District of New Jersey
Press releases recorded for this federal judicial district.
Owner of Nellie’s Provisions Pleads Guilty to Tax EvasionRead the Press Release
CAMDEN, N.J. – The owner of a meat distribution company admitted today to evading taxes related to income diverted from his companies for his personal use, U.S. Attorney Paul J. Fishman announced.
Nicholas Papanier Sr., 57, of Sewell, N.J., pleaded guilty before U.S. District Judge Noel L. Hillman to an Information charging him with one count of tax evasion.
According to documents filed in this case and statements made in court:
Between 2006 and 2009, Papanier owned Nellie’s Provisions, a meat distribution company that provided all of the meat for Primo Hoagies franchises and other independent restaurants. In 2006, 2007 and 2008, Papanier persuaded Primo Hoagies franchise owners to buy Thumann’s deli products from Nellie’s Provisions, often paying for them in cash. He took a significant amount of the cash paid to Nellie’s Provisions and deposited it into his personal bank accounts. He then used the money from his personal accounts to pay personal expenditures. He diverted a total of $556,664 for the calendar years 2006, 2007 and 2008 in the amounts of $56,395, $349,264, and $151,005, respectively.
Papanier admitted that he did not report the diverted cash to the IRS and only reported Form W-2 wages, interest and dividend income, and property tax information. By omitting all of the diverted cash, he failed to disclose and report a significant portion of this income on his tax returns, causing those tax returns to substantially understate the amount of income he received.
He admitted that for 2006, 2007 and 2008, had he reported the additional cash on his income tax returns he would have owed the government $189,656.
As part of the plea and in addition to the restitution, Papanier agreed to forfeit $484,010 to the United States. On Oct. 14, 2009, the United States filed a Verified Complaint for Forfeiture In Rem to forfeit and condemn to the use and benefit of the United States $372,042.54 in United States currency that was seized from Papanier’s bank accounts. On Sept. 16, 2010, the United States filed another Verified Complaint for Forfeiture In Rem to forfeit and condemn to the use and benefit of the United States an additional $111,967.50 in United States currency that was seized from Papanier’s bank accounts. The Complaints alleged that the subject funds were subject to forfeiture to the United States because they were involved in and were traceable to Structuring of Currency to Avoid a Reporting Requirement.
The charge to which Papanier pleaded guilty is punishable by a maximum potential penalty of five years in prison and a fine of $250,000. Sentencing is scheduled for June 28, 2013.
U.S. Attorney Fishman credited special agents of IRS – Criminal Investigation, under the direction of Acting 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 Jason M. Richardson of the U.S. Attorney’s Office Criminal Division in Camden in the criminal case, and Jordan Anger of the U.S. Attorney’s Office Asset Forfeiture Unit in Newark in the civil action.
13-140
Defense counsel: Ronald Warren Esq., Haddonfield, N.J.
Papanier, Nicholas Information
Former Hamilton Township, N.J., Official Sentenced to 18 Months in Prison for Laundering Bribe Money Paid to MayorRead the Press Release
TRENTON, N.J. – The former director of Community Planning and Compliance for Hamilton Township, N.J., who admitted laundering a $5,000 bribe from an insurance broker to township Mayor John Bencivengo, was sentenced today to 18 months in prison, U.S. Attorney Paul J. Fishman announced.
Robert Warney, 47, of Hamilton, previously pleaded guilty before U.S. District Judge Peter G. Sheridan to an Information charging him with one count of money laundering. U.S. District Judge Anne E. Thompson imposed sentenced today in Trenton federal court.
According to documents filed in this case and statements in court:On May 12, 2011, while serving as the director of Community Planning and Compliance for Hamilton Township, Warney accepted on Bencivengo’s behalf a $5,000 check from, Marliese Ljuba (identified in the Information to which Warney pleaded guilty as the Cooperating Witness), the health insurance broker for the Hamilton Township School District. Warney gave the proceeds of the check to Bencivengo in cash increments over several weeks. He, Bencivengo, and Ljuba agreed to have the check made payable to Warney’s spouse in order to conceal the payment. They also agreed that if anyone asked Warney or Ljuba about the check, they would say that Ljuba purchased a bedroom set from Warney’s spouse. A notation “Cherry Bedroom Set” was put on the check to support that story.
On Nov. 20, 2012, following a five-day trial before U.S. District Judge Anne E. Thompson, Bencivengo was found guilty of obstruction of commerce by extortion under color of official right, attempted obstruction of commerce by extortion under color of official right, two counts of violating the federal Travel Act, for causing the interstate travel and using facilities in interstate commerce in connection with the bribes that he accepted, and one count of money laundering in connection with $12,400 in bribes he allegedly solicited and accepted in exchange for his official influence in helping Ljuba maintain the position of health insurance broker with the township’s school district. On March 13, 2013, he was sentenced to 38 months in prison.
Warney also admitted that in March 2006 and November 2007, while serving as a member of the Hamilton Township Board of Education, he received corrupt payments from Ljuba in exchange for his official action and influence in voting in favor of the School Board entering into a three-year contract with the Ljuba and her employer for them to provide health insurance brokerage services to the school district. Warney admitted that on March 26, 2006, at a meeting of the school board, he voted in favor of entering into a three-year contract with Ljuba and that he received two payments of $5,000 in March 2006 and in November 2007– $10,000 total – from her in exchange for his official action.
In addition to the prison term, Judge Thompson sentenced Warney to two years of supervised release and fined him $2,000.
U.S. Attorney Fishman credited special agents of the FBI’s Trenton Resident Agency, Newark Field Office, under the direction of Acting Special Agent in Charge David Velazquez, for the investigation leading to today’s sentence.
The government is represented by Harvey Bartle, Attorney in Charge of the U.S. Attorney’s Office’s Trenton Office.
13-139
Defense counsel: William L. Hughes Esq., Atlantic City, N.J.
Warren County, N.J., Man Sentenced to 48 Months in Prison for Possessing Images of Child Sexual AbuseRead the Press Release
TRENTON, N.J. - Warren County, N.J., man was sentenced today to 48 months in prison for possessing images on his computer and an external hard drive of children being sexually abused, including violent video images, U.S. Attorney Paul J. Fishman announced.
Leonard Ramirez, 41, of Great Meadows, N.J., previously pleaded guilty before U.S. District Judge Freda L. Wolfson to one count of an Indictment charging him with possession of child pornography. Judge Wolfson imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:On April 21, 2009, law enforcement agents from the Phillipsburg, N.J., police department interviewed Ramirez at his former girlfriend’s residence in Phillipsburg. They obtained Ramirez’s consent to search his laptop computer and discovered the criminal images.
On May 13, 2009, law enforcement agents from the Warren County Prosecutor’s Office and the N.J. State Police executed a search warrant at Ramirez’s residence. Law enforcement seized an iMac computer and an external hard drive that contained numerous pictures and videos depicting child pornography. The external hard drive also contained videos of sadistic conduct and other violent images involving minors.
In addition to the prison term, Judge Wolfson sentenced Ramirez to five years of supervised release, with restricted contact with minors and computer-use monitoring. Ramirez also must register as a sex offender.
U.S. Attorney Fishman credited the FBI Cyber Crimes Task Force, under the direction of Acting Special Agent in Charge David Velazquez in Newark; the Warren County Prosecutor’s Office, under the direction of Prosecutor Richard T. Burke; the Warren County Chief of Detectives William R. Eppell; the Phillipsburg Police Department, under the direction of Chief James Faulborn; and the N.J. State Police, under the direction of Col. Rick Fuentes, Superintendent, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorneys John E. Clabby and R. Joseph Gribko of the U.S. Attorney's Office Criminal Division in Trenton.
13-136
Defense counsel: Brian Reilly, Assistant Federal Public Defender, Trenton
Union County, N.J., Man Charged with Distributing Images and Videos of Child Sexual AbuseRead the Press Release
NEWARK, N.J. – A Linden, N.J., man was arrested yesterday and charged for allegedly distributing child pornography from his home computer, U.S. Attorney Paul J. Fishman announced.
John Ellenbacher, 47, of Linden, N.J., is charged by Complaint with one count of distributing images of child sex abuse over the Internet. He is scheduled to appear this afternoon before U.S. Magistrate Judge Mark Falk in Newark federal court.
According to the criminal Complaint:
In August 2012, law enforcement officers engaged in a child exploitation investigation intercepted emails containing criminal images and videos. Subsequent investigation into the origin of the emails led to a computer at Ellenbacher’s home.
Special agents of Immigration and Customs Enforcement, Homeland Security Investigations (ICE HSI) executed a search warrant yesterday at Ellenbacher’s residence in Linden, seizing digital evidence that contained multiple images depicting child sexual abuse, including material involving prepubescent minors. Ellenbacher was taken into custody following the search.
The distribution count carries a mandatory minimum penalty of five years in prison, and a maximum potential penalty of 20 years in prison and a $250,000 fine.U.S. Attorney Fishman credited special agents of ICE HSI, under the direction of Special Agent in Charge Andrew M. McLees in Newark, with the investigation leading to the charge.
The government is represented by Assistant U.S. Attorney Danielle Alfonzo Walsman of the U.S. Attorney’s Office General Crimes Unit in Newark.
The charge and allegations against Ellenbacher are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Anyone with information which may be relevant to this investigation is encouraged to contact ICE HSI through its toll-free hotline at 1-866-DHS-2ICE or by completing its online tip form at http://www.ice.gov/exec/forms/hsi-tips/tips.asp.
13-135
Ellenbacher, John Complaint
Shipping Corporations to Pay $10.4 Million for Environmental Crimes on Four ShipsRead the Press Release
$2.6 Million Will Go To Projects to Aid Coastal Environment Hit by Hurricane Sandy
WASHINGTON – Two shipping firms based in Germany and Cyprus today pleaded guilty to 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.
U.S. Attorney for the District of New Jersey Paul J. Fishman and U.S. Coast Guard Deputy Commander of the Delaware Bay Sector Capt. Todd Wiemers announced the plea agreement – which includes a $10.4 million penalty, $2.6 million of which will be used to address environmental damage caused by Hurricane Sandy – at a press conference in Newark.
According to a multi-district plea agreement arising out of charges brought in the District of New Jersey and District of Delaware, Columbia Shipmanagement (Deutschland) GmbH (CSM-D), a German corporation, and Columbia Shipmanagement Ltd. (CSM-CY), a Cypriot company, have agreed to pay a $10.4 million penalty and be placed on probation for four years. During probation, the companies will be subject to the terms of an environmental compliance program 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 and Delaware. The guilty pleas were entered before U.S. District Judge Susan D. Wigenton in Newark federal court.
“We in New Jersey are as sensitive as anyone to the need to preserve the shoreline,” U.S. Attorney Fishman said. “Shipping companies who foul the water by deliberately discharging oil and lying about it to the Coast Guard can expect to be prosecuted.”
“Deliberate pollution and intentional falsification of ship records to hide environmental crimes are serious offenses. These reprehensible actions not only damage the marine environment, but also put law breakers at a competitive advantage over those who respect the law and play by the by rules,” said Ignacia S. Moreno, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “We intend to send a message with these prosecutions that those engaged in deliberate despoiling of our precious natural resources will be vigorously prosecuted.”
“This prosecution is a fine example of multi-district cooperation in enforcing federal environmental law and achieving a just sentence,” U.S. Attorney for the District of Delaware Charles M. Oberly III said.
“This was a case of wilful pollution and deliberate falsification of records designed to deceive the Coast Guard,” said Captain David Fish, Chief of Investigations for the Coast Guard. “It takes both resources and a culture of compliance to abide by the law. We are hopeful that the remedial measures required as part of this criminal conviction will have a positive impact on these companies and serve as a message to other maritime companies as to what is expected.”
According to documents filed in this case and statements made in court:
The $10.4 million penalty includes $2.6 million in organizational community service payments to assist the coastal maritime environment in New Jersey and Delaware damaged by Hurricane Sandy. The plea agreement directs the funds to environmental projects that will be selected by the National Fish & Wildlife Foundation to help conserve, preserve and restore the coastal environment of New Jersey and Delaware hit by Hurricane Sandy.
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 pleaded guilty previously and will be sentenced in Newark on April 3, 2013.
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. He 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.
Just two weeks prior to today’s plea, the defendants and their attorneys disclosed violations on a fourth ship, the M/T Cape Taft that was then anchored in New York waters and destined for New Jersey. After the ship disclosed problems to the company, 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.
In pleading guilty, the defendants have admitted the following in a detailed joint factual statement filed in Court:
• The King Emerald oil tanker used three different methods to illegally dispose of oily bilge waste. In April 2012, approximately five tons of oily waste was discharged in the exclusive economic zone of Costa Rica approximately 45 miles from a national park.
• At least three chief engineers and the second engineer were involved in illegal discharges and intentional falsification of the oil record book for the King Emerald. In one instance, the oily water separator was operated solely for the purpose of generating data on the ship’s electronic recording device to account for an illegal discharge that had already taken place.
• During the Coast Guard boarding in Carteret, N.J., the second engineer lied to inspectors and then hid a valve used to make illegal discharges in an overhead space on the ship.
• Oil contaminated bilge waste was illegally pumped overboard from the M/T Nordic Passat on the orders of the chief engineer and second engineer with a portable pump and “magic hose” that was draped down three levels of the engine room to dump overboard through the sewage system.
• Illegal discharges have been made from the M/T Nordic Passat since 2006 by “tricking” the sensor designed to detect oil with fresh water during overboard discharges on a regular and routine practice by or at the direction of the chief engineer and second engineer. As a result, virtually every discharge totaling approximately 2,000 tons of unmonitored and oil contaminated bilge waste were discharged into ocean waters illegally and in violation of MARPOL over at least a six-year period, and all of the corresponding entries in the oil record book were false.
• During the Coast Guard boarding of the Nordic Passat, senior ship engineers lied to the Coast Guard and told lower level crew members to lie.
• On the M/V Cape Maas, a container ship, the manufacturer’s seal on the oil content monitor had been broken and fresh water had been used to trick the sensor.
The plea agreement sets forth the counts charged as to each defendant in each district including six counts involving three vessels in New Jersey and four counts involving one ship in Delaware. The guilty pleas include 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. The maximum penalty for each of these felony offenses is $500,000 or up to twice the gross gain or loss from the offense for a corporation.
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 Investigations and Analysis.
The government is represented by Kathleen P. O’Leary, Assistant U.S. Attorney in the Criminal Division in New Jersey; Richard A. Udell, Senior Trial Attorney, and Stephen Da Ponte, Trial Attorney, 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.
13-134
Defense counsel: Thomas L. Mills Esq., Washington, D.C.
New Jersey Information
Delaware Information
Columbia Joint Factual Statement
Photo 1
Photo 2
Photo 3
Photo 4Monmouth County, N.J., Man Admits to Filing False Personal Income Tax Returns Omitting Swiss Bank AccountsRead the Press Release
TRENTON, N.J. - A Monmouth County, N.J., man today admitted filing false personal federal income tax returns, U.S. Attorney Paul J. Fishman announced.
Rakesh Chitkara, 60, of Marlboro, N.J., pleaded guilty today before U.S. District Judge Mary L. Cooper to Count Four of a five-count Information, charging him with making and subscribing to a 2007 federal income tax return to the IRS that he did not believe to be true.
According to documents filed in this case and statements made in court:
Chitkara admitted that he had a financial interest in at least two financial accounts at UBS AG in Zurich, Switzerland, and that he knowingly failed to disclose these accounts, and income from these accounts, on his personal tax returns for five years.
Citizens and residents of the United States who have an interest in, or signature or other authority over, a financial account in a foreign country at any time during the relevant tax year are required to so indicate on a U.S. Individual Income Tax Return, Form 1040, by checking “Yes” or “No” in the appropriate box on Schedule B, Part III - Foreign Accounts and Trusts. Citizens and residents of the United States are also required to report any interest and dividend income, as well as capital gain income, earned from such accounts.
On April 20, 1989, Chitkara caused to be opened an account in his own name at UBS AG in Zurich, Switzerland. On Jan. 13, 2000, Chitkara opened an account at UBS (Bahamas) Ltd. in the name of GMX. GMX Industries Inc. was a corporation formed under the laws of the Commonwealth of the Bahamas that was utilized to conceal Chitkara’s beneficial ownership in one of his two UBS accounts. On Oct. 10, 2002, Chitkara caused to be opened an account at UBS AG in Zurich, Switzerland, in the name of GMX, which was intended to be the successor account of the GMX account opened at UBS (Bahamas) Ltd. Chitkara was the sole beneficial owner of the GMX accounts at UBS (Bahamas) Ltd. and at UBS AG in Zurich.
Chitkara admitted that for tax years 2004 through 2008, he failed to report income received by him in one or more accounts at UBS and failed to report that he had an interest in, or a signature or other authority over, the financial accounts in Switzerland when he knew he had received income in one or more of the Swiss bank accounts.
As part of his plea agreement, Chitkara must repay back taxes – which the government contends total approximately $27,000, in addition to a civil penalty of $839,885, for willfully failing to file Reports of Foreign Bank and Financial Accounts (“FBARs”) to the IRS.
The charge to which Chitkara pleaded guilty carries a maximum potential penalty of three years in prison and a $250,000 fine. Sentencing is currently scheduled for June 26, 2013.
U.S. Attorney Fishman credited special agents of the IRS – Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen, with the investigation that resulted in today’s sentencing.
The government is represented by Assistant U.S. Attorney John E. Clabby of the U.S. Attorney’s Office Criminal Division in Trenton and Trial Attorney Tino Lisella of the Justice Department’s Tax Division.
13-137
Defense counsel: Ian M. Comisky and Matthew D. Lee Esqs., Philadelphia
Chitkara, Rakesh Information
Mercer County, N.J. Woman Admits Involvement in Trenton, N.J. Oxycodone RingRead the Press Release
TRENTON, N.J. – A Mercer County, N.J., woman today admitted her role in conspiring with Joseph “JoJo” Giorgianni, Charles Hall III and others to illegally distribute oxycodone pain pills, U.S. Attorney Paul J. Fishman announced.
Carol M. Kounitz, 57, of Hamilton, N.J., pleaded guilty before U.S. District Judge Michael A. Shipp in Trenton federal court to an Information charging her with one count of conspiracy to distribute and possess with intent to distribute oxycodone.
According to documents filed in this case and statements made in court:
Between August 2011 and September 2011, Carol M. Kounitz agreed with Charles Hall III, Stephanie Lima and Joseph A. Giorgianni to obtain oxycodone from a doctor in exchange for payment. In coordination with Hall, on Aug. 17, 2011, Kounitz went to a Nutley, N.J., doctor and obtained a prescription for 120 15-milligram oxycodone pills for resale. Kounitz and Lima later filled that prescription and gave the pills to Hall in exchange for payment. Kounitz, Hall and Lima made a second trip to the doctor on Sept. 14, 2011, during which she obtained a prescription for 120 30-milligram oxycodone pills, and Lima obtained a prescription for 120 15-milligram oxycodone pills. Kounitz and Lima later filled those prescriptions and provided the pills to Hall in exchange for payment. Kounitz understood Giorgianni to be overseeing the sale of the oxycodone that she and Lima provided to Hall.The drug conspiracy count to which Kounitz pleaded guilty is punishable by a maximum potential penalty of 20 years in prison and a $1 million fine. Sentencing is scheduled for June 26, 2013.
U.S. Attorney Fishman credited special agents of the FBI’s Newark Field Office, under the direction of Acting Special Agent in Charge David Velazquez, for the investigation leading to today’s guilty plea.The government is represented by Assistant U.S. Attorneys Eric W. Moran and Matthew J. Skahill of the U.S. Attorney’s Office Special Prosecutions Division in Trenton and Camden, respectively.
13-133
Defense counsel: Paul W. Norris Esq., Lawrenceville, N.J.
Kounitz Information
Disbarred New Jersey Attorney Sentenced to Three Years in Prison for Failing to Report Tax Preparation IncomeRead the Press Release
Evasion Resulted in Tax Loss of More Than $1 Million
CAMDEN, N.J. – A tax preparer and disbarred New Jersey lawyer was sentenced today to 36 months in prison for submitting false tax returns or failing to file returns for five years, resulting in a tax loss to the government of more than $1.1 million, U.S. Attorney Paul J. Fishman announced.
Joseph Gallagher, 69, of Rutherford, N.J., previously pleaded guilty before U.S. District Judge Noel L. Hillman to an Information charging him with one count of tax evasion. Judge Hillman imposed the sentence today in Camden federal court.According to documents filed in this case and statements made in court:
For at least five years, Gallagher used a consulting company – established at Gallagher’s direction and purportedly operated by another person – to evade income taxes by having his income from working as a tax preparer deposited into the company’s bank account. Gallagher filed income tax returns with the IRS, failing to report $590,513, $600,157 and $682,373 for the calendar years 2004, 2005 and 2006, respectively. Gallagher failed to file any income tax return at all for calendar years 2007 and 2008, failing to report $715,694 and $770,445 for those years. In total, Gallagher admitted failing to report $3,359,182 in taxable income to the IRS, resulting in a tax loss to the government of $1,198,196.
In addition to the prison term, Judge Hillman sentenced Gallagher to two years of supervised release and ordered him to pay a $60,000 fine. He is also required to pay his more than $1 million in outstanding taxes to the IRS, plus interest and penalties.
U.S. Attorney Fishman credited special agents of IRS – Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen, with the investigation that resulted in today’s sentence.
The government is represented by Jacob T. Elberg, Deputy Chief of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark.
13-128Defense counsel: Brian Neary Esq., Hackensack, N.J.
Bergen County, N.J., Man Sentenced to 54 Months in Prison for Conspiring to Defraud Investors of $1 Million Through Bogus InvestmentsRead the Press Release
NEWARK, N.J. – The former New Jersey-based operator of Suarez Investment and Development LLC was sentenced today to 54 months in prison for his role in a conspiracy that bilked victims out of $1 million through fraudulent investment schemes, U.S. Attorney Paul J. Fishman announced.
Joseph Suarez, 48, of Woodcliff Lake, N.J., previously pleaded guilty before U.S. District Judge William J. Martini to an Information charging him with one count of conspiracy to commit wire fraud. Judge Martini imposed the sentence today in Newark federal court.According to documents filed in this case and statements made in court:
Suarez conspired with others, including Katherine Ferro, 38, of Port St. Lucie, Fla., a disbarred attorney, to commit wire fraud by inducing their victims to invest a total of $1 million dollars into various fraudulent schemes. Suarez admitted he convinced an individual to invest more than $300,000 in connection with certain business ventures, including a credit card factoring scheme. Credit card factoring is a form of accounts receivable where businesses can receive cash in advance of future credit card receipts.
Suarez also admitted that he and Ferro convinced an individual to invest approximately $222,000 in a plan to purchase D2 diesel fuel from foreign sources and resell the fuel at a profit. Suarez admitted that, contrary to the representations he and Ferro made regarding how the funds would be used, nearly all of the $222,000 wired into Ferro’s attorney trust account was depleted by transferring large amounts into other accounts for their personal use.
Suarez and Ferro also used false representations to convince additional victims to invest approximately $500,000 in the D2 diesel fuel purchase and sale plan. Ferro executed a written escrow agreement with several of these additional victims, which stated, among other things, that the investment would remain in Ferro’s attorney trust account for the duration of the investment period. Days after the victims wired the $500,000 investment into accounts controlled by Suarez and Ferro, Ferro transferred substantially all of the funds into other accounts.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Charge David Velazquez; and IRS – Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen, for the investigation leading to today’s sentence. He also thanked the U.S. Securities and Exchange Commission’s New York Regional Office, under the leadership of Director Andrew Calamari; and the Bergen County Prosecutor’s Office, under the direction of John L. Molinelli, for their assistance.In addition to the prison term, Judge Martini sentenced Suarez to serve two years of supervised release. Suarez will also be required to pay restitution in an amount to be determined.
Ferro pleaded guilty in March 2012 to wire fraud and awaits sentencing.The government is represented by Assistant U.S. Attorney Mala Ahuja Harker of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. 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 more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
13-129Defense counsel: Curtis LaForge Esq., Saddle Brook, N.J.
Bergen County, N.J., Man Admits Downloading Images and Videos of Child Sexual AbuseRead the Press Release
NEWARK, N.J. – A Bergen County, N.J., man today admitted 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., pleaded guilty before U.S. District Judge Katharine S. Hayden in Newark federal court to Count One of an Indictment charging him with receipt of child pornography.
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. The court stayed the federal prosecution pending the resolution of the state charges.
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.
Amari faces a mandatory minimum penalty of five years in prison and a maximum potential penalty of 20 years, as well as a $250,000 fine. Sentencing is currently scheduled for May 13, 2013.
U.S. Attorney Fishman credited the FBI Cyber Crimes Task Force in New Jersey, under
the direction of Acting Special Agent in Charge David Velazquez in Newark, with the investigation leading to today’s plea. 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.
13-132
Defense counsel: Chester Keller, Esq., Newark, N.J.
Amari Indictment
Two Plead Guilty in Trenton, N.J., Narcotics RingRead the Press Release
TRENTON, N.J. – A Mercer County, N.J., man today admitted his role in a conspiracy to distribute oxycodone pain pills, U.S. Attorney Paul J. Fishman announced. An Atlantic City, N.J., man also admitted to engaging in related drug transactions by obtaining oxycodone pills and to being a felon in possession of a firearm.
Giuseppe A. Scordato, 47, of Hamilton, N.J, pleaded guilty to an Information charging him with one count of conspiracy to distribute and possess with intent to distribute oxycodone. Eugene Brown, 71, of Atlantic City, NJ, also pleaded guilty to an Information charging him with one count of distribution of oxycodone and one count of being a felon in possession of a firearm. Scordato and Brown entered their guilty pleas before U.S. District Judge Michael A. Shipp in Trenton federal court.
According to documents filed in this case and statements made in court:
Between November 2011 and July 2012, Scordato obtained oxycodone-based prescription pain pills from Joseph A. “JoJo” Giorgianni, Mary Manfredo and Charles Hall III from a restaurant on Martin Luther King Boulevard in Trenton (“JoJo’s Steakhouse”) and a clubhouse located next door to JoJo’s Steakhouse (“Giorgianni’s Clubhouse”). He would sell those pills and remit the proceeds to Giorgianni and Manfredo at JoJo’s Steakhouse in exchange for a portion of the proceeds from those sales.Eugene Brown admitted to engaging in related drug transactions. On May 12, 2012, Brown traveled from Atlantic City to Trenton to provide Endocet® pills, an oxycodone-based pain pill, to Charles Hall III in exchange for payment. Brown also admitted to previously giving Endocet® pills to Hall in Atlantic City and Camden, N.J. Brown, who previously had been convicted of a felony, admitted to possessing a .22 caliber semi-automatic pistol on July 20, 2012.
The drug conspiracy and distribution charges are punishable by a maximum potential penalty of 20 years in prison and a $1 million fine. The offense of being a felon in possession of a firearm is punishable by 10 years in prison and a $250,000 fine. Sentencing for Scordato is scheduled for June 25, 2013, and for Brown, June 26, 2013.
U.S. Attorney Fishman credited special agents of the FBI’s Trenton Resident Agency, Newark Field Office, under the direction of Acting Special Agent in Charge David Velazquez, for the investigation leading to today’s guilty pleas.
The government is represented by Assistant U.S. Attorneys Eric W. Moran and Matthew J. Skahill of the U.S. Attorney’s Office Special Prosecutions Division in Trenton and Camden, respectively.
13-127
Defense counsel:
Scordato: Scott Krasny Esq., West Trenton, N.J.
Brown: Bruce Throckmorton Esq., TrentonScordato, Giuseppe Information
Brown, Eugene InformationNew Jersey Man Sentenced to 10 Years in Prison for Luring Teen to Pennsylvania, Downloading Images of Child Sex AbuseRead the Press Release
NEWARK, N.J. – A Sussex County, N.J., man was sentenced today to 120 months in prison for luring a teenage boy to Pennsylvania for illegal sexual activity, as well as downloading and receiving images on his home computer of children being sexually abused, U.S. Attorney Paul J. Fishman announced.
Robert Mucha, 58, of Newton, N.J., previously pleaded guilty before U.S. District Judge William H. Walls in Newark federal court to one count of enticing a minor to engage in criminal sexual activity and one count of receiving child pornography. Judge Walls imposed the sentence today in Newark federal court.
According to documents filed and statements made in court:In October 2010, Mucha convinced a teenage boy to travel from New Jersey to Pennsylvania to spend the day with him and then sleep over at Mucha’s apartment in Stroudsberg, Pa. After he was arrested in July 2012, Mucha admitted to sexual contact with the teenager.
Prior to his arrest, Mucha worked as a volunteer Emergency Medical Technician in Andover, N.J. He also previously taught band and Bugle Corps to teenagers in Belleville, N.J., and Lakewood, N.J.In addition to the prison term, Judge Walls sentenced Mucha to serve a lifetime of supervised release – during which his access to computers, the Internet and children will be restricted – and ordered him to pay $10,000 in restitution. Mucha is also required to register as a sex offender.
Today’s sentencing is part of Operation Holitna, an ongoing HSI-led investigation that originated in Boston. U.S. Attorney Fishman credited special agents of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI), under the direction of Special Agent in Charge Andrew M. McLees in Newark, with the investigation leading to sentencing. He also thanked the U.S. Attorney’s Office for the District of Massachusetts and the HSI Boston office.
HSI encourages the public to report suspected child predators and any suspicious activity through its toll-free hotline at 1-866-347-2423 or its online tip form at http://www.ice.gov/tips Both are staffed around the clock by investigators. Suspected child sexual exploitation or missing children may be reported to the National Center for Missing & Exploited Children at 1-800-843-5678 or http://www.cybertipline.com.
The government is represented by Assistant U.S. Attorney Andrew J. Bruck of the U.S. Attorney’s Office Criminal Division in Newark.
14-094
Defense counsel: Assistant Federal Public Defender Carol Gillen Esq., NewarkContractors Arrested for Fraud, Arson and Aggravated AssaultRead the Press Release
CAMDEN, N.J. – Two principals of a Pennsylvania construction company were arrested today in connection with an employee kickback scheme that occurred during a reconstruction project at the Ft. Dix military base in Burlington County, U.S. Attorney Paul J. Fishman announced today.
A federal grand jury returned a five-count Indictment on March 4, 2013, charging Leonard Santos, 66, of Yardley, Pa., and Alex Rabinovich, 57, of Richboro, Pa., with one count each of conspiracy to obtain kickbacks from public works employees; malicious destruction of a vehicle by fire; travel in interstate commerce to commit a crime of violence; conspiracy to accept kickbacks on federal projects; and conspiracy to commit false payroll records. Both men are expected to make their initial court appearances today before U.S. Magistrate Judge Anne Marie Donio in Camden federal court.
According documents filed in this case and statements made in court:
Between November 2009 and September 2010, Santos and Rabinovich operated Sands Mechanical Inc. as a subcontractor on the restoration and rehabilitation of the Marine Corps Reserve Training Center at Joint Base-McGuire-Dix-Lakehurst in Burlington County, N.J. Sands provided sheet metal, electrical and plumbing work. The general contractor was a company headquartered in Marriotsville, Md. Santos and Rabinovich demanded that select employees kickback a percentage of their weekly paychecks or face termination. Two Sands’ supervisors have already pleaded guilty to these charges: Richard Cottone (Santos’ son-in-law) pleaded guilty Dec. 11, 2012, and will be sentenced Oct. 10, 2013; Michael Featherston pleaded guilty Jan. 10, 2012 and will be sentenced Oct. 9, 2013.
In February 2010, the U.S. Department of Labor’s Wage and Hour Division (WHD) was tipped off that the Sands employees were not being paid the prevailing wage for Burlington County. Santos conceded that Sands failed to pay the proper prevailing wage to its employees and agreed to repay $80,000 to those deprived employees. Santos cut settlement checks to those employees who were owed back wages. However, Cottone and Featherston warned those employees not to cash their settlement checks. Instead, Cottone and Featherston took the employees to a nearby check cashing business, where many of these checks were then endorsed over to Cottone, who cashed them and returned the funds to Santos. Since these kickbacks were removed from employees’ checks, Santos and Rabinovich routinely submitted inaccurate weekly payroll forms that are required whenever the federal government subsidizes a construction project.
The general contractor’s site manager was routinely critical of the work performance of Sands’ employees, which, at times, necessitated that work be done over. The site manager was targeted by Santos, Cottone and others by having his truck torched in front of his residence at 4 a.m. on May 17, 2010. This tactic failed to warn off the site manager. On June 10, 2010 at 5 AM, while riding his bike, the site manager was intentionally run down by a car driven by Cottone’s nephew and two friends. The victim sustained multiple serious injuries.
The defendants are charged with providing kickbacks to a prime contractor to improperly obtain subcontracts on federally funded construction projects. Between November 2009 and January 2013, Santos and Rabinovich paid off a Philadelphia contractor’s representative to get “last looks” at other competitors’ bids. Santos accumulated a total of $46,200 in kickbacks owed for the 10 subcontracts awarded to Sands Mechanical. By the summer of 2012 he still owed about $15,000 in kickbacks. On two occasions, in November and December 2012, at the behest of Santos, Alex Rabinovich was recorded giving a total of $4,156 in cash to the contractor’s representative in payment of the kickbacks still due and owing.
The counts of conspiracy to demand kickbacks from employees on a federally subsidized project, conspiracy to provide kickbacks to a prime contractor and conspiracy to submit false payroll records each carry a maximum potential penalty of five years in prison and a $250,000 fine. The count of traveling in interstate commerce to commit a crime of violence is punishable by a maximum potential penalty of 20 years in prison; and the arson count is punishable by up to 20 years in prison, with a mandatory minimum of five years in prison.
Seven defendants have previously pled guilty to various charges ranging from collecting kickbacks, arson and aggravated assault.
Fishman credited special agents of the Department of Labor, Office of Labor Racketeering and Fraud Investigations, under the direction of Special Agent-in-Charge Robert Panella; the Department of Labor-Wage and Hour Division, under the direction of George Ference, regional administrator; Naval Criminal Investigative Service, under the direction of Special Agent in Charge Cheryl DiPrizio, Northeast field office; and the Air Force Office of Special investigations, under the direction of Special Agent Seth Neville, detachment commander, Joint Base McGuire-Dix-Lakehurst.
The government is represented by Senior Litigation Counsel V. Grady O’Malley of the U.S. Attorney’s Office Organized Crime\Gangs Unit in Newark.
13-126
Santos, Leonard and Rabinovich, Alex Indictment
New York Man Sentenced to 41 Months in Prison for Hacking AT&T’s ServersRead the Press Release
Stole E-mail Addresses and Personal Information Belonging to 120,000 Apple iPad 3G Subscribers; Disclosed Information to Internet Magazine
NEWARK, N.J. – The head of a self-described “security research” hacking group was sentenced today to 41 months in prison for breaching AT&T’s servers, stealing e-mail addresses and other personal information belonging to approximately 120,000 Apple iPad users, and disclosing that information to an Internet magazine, U.S. Attorney Paul J. Fishman announced.
Andrew Auernheimer, 27, of New York, was convicted Nov. 20, 2012, of both counts of a Superseding Indictment: Conspiracy to access AT&T’s servers without authorization and disclose that information to a reporter at Gawker magazine, and possession and transfer of means of identification for more than 120,000 iPad users. Auernheimer was tried before U.S. District Judge Susan D. Wigenton, who imposed the sentence today in Newark federal court. His co-conspirator, Daniel Spitler, 27, of San Francisco, Calif., previously pleaded guilty to the same charges and is awaiting sentencing.
“Andrew Auernheimer knew he was breaking the law when he and his partner hacked into AT&T’s servers and stole personal information from unsuspecting iPad users,” U.S. Attorney Fishman said. “When it became clear that he was in trouble, he concocted the fiction that he was trying to make the Internet more secure, and that all he did was walk in through an unlocked door. The jury didn’t buy it, and neither did the Court in imposing sentence upon him today.”“Auernheimer coordinated a self-serving cyber attack on a United States corporation and tens of thousands of innocent customers, in order to promote his business,” FBI Acting Special Agent in Charge David Velazquez said. “Immediately after the attack he attempted to hide all the evidence. Auernheimer's conviction and today's sentence signifies the continued and growing efforts of the U.S. Attorney's Office and the FBI in investigating and prosecuting computer hacking and intellectual property crimes.”
According to documents filed in this case and the evidence at trial:
The iPad is a touch-screen tablet computer, developed and marketed by Apple Computers Inc., which allows users to, among other things, access the Internet and send and receive electronic mail. Since its introduction in January 2010, AT&T has provided iPad users with Internet connectivity via AT&T’s 3G wireless network. During the registration process for subscribing to the network, a user is required to provide an e-mail address, billing address, and password.
Prior to mid-June 2010, AT&T automatically linked an iPad 3G user’s e-mail address to the Integrated Circuit Card Identifier (“ICC-ID”), a number unique to the user’s iPad, when he or she registered. Every time a user accessed the AT&T website, the ICC-ID was recognized and the e-mail address was automatically populated for faster, user-friendly access to the site. AT&T kept the ICC-IDs and associated e-mail addresses confidential.
At that time, when an iPad 3G communicated with AT&T’s website, its ICC-ID was automatically displayed in the Universal Resource Locator, or “URL,” of the AT&T website in plain text. Seeing this, and discovering that each ICC-ID was connected to an iPad 3G user e-mail address, hackers wrote a script termed the “iPad 3G Account Slurper” and deployed it against AT&T’s servers.The Account Slurper attacked AT&T’s servers for several days in early June 2010 and was designed to harvest as many ICC-ID/e-mail address pairings as possible. It worked by mimicking the behavior of an iPad 3G so that AT&T’s servers would be deceived into granting the Account Slurper access. Once deployed, the Account Slurper used a process known as a “brute force” against the servers, randomly guessing at ranges of ICC-IDs. An incorrect guess was met with no additional information, while a correct guess was rewarded with an ICC-ID/e-mail pairing for a specific, identifiable iPad 3G user.
From June 5, 2010, through June 9, 2010, the Account Slurper stole for its hacker-authors approximately 120,000 ICC-ID/e-mail address pairings for iPad 3G customers.
Immediately following the theft, the hacker-authors of the Account Slurper provided the stolen e-mail addresses and ICC-IDs to the website Gawker, which published the stolen information in redacted form, along with an article concerning the breach. The article indicated that the breach “exposed the most exclusive email list on the planet,” and named a number of famous individuals whose emails had been compromised, including Diane Sawyer, Harvey Weinstein, New York Mayor Michael Bloomberg, and then-White House Chief of Staff Rahm Emanuel. The article also stated that iPad users could be vulnerable to spam marketing and malicious hacking. A group calling itself “Goatse Security” was identified as obtaining the subscriber data.
Goatse Security is a so-called “security research” group, comprised of Internet hackers, to which both Spitler and Auernheimer belonged.
During the data breach, co-defendant Daniel Spitler and Auernheimer communicated with one another using Internet Relay Chat, an Internet instant messaging program. Those chats not only demonstrated that Spitler and Auernheimer were responsible for the data breach, but also that they conducted the breach to simultaneously damage AT&T and promote themselves and Goatse Security. As the data breach continued, so, too, did the discussions between Spitler, Auernheimer, and other Goatse Security members about the best way to take advantage of the breach and associated theft. On June 10, 2010, immediately after going public with the breach, Spitler and Auernheimer discussed destroying evidence of their crime.In addition to the prison term, Judge Wigenton sentenced Auernheimer to three years of supervised release and ordered him to pay restitution of $73,162.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Charge David Velazquez in Newark, with the investigation leading to the charges. He also thanked special agents of the FBI, under the direction of Special Agent in Charge Valerie Parlave in Little Rock, Ark., and the U.S. Attorney’s Office for the Western District of Arkansas, under the direction of U.S. Attorney William Conner Eldridge.
The government is represented by Executive Assistant U.S. Attorney Michael Martinez and Assistant U.S. Attorney Zach Intrater of the Computer Hacking and Intellectual Property Section of the U.S. Attorney’s Office Economic Crimes Unit.
12-121
Defense counsel: Tor Ekeland Esq., Brooklyn, N.Y.
Jury Finds Attorney Paul W. Bergrin Guilty on All Counts After Racketeering TrialRead the Press Release
NEWARK, N.J. – A jury has convicted attorney Paul W. Bergrin, 57, of Nutley, N.J., of all 23 counts on which he was tried, including conspiracy to murder a witness and other racketeering, cocaine and prostitution offenses. The verdict was announced today by New Jersey U.S. Attorney Paul J. Fishman.
The jury returned the verdict after two months of trial before U.S. District Judge Dennis M. Cavanaugh in Newark federal court.
“Bergrin’s conduct was a stunning violation of his role as an officer of the court and a betrayal of his roots as a member of law enforcement,” said U.S. Attorney Fishman. “Today, the jury returned the verdict compelled by the evidence and imposed the justice he deserved. We take no joy from his tragic fall, but I am extremely proud of the work done by those in my office and agents from the FBI, IRS and DEA that led to this just result.”
According to documents filed in this case and the evidence at trial:
Bergrin turned his law firm and related corporations into a racketeering enterprise, through which he conspired to tamper with witnesses, distribute cocaine and facilitate drug trafficking, prostitution and bribery, among other things. The government also proved Bergrin conspired to murder witnesses to protect the drug trafficking enterprise, one of whom was shot to death to prevent him from testifying in court.
At sentencing, currently scheduled for July 18, 2013, Bergrin faces a mandatory sentence of life in prison on each of the following counts: count three, violent crimes in aid of racketeering; count 12, conspiring to murder a federal witness to prevent his testimony at an official proceeding; and count 13, aiding and abetting the murder of a federal witness to prevent testimony at an official proceeding. He also faces a maximum term of life in prison on four other counts.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Charge David Velazquez; Internal Revenue Service – Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen; and the Drug Enforcement Administration’s New Jersey Division – under the direction of Acting Special Agent in Charge Robert G. Koval, with the investigation leading to the conviction.
The government is represented by John Gay, Deputy Chief of the U.S. Attorney’s Office Criminal Division; Assistant U.S. Attorney Joseph N. Minish of the office’s Organized Crime/Gangs Unit; and Steven Sanders of the office’s Appeals Division in Newark.13-125
Defense counsel: Pro se; Lawrence Lustberg Esq., Newark; Bruce Levy; Amanda Protess (standby)
Four Men Arrested for Distributing Bath Salts at Area CollegesRead the Press Release
NEWARK, N.J. – Three New Jersey men and one New York man have been arrested in connection with a scheme to allegedly distribute kilogram amounts a controlled substance commonly known as “bath salts,” U.S. Attorney Paul J. Fishman said today.
Kyle Jobes, 23, of East Brunswick, N.J., and Charles Knierim, 24, of Old Bridge, N.J., were arrested on March 14, 2013; Benjamin Caturano, 22, of New Brunswick, N.J., and Conor Healion, 22, of West Hempstead, N.Y. were arrested on March 15, 2013. All are charged in connection with their respective roles in a conspiracy to distribute Methylenedioxypryovalerone (“MDPV”) in New Jersey and New York. “Bath salts” is the street name for a family of designer drugs that have effects similar to amphetamine and cocaine. Their white and yellow crystals often resemble legal bath salts, like Epsom salts, but are chemically different.
The current investigation involved a package containing approximately two kilograms of MDPV that was intercepted by law enforcement. The package originated in the People’s Republic of China and was supposed to be shipped to an address in Old Bridge. Law enforcement removed the MDPV and replaced it was sham drugs that resembled bath salts. On March 14, 2013, law enforcement delivered the package to where it was addressed and watched over the next two days as Knierim, Jobes, Caturano, and Healion transferred the package amongst themselves. After their arrests, a number of the defendants admitted that they had distributed multiple kilograms of bath salts over the past year and that some of the drugs were sold at local college campuses, including Rutgers University and Monmouth University. As part of the investigation, agents of Immigration and Customs Enforcement-Homeland Security Investigations seized more than $90,000 in cash and two luxury automobiles obtained with proceeds from the drug conspiracy.
Knierim made his initial appearance before U.S. Magistrate Judge Michael A. Hammer in Newark federal court on March 15, 2013. Jobes, Caturano and Healion made their initial appearance before U.S. Magistrate Judge Falk in Newark federal court today.
U.S. Attorney Fishman credited special agents of the ICE-HSI, under the direction of Special Agent in Charge Andrew McLees, with the investigation leading to the arrests, assisted by inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Maria Kelokates, and U.S. Customs and Border Protection, under the direction of Robert E. Perez, Director of CBP's New York Field Operations.
The Government is represented by Assistant U.S. Attorney Danielle M. Corcione of the U.S. Attorney’s General Crimes Unit in Newark, N.J.
13-123
Defense counsel:
Jobes: Wanda Akin Esq., Newark
Caturano: Frank Arleo Esq., West Orange, N.J.
Healion: Ronald Kliegerman Esq., New YorkJobes, Kyle Complaint
Former Vice President at Prism Career Institute Sentenced to Two Years in Prison for Stealing More Than $400,000Read the Press Release
CAMDEN, N.J. – A former vice president of operations at Prism Career Institute, a private, post-secondary educational institution with campuses in Cherry Hill, N.J., Egg Harbor Township, N.J., and Pennsylvania, was sentenced today to 24 months in prison for stealing more than $400,000 from her employer between 2008 and 2011, U.S. Attorney Paul J. Fishman announced.
Diane Bowler, 53, of Sewell, N.J., previously pleaded guilty before U.S. District Judge Renée Marie Bumb to embezzling, stealing and obtaining by fraud money belonging to Prism Career Institute, which receives federal funds from the U.S. Department of Education. Judge Bumb imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
Diane Bowler was a regional vice president of operations at Prism, authorized to make purchases on behalf of Prism with her personal credit cards and then submit the receipts of these purchases to Prism for reimbursement. Bowler admitted that she stole more than $400,000 from Prism by submitting fraudulent reimbursement requests for purchases of supplies, furniture, equipment, and other items that were never received by Prism. She falsified invoices by cutting and pasting new dates and invoice numbers onto prior receipts for purchases and by fraudulently creating invoices for certain vendors with which Prism no longer did business. Bowler would forge the signature of the CEO of Prism on reimbursement checks and in some instances signed the checks herself before depositing the money into her personal bank account.
In addition to the prison term, Judge Bumb sentenced Bowler to three years of supervised release and ordered her to pay $551,596 in restitution.
U.S. Attorney Fishman credited special agents of the FBI’s Resident Agency in Cherry
Hill, N.J., under the direction of Acting Special Agent in Charge John Brosnan; and special agents of the Department of Education - Office of the Inspector General, under the direction of Special Agent in Charge Brian Hickey, with the investigation leading to today’s sentence.
The government is represented by Assistant U.S. Attorney Matthew J. Skahill of the Special Prosecutions Division in Camden.
13-122
Defense counsel: Richard Sparaco Esq., Cherry Hill, N.J.FEMA Contractor Admits Illegally Accepting Gratuity from Victim of Hurricane IreneRead the Press Release
NEWARK, N.J. – A Texas woman working as a contractor for the Federal Emergency Management Agency (“FEMA”) admitted today that she demanded and received an illegal gratuity from a New Jersey resident who had applied for FEMA assistance for property damaged by Hurricane Irene, U.S. Attorney Paul J. Fishman announced.
Tara Fannin-Mark, a/k/a Tara Mark, 44, of Houston, Texas, pleaded guilty before U.S. District Judge Jose L. Linares in Newark federal court to an Information charging her with one count of receipt of an illegal gratuity by a public official.
According to documents filed in this case and statements made in court:
Fannin-Mark was employed as an inspector by a company that had entered into a contract with FEMA to inspect property belonging to individuals who sought FEMA assistance for damage caused by natural disasters. Fannin-Mark was assigned to conduct inspections of houses and other property of New Jersey residents who had applied for FEMA disaster assistance for damage caused by Hurricane Irene, which struck New Jersey in August 2011.
On Oct. 26, 2011, after a person listed in the information as a “Cooperating Witness” had initiated a request for FEMA disaster assistance, Fannin-Mark conducted an inspection at the Cooperating Witness’s residence in Essex County, N.J. On Oct. 31, 2011, having been informed that the Cooperating Witness had received a $2,313 disaster assistance check from FEMA, Fannin-Mark told the Cooperating Witness that Fannin-Mark needed $230 of the FEMA payment. Fannin-Mark received the $230 illegal gratuity from the Cooperating Witness in early November 2011.
The count to which Fannin-Mark pleaded guilty is punishable by a maximum potential penalty of two years in prison. Sentencing is scheduled for July 9, 2013.
U.S. Attorney Fishman credited the Department of Homeland Security, Office of Inspector General, under the direction of Special Agent in Charge Gregory Null, with the investigation leading to today’s guilty plea.The government is represented by Senior Litigation Counsel J Fortier Imbert of the U.S. Attorney’s Office Special Prosecutions Division Newark.
13-124
Defense counsel: André Ligon Esq., Houston, TexasFannin-Mark, Tara Information
Monmouth County, N.J., Man Sentenced to 71 Months in Prison for Defrauding 16 People of $1.2 MillionRead the Press Release
TRENTON, N.J. — A Monmouth County, N.J., man was sentenced today to 71 months in prison for defrauding 16 victims, including friends and family, of $1.2 million in an investment fraud scheme, U.S. Attorney Paul J. Fishman announced.
Brian McCahery, 45, of Bradley Beach, N.J., previously pleaded guilty before U.S. District Judge Anne E. Thompson in Trenton federal court to an Information charging him with engaging in a monetary transaction in excess of $10,000, using proceeds from wire fraud. Judge Thompson imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:McCahery was an employee of a “day trading” company in Matawan, N. J., which provided computer terminals, capital and other business services to “day traders,” who traded shares of public companies for profit.
From Jan. 9, 2009 through March 14, 2011, McCahery carried out a scheme to defraud investors of $1.2 million in cash, checks or wires, money which he obtained through false representations and promises. McCahery used the name of the day-trading company to promise a high rate of return on initial investments. He promised the investments would be used to purchase short-term equity funds and, in some instances, Initial Public Offerings. The investors provided him funds directly by wire, check, or cash, which were deposited in bank accounts in the name of McCahery or his spouse. McCahery used most of these funds for personal expenditures or to pay “lulling” payments to the victims to extend the life of the scheme.
McCahery communicated via phone, e-mail, and in person with the investors and falsely informed them where their money was being invested, and the value of their investment accounts. In fact, such investment accounts for the most part were never created. McCahery modified a software program he obtained at the company to allow investors to log on and check the balance of their purported investment accounts. There, they would see false figures indicating their money had been invested in a particular account and was increasing in value.
In addition to the prison term, Judge Thompson sentenced McCahery to three years of supervised release with restrictions, including a bar on fiduciary positions and management or access to other people’s money, and ordered restitution to the 16 victims of $1.19 million as well as forfeiture of $63,000.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Charge David Velazquez, and IRS – Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen, with the investigation that resulted in today’s sentencing.
The government is represented by Assistant U.S. Attorney John E. Clabby of the U.S. Attorney’s Office Criminal Division in Trenton.
13-119
Defense counsel: Antonio Martinez Esq., Trenton, NJ
Camden County, N.J., Man Sentenced to 163 Months in Prison for Robbing Three BanksRead the Press Release
CAMDEN, N.J. – A Camden County, N.J., man today was sentenced to 163 months in prison for robbing three banks in Pennsauken, N.J., in November 2011 while on federal supervised release for bank robbery, U.S. Attorney Paul J. Fishman announced.
Richard B. Jones, 38, of Pennsauken, previously pleaded guilty to an Information charging him with one count of bank robbery in connection with his robbing a Sovereign Bank on Nov. 28, 2011. He also admitted robbing the same Sovereign Bank and the PNC Bank in Pennsauken, N.J., that same month.
Jones also previously pleaded guilty before U.S. District Judge Renée Marie Bumb in Camden federal court to committing the three bank robberies while on federal supervised release for a bank robbery in Rhode Island in 2006.
Judge Bumb sentenced Jones today in Camden federal court. On the robbery count, Jones was sentenced to 151 months in prison and for violating his supervised release, he was sentenced to 24 months in prison, 12 of which are to be served consecutively.According to documents filed in this case and statements made in court:
In November 2011, Jones entered a PNC Bank in Pennsauken, approached a bank teller and presented a note that said: “Got a gun, no dye packs, all 20's, 50's, 100's.” He received money from the teller and fled. He also robbed the Sovereign Bank twice that month.
In addition to the prison term, Judge Bumb sentenced Jones to three years of supervised release and ordered him to pay $10,000 in restitution.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Charge David Velazquez in Newark; the Pennsauken Police Department, and the Camden County Prosecutor’s Office for the investigation leading to today’s sentence.
The government is represented by Assistant U.S. Attorney Alyson M. Oswald of the U.S. Attorney’s Office Criminal Division in Camden.
13-120
Defense counsel: Christopher H. O’Malley Esq., Assistant Federal Public Defender, CamdenThree Indicted in Mercer County Narcotics Distribution SchemeRead the Press Release
TRENTON, N.J. – A federal grand jury in Trenton today returned a six-count Indictment charging Joseph A. “Jojo” Giorgianni, Mary Manfredo, and Anthony Dimatteo with distribution of oxycodone, U.S. Attorney Paul J. Fishman announced.
Giorgianni, 63, of Ewing, N.J., Manfredo, 65, of Lawrenceville, N.J. and Dimatteo, 31, of Trenton, originally were charged by Complaint, filed Sept. 10, 2012, with one count of conspiracy to distribute oxycodone. The Indictment returned today adds four additional counts of distribution and possession with intent to distribute oxycodone against Giorgianni, three additional oxycodone distribution counts against Manfredo, and two additional oxycodone distribution counts against Dimatteo. Giorgianni, a convicted felon, is also charged in the Indictment with possessing four firearms.
According to the Indictment and other documents filed in this case:
Giorgianni, Manfredo, and Dimatteo conspired and agreed with each other and Giuseppe Scordato, 47, of Hamilton, N.J., Ralph Dimatteo Sr., 62, also of Hamilton, and Charles Hall III, 49, of Trenton, to distribute and possess with intent to distribute oxycodone. Jojo’s Steakhouse, a restaurant that Giorgianni owned and that Mary Manfredo operated, served as a front for this drug distribution organization and a clearing house, where prescription pain pills were stored, provided to individuals such as Anthony Dimatteo and Giuseppe Scordato, and where narcotics proceeds were returned.
Hall previously pleaded guilty to an Information in which he admitted his involvement in the distribution of oxycodone with Giorgianni, Manfredo, and Anthony Dimatteo. Scordato and Ralph Dimatteo are released on bail pending the charges contained in the criminal Complaint.
The narcotics conspiracy count contained in Count One of the Indictment and the four distribution counts contained in Counts Two through Five each carry a maximum penalty of 20 years in prison and $1 million fine.
The firearms count contained in Count Six carries a maximum penalty of 10 years in prison and a $250,000 fine.U.S. Attorney Fishman credited special agents of the FBI’s Trenton Resident Agency, Newark Field Office, under the direction of Acting Special Agent in Charge David Velazquez, with the investigation leading to today’s Indictment.
The government is represented by Assistant U.S. Attorneys Eric W. Moran and Matthew J. Skahill of the U.S. Attorney’s Office Special Prosecutions Division in Trenton and Camden, respectively.
The charges and allegations contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
13-118
Defense counsel:
Giorgianni: Jerome A. Ballarotto Esq., Trenton
Manfredo: Antony Simonetti, Esq. Hightstown, N.J.
Anthony Dimatteo: Edward G. Washburne Esq. Red Bank, N.J.Giorgianni, Joseph et al., Indictment
Middlesex County, N.J., Man Charged with Five Bank RobberiesRead the Press Release
NEWARK, N.J. – A New Brunswick, N.J. man has been arrested in connection with five bank robberies, U.S. Attorney Paul J. Fishman announced today.
Peter Greer, 38, of New Brunswick, N.J., is charged by Complaint with five counts of bank robbery. He made his first court appearance later today before U.S. Magistrate Judge Michael A. Hammer in Newark federal court.
According to the Complaint:
Greer robbed three banks in Essex County, one bank in Passaic County and attempted to rob one bank in Essex County. Greer used a similar procedure for all robberies: After entering the bank and approaching the teller window, he would hand the victim teller a note that claimed he had a gun and demanded money.
The banks Greer is charged with robbing are:
∙ Sept. 27, 2012, Valley National Bank, Newark;
∙ Oct. 31, 2012, Greer attempted to rob Sovereign Bank, Newark;
∙ Nov. 6, 2012, Valley National Bank, Belleville, N.J.;
∙ Dec. 8, 2012, Valley National Bank, Passaic, N.J.;
∙ Feb. 23, 2013, Valley National Bank Belleville.If convicted on the bank robbery charges, Greer faces a maximum potential penalty of 20 years in prison and a fine of $250,000, or twice the gross gain or loss from the offense, for each count with which he is charged.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Charge David Velazquez, with the investigation leading to charges. He also thanked N.J. State Parole Board, the Newark Police Department, the Passaic Police Department and the Passaic County Sheriff’s Department for their contributions to the case.
The government is represented by Assistant U.S. Attorney Danielle M. Corcione of the U.S. Attorney’s Office General Crimes Unit in Newark.The charges and allegations contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
13-117
Defense Counsel: Linda Foster Esq., Assistant Federal Public Defender, NewarkGreer Complaint
Hudson County, N.J., Man Charged with Production of Child PornographyRead the Press Release
NEWARK, N.J. – A federal grand jury today indicted a Hudson County, N.J., man for producing and possessing images and videos of child pornography, U.S. Attorney Paul Fishman announced.
Gregory John Schaffer, 35, of Bayonne, N.J., was charged by Indictment with two counts of production of child pornography and one count of possession of child pornography.
The charge of production of child pornography carries a mandatory minimum penalty of 15 years in prison and a $250,000 fine. The charge of possession of child pornography carries a maximum penalty of 10 years in prison and a $250,000 fine.
Schaffer was indicted on July 2, 2012, in the Eastern District of New York, with coercing and enticing a minor to travel for the purpose of engaging in illegal sexual activity, coercing and enticing a minor to engage in sexual activity. Those charges are pending.
U.S. Attorney Fishman credited special agents of the New York field office of U.S. Immigration and Customs Enforcement-Homeland Security Investigations, under the direction of Special Agent in Charge James T. Hayes, with the investigation leading to today’s indictment.
The government is represented by Assistant U.S. Attorney Elizabeth M. Harris of the U.S. Attorney’s Office General Crimes Unit in Newark.
13-115
Schaffer Indictment
Former Hamilton Township, N.J., Mayor Sentenced to 38 Months in Prison for Extortion, Bribery, Money LaunderingRead the Press Release
TRENTON, N.J. – The former mayor of Hamilton Township, N.J., was sentenced today to 38 months in prison in connection with $12,400 in bribes he solicited and accepted in exchange for his official influence in helping a health insurance broker maintain her contract with the township’s school district, U.S. Attorney Paul J. Fishman said.
John Bencivengo, 58, was previously found guilty following a five-day trial before U.S. District Judge Anne E. Thompson in Trenton federal court. Bencivengo was convicted of obstruction of commerce by extortion under color of official right, attempted obstruction of commerce by extortion under color of official right, two counts of violating the federal Travel Act, for causing the interstate travel and using facilities in interstate commerce in connection with the bribes that he accepted, and one count of money laundering. Judge Thompson imposed the sentence today in Trenton federal court.
“Mayor Bencivengo betrayed the people of Hamilton Township and all of the honest public servants in New Jersey who take their oaths and their responsibilities seriously,” U.S. Attorney Fishman said. “His conviction, and today’s sentence, serve as reminders that the public trust is not for sale.”
“John Bencivengo made the calculated decision to violate his sworn responsibilities in order to fulfill his personal needs,” said FBI Acting Special Agent in Charge David Velazquez. “His conviction and today's sentence underscore the impact of this crime on our community and state. The FBI views public corruption of any kind as a severe crime problem and will continue to dedicate our resources to investigate these crimes.”
According to documents filed in this case and evidence at trial:While serving as mayor between May 2011 and July 2011, Bencivengo accepted payments totaling $12,400 from a cooperating witness, Marliese Ljuba, the health insurance broker for the Hamilton Township School District. In exchange for the payments, Bencivengo agreed to use his official assistance, action, and influence to assist Ljuba retain the position as health insurance broker for the Hamilton Township School District. Bencivengo agreed to assist by (1) speaking to a member of the School District’s Board of Education (identified in the indictment as “School Board Member No. 1”) about retaining Ljuba as the school district’s health insurance broker instead of putting that position out for public bid; and (2) agreeing to let Ljuba choose the individual to replace another member of the school board if that member left the board to run for the New Jersey Assembly.
Bencivengo received the $12,400 in multiple payments. The first payment was a $5,000 check that Ljuba passed to Bencivengo through Warney. Bencivengo had informed Ljuba that he was having financial difficulties and that he needed her assistance. Bencivengo agreed to accept payment from Ljuba in exchange for Bencivengo’s assistance with School Board Member No. 1, who had advocated putting the School District’s health insurance broker position out for public bid instead of retaining Ljuba. On May 12, 2011, Ljuba traveled from another state to Hamilton Township to make that payment to Bencivengo. Bencivengo directed her to make the check payable to Warney’s wife to conceal the payment, and to put a notation on the check that it was to pay for a “Cherry Bedroom Set.” After receiving the check, Warney deposited the check and distributed the proceeds to Bencivengo in cash increments over several weeks. Warney previously pleaded guilty to money laundering and is awaiting sentencing. Bencivengo received the remaining $7,400 in two cash payments from Ljuba in July 2011, after she began cooperating with law enforcement: $2,400 from Ljuba at his home in Hamilton on July 20, 2011, and $5,000, from Ljuba in an Atlantic City hotel room on July 29, 2011.
In addition to the prison term, Judge Thompson sentenced Bencivengo to three years of supervised release, fined him $3,000 and ordered him to pay restitution of $12,400.U.S. Attorney Fishman credited special agents of the FBI’s Trenton Resident Agency, Newark Field Office, under the direction of Acting Special Agent in Charge David Velazquez, for the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorneys Harvey Bartle and Dustin Chao of the U.S. Attorney’s Office Special Prosecutions Division.
13-116
Defense counsel: Jerome A. Ballarotto Esq., Trenton
Essex County, N.J., Woman Arrested for Fraud Scheme That Targeted Elderly IndividualsRead the Press Release
NEWARK, N.J. – An Essex County, N.J., woman was arrested this morning for engaging in a credit card fraud and identity theft scheme in which she targeted elderly women, fraudulently obtained their personal information, and used it to open new credit cards or access existing credit cards belonging to these individuals, U.S. Attorney Paul J. Fishman announced.
Terrell Brunson, 39, of Newark, N.J., is charged by Complaint with one count of access device fraud and one count of aggravated identity theft. She appeared today before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court and was detained.
According to the Complaint:
From April 2012 through February 2013, Brunson engaged in an identity theft and credit card fraud scheme that specifically targeted elderly women. She searched through publically available directories for telephone numbers of individuals who she believed were elderly women based upon their names. One name that Brunson commonly sought out was “Ruth.” Brunson called these individuals and pretended to be someone she was not, such as a representative from a credit card company. She then solicited personal information from these women (Social Security numbers and dates of birth) and then contacted credit card companies and used the information to add herself as an authorized user to the victims’ accounts or to create new accounts.For example, on July 3, 2012, a woman identified as Victim One received
a telephone call from Brunson, purporting to be a representative of MasterCard. Brunson inquired about an alleged $400 transaction that she claimed Victim One had made at a Wal-Mart store. Victim One informed Brunson that the Wal-Mart transaction was fraudulent and provided her Social Security number, date of birth, and mother’s maiden name. Brunson then used Victim One's personal information to open two retail store credit card accounts and to access one of Victim One's current credit card accounts. Brunson then used these accounts to make thousands of dollars’ worth of purchases online and in person at various stores and restaurants in New Jersey.
On Dec. 14, 2007, Brunson was arrested was charged with access device fraud in federal court. While on pretrial release in connection with these charges, Brunson continued the scheme and fraudulently obtained additional identities and access to the credit card accounts of others. Brunson pleaded guilty to a two-count Information and on April 2, 2009, U.S. District Judge Anne E. Thompson sentenced her to 39 months in prison, followed by three years of supervised release. Brunson committed the present offenses while on supervised release.U.S. Attorney Fishman credited special agents of the U.S. Secret Service, under the direction of Special Agent in Charge James Mottola, for the investigation leading to today’s arrest.
The government is represented by Assistant U.S. Attorney Nicholas P. Grippo of the U.S. Attorney’s Office General Crimes Unit in Newark.
The charges and allegations in the Complaint are merely accusations, and the defendant is considered innocent unless and until proven guilty.
13-114Brunson Complaint
Essex County, N.J., Woman Arrested for Fraud Scheme That Targeted Elderly IndividualsRead the Press Release
NEWARK, N.J. – An Essex County, N.J., woman was arrested this morning for engaging in a credit card fraud and identity theft scheme in which she targeted elderly women, fraudulently obtained their personal information, and used it to open new credit cards or access existing credit cards belonging to these individuals, U.S. Attorney Paul J. Fishman announced.
Terrell Brunson, 39, of Newark, N.J., is charged by Complaint with one count of access device fraud and one count of aggravated identity theft. She appeared today before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court and was detained.
According to the Complaint:
From April 2012 through February 2013, Brunson engaged in an identity theft and credit card fraud scheme that specifically targeted elderly women. She searched through publically available directories for telephone numbers of individuals who she believed were elderly women based upon their names. One name that Brunson commonly sought out was “Ruth.” Brunson called these individuals and pretended to be someone she was not, such as a representative from a credit card company. She then solicited personal information from these women (Social Security numbers and dates of birth) and then contacted credit card companies and used the information to add herself as an authorized user to the victims’ accounts or to create new accounts.For example, on July 3, 2012, a woman identified as Victim One received
a telephone call from Brunson, purporting to be a representative of MasterCard. Brunson inquired about an alleged $400 transaction that she claimed Victim One had made at a Wal-Mart store. Victim One informed Brunson that the Wal-Mart transaction was fraudulent and provided her Social Security number, date of birth, and mother’s maiden name. Brunson then used Victim One's personal information to open two retail store credit card accounts and to access one of Victim One's current credit card accounts. Brunson then used these accounts to make thousands of dollars’ worth of purchases online and in person at various stores and restaurants in New Jersey.
On Dec. 14, 2007, Brunson was arrested was charged with access device fraud in federal court. While on pretrial release in connection with these charges, Brunson continued the scheme and fraudulently obtained additional identities and access to the credit card accounts of others. Brunson pleaded guilty to a two-count Information and on April 2, 2009, U.S. District Judge Anne E. Thompson sentenced her to 39 months in prison, followed by three years of supervised release. Brunson committed the present offenses while on supervised release.U.S. Attorney Fishman credited special agents of the U.S. Secret Service, under the direction of Special Agent in Charge James Mottola, for the investigation leading to today’s arrest.
The government is represented by Assistant U.S. Attorney Nicholas P. Grippo of the U.S. Attorney’s Office General Crimes Unit in Newark.
The charges and allegations in the Complaint are merely accusations, and the defendant is considered innocent unless and until proven guilty.
13-114Brunson Complaint
Hudson County, N.J., Woman Sentenced to 24 Months in Prison for Using Her Deceased Aunt’s Identity in Bank Fraud SchemeRead the Press Release
CAMDEN, N.J. – A Hudson County, N.J., woman today was sentenced to 24 months in prison for using the identity of her deceased aunt to obtain access to credit card and deposit accounts, causing three banks to lose more than $30,000, U.S. Attorney Paul J. Fishman announced.
Jocelyn Russo, 37, of Jersey City, previously pleaded guilty before U.S. District Judge Joseph E. Irenas in Camden federal court to an Information charging her with one count of bank fraud. Judge Irenas sentenced Russo today in federal court in Camden.
According to documents filed in the case and statements made in court:
Russo admitted that after the death of her aunt (“JB”) she used JB’s Social Security number and other personal identifying information to fraudulently add herself to JB’s credit accounts at Bank of America and JPMorgan Chase, and to open up a deposit account at Bank of America. She contacted Bank of America and JPMorgan Chase by phone and claimed to be JB, providing personal identifying information. Russo then added herself to JB’s credit card accounts as an authorized signer and used the cards. Russo also admitted that she used JB’s debit card to access JB’s Provident Bank account without authorization.
Russo made large purchases on JB’s credit cards, which she did not pay off, and withdrew all of the funds from JB’s bank accounts with Provident Bank. The scheme caused Bank of America, JPMorgan Chase, and Provident Bank to lose more than $30,000.
In addition to the prison term, Judge Irenas sentenced Russo to five years of supervised release and ordered her to pay restitution of $33,289.
U.S. Attorney Fishman credited special agents of the FBI under the direction of Acting Special Agent in Charge David Velazquez in Newark for the investigation leading to today’s sentence.
The government is represented by Assistant U.S. Attorney Daniel V. Shapiro of the U.S. Attorney’s Office General Crimes Unit in Newark.
13-110
Defense counsel: Kevin Carlucci Esq, Assistant Federal Public Defender, NewarkPennsylvania Prison Inmate Sentenced to 30 Months in Prison for Sending Threatening Letter to District Judge in PhiladelphiaRead the Press Release
TRENTON, N.J. – An inmate in the Pennsylvania State Prison system today was sentenced to 30 months in prison for sending a threatening letter to a federal judge in the Eastern District of Pennsylvania, U.S. Attorney Paul J. Fishman announced.
William Brown, 22, previously pleaded guilty before U.S. District Judge Freda L. Wolfson to Count 2 of an Indictment that charged him with threatening a U.S. District Court judge in Philadelphia. Judge Wolfson imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:
Brown, who is currently serving a sentence of life in prison for a 2011 Pennsylvania conviction for first-degree murder and aggravated assault, sent the threatening letter from his prison cell. He admitted writing the letter, containing expletives and threats against the judge’s life, smearing his fecal matter on it and mailing it to the judge.
He was transferred to federal custody in June 2012 after the grand jury returned the Indictment in this case.
In addition to the prison term, Judge Wolfson sentenced Brown to three years of supervised release.
U.S. Attorney Fishman credited special agents of the FBI in Philadelphia, under the direction of Special Agent in Charge George C. Venizelos, with the investigation leading to today’s sentencing.
The government is represented by Nelson Thayer, Attorney-in-Charge of the U.S. Attorney’s Office Criminal Division in Trenton.
13-111
Defense Counsel: Andrea Bergman Esq., Assistant Federal Public Defender, Trenton
Middlesex County Woman Admits Role in Identity Theft-Tax Fraud CaseRead the Press Release
NEWARK, N.J. – A Middlesex County woman today admitted her role in a scheme to fraudulently obtain a federal tax refund by filing a false claim with the IRS, U.S. Attorney Paul J. Fishman announced.
Patriciah Omari, 33, of Middlesex, pleaded guilty before U.S. Magistrate Judge Patty Shwartz in Newark federal court to a Superseding Information charging her with one count of aiding in the preparation and filing of a false income tax return.
According to documents filed in this case and statements made in court:An unidentified person prepared and filed at least one false U.S. Individual Income Tax return, Form 1040, in the name of an individual with the initials “V.K.” The return included false information and documents about V.K.’s address, income, W-2 form, income tax purportedly withheld and claim for a refund. The fraudulent return claimed a $72,859 tax refund. In reality, V.K. was not entitled to the refund and did not authorize anyone to file a return.
Omari provided the unidentified person with the routing number and bank account information of an account held in Omari’s name. That information was provided with the false tax return, causing the IRS to deposit the refund check into Omari’s bank account. The money was then withdrawn and wired to an account in Kenya.
The count to which Omari pleaded guilty is punishable by a maximum potential term of three years in prison and a fine of $250,000, or twice the gross gain or loss from the offense. Sentencing is scheduled for June 24, 2013.
U.S. Attorney Fishman credited special agents and investigators of the U.S. Secret Service, under the direction of Special Agent in Charge James Mottola in Newark; IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen; and the inspectors of the U.S. Postal Inspection Service under the direction of Inspector in Charge Philip R. Bartlett, with the investigation leading to today’s plea.
The government is represented by Assistant U.S. Attorneys Jacques Pierre and Barbara Llanes of the U.S. Attorney’s Office in Newark.
13-112
Defense counsel: Damian P. Conforti Esq., Newark
Omari Superseding Information
Two Men Charged with Real Estate Investment Fraud SchemeRead the Press Release
NEWARK N.J. – Two men were arrested this morning and charged with engaging in a real estate investment fraud conspiracy that defrauded more than fifteen victims of approximately $5 million from 2009 to the present, U.S. Attorney Paul J. Fishman announced.
Paul Mancuso, 46, of Glen Rock, N.J., and Pasquale Stiso, a/k/a “Pat Stiso,” 52, of West Harrison, N.Y., are charged by Complaint with one count of conspiracy to commit wire fraud. They made their initial court appearances this afternoon before U.S. Magistrate Judge Madeline Cox Arleo in Newark federal Court. Stiso was released on bail. Mancuso was ordered detained, pending a bail hearing tomorrow.
According to the Complaint:
From 2009 through the present, Mancuso held himself out as a real estate investor, broker, and/or developer, as well as a “hard money” lender and broker of other various purported investments. Mancuso obtained from his victims substantial investments for various projects that, in fact, either did not exist at all, or in which Mancuso had no actual involvement. Stiso, a disbarred attorney, held himself out as an individual who was working with Mancuso on various purported projects. Some of the purported projects touted by Mancuso, Stiso, and/or their co-conspirators included investments in a phony ticket scam, the development of a pizzeria at a resort in the Bahamas, the development of a casino in Atlantic City, the development of a commercial shopping center, and the “flipping” of a piece of real estate in Matawan. Most, if not all, of Mancuso’s victims lost all or substantially all of the money they invested with him and his co-conspirators. Many of Mancuso’s victims have lost all or substantially all of their life savings in his various schemes to defraud.The Complaint also alleges that Mancuso and Stiso were heavily involved in illegal gambling pursuits, and that they both owe substantial sums of money to one of their bookmakers or “bookies” (referred to in the Complaint as “the Bookie”). Indeed, Mancuso paid the Bookie in excess of $600,000 from gambling losses in or around 2012, and defendant Mancuso still owes the Bookie approximately $500,000 from gambling losses.
The charge of wire fraud conspiracy carries a maximum potential penalty of 20 years in prison and a maximum fine of $250,000 or twice the gross gain or loss associated with the offense, whichever is greatest.
U.S. Attorney Fishman credited special agents of the Federal Bureau of Investigation, under the direction of Acting Special Agent in Charge David Velazquez; Special Agents of the Internal Revenue Service-Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen; as well as Criminal Investigators of the U.S. Attorney’s Office for the investigation leading to today’s arrests.
The government is represented by Assistant U.S. Attorney Lisa M. Colone of the U.S. Attorney’s Office Criminal Division in Newark.
The charge and allegations in the Complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
13-109
Defense counsel:
Mancuso: Mary Frances Palisano, Esq., Newark, NJ (standing in for Lawrence Lustberg, Esq.)
Stiso: Max Di Fabio, Esq. White Plains, NYMancuso, Paul and Stiso, Pasquale Criminal Complaint
Three South Jersey Individuals Plead Guilty to Defrauding Fema Relating to Major DisastersRead the Press Release
CAMDEN, N.J. – Three individuals today admitted to disaster benefits fraud relating to a presidential disaster declaration for the state of New Jersey after the nor’easter in 2010 and Hurricane Irene in 2011, U.S. Attorney Paul J. Fishman announced.
Debbie Hicks, 51, of Atlantic City, N.J., pleaded guilty to a two-count Information charging her with disaster benefits fraud and making false statements to the U.S. Department of Housing and Urban Development.
Dwana Wright, 40, and Ryan Stevens, 38, both of Camden each pleaded guilty to separate Informations charging them with disaster benefits fraud. All three defendants entered their guilty pleas during separate appearances before Senior U.S. District Judge Joseph E. Irenas.
According to documents filed in this case and statements made in court:Due to FEMA's vast size and the typically large number of victims resulting from a disaster, FEMA has been frequently targeted in disaster fraud schemes by individuals or groups seeking FEMA monetary assistance for benefits to which they were not entitled. These individuals accomplished their schemes by submitting fraudulent applications to FEMA for, among other things, repairs and rental assistance.
Defendant Debbie Hicks
As a result of the nor’easter, Hicks’ apartment in Atlantic City was damaged. On or about April 12, 2010, Hicks filed an application with FEMA seeking federal rental assistance under FEMA’s Individual Assistance Program, claiming that her apartment in Atlantic City was damaged as a result of the severe storm and was unfit for occupancy.
On April 13, 2010, a FEMA inspector confirmed Hicks’ occupancy and the damage to her rental unit, and declared her apartment uninhabitable. Thereafter, FEMA awarded Hicks rental assistance in the amount of $923 per month. In her application to FEMA, Hicks failed to disclose that her rent was being paid by the Atlantic County Department of Family and Community Development.
During the plea hearing, Hicks admitted that to continue receiving money from FEMA she lied on various forms which were sent to FEMA. Hicks also admitted that she falsely stated that her rent was not being paid by another source. As a result of the fraud, Hicks received $15,691 in FEMA emergency rental assistance funds to which she was not entitled.
Hicks further admitted that while she was defrauding FEMA, she also lied to the Housing Authority and Urban Redevelopment Agency of the City of Atlantic City, which administers housing funds on behalf of HUD. Hicks admitted that when she applied for Section 8 housing, she failed to tell the housing authority that she was receiving funds from both FEMA and the Atlantic County Department of Family and Community Development. Hicks also admitted that she lied about her prior criminal record and the fact that she had used other names and Social Security numbers.
The charges to which Hicks pleaded guilty carry a maximum potential penalty of 35 years in prison and a fine of $500,000. Hicks’ sentencing is scheduled for June 14, 2013.
Defendant Dwana Wright
Wright admitted that she applied for FEMA benefits on Sept. 27, 2011. After FEMA awarded her temporary rental assistance, Wright admitted that she submitted fraudulent documents to FEMA to secure continued disaster assistance through FEMA’s rental assistance program. As a result of her fraud, Wright received $15,763 from FEMA’s emergency rental assistance funds to which she was not entitled.
Defendant Ryan Stevens
Stevens admitted that he applied for FEMA benefits on Sept. 13, 2011. After FEMA awarded him assistance for property damage and temporary rental assistance, Stevens admitted that he submitted fraudulent documents to FEMA to secure additional disaster assistance through FEMA’s rental assistance program. Stevens admitted that he received $15,487 from FEMA’s emergency rental assistance fund to which he was not entitled.
The charges to which Wright and Stevens pleaded guilty carry a maximum potential penalty of 30 years in prison and a fine of $250,000. Wright’s sentencing is scheduled for June 21, 2013. Stevens’ sentencing is scheduled for June 21, 2013.
U.S. Attorney Fishman credited special agents of the Department of Homeland Security, Office of Inspector General, under the direction of Special Agent in Charge Gregory Null, and special agents of U.S. Department of Housing and Urban Development, Office of Inspector General, under the direction of Special Agent in Charge Joseph W. Clarke for the investigation leading to today’s guilty pleas.
The government is represented by Assistant U.S. Attorney Jason M. Richardson of the U.S. Attorney’s Office Criminal Division in Camden.
13-108
Defense counsel:
Hicks: Maggie Moy, Esq., Assistant Federal Public Defender, Camden
Wright: Lori Koch, Esq., Assistant Federal Public Defender, Camden
Stevens: Lori Koch, Esq., Assistant Federal Public Defender, CamdenHicks, Debbie Information
Wright, Dwana Information
Stevens, Ryan InformationFormer Employee of Timeshare Consulting Firm Pleads Guilty to Fraud ConspiracyRead the Press Release
CAMDEN, N.J. – A former employee of The Vacation Ownership Group, LLC admitted today to conspiring to defraud owners of timeshare properties, U.S. Attorney Paul J. Fishman announced.
Aimee Allen, 27, of Myrtle Beach, S.C., pleaded guilty to a one-count criminal Information charging her with conspiracy to commit mail and wire fraud. Allen entered her guilty plea before U.S. District Court Judge Noel L. Hillman in Camden federal court.
According to documents filed in this case and statements made in court:
The Vacation Ownership Group, a/k/a VO Group LLC (the “VO Group”), purported to offer owners of timeshares consulting services, including timeshare cancellation services. In June 2010, Allen started working at the VO Group and was trained by VO Group managers to call customers using prepared scripts. Allen would call customers and give them the false impression that she was working for a bank or lending institution. Allen then would falsely represent that the VO Group could pay off the customers’ timeshares or have their timeshares cancelled. Allen also served as a “reference” for other VO Group employees by posing as a satisfied customer to persuade a new customer to send the VO Group money. After hearing Allen’s false representations, some customers sent checks to the VO Group. Allen admitted to causing over $200,000 in losses.
On Jan. 23, 2013, 10 other individuals who worked at the VO Group were charged in a Superseding Indictment with conspiracy to commit mail and wire fraud and other charges. Those charges are pending before Judge Hillman.
The mail and wire fraud conspiracy charge to which Allen pleaded guilty carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gain or loss caused by the offense. Sentencing is currently scheduled for June 14, 2013.
U.S. Attorney Fishman credited special agents from the FBI’s Atlantic City Resident Agency, under the direction of Acting Special Agent in Charge David Velazquez in Newark; and special agents from the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, under the direction of Special Agent in Charge Robert Panella, New York Region, for their roles in the investigation.
The government is represented by Assistant U.S. Attorneys Alyson M. Oswald and R. David Walk, Jr. of the U.S. Attorney’s Office Criminal Division in Camden.
13-107
Defense counsel: Edward F. Borden, Jr., Esq., Cherry Hill, N.J.
Allen, Aimee Information
Union County, N.J., Man Sentenced to 105 Months in Prison for Robbing Seven TD BanksRead the Press Release
TRENTON, N.J. – A Union County, N.J., man today was sentenced to 105 months in prison for robbing seven branch locations of TD Bank throughout New Jersey from September 2011 to December 2011, U.S. Attorney Paul J. Fishman announced.
Julio Ferrer, 29, of Elizabeth, N.J., previously pleaded guilty before U.S. District Judge Joel A. Pisano in Trenton federal court to an Information charging him with seven counts of bank robbery. He was sentenced by Judge Pisano today in Trenton federal court.
According to documents filed in this case and statements made in court:
Ferrer admitted robbing the following TD Bank branches:
Count
Date
TD Bank Location
Sept. 11, 2011
560 North Avenue East
Westfield, N.J.2
Oct. 19, 2011
37 Saint George Avenue
Roselle, N.J.3
Nov. 19, 2011
1071 St. Georges Avenue
Rahway, N.J.4
Dec. 1, 2011
70 Middlesex Avenue
Metuchen, N.J.5
Dec. 11, 2011
1906 Lincoln Highway
Edison, N.J.6
Dec. 16, 2011
570 Chestnut Street
Union, N.J.7
Dec. 22, 2011
883 State Road
Princeton, N.J.In every robbery, Ferrer passed handwritten demand notes to bank tellers. He admitted using a fake gun in the robbery of the TD Bank in Edison. Ferrer was on supervised release from a prior federal bank robbery conviction when he began his robbery spree.
In addition to a prison term, Judge Pisano sentenced Ferrer to three years of supervised release and $33,840 in restitution.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Charge David Velazquez in Newark, and the police departments of Westfield, Roselle, Rahway, Metuchen, Edison, Union and Princeton, with the investigation that resulted in today’s sentencing.
The government is represented by Assistant U.S. Attorney Jane H. Yoon of the U.S. Attorney’s Office in Newark.13-106
Defense counsel: Peter Carter Esq., Assistant Federal Public Defender, NewarkPar Pharmaceutical Companies Inc. Pleads Guilty, Admits Misbranding of Megacer EsRead the Press Release
Agrees to Pay $45M to Resolve Criminal and Civil Investigations
NEWARK, N.J. – New Jersey-based Par Pharmaceutical Companies Inc. (“Par”) pleaded guilty in federal court today and agreed to pay $45 million to resolve its criminal and civil liability in the company’s promotion of its prescription drug Megace® ES for uses not approved as safe and effective by the Food and Drug Administration (FDA) and not covered by federal health care programs, the Justice Department announced.
Chief Executive Officer Paul V. Campanelli pleaded guilty on behalf of Par before U.S. Magistrate Judge Madeline Cox Arleo earlier today in Newark federal court. Judge Arleo imposed sentence today, fining Par $18 million and ordering $4.5 million in criminal forfeiture. Par also agreed to pay $22.5 million to resolve its civil liability.
“The FDA requires drug makers to go through a stringent approval process before new drugs – or new uses for existing drugs – are made available to doctors and their patients,” U.S. Attorney Paul J. Fishman said. “Today, Par admitted that it chose to ignore that process in pursuit of more sales and greater profits. It is paying the price for its choice.”
“Today’s resolution emphasizes the importance of the U.S. government’s coordinated efforts to combat health care fraud. We expect companies to make honest, lawful claims about the drugs they sell. We will be vigorous in our enforcement efforts when they break the law, to ensure that they are held accountable,” said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Justice Department’s Civil Division.
“Individual accountability of Par's board and executives is required under the comprehensive five-year integrity agreement OIG has with the company,” said Daniel R. Levinson, Inspector General of the U.S. Department of Health and Human Services. “For example, company executives may have to forfeit annual bonuses if they or their subordinates engage in significant misconduct, and sales representatives may not be paid incentive compensation for the drug involved in the case, or successor branded versions of that drug.”
“The public has been well served by this investigation and the FDA commends the efforts of the U.S. Attorney's Office in New Jersey, the Department of Justice and the other law enforcement agencies that worked with us to vigorously pursue this matter,” said Mark Dragonetti, Special Agent In Charge of the FDA's Office of Criminal Investigation's New York Field Office. “Today's settlement demonstrates the FDA's continued commitment to target companies that disregard the safeguards of the drug approval process and promote drugs for uses before they have been proven to be safe and effective.”
Par pleaded guilty to an Information charging it with a criminal misdemeanor for misbranding Megace® ES in violation of the Federal Food, Drug, and Cosmetic Act (“FDCA”). Megace® ES, a megestrol acetate drug product, was approved by the FDA to treat anorexia, cachexia, or other significant weight loss suffered by patients with AIDS (the “AIDS Indication”). The Megace® ES distributed nationwide by Par was criminally misbranded because its FDA-approved labeling lacked adequate directions for use in the treatment of non-AIDS-related geriatric wasting, a use that was intended by Par but never approved by the FDA. The FDCA requires companies such as Par to specify the intended uses of a product in an application to the FDA. Once approved, a drug may not be distributed in interstate commerce for unapproved or “off-label” uses until the company receives FDA approval for the new intended uses. In addition to the criminal fine and forfeiture, the plea agreement mandates that Par implement several compliance measures and annually provide the U.S. Attorney’s Office with a sworn certification from its chief executive officer that the company has not unlawfully marketed any of its pharmaceutical products.
The civil settlement agreement requires Par to pay $22.5 million to the federal government and various states to resolve claims arising from its off-label marketing. The civil settlement resolves allegations that Par, by promoting the sale and use of Megace® ES for uses that were not FDA-approved and not covered by Federal health care programs, caused false claims to be submitted to these programs. The United States further alleged that Par deliberately and improperly targeted sales to elderly nursing home residents with weight loss, whether or not such patients suffered from AIDS, and launched a long-term care sales force to market to this population. During this marketing campaign, Par was allegedly aware of adverse side effects associated with the use of megestrol acetate in elderly patients, including an increased risk of deep vein thrombosis, toxic reactions in elderly patients with impaired renal function, and mortality. The United States alleged that Par made unsubstantiated and misleading representations about the superiority of Megace® ES over generic megestrol acetate for elderly patients to encourage providers to switch patients from generic megestrol acetate to Megace® ES, despite having conducted no well-controlled studies to support a claim of greater efficacy for Megace® ES. Except as admitted in the plea agreement, the claims settled by the civil settlement agreement are allegations only, and there has been no determination of liability as to those claims.
In addition to the criminal and civil resolutions, Par also agreed to enter into a five-year Corporate Integrity Agreement with the Office of the Inspector General of the Department of Health and Human Services (“HHS-OIG”) that requires enhanced accountability, increased transparency, and wide-ranging monitoring activities conducted by both internal and independent external reviewers.
The plea agreement and CIA include provisions that require Par to implement changes to the way it does business. The plea agreement and CIA prohibit Par from providing compensation to sales representatives or their managers based on the volume of sale of Megace ES, and in the CIA, based on the volume of Megace ES and any branded successor megestrol acetate drug. Under the CIA, Par is also required to change its executive compensation program to permit the company to recoup annual bonuses from covered executives if they, or their subordinates, engage in significant misconduct.
The settlement resolves three lawsuits filed under the whistleblower provisions of the False Claims Act, which permit private parties to file suit on behalf of the United States and obtain a portion of the government’s recovery. The civil lawsuits were filed in the District of New Jersey and are captioned U.S. ex rel. McKeen and Combs v. Par Pharmaceutical, et al., U.S. ex rel. Thompson v. Par Pharmaceutical, et al., and U.S. ex rel. Elliott & Lundstrom v. Bristol-Myers Squibb, Par Pharmaceutical, et al. As part of today’s resolution, relators McKeen and Combs will receive $4.4 million.
This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover more than $10.2 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $14.1 billion.
History of Megace® ES and Par’s Failed Attempts to Obtain FDA Approval
of a Geriatric Wasting Indication for Megace® ESAccording to the Information, a drug named Megace® OS – a predecessor to Megace® ES – was approved by the FDA in 1993 for the AIDS Indication. Between 2002 and 2005, Par’s market research showed that practitioners prescribed Megace® OS 1 for uses that were inconsistent with the approved labeling, including geriatric weight loss, and that the overwhelming majority of Megace® OS prescriptions were written for such off-label uses.
In 2002, Par first approached the FDA and discussed the company’s plan to seek approval of a new formulation of Megace® OS as a treatment option for geriatric patients with malnutrition. Par did not thereafter seek approval for that patient population. Instead, in June 2004, Par relied on the Megace® OS safety and effectiveness data in seeking approval for Megace® ES for the AIDS indication, i.e., the same indication as Megace® OS. Less than two months after the FDA approved Megace® ES for the AIDS indication, Par requested a meeting with the FDA to discuss Par’s intent to seek approval of Megace® ES for certain non-AIDS geriatric patients. Par never sought approval for that patient population, nor did Par ever conduct drug trials in the geriatric population.Par’s “Conversion” Strategy, False Superiority Claims, and Promotion of
Megace® ES for Geriatric WastingDespite knowing that Megace® ES had a limited market for its approved use, Par set aggressive sales goals for the product launch. After failing to attain these goals, Par adopted and implemented a marketing strategy designed to promote Megace® ES to geriatric wasting patients – the same population Par had twice discussed with the FDA. Par devised sales call panels which required Par sales representatives to market Megace® ES in nursing homes, as well as to practitioners who treated geriatric patients. These call panels identified physicians with the highest number of Megace® OS prescriptions as the top targets to “convert” from the old Megace® OS to Par’s Megace® ES product. Some Par sales managers required that their subordinates visit 10 to15 nursing homes a week to promote Megace® ES, and told them there would be possible employment consequences, including termination, if they did not promote Megace® ES in nursing homes.
While targeting an audience of health care practitioners that treated the elderly or geriatric population, Par promoted Megace® ES by making false and/or misleading claims that Megace® ES was superior to Megace® OS, including:
- Despite having no clinical support for the claim, Par sales representatives promoted Megace® ES as more effective than Megace® OS;
- Despite having no clinical support for the claim, Par sales representatives claimed that Megace® ES worked faster and was more effective than other products, and used the phrase “speed and ease” to promote Megace® ES;
- Par sales representatives were taught to try and “flip” a nursing home by asking the homes to convert all Megace® OS patients in the nursing home to Megace® ES, despite knowing that the nursing homes contained very few, if any, AIDS patients and the requested patients would therefore be using the product for off-label purposes;
- Par trained and directed its sales force to minimize or eliminate mentioning altogether the FDA-approved indication for Megace® ES during promotional sales calls, so as to draw as little attention as possible to the fact that Megace® ES was not approved for geriatric wasting; and
- Par managers trained, directed, and encouraged their sales representatives to ask health care practitioners for patient information protected by the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), so that the representatives could request that certain patients who were using Megace® OS be switched to Megace® ES.
U.S. Attorney Fishman said the corporate guilty plea, the civil settlement, and the corporate integrity agreement are the culmination of a multi-year investigation conducted jointly by special agents from HHS-OIG, under the direction of Special Agent in Charge Tom O’Donnell, special agents from FDA-OIG, under the direction of Special Agent in Charge Mark Dragonetti, and criminal investigators and paralegals with the U.S. Attorney’s Office.
U.S. Attorney Fishman thanked the Defense Criminal Investigative Service; the Office of Personnel Management-Office of Inspector General; the Department of Veterans’ Affairs Office of Inspector General; and TRICARE Program Integrity for assisting in the investigation. He also thanked the National Association of Medicaid Fraud Control Units (NAMFCU), with assistance from the Medicaid Fraud Control Unit of the Ohio Attorney General’s Office for their help in coordinating the settlements with the various states.
The government is represented in the prosecution of the criminal case by Assistant U.S. Attorney Joseph Mack of the U.S. Attorney’s Office Health Care and Government Fraud Unit and Special Assistant U.S. Attorney Shannon M. Singleton from the FDA's Office of Chief Counsel. Paralegals Jeffrey Skonieczny and Doug Minotti with the U.S. Attorney’s Office and Trial Attorney David Frank of the Department of Justice’s Consumer Protection Branch assisted on the criminal side of the case. The government is represented in the civil settlement by Assistant U.S. Attorney David Dauenheimer and Trial Attorney Eva Gunasekera from the Department of Justice’s Commercial Litigation Branch. The corporate integrity agreement was negotiated by Christina McGarvey and Gregory Lindquist from the Department of Health and Human Service’s Office of Inspector General.
U.S. Attorney Fishman reorganized the health care fraud practice at the U.S. Attorney’s Office, District of New Jersey, including creating a stand-alone Health Care and Government Fraud Unit, which handles both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the Office has recovered more than $500 million in health care fraud and government fraud settlements, judgments, fines, restitution, and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act, and other statutes.
13-105
Defense counsel: John N. Nassikas Esq., Washington, D.C.
1 The original Megace® OS product was sold by Bristol Myers Squibb (“BMS”) from approximately 1993 until 2001. Since on or about July 25, 2001, the FDA approved five different generic versions of BMS’s Megace® OS product. As used herein, the term “Megace® ® OS” refers not only to BMS’s branded Megace® OS product, but also to the five generic versions approved by the FDA.Par Pharmaceutical Information
Par Pharmaceutical Plea AgreementNewark, N.J., Businessman Sentenced to Two Years’ Probation for Extortion ConspiracyRead the Press Release
TRENTON, N.J. – Newark, N.J., businessman Sonnie Cooper was sentenced today to two years of probation, including eight months of home confinement, for his part in an extortion conspiracy in which a former Newark deputy mayor official used his official position to steer demolition work to Cooper’s trucking company, U.S. Attorney Paul J. Fishman announced.
U.S. District Judge Freda L.Wolfson imposed the sentence today in Trenton federal court. A jury returned a guilty verdict against Cooper, 70, and former Newark Deputy Mayor for Public Safety Ronald Salahuddin, 62, following a trial in October 2011. Salahuddin and Cooper were both convicted of one count of conspiracy to extort under the color of official right. They were each acquitted of one count of attempted extortion under the color of official right, and two counts of bribery. Salahuddin also was acquitted of an additional count of bribery.
On Feb. 11, 2013, Judge Wolfson sentenced Salahuddin to one year and one day in prison.
According to documents filed in this case and the evidence at trial:
Shortly after Salahuddin became deputy mayor in July 2006 and through December 2007, Salahuddin and Cooper conspired to use Salahuddin’s official position to steer City of Newark and Prudential Center demolition work to a cooperating witness who, in exchange for Salahuddin’s official action and influence, had to give a portion of that work to Cooper, the owner of S. Cooper Brothers Trucking, Inc. (“Cooper Trucking”).
While deputy mayor, Salahuddin maintained a concealed financial interest in Cooper Trucking. Salahuddin mortgaged approximately $900,000 worth of property as collateral for Cooper Trucking, as well as lent money to Cooper for payroll and received money from Cooper related to the company’s operations.
In addition to probation, Judge Wolfson fined him $3,000.U.S. Attorney Fishman credited special agents of the FBI’s Trenton and Newark Field Offices, under the direction of Acting Special Agent in Charge David Velazquez; and IRS – Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen, for the investigation leading to today’s sentence.
The government is represented by Assistant U.S. Attorney Harvey Bartle of the U.S. Attorney’s Office in Trenton, Assistant U.S. Attorneys and Zahid N. Quraishi of the U.S. Attorney’s Office Special Prosecutions Division in Newark, and James B. Nobile, chief of the Special Prosecutions Division.
13-103
Defense counsel: Alan Zegas Esq., Chatham, N.JFlorida Resident Sentenced to 33 Months in Prison for Securities and Investment Fraud SchemeRead the Press Release
NEWARK, N.J. – Scott Kupersmith, formerly of Alpine, N.J., and now living in Marco Island, Fla., was sentenced to 33 months in prison for engaging in a sophisticated securities and investment fraud scheme, U.S. Attorney Paul J. Fishman announced.
Kupersmith, 46, previously pleaded guilty before U.S. Magistrate Judge Patty Shwartz in Newark federal court to an Information charging him with securities fraud. U.S. District Judge Katharine S. Hayden imposed the sentence in Newark federal court.
According to documents filed in the case and statements made in court:
Kupersmith engaged in a securities fraud scheme commonly referred to as “free-riding,” in which a customer buys or sells securities in a brokerage account without the cash or securities to cover the trades. Kupersmith and his associates opened more than half-a-dozen brokerage accounts at brokerage firms located in New Jersey and across the country. To induce the brokerage firms to open these accounts, Kupersmith falsely represented that he had a personal net worth of approximately $5 million and that he controlled a hedge fund in Manhattan with assets worth more than $10 million. Once these accounts were opened, Kupersmith used them to make millions of dollars’ worth of securities trades. When the trades were successful, Kupersmith kept the profits. When the trades were not profitable, Kupersmith would walk away from the trades, leaving the brokerage firms to settle the trades on Kupersmith’s behalf. The brokerage firms collectively sustained $1 million in losses.
Kupersmith funded the scheme, in part, with money that he solicited from investors. He falsely represented to them that he ran a successful Manhattan hedge fund that had an annual return of about 30 percent and promised investors grossly unrealistic returns.
In addition to a prison term, Judge Shwartz sentenced Kupersmith to three years of supervised release and fined him $1.8 million.U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Charge David Velazquez in Newark, for the investigation leading to today’s sentence. He also thanked the U.S. Securities and Exchange Commission’s Division of Enforcement in New York for its assistance.
The government is represented by Assistant U.S. Attorney Christopher J. Kelly 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. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.13-104
Defense counsel: Lisa Mack Esq., Assistant Federal Public Defender, Newark
Former City of Hoboken IT Manager Pleads Guilty to Illegally Intercepting and Disclosing E-mails Intended for Hoboken Mayor and Top City OfficialsRead the Press Release
NEWARK, N.J. – A former management information systems specialist for the city of Hoboken pleaded guilty today for intercepting communications meant for the mayor of Hoboken and top city officials and passing some of those communications on to other officials, U.S. Attorney Paul J. Fishman announced.
Patrick Ricciardi, 46, of Hoboken, entered a guilty plea – before U.S. District Judge Esther Salas in Newark federal court – to an Information charging him with accessing a computer without authorization, interception of wire and electronic communications and disclosure of intercepted wire and electronic communications.
According to the documents filed in this case and statements made in court:
Ricciardi was a longstanding employee of the city of Hoboken and worked as the chief information technology officer for the mayor’s office. As part of his job duties, Ricciardi was responsible for keeping the city’s network running and had access to email accounts within the city’s computer system and other aspects of the city’s computer network.In early 2010, Ricciardi created an archive file on his work computer to intercept and store all emails sent to and from the mayor and certain of the mayor’s employees. Neither the mayor nor any other city employee authorized the storage of the emails or the creation of the file.
During his guilty plea proceeding, Ricciardi admitted he used his access to set up the email accounts of the mayor and two of the mayor’s top lieutenants so all of their incoming and sent emails would be sent to the archive folder.
He also admitted that he read some of the emails in order to spy on the mayor and her assistants, and forwarded them to other current and former city officials.
Ricciardi is scheduled to be sentenced on July 1, 2013, before Judge Salas. Each of the three counts carries a maximum potential penalty of five years in prison and a $250,000 fine.
U.S. Attorney Fishman praised special agents of the FBI’s Cyber Crimes Task Force, under the direction of Acting Special Agent in Charge David Velazquez, for the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Zach Intrater of the U.S. Attorney’s Office Computer Hacking and Intellectual Property Section in the Office’s Economic Crimes Unit in Newark.
13-130
Defense counsel: Assistant Federal Public Defender Donald McCauley, Esq.
Ricciardi Information
Forfeiture of More Than $15M Worth of Artwork Sought by U.S. Attorney’s OfficeRead the Press Release
NEWARK, N.J. – The United States has filed a civil asset forfeiture Complaint seeking a collection of artwork containing more than 2,200 pieces and valued at more than $15 million, U.S. Attorney Paul J. Fishman announced today.
The Complaint alleges that the artwork – bought with money from the sale of fraudulent credits for renewable fuel – was transported in interstate commerce knowing that it was the proceeds of fraud and was utilized in laundering the proceeds of fraud.
According to the Complaint:
Federal law requires gasoline and diesel refiners and importers to introduce renewable, non-fossil fuel into the national fuel mix. To ensure this, the Environmental Protection Agency created a system of credits known as “Renewable Identification Numbers” – or “RINs” – to track and boost renewable fuel production. The RINs can be obtained by:
· producing renewable fuel;
· importing renewable fuel produced by approved foreign producers;
· purchasing renewable fuel, with associated RINs, from approved domestic producers; and
· purchasing RINs without the underlying renewable fuel.A market for RINs has developed, and thousands of RIN transactions are electronically recorded with EPA every week. Hundreds of millions of dollars’ worth of RINs are exchanged every year.
A company known as Green Diesel held itself out as operating a facility in Houston, Texas, that generated biomass-based diesel fuel. It did not, however, actually generate any such biodiesel. From November 2007 through at October 2011, Green Diesel sold RINs to companies such as Shell Oil, BP, CITGO, and Exxon that were invalid because they did not, in fact, represent the production of any biodiesel at all. Purchasers of invalid RINs from Green Diesel have reported losses exceeding $78 million.
The owner of Green Diesel, Philip J. Rivkin, used part of the proceeds of the fraud to purchase at least $18 million worth of artwork, chiefly photographs. On Jan. 30, 2012, Rivkin caused 396 packages of artwork to be transported to a warehouse on Frelinghuysen Avenue in Newark. The artwork was stored there until late June 2012, when it was moved to a warehouse in New York on its way to Spain. On July 12, 2012, it was seized for forfeiture pursuant to a warrant issued by a U.S. Magistrate Judge Mark Falk in Newark.
The seized artwork has been appraised by New York Fine Art Appraisers, which concluded that it has a total fair market value of $15,773,128. Among the works sought by the Complaint are:
a. Gelatin silver print titled “Distortion no. 6, Paris” by artist Andre Kertesz. The photograph was purchased by Rivkin from Philips De Prury & Company as part of a group of photographs. Rivkin paid $42,500 for the piece and wired $60,000 as payment for the group of photographs on Nov. 9, 2010.
b. Gelatin silver print titled “Dunes, Oceano” by artist Edward Weston. The photograph was purchased by Rivkin from Sotheby’s as part of a group of photographs. Rivkin paid $134,500 for the piece and wired $424,750 as payment for the group of photographs on Nov. 11, 2010.
c. Gelatin silver print titled “Death Valley” by artist Edward Weston. The photograph was purchased by Rivkin from Sotheby’s as part of a group of photographs. Rivkin paid $16,250 for the piece and wired $424,750 as payment for the group of photographs on Nov. 16, 2010.d. Albumen print titled “Notre Dame” by artist Eugene Atget. The photograph was purchased by Rivkin from Camera Lucida, LLC as part of a group of photographs. Rivkin paid $130,000 for the piece and wired $1,267,000 as payment for the group of photographs on Feb. 8, 2011.
e. A 1907 platinum print titled “Nude Study, Miss Mabel Cramer” by artist Clarence Hudson White. The photograph was purchased by Rivkin from Camera Lucida, LLC as part of a group of photographs. Rivkin paid $35,000 for the piece and wired $1,267,000 as payment for the group of photographs on Feb. 8, 2011.
f. A 1930 silver print titled “Equivalent” by artist Alfred Stieglitz. The photograph was purchased by Rivkin from Lee Gallery for $33,000. Rivkin wired $33,000 as payment for the photograph on February 28, 2011.
g. Gelatin silver print titled “Poplars, Lake George” by artist Alfred Stieglitz. The photograph was purchased by Rivkin from Joel Soroko Gallery for $51,000. Rivkin wired $51,000 as payment for the photograph on March 7, 2011.
h. Vintage warm-toned matte-surface gelatin silver print titled “Vortograph 1917” by artist Alvin Langdon Coburn. The photograph was purchased by Rivkin from Camera Lucida, LLC as part of a group of photographs. Rivkin paid $175,000 for the piece and wired $1,400,000 as payment for the group of photographs on March 10, 2011.
i. Vintage gelatin silver contact print titled “From the Shelton, West” by artist Alfred Stieglitz. The photograph was purchased by Rivkin from Camera Lucida for $150,000. Rivkin wired $150,000 as payment for the photograph on March 31, 2011.
j. Vintage matte gelatin silver print titled “Knees (fragment)” by artist Edward Weston. The photograph was purchased by Rivkin from Camera Lucida, LLC as part of a group of photographs. Rivkin paid $165,000 for the piece and wired $1,400,000 as payment for the group of photographs on March 31, 2011.
k. An 1894 platinum print titled “The Letterbox” by artist Alfred Stieglitz. The photograph was purchased by Rivkin from Lee Gallery for $35,700. Rivkin wired the $35,700 payment for the photograph on April 5, 2011.
l. Vintage gelatin silver print titled “Greta Garbo for Vanity Fair Hollywood” by artist Edward Steichen. The photograph was purchased by Rivkin from Paul Hertzman, Inc. Vintage Photographs for $75,000. Rivkin wired $75,000 as payment for the photograph on April 11, 2011.
m. Waxed palladium print titled “Georgia O’Keeffe” by artist Alfred Stieglitz. The photograph was purchased by Rivkin from Camera Lucida, LLC for $675,000. Rivkin wired $675,000 as payment for the photograph on April 12, 2011.
n. Gelatin silver print titled “Equivalent, 1925” by artist Alfred Stieglitz. The photograph was purchased by Rivkin from Bruce Silverstein Gallery, LLC as part of a group of photographs. Rivkin paid $55,000 for the piece and wired $150,000 as payment for the group of photographs on April 12, 2011.
Civil forfeiture cases are “in rem” proceedings—proceedings against “things.” In this case, the Complaint is against the seized artwork, not against the persons who committed the underlying unlawful acts or anyone else. The law permits persons claiming an interest in the property an opportunity to appear and present their cases that they are innocent owners of the property and the property should not be forfeited. Whether the United States is entitled to forfeit the property will be determined conclusively. When property is forfeited to the United States, the law allows the U.S. Department of Justice to utilize the property to reimburse victims of the underlying unlawful activity for their losses.
U.S. Attorney Fishman credited special agents from the EPA-Criminal Investigation Division, under the direction of Special Agent in Charge Ivan J. Vikin, Area Office in Dallas, Texas; and special agents from the U.S. Secret Service under the direction of Special Agent in Charge Cynthia Marble in Houston, Texas, and Special Agent in Charge James Mottola in New Jersey, for the investigation that led to the seizure of the artwork.
The government is represented by Assistant U.S. Attorney Marion Percell, Chief of the U.S. Attorney’s Office’s Asset Forfeiture and Money Laundering Unit, in Newark.
13-101
Green Diesel Complaint
Burlington County, N.J., Woman Sentenced to One Year of Home Confinement, Five Years of Probation, for Trying to Hide CashRead the Press Release
TRENTON, N.J. – A Burlington County, N.J., woman was sentenced today to 12 months of home confinement and five years of probation for making cash deposits totaling more than $700,000 in amounts of less than $10,000 each in order to avoid having banks file a report on her deposits, U.S. Attorney Paul J. Fishman announced.
Sandra Mastoris, 58, of Chesterfield, N.J., previously pleaded guilty before U.S. District Judge Joel A. Pisano to an Indictment that charged her with structuring more than $700,000 in cash deposits from 2008 to 2009. Judge Pisano imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:
By the beginning of 2008, Mastoris had accumulated a cash hoard of more than $700,000. Beginning in May 2008 and continuing in 2009, Mastoris deposited that cash hoard in amounts of less than $10,000 because she was aware that banks were required to report cash transactions that involved amounts of more than $10,000, and she wanted to avoid having the banks file such reports. Making deposits of cash in amounts of less than $10,000 in order to avoid having banks file Currency Transaction Reports constitutes the criminal offense of “structuring.”
Mastoris made cash deposits into 13 different accounts at five different banks. Between May 1, 2008, and Dec. 31, 2009, Mastoris made more than 200 cash deposits of less than $10,000 into accounts at JPMorganChase, Bank of America, PNC Bank, Sovereign Bank and Grand Bank. On Aug. 29, 2008, for example, Mastoris made cash deposits of $9,900 into an account at the Bank of America, $5,000 into one account at JPMorganChase, $4,500 into a second account at JPMorganChase, and $8,500 into an account at PNC Bank.
In addition to the home confinement and probation, Judge Pisano ordered Mastoris to forfeit $70,000.
U.S. Attorney Fishman credited special agents of IRS–Criminal Investigation, under the direction of Acting 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 Bohdan Vitvitsky of the U.S. Attorney’s Office Economic Crimes Unit.
13-100
Defense Counsel: Vincent P. Sarubbi Esq., Haddonfield, N.J.Bergen County, N.J., Man Admits Role in Two Separate Fraud SchemesRead the Press Release
Ran Multi-Million Dollar Ponzi Scheme, Swindled Elderly, Disabled Widow
NEWARK, N.J. – A Bergen County, N.J., man who claimed to run New Jersey-based hedge funds using a secret computer program to invest in foreign currency admitted today he defrauded victims out of millions of dollars, defrauded an elderly, disabled widow out of her life savings, and evaded payment of taxes, U.S. Attorney Paul J. Fishman announced.
George Sepero, 40, of Glen Rock, N.J., pleaded guilty to a Superseding Information charging him with wire fraud conspiracy, wire fraud, and tax evasion before U.S. District Judge Jerome B. Simandle in Camden federal court. Two conspirators, Carmelo Provenzano and Daniel Dragan, previously pleaded guilty before Judge Simandle.
According to documents filed in this case and statements made in court:Beginning in 2009, Sepero, Dragan and Provenzano claimed to run a series of hedge funds in New Jersey, luring investors with the prospect of extraordinary profits in foreign currency trading. The defendants made numerous misrepresentations and omissions to induce their victims to invest in “Caxton Capital Management” and “CCP Pro Consulting Inc.” Sepero claimed that he and his conspirators owned and controlled a proprietary computer algorithm for trading foreign currencies; that they had used the algorithm to achieve returns of more than 170 percent in the prior two years; and that any investment funds would be highly liquid and could be withdrawn on days’ notice.
Investors sent the defendants a total of more than $3.5 million. Sepero and the others invested little or no money in foreign currency or any other investment vehicle, instead diverting the vast majority of victims’ investments to pay prior victims in Ponzi-scheme style and to finance extravagant personal expenditures.
Sepero and his co-conspirators spent investor money on credit card bills averaging $25,000 per month; bar tabs of $18,241, including a $4,000 tip; $14,034 on separate nights at “Drai’s Hollywood” nightclub in Los Angeles; and flights to Paris and elsewhere. Sepero bought a custom Ford pickup truck costing more than $80,000.
The defendants e-mailed victims fake statements showing their principal had been invested in the foreign currency markets and was achieving substantial results. Many of these e-mails were purportedly sent by an individual named “Mel Tannenbaum,” a fictional character of Provenzano’s invention.
The defendants also e-mailed to several investors “screen shots” of a computer-based trading program, which they claimed represented the investors’ funds being traded in the currency markets. In reality, the shots reflected trading in fictional accounts set up by the conspirators to dupe investors.
The wire fraud conspiracy count to which Sepero pleaded is punishable by a maximum potential penalty of 20 years in prison and a fine of $250,000 or twice the gain or loss from the offense. Sentencing is scheduled for June 14, 2013.
Sepero also pleaded guilty to conducting a wholly separate fraud scheme:
Sepero worked as a financial planner at a financial institution for several years, but was fired in 2006 because of investigations into his churning of clients’ accounts. One of his clients was an elderly, demented, paraplegic woman with the initials M.V. Sepero took control of M.V.’s annuity account, which was the sole means that M.V. had to provide for her retirement and nursing expenses.
Notwithstanding his termination from the financial institution, Sepero lied to M.V. and her family, and told them that he was still authorized to manage the annuity account. When M.V. had money to add to the annuity account, M.V. – at Sepero's direction – handed it over to Sepero, with checks made payable not to the administrator of the account, but rather to Sepero’s company, “Casa Nostra Enterprises.” Instead of transferring the money to the annuity account, however, Sepero spent it on his own expenses: credit card and other bills, mortgage payments, and car payments, among other things.
To hide the fraud, Sepero fabricated a bogus account statement, showing that the annuity account was worth more than $700,000, when, for the period covered by the bogus statement, the annuity account actually contained $16.57.
Sepero placed recorded phone calls to the administrator of the annuity account, during which he impersonated both M.V.’s son and her husband, who had been dead for more than three years at the time Sepero made the calls.
Sepero also pleaded guilty to tax evasion for the tax year 2010, as he derived income from his fraudulent activities, but did not file a tax return and deposited his victims’ money into his companies’ accounts.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Charge David Velazquez in Newark, and special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen, for the investigation leading to today’s guilty plea. He also thanked the Commodity Futures Trading Commission’s New York Regional Office, under the direction of David Meister.
The government is represented by Assistant U.S. Attorneys Christopher Kelly and Zach Intrater of the U.S. Attorney’s Office Economic Crimes Unit and Evan Weitz of the Office’s Asset Forfeiture Unit in Newark.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
13-102Defense counsel: John Weischel Esq., Hackensack, N.J.
Sepero Superseding Information
Mercer County, N.J., Man Sentenced to 30 Years in Prison for Robbing the Same Bank Twice, Carjacking A Car and Shooting Two PeopleRead the Press Release
TRENTON, N.J. - A Mercer County, N.J., man was sentenced today to 30 years in prison for robbing a bank and returning nine months later to rob the same bank, carjacking a vehicle and shooting two people in the course of that conduct, U.S. Attorney Paul J. Fishman announced.
Jeffrey Garrett, 36, of Trenton, previously pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton federal court to Counts One, Three, Five and Six of an Indictment charging him with two armed bank robberies, carjacking, and discharging a firearm during a crime of violence. Judge Sheridan imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:Garrett robbed the Chase Bank, in Hamilton, N.J., on Nov. 10, 2010. He handed the teller a note that stated: “I have a gun, give me all the fifty and hundred dollar bills.” He displayed a black handgun before fleeing with the cash. Surveillance cameras revealed clear images of Garrett, and FBI agents determined that Garrett used his own Visa card at the Chase Bank’s ATM just moments before the robbery. Federal authorities charged Garrett by Complaint two days later and obtained an arrest warrant, but Garrett remained at large.
Nine months later, on Aug. 23, 2011, Garrett robbed the same bank. To get to the bank, he carjacked a car at 5:30 a.m. He pistol-whipped the victim, and the gun discharged, causing the victim a serious head wound. Garrett locked the bleeding victim in the trunk of the car and shortly thereafter bound his hands with cable and threatened his life.
Garrett arrived at the same Chase Bank in Hamilton in the stolen vehicle around 10 a.m., after driving around for hours. He wore a dark baseball cap and sunglasses when he entered the bank. Showing a chrome revolver, he demanded that the teller give him all the money. When she complied, he asked for more money and threatened to shoot her if she turned any keys at her station. The handgun discharged and the teller was shot in the abdomen.
Garrett drove off in the stolen car and later abandoned it in a shopping mall parking lot in Moorestown, N.J., with the bound carjacking victim still locked in the trunk. Both victims survived.
Garrett was arrested in Florida on Oct. 17, 2011.
In addition to the prison term, Judge Sheridan sentenced Garrett to five years of supervised release.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Charge David Velazquez; officers of the Hamilton Township Police Department, under the direction of Police Chief James W. Collins; officers of the Trenton Police Department, under the direction of Police Director Joseph S. Juniak; and the U.S. Marshals Service, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorneys R. Joseph Gribko and John E. Clabby of the U.S. Attorney’s Office Criminal Division in Trenton.
12-097
Defense counsel: David E. Schafer Esq., Assistant Federal Public Defender, Trenton
Essex County, N.J., Man Admits Transporting Explosive MaterialsRead the Press Release
TRENTON, N.J. – An Essex County, N.J., man today admitted transporting explosive chemicals in a piece of polyvinyl chloride, or PVC, pipe to Pennsylvania without a federal license or permit, U. S. Attorney Paul J. Fishman announced.
Anthony Nicholas Gallo, 20, of North Caldwell, N.J., pleaded guilty before U.S. District Court Judge Anne E. Thompson in Trenton federal court to an Information charging him with transportation of explosive materials without a license or permit issued by the U.S. Attorney General.
According to the Information to which Gallo pleaded guilty and statements made in court:
On Jan. 8, 2012, Gallo went to Pennsylvania and blew up potassium chlorate and magnesium in a PVC pipe, which provided a contained environment for the chemicals to produce a more powerful explosion. The potassium chlorate mixture is considered to be an explosive by the U. S. Bureau of Alcohol, Tobacco, and Firearms.
The charge to which Gallo pleaded guilty carries a maximum penalty of 10 years in prison and a fine of $250,000. Sentencing is scheduled for June 5, 2013.
U.S. Attorney Fishman credited special agents, detectives and investigators assigned to the FBI Joint Terrorism Task Force, under the direction of Acting Special Agent in Charge David Velazquez, with the investigation leading to today’s guilty plea. The FBI Joint Terrorism Task Force comprises law enforcement officers from 30 federal, state and local agencies throughout New Jersey. He also thanked the North Caldwell Police Department and the Essex County Prosecutor's Office for their significant contributions to this investigation.The government is represented by Assistant U.S. Attorney Joyce M. Malliet of the U.S. Attorney’s Office National Security Unit in Newark.
13- 098
Defense counsel: Anthony Iacullo Esq., Nutley, N.J.
Gallo, Anthony Information
Essex County, N.J., Man Admits Role in Two Bank RobberiesRead the Press Release
NEWARK, N.J. - An Essex County, N.J., man today admitted robbing the Garden State Community Bank in Newark, N.J., on two separate occasions, U.S. Attorney Paul J. Fishman announced.
Alfred Ferguson, 55, of Newark, pleaded guilty before U.S. District Judge Stanley R. Chesler in Newark federal court to an Information charging him with two counts of bank robbery. On Oct. 9, 2012, Ferguson was arrested fleeing the scene of his most recent bank robbery on a bicycle.
According to documents filed in this case and statements made in court:
Alfred Ferguson committed two bank robberies – both of the Garden State Community Bank in Newark – on Sept. 17, 2012, and Oct. 9, 2012. Ferguson used a similar procedure for each robbery: After entering the bank wearing a red bandana over the lower part of his face, Ferguson would verbally threaten the bank teller, vault over the glass partition, and empty money from bank tellers’ cash drawers.
Each charge of bank robbery is punishable by a maximum potential penalty of 20 years in prison and a fine of $250,000, or twice the gross gain or loss from the offense. Sentencing is scheduled for June 5, 2013.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Charge David Velasquez, with the investigation leading to charges. He also thanked the Newark Police Department for their contribution to the case.
The government is represented by Assistant U.S. Attorney David M. Eskew of the U.S. Attorney’s Office General Crimes Unit in Newark.
13-099Defense counsel: John Yauch Esq., Federal Public Defender’s Office, Newark
Ferguson Information
Two Admit Mortgage Fraud Conspiracy and Money LaunderingRead the Press Release
CAMDEN, N.J. – A former property manager admitted today to conspiring to defraud financial institutions and launder stolen funds as part of a $15 million mortgage fraud scam that used phony documents and “straw buyers” to make illegal profits on overbuilt condos, U.S. Attorney Paul J. Fishman announced.
Last week, a Georgia man also admitted to conspiring to defraud financial institutions and launder stolen funds as part of the same scam.
Timothy Ricks, 45, of East Orange, N.J., pleaded guilty today to a Superseding Indictment charging him with one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering. Orlando Allen, 47, of Fayetteville, Ga., pleaded guilty to the same crimes on Feb. 20, 2013. Both Ricks and Allen entered their guilty pleas before U.S. District Judge Jerome B. Simandle in Camden federal court.
According to documents filed in this case and statements made in court:
Ricks and Allen were among 11 defendants arrested in July 2012 and charged with conspiracy to commit wire fraud and conspiracy to commit money laundering. Ricks and his conspirators located oceanfront condominiums overbuilt by financially distressed developers and negotiated a buyout price with the sellers. They then caused the sales prices for the properties – located in Wildwood Crest and North Wildwood, N.J., other locations in New Jersey and in Naples, Fla. – to be much higher than the buyout price to ensure large proceeds. Other defendants helped conceal the true sales prices of certain properties through inflated sales contracts and sale and finder’s fee agreements.
Ricks and Allen recruited straw buyers to purchase those properties at the inflated rates. The straw buyers had good credit scores but lacked the financial resources to qualify for mortgage loans. The conspirators created false documents, such as fake W-2 forms, pay stubs, bank statements and investment statements, to make the straw buyers appear more creditworthy than they actually were in order to induce the lenders to make the loans.
Ricks and his conspirators caused fraudulent mortgage loan applications in the name of the straw buyers, including the supporting documents, to be submitted to mortgage brokers that the brokers knew were false. Once the loans were approved and the mortgage lenders sent the loan proceeds in connection with real estate closings, Ricks and his conspirators took a portion of the proceeds, having funds wired or checks deposited into various accounts they controlled. They also distributed a portion of the proceeds to other members of the conspiracy for their respective roles.
The wire fraud conspiracy charge carries a maximum potential penalty of 30 years in prison and a $1 million fine. The money laundering conspiracy charge carries a maximum potential penalty of 10 years in prison and a $250,000 fine. Ricks’ sentencing is scheduled for Nov. 8, 2013. Allen is scheduled to be sentenced Aug. 8, 2013.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Charge David Velazquez in Newark; and IRS–Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen, Newark field office, for their roles in the ongoing investigation.
The government is represented by Assistant U.S. Attorney Matthew T. Smith and Attorney in Charge R. Stephen Stigall of the U.S. Attorney’s Office Criminal Division in Camden.
13-095
Defense counsel:
Ricks: Joshua Markowitz Esq., Princeton, N.J.
Allen: Nace Naumoski Esq., Roseland, N.J.Ricks, Timothy et al. Superseding Indictment
Philadelphia Man Sentenced to 12 Months in Prison for Role in Forging U.S. Postal Service Money OrdersRead the Press Release
TRENTON, N.J. – A Philadelphia man was sentenced today to one year and one day in prison for his role in a conspiracy to forge U.S. Postal Service money orders, U.S. Attorney Paul J. Fishman announced.
Yacouba Magadji, 36, previously pleaded guilty before U.S. District Judge Mary L. Cooper to an Information charging him with one count of conspiracy to falsely and materially alter money orders. Judge Cooper imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:
Magadji and others allegedly agreed to buy U.S. Postal Service money orders for small amounts and then alter them to show a higher face value. Magadji met three times with buyers who were actually confidential informants. At each meeting, Magadji sold the confidential informant 10 money orders with an apparent face value of $1,000. Each of the money orders had been purchased for a much smaller amount, and then altered.
In addition to the prison term, Judge Cooper sentenced Magadji to three years of supervised release and ordered him to pay restitution of $392,646.
Fishman credited inspectors of the U.S. Postal Inspection Service, Newark, under the direction of Acting Inspector in Charge Maria Kelokates,n with the investigation leading to today’s sentence.
The government is represented by Assistant U.S. Attorney Charlton A. Rugg of the Economic Crimes Unit in Newark.
13-096
Defense counsel: Pasquale F. Giannetta Esq., of Wayne, N.J.
Middlesex County, N.J., Man Charged with Trafficking in Counterfeit Male Enhancement Pills and Money LaunderingRead the Press Release
NEWARK, N.J. – A Middlesex County, N.J. man was charged today with trafficking in counterfeit male enhancement supplements imported from China and with laundering proceeds of more than $1 million, U.S. Attorney Paul J. Fishman announced.
Shuja Ali Syed, 52, originally from Pakistan and now a resident of Iselin, N.J., was arrested this morning by U.S. Department of Homeland Security-Homeland Security Investigations special agents. He was charged in a two-count Complaint and is scheduled for an initial appearance this afternoon before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court.
According to the Complaint filed in Newark federal court:
From February 2012 through January 2013, Syed trafficked in counterfeit, purportedly all-natural male enhancement products, namely Libigrow, Blue Diamond, Nite Rider, and ExtenZe. Syed imported counterfeit Libigrow, Blue Diamond, Nite Rider, and ExtenZe from China, and sold the products to undercover law enforcement agents and other individuals in New Jersey and New York. Syed represented that the products were “all natural,” when, in fact, laboratory analyses of the counterfeit products indicated that they contained either sildenafil, commonly known as Viagra, or tadalafil, commonly known as Cialis. Both Viagra and Cialis are prescription drugs approved by the Food and Drug Administration and used to treat, among other things, erectile dysfunction.
From December 2011 through November 2012, Syed deposited more than $600,000 into New Jersey bank accounts and wired more than $1 million to China, all of which were proceeds from the illegal importation and sale of the counterfeit products.
The criminal Complaint charges Syed with one count of trafficking in counterfeit goods, which carries a maximum potential penalty of 10 years in prison and a fine of $2 million, and one count of money laundering, which is punishable by a maximum potential penalty of 20 years in prison and a fine of $500,000 or twice the value of the property involved in Syed’s financial transactions.
U.S. Attorney Fishman credited law enforcement agents of the U.S. Department of Homeland Security-Homeland Security Investigations, under the direction of Special Agent in Charge Andrew McLees, and postal inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Maria Kelokates, for the investigation leading to today’s charges.
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. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
The charges and allegations contained in the Complaint against Syed are merely accusations, and he is considered innocent unless and until proven guilty.
13-093
Defense counsel: Carol Gillen Esq., Assistant Federal Public Defender, TrentonSyed Complaint
Former Trenton, N.J., City Employee Admits Involvement in Corruption and Narcotics ConspiraciesRead the Press Release
TRENTON, N.J. – A former Trenton city employee today admitted his participation in a bribery scheme involving Trenton Mayor Tony F. Mack, the mayor’s brother, Ralphiel Mack, and close associate, Joseph A. “JoJo” Giorgianni, U.S. Attorney Paul J. Fishman announced.
Charles Hall III, 49, of Trenton, pleaded guilty before U.S. District Judge Michael A. Shipp in Trenton federal court to an Information charging him with one count of conspiracy to obstruct commerce by extortion under color of official right. He also pleaded guilty to one count of conspiracy to distribute oxycodone in a separate conspiracy with Giorgianni and others.According to documents filed in this case and statements made in court:
From September 2010 through June 2012, Hall, Tony Mack, and Ralphiel Mack agreed to accept corrupt cash payments and other things of value from two cooperating witnesses in exchange for the mayor’s official assistance with the cooperating witnesses’ efforts to acquire a city owned lot (the “East State Street Lot”) to develop an automated parking garage. Hall admitted that he, Giorgianni, and Tony Mack agreed that Mack would take official action to fix the sale price of the East State Street Lot at $100,000 in exchange for a $100,000 bribe payment. Hall admitted that he met with a Trenton city official and caused that official to issue a letter offering to sell the East State Street Lot for $100,000, which was substantially lower than what the cooperating witness was willing to pay. Hall further admitted that he, Giorgianni, and Tony Mack agreed to split among themselves the $100,000 bribe payment.Hall said Tony Mack instituted a system of “buffers,” or intermediaries, to receive bribe payments on his behalf. He admitted that Giorgianni and Ralphiel Mack served as Tony Mack’s intermediaries. Hall said that when talking over the telephone, he, Tony Mack, Giorgianni, and Ralphiel Mack limited their conversations to hide the illegal nature of the scheme in case law enforcement was tapping their phones. Hall admitted that “Uncle Remus” was a code word used by Hall, Tony Mack, and Giorgianni to signal that a bribe payment was available for pickup from Giorgianni. On Dec. 6, 2012, the Mack brothers and Giorgianni were charged in an eight-count Indictment with extortion, bribery and mail and wire fraud.
In addition to the parking garage project-related bribe and extortion payments, Hall also admitted his involvement in a narcotics distribution conspiracy involving Giorgianni and others. Hall said he obtained, in coordination with Giorgianni, oxycodone-based pain medication, for the purpose of distribution. Jojo’s Steakhouse, a restaurant operated by Giorgianni and Mary Manfredo, 65, of Lawrenceville, N.J., served as a front where oxycodone pills and drug proceeds were received and distributed. Also charged by Complaint on Sept. 4, 2012, along with Giorgianni and Manfredo in the drug conspiracy are:
Name
Age
Town
31
Trenton
Ralph Dimatteo Sr.
63
Trenton
Giuseppe A. Scordato
47
Hamilton, NJ
Carol Kounitz
57
Hamilton, NJ
Stephanie Lima
41
Yardville, NJ
Mark Bethea
45
Trenton
Eugene Brown
70
Atlantic City, NJ
The investigation did not reveal evidence that either Tony Mack or Ralphiel Mack were involved in the narcotics conspiracy.
The extortion conspiracy count to which Hall pleaded guilty is punishable by a maximum potential penalty of 20 years in prison and a fine of $250,000 or twice the gross gain or loss from the offense. The narcotics conspiracy count is punishable by a maximum penalty of 20 years in prison and a $1 million fine. Sentencing is scheduled for June 5, 2013.
U.S. Attorney Fishman credited special agents of the FBI’s Trenton Resident Agency, Newark Field Office, under the direction of Acting Special Agent in Charge David Velazquez with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorneys Eric W. Moran and Matthew J. Skahill of the U.S. Attorney’s Office Special Prosecutions Division in Trenton and Camden, respectively.
The charges and allegations in the Indictment and Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
13-094
Defense counsel for Charles Hall III: Alan D. Bowman Esq., Newark
Hall Information
Owner of Ocean County, N.J., Architectural Firm Admits Submitting False Corporate ReturnsRead the Press Release
NEWARK, N.J. – The owner of an Ocean County, N.J. architectural and engineering firm today admitted filing fraudulent tax returns on behalf of his firm, U.S. Attorney Paul J. Fishman announced.
Pravin H. Patel, 67, of Toms River, N.J., pleaded guilty before U.S. District Judge Stanley R. Chesler to an Information charging him with subscribing to false corporate tax returns on behalf of his firm, Pravin H. Patel Associates Inc., of Toms River, N.J.
According to documents filed in this case and statements made in court:
Patel was the owner and operator of Pravin H. Patel Associates, Inc. for more than 25 years; in recent years, the firm’s primary clients included the Toms River Board of Education and Ocean County College. Between 2005 and 2009, Patel filed corporate tax returns which falsely passed off personal expenses as legitimate business deductions.
Among the personal expenses which Patel admitted to improperly using to reduce the tax liability owed by his company was $112,650 in payments for renovations on his personal residence in 2006. Patel also admitted that the corporate tax return for the year ending in March 2007 improperly included more than $8,200 in expenses related to a personal country club membership and associated fees, as well as numerous personal expenses paid through a corporate credit card. Patel admitted that the corporate tax return for the year ending in March 2007 included false deductions of more than $145,000 and that the tax loss over a four-year period for which he is criminally liable totaled $63,815.
The count to which Patel pleaded guilty is punishable by a maximum potential penalty of three years in prison and a maximum fine of $250,000. Sentencing is scheduled for June 4, 2013.
U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen, and special agents of the FBI under Acting Special Agent in Charge David Velazquez, with the investigation that resulted in today’s plea.The government is represented by Special Litigation Counsel Mark J. McCarren of the U.S. Attorney’s Office Special Prosecutions Division.
13-091
Defense counsel: Lawrence Horn Esq. and Richard Sapinski Esq.Patel Information
Middlesex County, N.J., Man Admits Tax Evasion and Concealing $1.2M in Income in Undeclared Indian Bank AccountsRead the Press Release
NEWARK, N.J. – A Middlesex County, N.J., man who co-owns and operates a wholesale adult paraphernalia business in New York City today admitted concealing more than a million dollars in income in various domestic and foreign bank accounts, U.S. Attorney Paul J. Fishman announced.
Sameer Gupta, 33, of Edison, N.J., pleaded guilty before U.S. Magistrate Judge Patty Shwartz in Newark to an Information charging him with one count of tax evasion in connection with his diverting funds from the wholesale merchandise business, J.S. Marketers Inc. Some of the diverted funds were deposited and held in undisclosed foreign accounts at HSBC in India.
According to documents filed in this case and statements made in court:
Gupta is a 50 percent owner of J.S. Marketers Inc., which sold adult paraphernalia to large adult-store chains and smaller retail video stores and bodegas. From 2006 through 2009, Gupta diverted $822,916 of J.S. Marketer business receipts into 17 different personal bank accounts held in the names of various individuals, including himself, his wife, identified only as “A.G.,” and his daughter, identified as “D.G.” 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, or his father, identified as “J.G.,” in amounts identical to invoices from J.S. Marketers’ 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 arising from the diverted J.S. Marketers funds.
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 2005 through 2008. As part of his plea agreement, Gupta has agreed to pay a one-time FBAR penalty of $259,045. The tax loss resulting from Gupta’s conduct is greater than $200,000 but less than $400,000.
Gupta faces a maximum sentence of five years in prison and a fine of $250,000 or twice his gain from the offense, together with the costs of prosecution. Gupta agreed to file true and accurate tax returns and to pay to the IRS all taxes and penalties owed, in addition to the $259,045 penalty imposed for his failure to disclose the foreign accounts. Judge Shwartz scheduled sentencing for June 13, 2013, before U.S. District Court Judge Faith Hochberg.
U.S. Attorney Fishman credited special agents with IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen in Newark, 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 Healthcare and Government Fraud Unit and Trial Attorney Michael C. Vasiliadis of the Department of Justice Tax Division.13-092
Defense counsel: Kevin H. Marino Esq., Chatham, N.J.
Gupta Information
Middlesex County, NJ, Man Sentenced to 18 Months in Prison for Attempted Escape from Hospital While in Federal CustodyRead the Press Release
TRENTON, N.J. – A Middlesex County, N.J., man who was in custody awaiting a hearing for allegedly violating conditions of his federal supervised release was sentenced today to 18 months in prison for attempting to flee from a Trenton hospital, U.S. Attorney Paul J. Fishman announced.
Joseph Vitale, 59, of Milltown, N.J., pleaded guilty on Nov. 8, 2012, before U.S. District Judge Freda L. Wolfson in Trenton federal court to an Information charging him with attempted escape.
According to documents filed in this case and statements made in court:On March 12, 2008, Vitale was convicted in U.S. District Court of bank fraud. He was sentenced to prison and released in April 2009, when he began serving five years of supervised release. In January 2012, Vitale was charged with violating several conditions of his supervised release and was taken into custody by the U.S. Marshal’s Service on Feb. 7, 2012. After making an appearance in court, Vitale complained of chest pains and was taken to St. Francis Medical Center in Trenton, where he was placed in the custody of a private security service that has a contract with the U.S. Marshal’s Service to provide security for federal prisoners being treated at the hospital. Vitale remained under 24-hour armed guard.
On Feb. 13, 2012, as one of the security guards was adjusting Vitale’s leg restraints, Vitale ran out of his room, evaded the two security guards, and ran down the hallway in an attempt to escape. The two security guards ran down the hallway after Vitale and yelled at him to stop. At one point, Vitale screamed, “I’m getting the (expletive) out of here.” The two security guards caught up to Vitale and while attempting to subdue him, one of the security guards struck his knees on the floor. Vitale continued to struggle with the security guards and made several attempts to grab one of their guns, but he was unable to remove it from its holster. With the assistance of at least one other individual, the security guards were able to subdue Vitale and handcuff him.
In addition to the prison term, Judge Wolfson sentenced Vitale to three years of supervised release.
U.S. Attorney Fishman credited deputy marshals of the U.S. Marshal’s Service, under the direction of U.S. Marshal Juan Mattos Jr., with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Jonathan W. Romankow of the U.S. Attorney’s Office Organized Crime/Gangs Unit.13-089
Defense counsel: David Schafer Esq., Assistant Federal Public Defender, Trenton