.S. Attorney’s Office Appeals Division in Newark, and Mark Coyne, Chief of the Appeals Division.
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Defense counsel:
Smith: Christopher O’Malley, Esq.
Sanders: Edward Borden Esq. and Carl J. Herman Esq.
Hicks: Michael Huff Esq. and David Glazer Esq.
Henry Ruffin: Richard Sparaco Esq.
Ronnie Ruffin: Stanley O. King Esq.
Isiah Ruffin: J. Michael Farrell Esq.Smith, Shameria Information
Sanders, Aziz Information
Hicks, Deshawn InformationSouth Jersey Doctor Sentenced to Two Years in Prison for Fraud Scheme Involving Home Health Care for Elderly PatientsRead the Press Release
Doctor Made More Than Half a Million Dollars Illegally
TRENTON, N.J. – A doctor who was the owner and founder of Visiting Physicians of South Jersey (VPA) – a Hammonton, N.J., provider of home-based physician services for seniors – was sentenced today to 24 months in prison for charging lengthy visits to elderly patients that they did not receive, U.S. Attorney Paul J. Fishman announced.
Lori Reaves, 52, of Waterford Works, N.J., previously pleaded guilty before U.S. District Judge Freda L. Wolfson to an information charging her with one count of health care fraud. Judge Wolfson imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:
Reaves admitted lying in Medicare billings about the amount of face-to-face time she spent with patients, which led to her receiving at least $511,068 in criminal profits. Reaves was the highest billing home care provider among the more than 24,000 doctors in New Jersey from Jan. 1, 2008, through Oct. 14, 2011.
VPA provided home-based physician health care for elderly and homebound patients in New Jersey, offering services throughout South Jersey. As part of her responsibilities at VPA, Reaves was responsible for Medicare billings as a Medicare-approved provider. The claim submitted by the health care provider requires a physician to state a diagnosis and provide a procedure code – called a Current Procedural Technology (CPT) code – identifying services rendered. Medicare regulations require that each provider certify that the services rendered were medically necessary and were furnished by that provider. A warning at the bottom of the form specifically states that any false claims or statements in relation to the submission of a claim for reimbursement are prosecutable under federal or state law.
In most instances during the relevant time period, Reaves submitted forms that falsely claimed she had provided prolonged service visits to her patients in order to induce Medicare to make payments to her that were significantly higher than the payments she should have received. She routinely billed Medicare using codes that would have required her – under Medicare regulations and depending on the corresponding service – to spend between 60 and 150 minutes with a patient. Many of the claims Reaves submitted would have required her to spend a minimum of 2.5 hours of face-to-face time with her elderly clients, when she actually spent far less. As a result, Medicare reimbursed Reaves more than $511,068 for the fraudulent prolonged service visits Reaves claimed to have made.
In addition to the prison term, Judge Wolfson sentenced Reaves to three years of supervised release. In addition to Reaves forfeiture of $511,068, Judge Wolfson ordered Reaves to pay restitution of $511,068 and pay a fine of $5,000.
U.S. Attorney Fishman credited special agents of the FBI in Newark, under the direction of Special Agent in Charge Aaron T. Ford, and special agents of the Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Tom F. O’Donnell of the New York Regional Office, with the investigation leading to today’s sentence.
The government is represented by Assistant U.S. Attorneys Deborah J. Gannett and R. David Walk Jr. of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark.
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Defense counsel: Rocco Cipparone Jr. Esq., Haddon Heights, N.J.New Jersey Pharmacist Pleads Guilty in Scheme to Illegally Distribute Pharmaceutical DrugsRead the Press Release
TRENTON, N.J. – Randy Binder, a pharmacist and the former proprietor of Texas Road Pharmacy in Manalapan, N.J., admitted today that he conspired to illegally distribute oxycodone to people without a legitimate need for the drug, U.S. Attorney Paul J. Fishman announced.
Binder, 60, of Matawan, N.J., pleaded guilty before U.S. District Judge Freda L. Wolfson in Trenton federal court to an information charging him with conspiracy to distribute oxycodone.
According to documents filed in the case and statements made in court:
Binder admitted that he participated in a conspiracy to distribute oxycodone for no legitimate medical purpose and beyond the bounds of medical practice between January 2009 and June 2012.
Oxycodone, the active ingredient in brand name pills such as OxyContin, Roxicodone and Percocet, is a Schedule II controlled substance – meaning that it has a high potential for abuse. Demand for oxycodone-based prescription pain medication has grown to epidemic proportions in the United States, and dealers profit by selling such medication on the street. Users will often crush and snort the pills or dissolve and inject them to get an immediate high. This abuse can lead to addiction, overdose and death.
Binder would meet fellow conspirators in the parking lot of Texas Road Pharmacy to provide them with pills, or would leave the pills in a car in the parking lot, which conspirators would then pick up. Binder would also accept prescriptions which he knew to be invalid.
The charge to which Binder pleaded guilty carries a maximum potential penalty of 20 years in prison and a $1 million fine. Sentencing is currently scheduled for Oct. 24, 2013.
U.S. Attorney Fishman credited special agents of the DEA, under the direction of Special Agent in Charge Carl J. Kotowski; 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 the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorneys R. Joseph Gribko and Jonathan Romankow of the U.S. Attorney’s Office Criminal Division and Tino Lisella, Trial Attorney with the Department of Justice, Tax Division. 13-297
Defense counsel: Steven Altman Esq., New Brunswick, N.J.Binder, Randy Information
Bergen County, N.J., Man Sentenced to Five Years in Prison for Downloading Images and Videos of Child Sexual AbuseRead the Press Release
NEWARK, N.J. – A Bergen County, N.J., man was sentenced today to 60 months in prison for knowingly receiving over the Internet images and videos of child sexual abuse, U.S. Attorney Paul J. Fishman announced.
Joseph Anthony Amari, 81, of Fair Lawn, N.J., previously pleaded guilty before U.S. District Judge Katharine S. Hayden to one count of an indictment charging him with receipt of child pornography. Judge Hayden imposed the sentence today in Newark federal court.
Amari, who was initially federally charged by complaint in 2009, is currently serving a sentence in state prison following a separate state conviction for endangering the welfare of two minors. His federal sentence will run concurrently with his state sentence. The state also required Amari to register as a sex offender. The court had stayed the federal prosecution pending the resolution of the state charges.
According to documents filed in this case and statements made in court:
Amari admitted during his guilty plea that he used peer-to-peer file-sharing software to download images and videos in February 2007 of children being sexually abused.
In addition to the prison term, Judge Hayden sentenced Amari to five years of supervised release.
U.S. Attorney Fishman credited the FBI Child Exploitation Task Force in New Jersey, 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 Bergen County Prosecutor’s Office, under the direction of Prosecutor John L. Molinelli, and the Fair Lawn Police Department, under the direction of Chief of Police Erik Rose.
The government is represented by Assistant U.S. Attorneys Jane H. Yoon and Shirley U. Emehelu of the U.S. Attorney’s Office Criminal Division in Newark.
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Defense counsel: Chester Keller Esq., NewarkAffordable Housing Developer Indicted for Alleged Fraud, Diverting Public Funds from Trenton, N.J. ProjectsRead the Press Release
TRENTON, N.J. – A federal grand jury in New Jersey has indicted the developer of three Trenton affordable housing projects for allegedly diverted money intended for the developments, announced New Jersey U.S. Attorney Paul J. Fishman.
A federal grand jury returned a 25-count indictment today charging Robert Kahan, 67, of Sunny Isles Beach, Fla., with 10 counts of making false statement in a loan application, three counts of bank fraud, three counts of mail fraud, two counts of fraud against a local government receiving federal benefits, and seven counts of transacting in criminal proceeds. Kahan will be required to appear in federal court to face the charges on a date to be determined.
“As alleged in the indictment, Kahan took money intended for projects designed to help those in need of affordable housing and used it for his own ends,” said U.S. Attorney Fishman. “It isn’t just defrauded financial institutions and programs that lose: it’s the people of our cities who are the most vulnerable. They can’t afford it, and we won’t stand for it.”
“Mr. Kahan allegedly took advantage of the system and the good faith of banks, credit lenders and the local and federal government by diverting funds procured for the development of affordable housing,” said FBI Special Agent in Charge Aaron T. Ford. “The Newark office of the FBI remains committed to bringing to justice those individuals that insist on misusing funds through fraud and deception. Today’s plea is the result of the hard work of the men and women of the FBI and our federal partners at the Internal Revenue Service and U.S. Department of Housing and Urban Development, Office of Inspector General. Together with our federal partners we will continue combating fraud at all levels of society.”
According to the indictment:
Kahan was a developer of three affordable housing projects in Trenton between 2006 and 2010 – the Canal Plaza Homeownership Project, the Southwest Village II Project and the Catherine S. Graham Project – for which he obtained both private and public funding.
When seeking loans for projects, including the three Trenton projects, Kahan caused personal financial statements to be submitted to banks on behalf of himself and his spouse that falsely overstated the value of his assets.
Kahan also falsely represented in payment applications, when requesting advances of loan and subsidy money in connection with the three Trenton projects, that all money he was previously paid had been used to pay costs for labor, materials and other obligations for a particular project. Kahan allegedly caused substantial portions of the money to be diverted for his own personal use, his other development projects and other uses that were not authorized.
The false statement in a loan application, bank fraud and mail fraud counts each carry a maximum potential penalty of 30 years in prison and a $1 million fine. The charges of fraud against a local government receiving federal benefits and transacting in criminal proceeds each carry a maximum potential penalty of 10 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 Ford; IRS-Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen; and the U.S. Department of Housing and Urban Development, Office of Inspector General, under the direction of Cary Rubenstein, Special Agent in Charge, Northeast Region, with the investigation leading to the indictment.
The government is represented by Assistant U.S. Attorney Eric Moran in Trenton and Senior Litigation Counsel J Fortier Imbert in Newark, both of the U.S. Attorney’s Office Special Prosecutions Division.
The charges and allegations contained in the Indictment are merely accusations, and the defendant is considered innocent unless and until proven guilty.13-298
Defense counsel: Scott Krasny Esq., West Trenton, N.J.Kahan Indictment
U.S. Postal Service Employee Sentenced to 46 Months in Prison for Mailing and Receiving Packages of CocaineRead the Press Release
Husband Who Was Charged With Her Sentenced Last Month
NEWARK, N.J. – A former U.S. Postal Service employee was sentenced today to 46 months in prison for her role in a scheme to intercept cocaine-laden packages mailed from Puerto Rico to New Jersey, U.S. Attorney Paul J. Fishman announced.
Christina Nunez, 30, of Lyndhurst, N.J., previously pleaded guilty before U.S. District Judge Esther Salas to an information charging her with one count of conspiracy to possess with intent to distribute and distribution of 500 grams or more of cocaine and one count of mail theft. Judge Salas imposed the sentence today in Newark federal court.Last month, her husband, Luis A. Vega, 37, was sentenced to 37 months in prison for his role in distributing the cocaine-laden packages. Vega previously pleaded guilty before Judge Salas to an information charging him with conspiracy to possess with intent to distribute and distribution of 500 grams or more of cocaine.
According to documents filed in this case and statements made in court:
Since December 2010, Nunez had been receiving packages of cocaine, which were mailed from Puerto Rico to delivery addresses along her mail route. Nunez intercepted the packages, scanned them as delivered despite never delivering the packages to their actual delivery addresses, and ultimately transported them to conspirators in Camden, N.J.
Law enforcement seized approximately two kilograms of cocaine during the investigation. On Feb. 1, 2011, inspectors with the U.S. Postal Inspection Service lawfully seized approximately 1,300 grams of cocaine from an express mail package that was supposed to be delivered by Nunez. After this seizure, the drug trafficking organization ceased sending packages until December 2011, when, once again, packages sent from Puerto Rico were mailed to addresses assigned to Nunez’s mail route.
Another suspicious package was sent from Dorado, Puerto Rico, on August 22, 2012. Once the package arrived in Kearny, N.J., law enforcement noted that the delivery address on the package would be assigned to Nunez’s mail route. Subsequent laboratory analysis confirmed that the package contained approximately 500 grams of cocaine. The cocaine was seized and replaced with a substance similar in appearance to the contents of the package. The package was placed back into circulation for delivery. On August 24, 2012, Nunez failed to deliver the package to its delivery address. At the end of her shift, Nunez returned to her residence in Lyndhurst, N.J., with the package, where she and Vega were arrested.
In addition to intercepting the cocaine-filled packages on her mail route, both Nunez and Vega received packages of narcotics at her residence in Lyndhurst and Vega’s former residence in Jersey City, N.J. In total, it is estimated that Nunez, Vega and their conspirators distributed more than 18 kilograms of cocaine between October 2010 and August 24, 2012.In addition to the prison term, Judge Salas sentenced Nunez to two years of supervised release. Judge Salas also imposed a two-year period of supervised release on Vega.
U.S. Attorney Fishman credited inspectors with the U.S. Postal Inspection Service, under the direction of Postal Inspector in Charge Maria L. Kelokates; special agents of the Office of Inspector General for the U.S. Postal Service, under the direction of Special Agent in Charge Rafael Medina; and special agents with the Drug Enforcement Administration, under the direction of Special Agent in Charge Carl J. Kotowski, with the investigation leading to today’s sentence.The Government is represented by Assistant U.S. Attorney Mary E. Toscano of the U.S. Attorney’s Criminal Division in Newark.
13-293Defense counsel:
Nunez: Charles Alvarez Esq., Jersey City
Vega: Paul Casteleiro Esq., Hoboken, N.J.Three Doctors Admit Accepting Bribes for Test Referrals to New Jersey Clinical LaboratoryRead the Press Release
NEWARK, N.J. – Three New Jersey doctors admitted today they accepted tens of thousands of dollars in bribes from Parsippany, N.J.-based Biodiagnostic Laboratory Services LLC (BLS) as part of a long-running scheme operated by the lab, its president, and numerous associates, U.S. Attorney Paul J. Fishman announced.
Dennis Aponte, 46, of Cedar Grove, N.J.; Claudio Dicovsky, 51, of Fort Lee, N.J.; and Franklin Dana Fortunato, 63, of Montville, N.J., each pleaded guilty to violating the Federal Travel Act. Fortunato also pleaded guilty to filing a false tax return, admitting that from 2004 to 2008, he failed to disclose and report as income more than $640,000 in bribe money and patient co-pays and failed to pay more than $160,000 in taxes he owed as a result of that unreported income. The defendants entered their guilty pleas today before U.S. District Judge Stanley R. Chesler in Newark federal court.
“Decisions about medical care should not be influenced by doctors and providers who are more interested in lining their pockets than in providing quality healthcare,” U.S. Attorney Fishman said. “The doctors who pleaded guilty today admitted making decisions about the care they provided based on being paid in return for their referrals. We will continue to seek out and punish those doctors and other medical professionals who put profit before patient care.”
Newark FBI Special Agent in Charge Aaron T. Ford said: “Patients have every right to insist that their physician is making medical referrals based on what is best for the patient. However, these three physicians decided to accept bribes in exchange for referrals. These types of kickback arrangements cripple the healthcare industry and severely impact patient care. The FBI remains committed to investing its resources to combat these types of schemes.”
“Today’s pleas should send a loud and clear message that kickbacks and unnecessary billing have no place in our Federal healthcare system,” Thomas O’Donnell, Special Agent in Charge of the Office of Inspector General of the U.S. Department of Health and Human Region covering New Jersey, said. “We will aggressively investigate those suspected of defrauding taxpayers and the Medicare program.”
According to documents filed in this and other cases and statements made in court:On April 9, 2013, federal agents arrested BLS president and part owner, David Nicoll, 39, of Mountain Lakes, N.J.; Scott Nicoll, 32, of Wayne, N.J., a senior BLS employee and David Nicoll’s brother; and Craig Nordman, 34, of Whippany, N.J., a BLS employee and the CEO of Advantech Sales LLC – an entity used by BLS to make illegal payments. They were charged by federal complaint with the bribery conspiracy, along with the BLS company and New Jersey physician Frank Santangelo, 43, of Boonton, N.J. The charges against BLS and Santangelo are pending.
Dicovsky
Dicovsky admitted he agreed with David Nicoll to accept bribes from BLS in exchange for his referral of blood specimens. To disguise those bribes, Dicovsky and BLS entered into a sham lease agreement and a sham service agreement in which the monthly bribe payments of more than $5,000 were characterized as “lease” and “service” payments. While the lease agreement purported to be for 1,000 square feet of space, little or no space was allocated to BLS in Dicovsky’s medical office in Paterson, N.J. Between November 2006 and August 2009, Dicovsky received more than $224,000 in bribe payments from BLS, and BLS made more than $800,000 through testing on blood specimens referred by Dicovsky.
Fortunato
On May 2, 2013, two former sales representatives of BLS, Peter Breihof, 42, of Nutley, N.J., and William Dailey, 41, of Wall, N.J., pleaded guilty to an information charging them with conspiracy to violate the Anti-Kickback Statute and the Federal Travel Act. They admitted using phony lease and service agreements to bribe physicians to send their patients’ blood samples to BLS. Breihof and Dailey also admitted that individuals acting on behalf of BLS paid various physicians a fee per test on behalf of BLS in order to induce those physicians to order more of the blood tests than they otherwise would have.
Fortunato admitted entering into bribe arrangements with BLS through Breihof, with David Nicoll’s knowledge and approval, for the referral of blood specimens of patients of Fortunato’s Montclair, N.J., practice. Fortunato received more than $100,000 in bribe payments – often more than $5,000 per month – from BLS disguised through sham lease and sham service agreements between 2006 and 2009, and BLS made more than $430,000 through testing on blood specimens referred by Fortunato.
Aponte
Aponte admitted that he and David Nicoll agreed that BLS would pay Aponte bribes to refer to BLS blood specimens from the patients of his West New York, N.J., medical practice. From October 2012 to March 2013, Nordman, acting at David Nicoll’s direction, paid Aponte approximately $3,000 per month in cash in return for blood specimens referred to BLS. The lab made more than $175,000 through testing on blood specimens referred by Aponte.
The count to which Aponte, Dicovsky and Fortunato each pleaded guilty is punishable by a maximum potential penalty of five years in prison and a $250,000 fine. Fortunato also faces a maximum potential penalty of five years in prison and a $250,000 fine on the filing a false tax return charge. Sentencing for all three defendants is scheduled for Oct. 22, 2013.
Aponte has agreed to forfeit $235,000, Dicovsky has agreed to forfeit more than $220,000, and Fortunato has agreed to forfeit more than $635,000. The investigation has so far recovered more than $2 million through forfeiture.
On June 10, 2013, David Nicoll, Scott Nicoll, Nordman, and four other associates of BLS pleaded guilty to informations charging them with one count of conspiracy to violate the Anti-Kickback Statute and the Federal Travel Act and one count of money laundering. The charges and allegations against Santangelo and BLS are merely accusations, and the defendants are considered innocent unless and until proven guilty.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Ford; U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge O’Donnell; IRS–Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen, and the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, with the ongoing investigation leading to today’s guilty pleas.
The government is represented by Senior Litigation Counsel Andrew Leven, Assistant U.S. Attorney Joseph Minish, and Jacob T. Elberg, Chief of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark, as well as Assistant U.S. Attorney Barbara Ward of the office’s Asset Forfeiture and Money Laundering Unit.
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Defense counsel:
Aponte: John Vazquez Esq. & Michael Critchley Esq., Roseland, N.J.
Dicovsky: Gerald Miller Esq., Jersey City, N.J.
Fortunato: Ricardo Solano Esq., Newark, N.J.Aponte Information
Dicovsky Information
Fortunato InformationFive Federally Charged with Gunpoint Carjackings, Attempts in Essex County, N.J.Read the Press Release
NEWARK, N.J. – Five men will appear in Newark federal court today to face federal charges for a string of gunpoint carjackings and attempted carjackings in Essex County, N.J., U.S. Attorney Paul J. Fishman announced.
As part of an ongoing joint anti-carjacking initiative involving investigators and prosecutors at the federal, state and local levels, the U.S. Attorney’s Office works with the Essex County Prosecutor’s Office and other law enforcement partners to select cases appropriate to adopt from the state for federal prosecution. Federal charges typically carry longer potential prison terms and there is no parole in the federal system.
The five defendants, who have been in state custody since their respective arrests, are expected to appear today before U.S. Magistrate Judge Mark Falk.
“The wave of carjackings in Essex County is unacceptable to all who live, work and visit here,” said U.S. Attorney Fishman. “As long as carjackers target the area, law enforcement will continue to work together to fight back. Federally prosecuted carjackers face decades in prison, with no parole, far from home.”
“As part of our ongoing effort to combat carjacking in Essex County, we are encouraged by this partnership with the U.S. Attorney’s Office to bring more stringent penalties to individuals who commit the violent crime of carjacking on our streets,” said Acting Essex County Prosecutor Carolyn A. Murray.
According to the federal complaints unsealed today:
Corey Thermitus, 21, of Newark, is charged with one count of theft of a motor vehicle by force, violence and intimidation and one count of attempting the same crime. He is also charged with discharging a firearm in furtherance of a crime of violence.
On Dec. 28, 2012, Thermitus approached a gray Honda Accord in the driveway of a Newark home, opened the door and put a gun to the head of the person in the driver’s seat, threatening to shoot. Thermitus and accomplices drove away in the car, leaving the victim sitting on the ground. Later that night, Thermitus took the Accord to another Newark residence and tried to carjack a red Pathfinder from a victim with a young child in the car, shooting at someone who came out of the residence. Newark police officers apprehended Thermitus shortly after midnight after his accomplice rammed a police car with the Accord and the suspects fled on foot.
Edwin Ayala, 37, and Walder Morales, 21, both of Newark, are each charged with one count of attempted theft of a motor vehicle by force, violence and intimidation and one count of use of a firearm in furtherance of a crime of violence.
On Dec. 15, 2012, Ayala, wearing a ski mask, pointed a gun at the head of an individual sitting in a Chevrolet Equinox and demanded the keys to the vehicle. After the victim dropped the keys, Morales came over to retrieve them and the pair fled with the victim’s car keys, money and phone. Newark police officers were able to track the phone to apprehend the defendants.
Lee Caraballo, 27, of Newark, is charged with one count of theft of a motor vehicle by force, violence and intimidation and one count of use of a firearm in furtherance of a crime of violence.
On Nov. 30, 2012, Caraballo approached a silver Toyota Corolla parked in the victim’s driveway, pointed a gun at the driver’s head and ordered the driver out of the car. After also stealing the victim’s wallet and cell phone, Caraballo left the area with the car.
A Roselle Park police officer caught Caraballo later that day in a traffic stop. Caraballo was driving a black Mercedes for which he couldn’t produce the necessary papers. Police found a cell phone and keys in the vehicle Caraballo was driving.
Nathaniel Tullies, 19, of East Orange, N.J., is charged with one count of theft of a motor vehicle by force, violence and intimidation and one count of use of a firearm in furtherance of a crime of violence.
On Nov. 8, 2012, when an individual got out of a Chevrolet Impala to open a garage door, Tullies and an accomplice got on either side of the car, took it from the victim at gunpoint and drove away. The victim called police, who responded within minutes.
A Newark police detective spotted the vehicle and a high-speed chase ensued, ending when the Impala crashed on the shoulder of Route 1/9, the suspects fled on foot and the detective chased and captured Tullies.
The federal charge of carjacking or attempted carjacking carries a maximum potential penalty of 15 years in prison; 25 years in prison if serious bodily injury results; and life in prison or the federal death penalty if death results. The charge of use of a firearm in furtherance of a crime of violence carries a minimum consecutive term of five years in prison if a firearm is possessed, seven years in prison if a firearm is brandished, 10 years in prison if a firearm is discharged and a maximum of life in prison. Each of these charges also carries a maximum $250,000 fine.
Defendants prosecuted by the U.S. Attorney’s Office as a result of the anti-carjacking initiative have been sentenced to significant prison terms. Recent examples include:
Defendant
Age
Charges
Sentencing Date
Sentence
23
conspiracy; theft of a motor vehicle by force, violence and intimidation; and use of a firearm in furtherance of a crime of violence
2/20/13
130 months
Jermaine May
29
conspiracy; theft of a motor vehicle by force, violence and intimidation; and use of a firearm in furtherance of a crime of violence
2/15/13
118 months
Jirrod Parker
25
theft of a motor vehicle by force, violence and intimidation; use of a firearm in furtherance of a crime of violence; and being a felon in possession of a firearm
1/9/13
150 months
Taj Elliott
24
conspiracy; theft of a motor vehicle by force, violence and intimidation; and use of a firearm in furtherance of a crime of violence
10/22/12
147 months
Jerome Conover
21
conspiracy; theft of a motor vehicle by force, violence and intimidation; and use of a firearm in furtherance of a crime of violence
8/16/12
181 months
Jahlil Thomas
23
conspiracy; theft of a motor vehicle by force, violence and intimidation; and use of a firearm in furtherance of a crime of violence
6/1/12
262 months
Amonra Jackson
30
theft of a motor vehicle by force, violence and intimidation and one count of being a convicted felon in possession of a firearm
3/28/12
120 months
U.S. Attorney Fishman praised the Essex County Prosecutor’s Office, under the Direction of Acting Prosecutor Murray; the FBI, under the direction of Special Agent in Charge Aaron T. Ford; the Newark Police Department, under the direction of Director Samuel A. DeMaio and Chief Sheilah A. Coley; and the Roselle Park Police Department, under the direction of Chief Paul Morrison; as well as investigators in the U.S. Attorney’s Office for the investigation that led to the new charges announced today.
Fishman also lauded the other members of the carjacking task force – the New Jersey Attorney General’s Office; New Jersey State Police; Essex County Sheriff’s Office; Bureau of Alcohol, Tobacco, Firearms and Explosives; DEA, United States Marshals Service; and U.S. Immigration and Customs Enforcement, Homeland Security Investigations – for their continued commitment to addressing the carjacking problem in Essex County.
Regarding the federal cases with charges unsealed today, the government is represented by Assistant U.S. Attorneys Dara Govan, Elizabeth Harris and Courtney Oliva of the U.S. Attorney’s Office Criminal Division in Newark.
The charges and allegations contained in the complaints are merely accusations and the defendants are considered innocent unless and until proven guilty.
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Defense counsel:
Corey Thermitus, Edwin Ayala, Lee Caraballo, Nathaniel Tullies: Assistant Federal Public Defender Peter Carter Esq., Newark
Walder Morales: Joseph Rubino Esq., West Orange, N.J.Caraballo Complaint
Ayala and Morales Complaint
Thermitus Complaint
Tullies ComplaintPennsylvania Man Sentenced to Two Years in Prison for Selling Thousands of Dollars Worth of Firearms to New Jersey ResidentRead the Press Release
NEWARK, N.J. – A Pennsylvania man was sentenced today to 24 months in prison for illegally selling firearms and ammunition on multiple occasions for thousands of dollars in cash, U.S. Attorney Paul J. Fishman announced.
Eduardo Velasquez, 63, of Reading, Pa., previously pleaded guilty before U.S. District Judge William H. Walls to an information charging him with one count of illegally dealing in firearms. Judge Walls imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Velasquez admitted that he traveled from Pennsylvania to Jersey City, N.J., on five separate occasions, between July 5, 2012, and Oct. 18, 2012, for the purpose of selling firearms. Velasquez sold 11 firearms to a New Jersey resident for more than $9,000. The firearms sold by Velasquez included: (1) two SKS 39 mm rifles; (2) a Mossberg Model 88 shotgun; (3) a Winchester Model 1300 12-gauge shotgun; (4) a Mossberg Model 190 16-gauge shotgun; (5) a stolen Ruger 9 mm semi-automatic handgun; (7) a Smith & Wesson .41 caliber revolver; (8) a Taurus PT917 9 mm semi-automatic pistol; (9) a Desert Eagle .44 caliber semi-automatic pistol; and (10) a Smith & Wesson SW99 .40 caliber handgun.
Velasquez sold multiple high-capacity magazines and more than 80 rounds of ammunition, including several hollow-point bullets. Velasquez indicated to the buyer that he often shipped firearms to the Dominican Republic, and could procure additional long guns, such as double-barrel shotguns and military rifles.
In addition to the prison term, Judge Walls sentenced Velasquez to three years of supervised release.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, for the investigation leading to today’s sentence.
The government is represented by Assistant U.S. Attorney Rahul Agarwal of the U.S. Attorney’s Office Criminal Division in Newark.
13-288Defense counsel: Tomas Espinosa Esq. Union City, N.J.
Passaic County, N.J., Man Sentenced to 15 Months in Prison for Importing and Selling Counterfeit MerchandiseRead the Press Release
NEWARK, N.J. – A Passaic County, N.J., man was sentenced today to 15 months in prison for importing and selling counterfeit merchandise, U.S. Attorney Paul J. Fishman announced.
Wesam Abedrabbo, 29, of Clifton, N.J., previously pleaded guilty before U.S. District Judge Katharine S. Hayden to an information charging him with trafficking in counterfeit goods. Judge Hayden imposed sentence today in Newark federal court.
According to documents filed in the case and statements made in court:
Abedrabbo admitted that from March 2010 through May 2012, he imported counterfeit merchandise from Asian locations, including China, Taiwan, and Japan, for resale in the United States. The counterfeit merchandise purported to be from companies including the North Face and UGG, and professional sports associations, such as the NFL, NHL, and MLB. Abedrabbo advertised the counterfeit merchandise on the Web site tophotnamebrands.com and sold the counterfeit merchandise on eBay. Abedrabbo also paid other individuals a commission to sell the counterfeit merchandise for him over the Internet. In connection with his illicit efforts, Abedrabbo sold more than $350,000 worth of counterfeit goods.
In addition to the prison term, Judge Hayden sentenced Abedrabbo to one year of supervised release. She also ordered Abedrabbo to forfeit $387,516, representing the gross proceeds of his sale of counterfeit merchandise.
U.S. Attorney Fishman praised special agents of Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge Andrew M. McLees in Newark, for the investigation leading to today’s sentence.
The government is represented by Assistant U.S. Attorney Joseph B. Shumofsky of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
Defense counsel: Jay V. Surgent Esq., Lyndhurst, N.J.
13-289Ocean County, N.J., School Bus Driver Sentenced to 10 Years in Prison for Distributing Images of Child Sexual Abuse over InternetRead the Press Release
TRENTON, N.J. – An Ocean County, N.J., school bus driver was sentenced today to 120 months in prison for distributing images of child sexual abuse over the internet through his home computer, U.S. Attorney Paul J. Fishman announced.
Frank J. Bognar, 31, of Jackson, N.J., pleaded guilty before U.S. District Judge Joel A. Pisano in Trenton federal court to an information charging him with one count of distribution of child pornography.
According to documents filed in this case and statements made in court:
As early as Oct. 27, 2011, Bognar downloaded and distributed videos and images of child pornography on the Internet via a peer-to-peer file sharing network, through which others had access to the material on a shared drive. The FBI seized a computer containing videos and photographs of child sexual abuse, including images of sadistic and masochistic conduct against children, during a search of his residence on Feb. 9, 2012. He was arrested later that day.
As part of his plea, Bognar agreed to surrender six firearms and assorted ammunition that were seized on the day of his arrest.In addition to the prison term, Judge Pisano sentenced Bognar to 10 years of supervised release and ordered to pay $2,000 in restitution.
U.S. Attorney Fishman credited the FBI Cyber Crimes Task Force in New Jersey, under the direction of Special Agent in Charge Aaron T. Ford in Newark, with the investigation leading to today’s sentencing. He also thanked the Ocean County Prosecutor’s Office, under the direction of Prosecutor Joseph D. Coronato; the Jackson Township Police Department, under the direction of Chief of Police Matthew D. Kunz; and the Essex County Prosecutor’s Office task force officers, under the direction of Acting Prosecutor Carolyn Murray, for their assistance.
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: Lisa Van Hoeck Esq., Assistant Federal Public Defender,Trenton
South Carolina Man Sentenced to 75 Months in Prison for Transporting Stolen Weapons into New JerseyRead the Press Release
Cache Included Military-Style Assault Rifles, Handguns and Shotgun
NEWARK, N.J. – A South Carolina man was sentenced today to 75 months in prison for his role in transporting into New Jersey 22 firearms that were stolen from gun shops in Tennessee and North Carolina, U.S. Attorney Paul J. Fishman announced.
Bassir Baxter, 40, of Columbia, S.C., previously pleaded guilty before U.S. District Judge Susan D. Wigenton to an information charging him with one count of transporting stolen firearms in interstate commerce. Judge Wigenton imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
On March 7, 2012, Baxter, Cedric Reddick, 20, and, Reddick’s father, Bevan Holston, 41, of Columbia, S.C., drove from South Carolina to the apartment of Terrell James, 23, of Newark, to illegally sell firearms. All four were charged by Complaint with transporting stolen firearms in interstate commerce.
Baxter, Reddick and Holston entered the apartment, where there were approximately 10 other individuals, and displayed firearms on the floor for the potential buyers. In total, 22 guns were recovered, including semi-automatic handguns and military-style assault rifles. Twenty had been stolen March 1, 2012, from a gun shop in Bristol, Tenn. Two of the guns had been stolen Feb.16, 2012, from a gun shop in Boone, N.C. Police arrested James and Baxter inside the apartment. Reddick and Holston were arrested after jumping to a rooftop from the kitchen window. Holston was sentenced in May 2013 to 10 years in prison. James was sentenced last week to six months in prison. Reddick is scheduled to be sentenced July 23, 2013.
In addition to the prison term, Judge Wigenton sentenced Baxter to two years of supervised release.
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; special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark; the Essex County Prosecutor's Office, under the direction of Acting Prosecutor Carolyn A. Murray; and the Newark Police Department, under the direction of Director Samuel DeMaio and Police Chief Sheilah Coley, with the investigation leading to today’s sentence.The government is represented by Assistant U.S. Attorney José R. Almonte of the U.S. Attorney's Office Narcotics/OCDETF Unit.
13-284Defense counsel: Thomas Ashley Esq., Newark
Ocean County, N.J., Man Sentenced to 78 Months in Prison for Possession of Child PornographyRead the Press Release
TRENTON, N.J. – An Ocean County, N.J., man was sentenced today to 78 months in prison for possessing child pornography on his computer and an external hard drive, including images of children being sexually abused, U.S. Attorney Paul J. Fishman announced.
William A. Burrows, 60, of Lacey, N.J., previously pleaded guilty before U.S. District Judge Michael A. Shipp to an information charging him with possession of child pornography. Judge Shipp imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:Burrows admitted that from March 2011 to April 2012, he downloaded videos and images of child pornography. On or about April 12, 2012, law enforcement officers executed a search warrant at Burrows’ home and seized a desktop computer and external hard drive, which contained more than 600 images of child pornography, including images of prepubescent minors and sadistic or violent conduct involving minors.
U.S. Attorney Fishman credited special agents of the FBI Child Exploitation Task Force, under the direction of Special Agent in Charge Aaron T. Ford in Newark; and the Ocean County Prosecutor’s Office, under the direction of Prosecutor Joseph D. Coronato, with the investigation leading to today’s sentence.
In addition to the prison term, Judge Shipp sentenced Burrows to five years of supervised release, fined him $12,500, and ordered payment of $10,000 in restitution. He also ordered restricted contact with minors, computer-use monitoring and required Burrows to register as a sex offender.
The government is represented by Special Assistant U.S. Attorney Joseph Muoio of the U.S. Attorney's Trenton Office.
13-285
Defense counsel: John S. Furlong Esq. West Trenton, N.J.
Member of the Scripps Media Family Sentenced to Nine Years in Prison for Stealing Millions from FamilyRead the Press Release
Financial Advisor Also Sentenced to Prison for His Role in the Scheme
PHILADELPHIA – A member of the Scripps Media family was sentenced today to 108 months in prison for embezzling $3.6 million from members of his family to fund his lavish lifestyle, New Jersey U.S. Attorney Paul J. Fishman announced.
Michael Scripps, 36, of Detroit, was convicted by a jury on April 12, 2013, following a one and a half week trial before U.S. District Judge Legrome D. Davis. Scripps was convicted of all seven counts of wire fraud charged in the indictment on which he was tried. Also sentenced today was Richard Gleeson, 37, formerly a Merrill Lynch financial advisor in Media, Pa., who previously pleaded guilty to two counts of wire fraud for his participation in the scheme and testified at the Scripps trial. Judge Davis sentenced Gleeson to a year and a day in prison.
The case was prosecuted in Philadelphia by Assistant U.S. Attorneys from the U.S. Attorney’s Office for the Eastern District of Pennsylvania, supervised by the U.S. Attorney’s Office for the District of New Jersey as the former office was recused from the case. Judge Davis imposed the sentence today in Philadelphia federal court.
According to documents filed in this case and the evidence at trial:
From November 2001 through October 2006, Michael Scripps persuaded his uncle and mother to transfer millions of dollars in trust funds to the Merrill Lynch Trust Co. and brokerage firm. With the assistance of Gleeson, Scripps used fraudulent authorizations to transfer his uncle’s and mother’s money to his own account at Merrill Lynch, resulting in $2.9 million in losses. Scripps also fraudulently transferred $727,500 from the refinancing of the victims’ Michigan home to another bank account belonging to Scripps.
The jury heard testimony that Scripps used some of the ill-gotten gains to lead a playboy lifestyle, including by purchasing expensive jewelry. He bought Tiffany earrings, a diamond ring and a Cartier necklace. He also used some of the stolen money to purchase a car for his girlfriend, four properties in New Orleans and for luxury travel across the U.S.
In addition to the prison term, Judge Davis sentenced Scripps to serve three years of supervised release and ordered him to pay $3,634,019 in restitution. Judge Davis also sentenced Gleeson to serve three years of supervised release.
U.S. Attorney Fishman credited special agents of the Philadelphia FBI, Newtown Square Resident Agency, under the direction of Special Agent in Charge Edward J. Hanko, with the investigation leading to today’s sentence.
The government is represented by Assistant U.S. Attorneys Terri Marinari and L.C. Wright of the U.S. Attorney’s Office for the Eastern District of Pennsylvania.
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Defense counsel: Mark Durant Esq., Philadelphia; Paul W. Broschay Esq. and Michael R. Dezsi Esq., DetroitCamden Man Sentenced to 135 Months in Prison for Scheme to Steal Checks from U.S. MailRead the Press Release
CAMDEN, N.J. – A Camden man was sentenced today to 135 months in prison for his role in a scheme in which he and others stole business checks from the U.S. Mail in New Jersey and Connecticut, altered them, and cashed them, U.S. Attorney Paul J. Fishman announced.
Ibn Muhammad, 35, previously pleaded guilty before U.S. District Judge Jerome B. Simandle to an information charging him with one count of bank fraud and one count of theft of mail. Judge Simandle imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
Muhammad and others stole checks from curbside U.S. mailboxes in business industrial parks in Burlington, Camden, and Gloucester counties in New Jersey. Muhammad and his conspirators (including Michael A. Ingalls Jr., 35, of Camden) would then recruit a conspirator to cash the stolen checks. Once they identified a person to cash the check, Muhammad and Ingalls would then alter the stolen checks so that the name of the “payee” of the check would match the name of the recruited check casher. Muhammad, Ingalls and the check casher would then travel to a bank where the check casher would cash the check.
Muhammad, Ingalls and their conspirators cashed or attempted to cash more than 100 stolen and altered business checks worth more than $600,000. The scheme resulted in a total loss of more than $300,000 to the victim banks.
Ingalls pleaded guilty May 23, 2013, before Judge Simandle to conspiracy to commit bank fraud and possession of stolen mail. He is scheduled to be sentenced on Sept. 5, 2013. One of Ingalls’ and Muhammad’s conspirators, Andrew Fortune, 62, of Camden, was arrested March 11, 2013, on a criminal complaint and charged with conspiracy to commit bank fraud for his role in the fraudulent scheme. His case is pending.
In addition to the prison term, Judge Simandle sentenced Muhammad to five years of supervised release. Restitution will be determined at a hearing on Sept. 16, 2013.
U.S. Attorney Fishman credited inspectors from the U.S. Postal Inspection Service, Philadelphia Division, under the direction of Acting Inspector in Charge Jean Wright, and troopers from the N.J., State Police, under the direction of Col. Rick Fuentes, for the investigation leading to today's sentence.
The government is represented by Assistant U.S. Attorneys Matthew T. Smith and Jason M. Richardson of the U.S. Attorney’s Office Criminal Division in Camden.
13-286Defense counsel: Lisa Evans Lewis Esq., Assistant Federal Public Defender, Camden
New Jersey Check Cashing Company Ordered to Pay More Than $1 Million, on Probation After Admitting Failure to File Currency Transaction ReportsRead the Press Release
CAMDEN, N.J. – GB Check Cashing LLC, a check cashing company licensed in New Jersey, pleaded guilty today and was ordered to forfeit over $1 million for failing to file Currency Transaction Reports as required by law, U.S. Attorney Paul J. Fishman announced.
The co-owners of GB Check Cashing LLC, Dalwinder S. Ghuman, 45, and Talvinder S. Ghuman, 53, both of Mt. Laurel, N.J., entered the plea on behalf of GB Check Cashing before U.S. District Judge Robert B. Kluger in Camden federal court. Following the guilty plea, Judge Kluger sentenced GB Check Cashing to one year of probation and ordered the company to forfeit $1,086,894.
According to documents filed in this case and statements made in court:
GB Check Cashing is a money service business the Ghumans, brothers, have co-owned and operated since 2003. The business has four storefronts, all of which are located in New Jersey: in Pennsauken, Delran, Carteret and East Windsor. Under federal law, such companies are obligated to file a Currency Transaction Report (CTR) whenever they are involved in a transaction for the payment, receipt or transfer of more than $10,000.
From September 2010 through June 2011, an individual referred to in court documents as “CC,” who operated a check cashing business in New Jersey without the appropriate license, brought several checks from customers of that business to GB Check Cashing and exchanged them for cash, less a one percent fee. Because the value of those checks was usually greater than $10,000, so was the amount of cash CC received. GB Check Cashing documented each transaction to make it appear as though CC’s customers went directly to GB Check Cashing to cash their checks.
In all, GB Check Cashing cashed approximately $1,148,247.63 of CC’s customers’ checks, paying approximately $1,086,894.33 to CC in increments greater than $10,000. GB Check Cashing did not file a CTR for any of those transactions.
U.S. Attorney Fishman credited special agents of U.S. Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge Andrew M. McLees, with the investigation.
The government is represented by Assistant U.S. Attorney Lakshmi Srinivasan Herman of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
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Defense counsel: Lawrence S. Lustberg Esq., Newark, N.J.
Henry Klingeman Esq., NewarkGB Check Cashing Information
Cardiologist Sentenced to Prison for Taking Cash Kickbacks for Patient ReferralsRead the Press Release
NEWARK, N.J. – An Edison, N.J., cardiologist was sentenced today to 30 months in prison for referring patients for diagnostic testing in exchange for cash kickbacks as part of a cash-for-patients scheme with a diagnostic facility in Orange, N.J., U.S. Attorney Paul J. Fishman announced.
Shashi Agarwal, 61, who had his own cardiology practice in East Orange, N.J., previously pleaded guilty before U.S. District Judge Claire C. Cecchi to an information charging him with one count of soliciting and receiving more than $100,000 in cash kickbacks in violation of the federal health care anti-kickback statute. Judge Cecchi imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
From early 2009 through December, 2011, Orange MRI paid Agarwal for each MRI and CAT scan he referred. According to Agarwal, Orange MRI gave him $100 cash for each Medicare or Medicaid patient he referred for an MRI. Agarwal also received $50 for each CAT scan referral. Agarwal admitted that he agreed to refer as many as 20 MRIs to Orange MRI each month.
During his plea proceeding, Agarwal identified two occasions on which he was paid kickbacks. On Oct. 11, 2011, Agarwal received $2,600 in cash from a government informant at Salvadoreño restaurant in Elizabeth, N. J., in exchange for MRI and CAT scan referrals. On Nov. 10, 2011, at his office in East Orange, N.J., Agarwal received another kickback for patient referrals of $2,500 in cash.
Agarwal was one of 12 doctors and one nurse practitioner arrested Dec. 13, 2011, and charged with accepting cash kickback payments.
In addition to the prison term, Judge Cecchi sentenced Agarwal to two years of supervised release and ordered him to perform 100 hours of community service. At his plea hearing, Agarwal also agreed to forfeit $101,750 in bribe money.The investigation ultimately led to the arrest of and charges against 15 individuals, including those arrested in December 2011. Of those charged, 12 have pleaded guilty to date.
Daisy Deguzman, a doctor practicing in Newark, was sentenced to six months in prison and six months of home confinement on Jan. 31, 2013. Dov Rand, a doctor practicing in West Orange, N.J., was sentenced to five months in prison and five months of home confinement on Feb.13, 2013. Rameshcha Kania, an East Orange, N.J., doctor, was sentenced to three months in prison and three months of home confinement on June 24, 2013. Lucio Cardoso, a North Arlington, N.J., doctor, was sentenced to four months in prison and four months of home confinement on June 25, 2013. The defendants were also ordered to forfeit their illegal gains.
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 and civil investigators with the U.S. Attorney’s Office, for the investigation leading to today’s sentence.
The government is represented by Assistant U.S. Attorneys Scott B. McBride and Joseph G. Mack of the U.S. Attorney’s Office’s Health Care and Government Fraud Unit.
As for the defendants with charges pending as a result of this investigation, they are considered innocent unless and until proven guilty.
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Defense counsel: William R. Lundsten Esq., Teaneck, N.J.
Woman Who Allegedly Mailed Threatening Letters to U.S. Supreme Court and Throughout New Jersey Arrested on Federal ChargeRead the Press Release
NEWARK, N.J. – An Irvington, N.J., woman was arrested at her home this morning by members of the FBI Joint Terrorism Task Force (JTTF) for allegedly mailing letters threatening bodily harm to the U.S. Supreme Court and recipients throughout New Jersey, U.S. Attorney Paul J. Fishman announced.
Karen Waller, 50, is charged in a federal criminal complaint with one count of mailing threatening communications. She is expected to appear to face the charge this afternoon before U.S. Magistrate Judge Mark Falk in Newark federal court.
According to the criminal complaint unsealed today, Waller mailed more than 50 threatening letters in May and June 2013 to multiple entities and individuals, including a number in New Jersey. The recipients of those letters included the U.S. Supreme Court; the town hall in Woodbridge Township, N.J.; Rutgers University; an insurance company; and the Millburn Township, N.J., Police Department. The letters threatened to injure and kill unspecified individuals.
The charge carries a maximum potential penalty of 10 years in prison and a $250,000 fine.
U.S. Attorney Fishman credited special agents, detectives and investigators assigned to the JTTF, under the direction of FBI Special Agent in Charge Aaron T. Ford in Newark, with the investigation. The JTTF comprises law enforcement officers from numerous federal, state and local agencies throughout New Jersey.
The government is represented by Andrew Kogan, chief of the U.S. Attorney’s Office National Security Unit.
The charge and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
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Waller, Karen Complaint
Seven Arrested, Charged with Selling Illegal Drugs to Veterans Treated at VA Medical Centers in New JerseyRead the Press Release
NEWARK, N.J. – Seven men with access to two VA medical centers in New Jersey were arrested this morning by special agents of the U.S. Department of Veterans Affairs, Office of Inspector General and the FBI on federal charges alleging they sold illegal drugs to veterans being treated at the centers, U.S. Attorney Paul J. Fishman announced.
The seven defendants were each charged in separate criminal complaints with various counts of distributing controlled substances – including heroin, crack and hydromorphone – at the VA medical centers in East Orange and Lyons, N.J. Five of the men were arrested this morning at the Lyons facility, one was arrested at the East Orange facility and one was arrested at his home. All are expected to make their initial appearances this afternoon before U.S. Magistrate Judge Mark Falk in Newark federal court.
“According to our charges, these seven men abused their access to VA medical facilities to peddle dangerous drugs to other veterans undergoing treatment,” said U.S. Attorney Fishman. “It is tragic that those who have served their country would exploit their fellow veterans.”
“This investigation was initiated by VA OIG two years ago in response to the fatal heroin overdose of a veteran at the VA medical center in Lyons, New Jersey,” said Jeffrey G. Hughes, Special Agent in Charge, U.S. Veterans Affairs, Officer of Inspector General, Northeast Field Office. “Subsequently, the FBI and VA OIG jointly launched an operation which focused on combating the sale of heroin and crack cocaine to patients at Lyons. VA management at Lyons, including VA Police, provided invaluable support during the course of this investigation. We hope anyone selling drugs at VA treatment facilities will realize that we will vigorously pursue them to protect veterans seeking treatment.”
“The Federal Bureau of Investigation, Newark Division and the Department of Veterans Affairs Office of Inspector General conducted a joint investigation targeting the distribution of narcotics on the grounds of VA Hospitals in New Jersey,” said FBI Special Agent in Charge Aaron T. Ford. “As a result of this joint investigation, the FBI and VA OIG have been successful in disrupting the criminal activity occurring on the VA grounds. The Newark Division will continue to work in conjunction with our federal, state and local partners to combat the drug problem.”
The VA medical centers provide a wide range of medical and rehabilitation treatment services to veterans, including drug abuse and additional rehabilitation services, along with vocational training and other social services. According to the complaints, the defendants, each of whom is a veteran with privileged access to the buildings and grounds of the medical centers, sold controlled substances to other veterans receiving services from the centers.
Each count with which the defendants are charged carries a maximum potential penalty of 20 years in prison and a fine of $1 million, or twice the gross gain or loss from the offense. The defendants and counts with which they are charged are as follows:
Defendant
Charges
Count One – heroin distribution
Count Two – cocaine base distribution
Robin Merritt, 55, of Hackensack, N.J.
Count One - heroin distribution
Count Two - cocaine base distribution
Count Three – hydromorphone distribution
Abdul Kareem Muhammad, 50, of Boundbrook, N.J.
Count One – heroin distribution
Count Two – cocaine base distribution
Yusef Muhammad, 59, of North Plainfield, N.J.
Count One – heroin distribution
Thomas Pearson, 66, of Dover, N.J.
Count One – heroin distribution
Christopher Shalaby, 31, of Somerville, N.J.
Count One – heroin distribution
John Stuckey, 49, of Newark
Count One – heroin distribution
U.S. Attorney Fishman praised special agents of the Veterans Administration, Office of Inspector General, under the direction of Special Agent in Charge Hughes in Newark, and the FBI, under the direction of Special Agent in Charge Ford in Newark, with the investigation leading to the charges. He also thanked the VA Police for their assistance.
The government is represented by Assistant U.S. Attorney David M. Eskew of the U.S. Attorney’s Office General Crimes Unit in Newark.
The charges and allegations contained in the complaints are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
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Johnson, Phillip Complaint
Merritt, Robin Complaint
Muhammad, Abdul Kareem Complaint
Muhammad, Yusuf Complaint
Pearson, Thomas Complaint
Shalaby, Christopher Complaint
Stuckey, John ComplaintPresident of New Jersey-Based Financial Services Firm Pleads Guilty to Multimillion-dollar Securities FraudRead the Press Release
Targeted Dozens of Investors Across the Country
CAMDEN, N.J. – The president of an investment and financial services firm today admitted defrauding dozens of investors New Jersey, Pennsylvania, Texas and elsewhere of $5 million and evading taxes, U.S. Attorney Paul J. Fishman announced.
Everett C. Miller, 43, of Marlton, N.J., pleaded guilty before U.S. District Judge Renee Marie Bumb in Camden federal court to an information charging him with one count of securities fraud and one count of tax evasion.
The defendant in this case has admitted responsibility in a financial scheme that was both widespread and long-running,” U.S. Attorney Fishman said. “By preying on trusting investors around the country over a period of years, he was able to rob them of millions of dollars. He defrauded the public as well, by failing to pay taxes on his illegal proceeds. He will now face the punishment he deserves for his greed.”
Aaron T. Ford, special agent in charge of the FBI office in Newark, said, “Investment schemes such as that perpetrated by Mr. Miller prey on innocent investors and compromise our free market economy. Mr. Miller put his investors’ resources, pensions, and life savings at risk for his own gain. The FBI, together with its law enforcement and regulatory agency partners, will vigorously investigate these financial crimes and hold those responsible accountable.”
“Remember the old cliché: if it sounds too good to be true it probably is,” Shantelle P. Kitchen, Special Agent in Charge, IRS Criminal Investigation, Newark Field Office, said. “Mr. Miller preyed upon trusting investors and then stole their hard-earned money. Today’s plea should be a reminder for investors to exercise caution when pitched with an investment opportunity that promises unbelievable returns.”According to documents filed in this case and statements made in court:
Miller was the founder, chief executive officer, president, principal and sole owner of Carr Miller Capital LLC (CMC), an investment and financial services firm based in Marlton. Miller and others solicited investments through the firm from individuals located in New Jersey, Pennsylvania, North Carolina, Arkansas, Texas and elsewhere. CMC had more than 30 affiliates and related entities, and more than 75 related bank accounts. Miller controlled the firm’s finances and established himself as synonymous with CMC. Prior to founding CMC in June 2006, Miller was a registered financial advisor at several financial institutions.
Miller admitted that from June 2006 through December 2010, he and others issued promissory notes to more than 190 investors across the United States, and Miller and CMC received $41.2 million from these investors. The notes were provided as “securities,” but Miller and CMC never registered the notes as securities with any federal or state agency, nor were the notes exempt from such registration requirements. The notes had a term of nine months and promised the investors returns of 7 to 20 percent per year, and a return of the principal investment at the end of the nine-month period.
Miller and others falsely represented to the investors that their money would be invested in certain ways, but the investors were not provided with material information about their investments or were misled about the risks of their investments. Miller commingled and pooled the investors’ monies into one of CMC’s 75 related bank accounts. Unbeknown to the investors, Miller used some of the monies in the following ways: (1) to repay prior investors, most in Ponzi scheme fashion, (2) to pay CMC and its related entities’ payrolls and operating expenses, and (3) to support Miller’s lifestyle. Miller’s purchases included luxury automobiles; home furnishings and electronic equipment; tickets to entertainment and sporting events; travel, lodging, and vacations; meals, entertainment, retail shopping; and groceries.
On Aug. 11, 2009, the Arkansas Securities Department (ASD) initiated an investigation of Miller, CMC, and others for selling unregistered securities to investors in the form of the promissory notes. Following the investigation, the ASD issued a cease-and-desist order against Miller, CMC, and others from selling the notes.From August 2009 through December 2010, despite knowing about the ASD’s investigation of the promissory notes and CMC’s inability to pay either the interest or the principal on them, Miller and others continued to sell the notes as unregistered securities to investors. They issued notes to approximately 50 new investors, but never returned any of the principal to the new investors.
Miller admitted that for calendar years 2007, 2008, and 2009, he intentionally failed to provide the IRS with any information regarding the proceeds that he personally received in connection with his fraudulent scheme. Miller failed to disclose $218,770, $244,879 and $199,507 for 2007, 2008 and 2009, respectively. In total, Miller admitted failing to report $663,156 in taxable income to the IRS, resulting in a tax loss to the government of $47,342.
At today’s plea proceeding, Judge Bumb entered a consent judgment and order of forfeiture in the amount of $4,999,400, which constitutes the proceeds Miller obtained as a result of the securities fraud.
The securities fraud count to which Miller pleaded guilty is punishable by a maximum potential penalty of 20 years in prison and a fine of $5 million. The tax fraud count is punishable by a maximum potential penalty of five years in prison and a fine of up to $250,000. Sentencing is scheduled for Oct. 18, 2013.
U.S. Attorney Fishman credited special agents with 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. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, for the investigation leading to today’s guilty plea. He also thanked the Financial Industry Regulatory Authority – Criminal Prosecution Assistance Group, and the U.S. Securities and Exchange Commission’s Philadelphia Office for its assistance with this investigation. And thanked the N.J. Securities Fraud Prosecution Section, the Arkansas Securities Department and the Texas State Securities Board for their roles in the investigation.
The government is represented by Assistant U.S. Attorneys Aaron Mendelsohn of the Economic Crimes Unit and Evan Weitz of the Asset Forfeiture and Money Laundering Unit of the U.S. Attorney’s Office 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: John A. Azzarello Esq., Chatham, N.JMiller, Everett Information
New Jersey Adult Paraphernalia Wholesaler Sentenced to Prison for Tax Evasion, Hiding Nearly $1.2m from New York Business, Including in Undeclared Indian Bank AccountsRead the Press Release
NEWARK, N.J. – A Middlesex County, N.J., man who co-owns and operates a wholesale merchandise business in New York selling adult paraphernalia was sentenced today to 19 months in prison for concealing more than $1.2 million in income in various domestic and foreign bank accounts, New Jersey U.S. Attorney Paul J. Fishman and Assistant Attorney General Kathryn Keneally of the Justice Department’s Tax Division announced.
Sameer Gupta, 33, of Edison, N.J., pleaded guilty before U.S. Magistrate Judge Patty Shwartz on Feb. 26, 2013, to one count of tax evasion in connection with his diverting funds from the wholesale merchandise business, J.S. Marketers Inc., to undisclosed foreign accounts at HSBC in India, among other places. U.S. District Judge Faith S. Hochberg imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Gupta is the 50 percent owner of J.S. Marketers Inc., which sells adult paraphernalia to large adult store chains and smaller retail video stores and bodegas. From 2006 through 2009, Gupta diverted $822,916 of the business’ receipts into 17 different personal bank accounts held in the names of various individuals, including himself and family members. He directed more than $250,000 of those diverted funds into six different accounts held offshore at a branch of HSBC in India. From 2007 through 2009, Gupta caused 22 J.S. Marketers corporate checks to be made payable to himself and family members in amounts identical to invoices from the business’ suppliers. Gupta endorsed those checks, which totaled $375,138, and deposited them into bank accounts that he controlled. Gupta filed individual income tax returns for the years 2006 through 2009 that did not report his income from the diverted funds.
As a result, Gupta evaded taxes on $1,198,054 in income for 2006 through 2009. He also failed to file Reports of Foreign Bank and Financial Accounts, (FBARs), for 2006 through 2008. The tax loss resulting from Gupta's conduct, not including interest and penalties, is $383,475.
In addition to the prison term, Judge Hochberg sentenced Gupta to serve two years of supervised release. As part of his plea agreement, Gupta has paid to the United States Treasury a one-time FBAR penalty of $259,045 and has cooperated with the IRS in the investigation of his outstanding taxes due and owed for 2006 through 2009. Judge Hochberg also ordered Gupta to pay an additional $20,000 fine.
U.S. Attorney Fishman and Assistant Attorney General Keneally credited special agents with IRS-Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen in Newark, with the investigation leading to today’s sentence.
The government is represented by Assistant U.S. Attorney Joseph Mack of the U.S. Attorney’s Health Care and Government Fraud Unit and Trial Attorney Michael C. Vasiliadis of the Department of Justice Tax Division.13-280
Defense counsel: Kevin H. Marino Esq., Chatham, N.J.
Members of International Arms Smuggling Network Sentenced to Prison for Trafficking Weapons and Ammunition to GreeceRead the Press Release
CAMDEN, N.J. – Four members of an international arms trafficking organization were sentenced to prison today in New Jersey for conspiring to smuggle substantial quantities of firearms and ammunition from the United States to Greece, U.S. Attorney Paul J. Fishman announced.
Dennis Meleshes, 46, and Vladimir Polivka, 58, of Las Vegas and Nick Somos, 71, of Queens, N.Y., each previously pleaded guilty before U.S. District Judge Joseph E. Irenas to informations charging them with conspiracy to smuggle weapons. Vasileios Angelakis, 36, also of Queens, previously pleaded guilty to misprision of a felony.
Judge Irenas sentenced Meleshes to serve six months in prison and six months of home confinement; and Polivka, Somos and Angelakis to 24, 18 and 15 months in prison, respectively.
According to documents filed in this case and statements made in Camden federal court:
Beginning in December 2011, Meleshes, Polivka and Somos orchestrated a plan to acquire a large quantity of weapons and ammunition in the United States that they intended to ship to Greece for sale on the black market. Meleshes and Polivka purchased a number of weapons – some of the money for which was provided by Angelakis – at various locations in Nevada and surrounding areas.
Meleshes and Polivka ultimately created a weapons cache that included 65 revolvers and semi-automatic pistols, an UZI machine gun, one AK-47 assault rifle and approximately 10,540 assorted rounds of ammunition. Meleshes and Polivka packed the weapons in two vehicles – an Audi A6 and a Chevrolet Caprice – one of which contained an improvised lock system, or “trap,” which was intended to prevent law enforcement from finding the cache. Polivka and another individual then drove the vehicles to a freight forwarding service in Brooklyn, N.Y., where Somos had arranged for the cars to be loaded onto cargo containers and placed on a commercial shipping line bound for Greece via Port Naples, Italy. Meleshes and Angelakis traveled to Italy in order to personally receive the shipment.
Customs officials issued a recall on the shipment and the cargo container was returned to the Port of New York/Newark in New Jersey. The weapons cache was seized on April 3, 2012. Law enforcement confirmed it contained items listed as U.S. Munitions List defense articles, which require a license to be exported out of the United States. No such license accompanied any of the firearms recovered and a search of law enforcement databases revealed that no licenses had been obtained by any of the defendants for the items.
In fact, the export documents filed in connection with the shipment did not list any of the weapons or ammunition.In all, the seized weapons and ammunition were worth more than $250,000 on the secondary market in Greece.
In addition to the prison terms, Judge Irenas sentenced Meleshes, Polivka and Somos to serve three years of supervised release and Angelakis to serve a year of supervised release.
U.S. Attorney Fishman credited special agents of the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Andrew M. McLees; the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Thomas J. Cannon; U.S. Customs and Border Protection, led by Robert E. Perez, director of New York Field Operations; as well as detectives from the Las Vegas Metropolitan Police Department, with the investigation.
The government is represented by Assistant U.S. Attorney Dennis C. Carletta of the U.S. Attorney’s Office National Security Unit in Newark.13-277
Defense counsel:
Dennis Meleshes: Ryan Clark Esq., Freehold, N.J.
Vladimir Polivka: Susan C. Cassell Esq., Ridgewood, N.J.
Nick Somos: Louis Rosenthal Esq., Brooklyn
Vasileios Angelakis: Joseph Rubino Esq., West Orange, N.J.Union County, N.J., Businessman Admits Tax Evasion SchemeRead the Press Release
Concealed Nearly $4m in Business Receipts
NEWARK, N.J. – A Union County, N.J., man who owns and operates a medical supply company that he runs out of his home admitted today to concealing $3,984,508 in business receipts and pleaded guilty to one count of tax evasion, U.S. Attorney Paul J. Fishman announced.
Yuxin Xie, 59, of Mountainside, N.J., pleaded guilty before U.S. District Judge Kevin McNulty in Newark federal court to an information charging one count of tax evasion for failing to report business receipts from his company, YX Enterprises.According to documents filed in this case and statements made in court:
During the tax years in question – 2006 through 2010 – Xie purchased diabetic test strips from numerous suppliers. He re-packaged and sold them to wholesale pharmaceutical and medical products distribution companies. Customer payments that Xie received were deposited into 11 different bank accounts at three different financial institutions. YX Enterprises was not a registered corporation and any income received by YX Enterprises should have been reported on Xie’s tax returns.
Xie’s tax returns for the five years in question failed to report millions of dollars in gross receipts received by YX Enterprises. For each of the tax years 2006, 2007 and 2008, Xie’s tax returns reported that YX Enterprises had gross receipts of less than $10,000; Xie’s 2009 and 2010 tax returns contained no reference at all to YX Enterprises. YX Enterprises had in fact received nearly $4 million in business receipts during this five-year period.
Although Xie pleaded guilty to only one count of tax evasion for the 2009 tax year, the plea agreement requires that Xie admit to evading income taxes for all five years, and the court will take into account at sentencing the tax loss for all five years. The tax loss is $200,000 to $400,000.
Xie faces a maximum potential penalty of five years in prison and a fine of $250,000 or twice his gain from the offense, together with the costs of prosecution. Xie also agreed to file true and accurate tax returns and to pay to the IRS all taxes and penalties owed. Sentencing is scheduled for Oct. 23, 2013.U.S. Attorney Fishman credited special agents with IRS-Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen, in Newark; special agents with the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark; and inspectors with the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Joseph Mack of the U.S. Attorney’s Health Care and Government Fraud Unit.
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Defense counsel: Robert J. DeGroot Esq., Newark
Xie Information
Former N.J. Turnpike Authority Manager Charged with Stealing More Than $120,000Read the Press Release
NEWARK, N.J. – A former claims manager for the N.J. Turnpike Authority was arrested today for allegedly stealing more than $120,000 from the authority, U.S. Attorney Paul J. Fishman announced.
Gerardo Blasi, 54, of Clifton, N.J., was arrested by special agents of the FBI and charged by complaint with mail fraud and defrauding a state agency that receives federal funds. He is scheduled to make his initial appearance later today before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court.
According to the complaint:
Blasi was a claims manager at the N.J. Turnpike Authority, responsible for negotiating and collecting payments from insurance companies whose insured drivers caused damage to the Turnpike. From April 2011 to June 2013, Blasi allegedly stole more than $120,000 from the authority in several ways, including instructing insurance companies to issue checks payable to fraudulent repair companies. When the checks were mailed to Blasi at the authority, he would arrange to have them cashed and keep a portion of the money for himself.
The fraud count with which Blasi is charged carries a maximum potential penalty of up to 20 years in prison and a $250,000 fine. The theft from a state agency count is punishable by a maximum potential penalty of up to 10 years in prison and a $250,000 fine.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, with the investigation leading to today’s charges. He also thanked the N.J. Turnpike Authority for its cooperation in the investigation.
The government is represented by Assistant U.S. Attorney David L. Foster of the office’s Special Prosecutions Division in Newark.
The charges and allegations contained in the complaint are merely accusations, and the defendant is considered innocent unless and until proven guilty.
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Blasi Complaint
Essex County, N.J., Man Convicted on Weapons ChargesRead the Press Release
NEWARK, N.J. – An Essex County, N.J., man, charged 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, was convicted on weapons charges, U.S. Attorney Paul J. Fishman announced today.
Randy Andrew, 36, of Irvington, N.J., was 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 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. For more than one year the FBI Safe Streets Task Force led an operation 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, May 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.
Andrew represented himself pro se after the first day of trial, assisted by defense counsel. The trafficking and conspiracy charges on which Andrew was convicted are punishable by a maximum potential penalty of five years in prison and the felon in possession charges are punishable by up to 10 years in prison. Sentencing is scheduled for Sept. 3, 2013.
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 that led to the guilty verdict. 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.
13-274Defense counsel: Paul Casteleiro Esq., Hoboken, N.J.
Essex County, N.J., Man Convicted on Weapons ChargesRead the Press Release
NEWARK, N.J. – An Essex County, N.J., man, charged 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, was convicted on weapons charges, U.S. Attorney Paul J. Fishman announced today.
Randy Andrew, 36, of Irvington, N.J., was 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 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. For more than one year the FBI Safe Streets Task Force led an operation 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, May 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.
Andrew represented himself pro se after the first day of trial, assisted by defense counsel. The trafficking and conspiracy charges on which Andrew was convicted are punishable by a maximum potential penalty of five years in prison and the felon in possession charges are punishable by up to 10 years in prison. Sentencing is scheduled for Sept. 3, 2013.
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 that led to the guilty verdict. 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.
13-274Defense counsel: Paul Casteleiro Esq., Hoboken, N.J.