District of New Jersey
Press releases recorded for this federal judicial district.
Middlesex County, N.J., Man Charged with Production and Distribution of Child PornographyRead the Press Release
NEWARK, N.J. –A Middlesex County, N.J., man was arrested today for allegedly producing and distributing numerous images of child pornography, some taken in his own bedroom, U.S. Attorney Paul J. Fishman announced.
Kenneth Christensen, 44, of Edison, N. J., is charged by Complaint with one count of distribution of child pornography and one count of sexual exploitation of a child. He appeared before U. S. Magistrate Judge Patty Schwartz in Newark federal court this afternoon.
According to documents filed in this case and statements made in court:On May 14, 2012, Christensen, who works as a school crossing guard at a middle school in Metuchen, emailed from his personal computer 240 images depicting child pornography. Among them were three images of a boy who appeared to be about 5 years old. During a search conducted Feb. 21, 2013, at Christensen’s residence, the FBI discovered on his computer the three images from the emails, as well as several hundred more images depicting child pornography.
Since as early as 2002, Christensen has produced photographs of a young boy, who at the time was approximately 12 years old, engaged in sexually explicit conduct. In several of the photos discovered by law enforcement at Christensen’s residence, the boy was naked and his hands and feet were bound with handcuffs, duct tape, plastic ties, or cloth ties. Most of the photos were taken in Christensen’s bedroom.
On the distribution count, the maximum potential penalty is 20 years in prison, with a mandatory minimum sentence of five years in prison, and a fine of $250,000. On the exploitation charge, the maximum penalty Christensen faces is 30 years in prison, with a mandatory minimum sentence of 15 years in prison and a fine of $250,000.U.S. Attorney Fishman praised special agents with the FBI-Innocent Images Unit, under the direction of Special Agent James Tareco, and Acting Special Agent in Charge David Velasquez, for the investigation leading to today’s arrest.
The government is represented by Assistant U.S. Attorney David M. Eskew of the U.S. Attorney’s Office General Crimes Unit in Newark.The charges and allegations contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty
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Defense counsel: K. Anthony Thomas, Assistant Federal Public Defender, Newark
Christensen Complaint
Newark Man Admits Role in Scheme to Steal Checks from U.S. MailRead the Press Release
Deposited Hundreds of Thousands of Dollars into Personal Accounts
NEWARK, N.J. – A Newark man today admitted his role in a scheme to gain access to personal checks from the U.S. mail, fraudulently endorse and deposit them into personal checking accounts, U.S. Paul J. Fishman announced.
Kurtis Steele, 26, pleaded guilty before U.S. District Judge Kevin McNulty in Newark federal court to an Information charging him with one count of conspiracy to commit bank fraud.According to the documents filed in this case and statements made in court:
Steele and his conspirators gained access to blank checks that were sent via U.S. Mail and stolen from unsuspecting victims. Steele and his co-conspirators then fraudulently endorsed the blank checks for a certain sum and deposited those checks into legitimate bank accounts that defendants and unnamed conspirators opened at the banks, including TD Bank, Bank of America, Capital One Bank, Garden State Community Bank, Hudson City Savings Bank, PNC Bank and Valley National Bank. Before the victims and banks discovered the checks were fraudulent, Steele and his conspirators had withdrawn the funds either via Automated Teller Machine (ATM) or by entering the banks and filling out a withdrawal slip. During the investigation, U.S. Postal Inspection Service and FBI agents were able to obtain bank video surveillance which captured Steele making fraudulent deposits of the stolen checks and withdrawals of the proceeds of those checks.
Steele and his conspirators deposited $1.5 million in fraudulent checks stolen from 122 victims, which were deposited into 258 different banks. Steele and his conspirators’ conduct resulted in approximately $625,000 in loss.Steele faces a maximum potential penalty of 30 years in prison on the conspiracy charge and a maximum fine of $1 million or twice the gross gain or loss resulting from the offense. Sentencing is scheduled for May 29, 2013.
U.S. Attorney Fishman credited special agents of the U.S. Postal Inspection Service, under the direction of Philip Bartlett; and special agents of the FBI, under the direction of Acting Special Agent in Charge David Velazquez.
The government is represented by Assistant U.S. Attorney Dara Aquila Govan of the Organized Crime/Gangs Unit in Newark.13-087
Defense Counsel: Stephen A. Turano Esq., NewarkSteele, Kurtis Information
Burlington County, N.J., Man Sentenced to 18 Months in Prison for Defrauding CharityRead the Press Release
TRENTON, N.J. – The director of operations at a warehouse for a non-profit organization was sentenced today to 18 months in prison for defrauding the charity of $101,927, U.S. Attorney Paul J. Fishman announced.
Sean J. Smith, 38, of Mount Holly, N.J., pleaded guilty Nov. 15, 2012, before U.S. District Judge Michael A. Shipp to an Information charging him with one count of mail fraud. Judge Shipp imposed the sentence today in Trenton federal court.
According to the documents filed in this case and statements made in court:
Smith admitting to stealing money from Clothes for Kids Sake Inc., (Clothes for Kids) by making it appear as though employees were working for Clothes for Kids and entitled to wages even though those employees had either left or never worked there. Smith caused Clothes for Kids to electronically deposit their wages into bank accounts he controlled and spent the funds on various personal expenses. Between May 2011 and August 2012, Smith made it appear that two employees were entitled to compensation of $59,361, all of which was directly deposited into his own bank accounts
Smith admitted to stealing money from Clothes for Kids by causing Clothes for Kids to pay wages to at least seven employees who had recently stopped working for Clothes for Kids and directing that those wages be deposited into his own bank accounts. Beginning in January 2012, Smith manually changed the direct deposit information for approximately seven employees who recently stopped working for him at the Mount Laurel warehouse. After changing the direct deposit information to his own bank accounts, Smith would make it appear as though the former employees were continuing to do work for Clothes for Kids, which would continue to pay them wages. Smith stole approximately $42,566 from Clothes for Kids as wages for employees who no longer worked at his warehouse.In addition to the prison term, Judge Shipp also sentenced Smith to three years of supervised release, and ordered him to pay $117,615 in restitution to victims of his offense.
U.S. Attorney Fishman credited special agents of the FBI, 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. Attorney Rahul Agarwal of the U.S. Attorney’s Office General Crimes Unit in Newark.
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Defense Counsel: David Bahuriak Esq., Philadelphia
Essex County, N.J., Man Sentenced to 130 Months in Prison for Armed CarjackingRead the Press Release
NEWARK, N.J. – An Essex County man was sentenced today to 130 months in prison for his role in an armed carjacking in Elizabeth, N.J., on Jan. 25, 2011, U.S. Attorney Paul J. Fishman announced.
Alhakim Young, 23, of Newark, N.J., previously pleaded guilty before U.S. District Judge Claire C. Cecchi in Newark federal court to a Superseding Information charging him with conspiracy, theft of a motor vehicle by force, violence and intimidation, and use of a firearm in furtherance of a crime of violence.
According to documents filed in this case and statements made in court:
Young conspired with Jermaine May, David Jones and Maurice Williams to carjack a vehicle. On Jan. 25, 2011, Young, May, Jones and Williams traveled to Elizabeth in a white Jeep Cherokee to carjack a vehicle. Young and May approached two victims who were standing near a 2004 Infiniti G-35 that was parked and warming up on Britton Street in Elizabeth, and at gunpoint, ordered the two victims to the ground. Williams and Jones fled in the Infiniti, while Young and May fled in the white Jeep Cherokee. May, Jones and Williams previously pleaded guilty to conspiracy to commit carjacking, carjacking, and use of a firearm in furtherance of a crime of violence.
Judge Cecchi sentenced Young to concurrent 70-month prison terms on the counts of carjacking and conspiracy and a consecutive 60-month sentence on the firearms count. In addition to the prison term, Judge Cecchi sentenced Young to five years of supervised release. Restitution will be determined at a hearing on May 19, 2013.
U.S. Attorney Fishman credited special agents with the FBI, under the direction of Acting Special Agent in Charge David Velazquez in Newark, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorneys Dara Aquila Govan of the Organized Crime/Gangs Unit and Gurbir Grewal of the Economic Crimes Unit in Newark.
13-086Defense counsel: Sean McGovern Esq., Newark
Former South Plainfield, N.J., Police Captain Charged with Sexually Exploiting A MinorRead the Press Release
TRENTON, N.J. – A former South Plainfield, N.J., police captain is charged with the sexual exploitation of a minor female after enticing the girl to live-stream sexually explicit acts via the Internet, U.S. Attorney Paul J. Fishman announced.
Michael Grennier, 50, of South Plainfield, N.J., is charged by Complaint with one count of sexual exploitation of a child. Grennier appeared today before U.S. Magistrate Judge Tonianne J. Bongiovanni and was detained.
According to the Complaint:
Special agents of the FBI executed a consent search of the New Jersey home of “Jane Doe,” a minor female, on Feb. 15, 2013. Jane Doe stated in an interview that day that for several years Grennier paid her for photographs and video of herself naked and partially clothed. Grennier had also paid Jane Doe and another minor female, “Mary Roe,” to engage in sexually explicit conduct in hotel rooms, which Grennier videotaped. Grennier paid Jane Doe to perform sexually explicit acts while Grennier watched via webcam from another computer. The last time Grennier enticed Jane Doe to do this was at approximately 10:30 p.m. on February 14, 2013, according to Jane Doe. This was confirmed by text-messages between Grennier and Jane Doe on February 14, 2013, at approximately that time. As payment for those acts, Grennier was going to purchase approximately $175 worth of merchandise for Jane Doe.
The charge of sexual exploitation of children carries a mandatory minimum penalty of
15 years in prison, a maximum potential penalty of 30 years in prison and a $250,000 fine.U.S. Attorney Fishman credited the FBI Child Exploitation Task Force, under the direction of Acting Special Agent in Charge David Velazquez in Newark, with the investigation leading to the federal charges. Fishman also thanked the South Plainfield Borough Police Department, under the direction of Chief of Police James Parker, and the Middlesex County Prosecutor’s Office, under the direction of Prosecutor Bruce J. Kaplan, for their assistance with the investigation.
This case was brought as part of Project Safe Childhood, a nationwide initiative to
combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by
the Department of Justice. Led by U.S. Attorneys’ Offices and the Child Exploitation and
Obscenity Section (CEOS) in the Justice Department’s Criminal Division, Project Safe
Childhood marshals federal, state and local resources to better locate, apprehend and prosecute
individuals who exploit children as well as to identify and rescue victims. For more information
about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The government is represented by Assistant U.S. Attorney Harvey Bartle of the U.S. Attorney’s Trenton Office.The charge and allegations contained in the Complaint are merely accusations, and the
defendant is presumed innocent unless and until proven guilty.13-085
Grennier Complaint
Former South Plainfield, N.J., Police Captain Charged with Sexually Exploiting A MinorRead the Press Release
TRENTON, N.J. – A former South Plainfield, N.J., police captain is charged with the sexual exploitation of a minor female after enticing the girl to live-stream sexually explicit acts via the Internet, U.S. Attorney Paul J. Fishman announced.
Michael Grennier, 50, of South Plainfield, N.J., is charged by Complaint with one count of sexual exploitation of a child. Grennier appeared today before U.S. Magistrate Judge Tonianne J. Bongiovanni and was detained.
According to the Complaint:
Special agents of the FBI executed a consent search of the New Jersey home of “Jane Doe,” a minor female, on Feb. 15, 2013. Jane Doe stated in an interview that day that for several years Grennier paid her for photographs and video of herself naked and partially clothed. Grennier had also paid Jane Doe and another minor female, “Mary Roe,” to engage in sexually explicit conduct in hotel rooms, which Grennier videotaped. Grennier paid Jane Doe to perform sexually explicit acts while Grennier watched via webcam from another computer. The last time Grennier enticed Jane Doe to do this was at approximately 10:30 p.m. on February 14, 2013, according to Jane Doe. This was confirmed by text-messages between Grennier and Jane Doe on February 14, 2013, at approximately that time. As payment for those acts, Grennier was going to purchase approximately $175 worth of merchandise for Jane Doe.
The charge of sexual exploitation of children carries a mandatory minimum penalty of
15 years in prison, a maximum potential penalty of 30 years in prison and a $250,000 fine.U.S. Attorney Fishman credited the FBI Child Exploitation Task Force, under the direction of Acting Special Agent in Charge David Velazquez in Newark, with the investigation leading to the federal charges. Fishman also thanked the South Plainfield Borough Police Department, under the direction of Chief of Police James Parker, and the Middlesex County Prosecutor’s Office, under the direction of Prosecutor Bruce J. Kaplan, for their assistance with the investigation.
This case was brought as part of Project Safe Childhood, a nationwide initiative to
combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by
the Department of Justice. Led by U.S. Attorneys’ Offices and the Child Exploitation and
Obscenity Section (CEOS) in the Justice Department’s Criminal Division, Project Safe
Childhood marshals federal, state and local resources to better locate, apprehend and prosecute
individuals who exploit children as well as to identify and rescue victims. For more information
about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The government is represented by Assistant U.S. Attorney Harvey Bartle of the U.S. Attorney’s Trenton Office.The charge and allegations contained in the Complaint are merely accusations, and the
defendant is presumed innocent unless and until proven guilty.13-085
Grennier Complaint
Former South Plainfield, N.J., Police Captain Charged with Sexually Exploiting A MinorRead the Press Release
TRENTON, N.J. – A former South Plainfield, N.J., police captain is charged with the sexual exploitation of a minor female after enticing the girl to live-stream sexually explicit acts via the Internet, U.S. Attorney Paul J. Fishman announced.
Michael Grennier, 50, of South Plainfield, N.J., is charged by Complaint with one count of sexual exploitation of a child. Grennier appeared today before U.S. Magistrate Judge Tonianne J. Bongiovanni and was detained.
According to the Complaint:
Special agents of the FBI executed a consent search of the New Jersey home of “Jane Doe,” a minor female, on Feb. 15, 2013. Jane Doe stated in an interview that day that for several years Grennier paid her for photographs and video of herself naked and partially clothed. Grennier had also paid Jane Doe and another minor female, “Mary Roe,” to engage in sexually explicit conduct in hotel rooms, which Grennier videotaped. Grennier paid Jane Doe to perform sexually explicit acts while Grennier watched via webcam from another computer. The last time Grennier enticed Jane Doe to do this was at approximately 10:30 p.m. on February 14, 2013, according to Jane Doe. This was confirmed by text-messages between Grennier and Jane Doe on February 14, 2013, at approximately that time. As payment for those acts, Grennier was going to purchase approximately $175 worth of merchandise for Jane Doe.
The charge of sexual exploitation of children carries a mandatory minimum penalty of 15 years in prison, a maximum potential penalty of 30 years in prison and a $250,000 fine.
U.S. Attorney Fishman credited the FBI Child Exploitation Task Force, under the direction of Acting Special Agent in Charge David Velazquez in Newark, with the investigation leading to the federal charges. Fishman also thanked the South Plainfield Borough Police Department, under the direction of Chief of Police James Parker, and the Middlesex County Prosecutor’s Office, under the direction of Prosecutor Bruce J. Kaplan, for their assistance with the investigation.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Child Exploitation and Obscenity Section (CEOS) in the Justice Department’s Criminal Division, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The government is represented by Assistant U.S. Attorney Harvey Bartle of the U.S. Attorney’s Trenton Office.The charge and allegations contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
13-085
Grennier, Michael Complaint
Essex County, N.J., Man Sentenced to 118 Months in Prison for Armed CarjackingRead the Press Release
NEWARK., N.J, - An Essex County man was sentenced today to 118 months in prison for his role in an armed carjacking in Elizabeth, N.J., on Jan. 25, 2011, U.S. Attorney Paul J. Fishman announced.
Jermaine May, 29, of Newark, previously pleaded guilty before U.S. District Judge Claire C. Cecchi in Newark federal court to a Superseding Information charging him with conspiracy to commit carjacking, theft of a motor vehicle by force, violence and intimidation, and use of a firearm in furtherance of a crime of violence.
According to documents filed in this case and statements made in court:
May conspired with Alhakim Young, David Jones and Maurice Williams to carjack a vehicle. On Jan. 25, 2011, May, Young, Jones and Williams traveled to Elizabeth, N.J., in a white Jeep Cherokee to look for a vehicle to carjack. May and Young approached two victims who were standing near a 2004 Infiniti G-35 that was parked and warming up on Britton Street in Elizabeth, and at gunpoint, ordered the two victims to the ground. Williams and Jones fled in the Infiniti, while May and Young fled in the white Jeep Cherokee. Young, Jones and Williams previously pleaded guilty to conspiracy to commit carjacking, carjacking, and use of a firearm in furtherance of a crime of violence.
May was sentenced to concurrent 58-months prison terms on the conspiracy and carjacking counts and a consecutive 60-month prison term on the count of using a firearm in furtherance of a crime of violence, for a total sentence of 118 months in prison. Judge Cecchi also sentenced May to five years of supervised release. Restitution will be determined at a later date.
U.S. Attorney Fishman credited special agents with the FBI, under the direction of Acting Special Agent in Charge David Velazquez B. Ward in Newark, with the investigation leading to today’s plea.The government is represented by Assistant U.S. Attorneys Dara Aquila Govan of the General Crimes Unit and Gurbir Grewal of the Economic Crimes Unit in Newark.
13-084Defense counsel: Lisa Mack Esq., Assistant Federal Public Defender, Newark
Three Brooklyn, N.Y., Men Arrested for Armed Robberies of New Jersey T-mobile StoresRead the Press Release
NEWARK, N.J. – Three Brooklyn, N.Y, men were arrested today by agents of the FBI in connection with two armed robberies of T-Mobile stores in Linden, N.J., and Woodbridge, N.J., U.S. Attorney Paul J. Fishman announced.
Terrell McQueen, 29, is charged by Complaint with conspiracy to commit Hobbs Act robbery and two counts of using a firearm in furtherance of a crime of violence. Carl Williams, 29, and Eric Williams, 32, are each charged with one count of conspiracy to commit Hobbs Act robbery and one count of using a firearm in furtherance of a crime of violence. All three defendants are scheduled to appear today before U.S. Magistrate Judge Mark Falk in Newark federal court.
According to the Complaint:
On Sept. 20, 2012, Carl Williams and a conspirator walked into a T-Mobile store in Linden. The conspirator brandished a firearm, and the men then tied up the employees in the back of the store. After taking 50 to 60 cell phones, the men fled in a Land Rover. Terrell McQueen, Carl Williams, Eric Williams, and other conspirators then delivered the stolen cell phones to a cell phone store in Brooklyn.
On Oct. 2, 2012, two men, one of whom was armed with a firearm, entered a T-Mobile store in Woodbridge. After locking the front door, the men took the employees to the back of the store and tied them up. The men took approximately 40 cell phones. One of the men then used his own cell phone to contact a third individual, who drove the other two men away in a Land Rover. Terrell McQueen, Eric Williams, and other conspirators later delivered the stolen cell phones to the same cell phone store in Brooklyn.
If convicted of the Hobbs Act conspiracy charges, McQueen, Carl Williams, and Eric Williams face a maximum penalty of 20 years in prison and a fine of $250,000. If convicted of the two counts of using a firearm in furtherance of a crime of violence, McQueen faces a mandatory minimum of 32 years in prison to run consecutively to any sentence that he receives for the Hobbs Act conspiracy charge and a maximum of life in prison, as well as a fine of up to $250,000. If convicted of the one count of using a firearm in furtherance of a crime of violence, Carl Williams and Eric Williams each face a mandatory minimum of seven years in prison to run consecutively to any sentence that they receive for the Hobbs Act robbery charge and a maximum of life in prison and a fine of up to $250,000.
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 the arrests and charges. He also thanked the Linden and Woodbridge Police Departments in New Jersey, as well as the New York City and Nassau County Police Departments and the Kings County District Attorney’s Office in New York for their work in this case.
The government is represented by Assistant U.S. Attorney Osmar J. Benvenuto of the U.S. Attorney’s Office General Crimes Unit in Newark.The charge and allegations contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
12-080McQueen, Terrell et al., Complaint
Morris County, N.J., Man Sentenced to 41 Months in Prison for Possession of Child PornographyRead the Press Release
TRENTON, N.J. – A Morris County, N.J., man was sentenced today to 41months in prison for possessing child pornography on two laptop computers at his residence, U.S. Attorney Paul J. Fishman announced.
Steve Goni, 37, of Mine Hill, N.J., previously pleaded guilty before U.S. District Judge Michael A. Shipp in Trenton federal court to an Information charging him with possession of child pornography. Judge Shipp imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in Court:
In June 2011, law enforcement agents executed a search warrant for Goni’s residence. They determined that Goni’s laptop computers contained multiple images of child pornography, which appeared to have been downloaded from the Internet. Goni possessed more than 600 images and multiple videos depicting the sexual abuse of children. When interviewed by law enforcement, Goni admitted accessing websites offering child pornography, observing child pornography on those websites, and admitted that child pornography was downloaded onto his computer.
In addition to the prison term, Judge Shipp also sentenced Goni to five years of supervised release, and ordered him to pay $4,000 in restitution to victims of his offense. Goni also must register as a sex offender.U.S. Attorney Fishman credited special agents of ICE Homeland Security Investigations, under the direction of Special Agent in Charge Andrew M. McLees in Newark, for the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Shirley U. Emehelu of the U.S. Attorney’s Office criminal division in Newark.
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Defense counsel: John C. Whipple Esq., Chatham, N.J.Irvington, N. J. Tax Preparer Arraigned on Charges of Preparing and Filing False Tax ReturnsRead the Press Release
NEWARK, N.J. – An Irvington, N.J. tax preparer was arraigned today for allegedly preparing false tax returns designed to get her clients larger returns than they were entitled to, U.S. Attorney Paul J. Fishman announced.
Alicia Jones, 46, appeared today in federal court in Newark, N.J. after being charged in a 25-count Indictment. A federal grand jury in Newark, N.J., indicted her on charges of willfully aiding and assisting in the preparation and presentation of false tax returns. Jones surrendered this morning to special agents of the IRS - Criminal Investigation. She appeared before U.S. Magistrate Judge Mark Falk.
According to the Indictment:
Jones, the owner of Rightchoice Financial and Insurance Services, prepared tax returns for her clients that included fabricated and inflated itemized deductions, education expenses, and false filing statuses. From 2006 through 2009, Jones prepared and filed the fraudulent tax returns for her clients in order to obtain greater refunds for her clients than those to which they were entitled.
Each count of the Indictment carries a maximum potential penalty of three years in prison and a $250,000 fine.
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 leading to today’s indictment.
The government is represented by Assistant U.S. Attorney Barbara R. Llanes of the U.S. Attorney’s Office in Newark.
The charges and allegations contained in the indictment are merely accusations, and the defendant is considered innocent unless and until proven guilty.
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Defense counsel: Thomas Ashley Esq., NewarkJones Indictment
Cardiologist Admits Taking Cash Kickbacks for Patient ReferralsRead the Press Release
NEWARK, N.J. – An Edison cardiologist today admitted referring patients for diagnostic testing in exchange for cash kickbacks as part of a cash-for-patients scheme with a diagnostic facility in Orange, N.J., U.S. Attorney Paul J. Fishman announced.
Shashi Agarwal, 60, of Edison, N.J., who has his own cardiology practice in East Orange, N.J., pleaded guilty before U.S. District Judge Claire C. Cecchi in Newark federal court to an Information charging him with one count of soliciting and receiving more than $100,000 in cash kickbacks in violation of the federal health care anti-kickback statute.
Agarwal is the 10th person to plead guilty in the government’s investigation into the scheme to pay cash to health care providers who referred patients to Orange Community MRI, LLC (Orange MRI) in Orange N.J., for diagnostic testing.
According to documents filed in this case and statements made in court:From early 2009 through December, 2011, Orange MRI paid Agarwal for each MRI and CAT scan he referred. According to Agarwal, Orange MRI gave him $100 cash for each Medicare or Medicaid patient he referred for an MRI. Agarwal also received $50 for each CAT scan referral. Agarwal also admitted that he agreed to refer as many as 20 MRIs to Orange MRI each month. Agarwal agreed to forfeit $101,750 in bribe money.
Agarwal identified two occasions on which he was paid kickbacks. On Oct. 11, 2011, Agarwal received $2,600 in cash from a government informant at Salvadoreño restaurant in Elizabeth, N. J., in exchange for MRI and CAT scan referrals. On Nov. 10, 2011, at his office in East Orange, N.J., Agarwal received another kickback for patient referrals of $2,500 in cash.
Agarwal was one of 12 doctors and one nurse practitioner arrested Dec. 13, 2011, and charged with accepting cash kickback payments.The anti-kickback charge carries a maximum potential penalty of five years in prison and a maximum $250,000 fine, or twice the gain or loss caused by the offense. Sentencing is scheduled for June 6, 2013.
Eight of those who pleaded guilty have agreed to forfeit $279,690 in illegal cash kickbacks from Orange MRI. The two other defendants, Ashokkumar Babaria, Orange MRI’s former medical director, and Chirag Patel, Orange MRI’s former executive director, have agreed to forfeit their gains. Babaria agreed to forfeit revenues traceable to corrupt referrals, which the government estimates could reach as much as $2 million. Patel agreed to forfeit $89,180.
With respect to the other defendants charged in the investigation:• Jose Castaneda, a nurse practitioner formerly practicing in Newark, N.J., pleaded guilty before Judge Cecchi on April 3, 2012, and is scheduled to be sentenced on June 18, 2013.
• Ash Khanna, M.D., a doctor practicing in East Orange, N.J., was indicted on May 4, 2012, by a federal grand jury on one count of accepting kickbacks. Judge Cecchi has not yet set a trial date.
• Dov Rand, M.D., a doctor practicing in West Orange, N.J., pleaded guilty before Judge Cecchi on May 18, 2012, and was sentenced to five months in prison and five months of home confinement on Feb.13, 2013.
• Daisy Deguzman, M.D., a doctor practicing in Newark, N.J., pleaded guilty before Judge Cecchi on June 4, 2012, and was sentenced to six months in prison and six months of home confinement on Jan. 31, 2013.
• William Lagrada, M.D., another Newark, N.J., doctor, pleaded guilty before Judge Cecchi on July 11, 2012, and is scheduled to be sentenced on June 4, 2013.
• Maryam Jafari, M.D., another Newark, N.J, doctor, was indicted July 13, 2012, by a federal grand jury on one count of accepting kickbacks. On Sept. 14, 2012, the same grand jury handed up a superseding indictment against Dr. Jafari, charging her with one count of conspiracy and two counts of accepting kickbacks. The trial of Dr. Jafari ended with a hung jury and mistrial on Dec. 6, 2012. Judge Cecchi has set the retrial date for March 1, 2013.
• Chikezie Onyenso, M.D., an Irvington, N.J., doctor, was indicted Sept. 7, 2012, by a federal grand jury on one count of accepting kickbacks. Judge Cecchi has not yet set a trial date.
• Dinesh Patel, M.D., another Newark doctor, pleaded guilty before Judge Cecchi on September 19, 2012, and is scheduled to be sentenced on Feb. 26, 2013.• Ashokkumar Babaria, M.D., a Moorestown, N.J., radiologist and Orange MRI’s former medical director and owner-in-fact, pleaded guilty before Judge Cecchi on Sept. 27, 2012, and is scheduled to be sentenced on March 21, 2013.
• Lucio Cardoso, M.D., a North Arlington, N.J., physician, pleaded guilty before Judge Cecchi on October 10, 2012, and is scheduled to be sentenced on March 27, 2013.
• Rameshcha Kania, M.D., an East Orange, N.J., doctor, pleaded guilty before Judge Cecchi on Oct. 12, 2012, and is awaiting sentencing.
• Chirag Patel, Orange MRI’s former executive director, pleaded guilty before Judge Cecchi on Oct. 16, 2012, and is scheduled to be sentenced on July 15, 2013.The remaining defendants are charged in criminal complaints at this time.
Fishman credited special agents of the U.S. Department of Health and Human Services- Office of the Inspector General, under the direction of Special Agent in Charge Tom O’Donnell, as well as criminal and civil investigators with the U.S. Attorney’s Office, for the investigation leading to the guilty plea.
The case is being prosecuted by Assistant U.S. Attorneys Scott B. McBride and Joseph G. Mack of the U.S. Attorney’s Office’s Health Care and Government Fraud Unit.
13-081
Defense counsel: William R. Lundsten Esq.; Teaneck, NJ
Agarwal, Shashi Information
Union County, N.J., Bank Employee Sentenced to 37 Months in Prison for Conspiracy to Commit Bank RobberyRead the Press Release
TRENTON, N.J. – A Union County, N.J., man employed by the Westfield, N.J., branch of TD Bank was sentenced today to 37 months in prison for his role in a plan to rob the bank, U.S. Attorney Paul J. Fishman announced.
Jelani Bustamonte, 23, of Elizabeth, N.J., previously pleaded guilty before U.S. District Judge Joel A. Pisano to an Information charging him with two counts of criminal conspiracy. On Jan. 26, 2012, Bustamonte was arrested at his home and charged by Complaint. Judge Pisano imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:
The first conspiracy involved a scheme to rob the TD bank tellers in Westfield. The second conspiracy was a plot to rob the vault inside the same bank. The bank was, in fact, robbed Sept. 11, 2011, although the vault was never robbed. Bustamonte admitted that he provided information about the bank’s layout, security and business operations, information he had gained through his employment, to conspirator Julio Ferrer. Ferrer previously pleaded guilty to robbing the Westfield branch of TD Bank on Sept. 11, 2011, and to six other branches of TD Bank in New Jersey between October 2011 and December 2011. He is scheduled to be sentenced by Judge Pisano on March 5, 2013.
At 2:21 p.m. on Sept. 11, 2011, an individual entered the TD Bank located at 560 North Avenue East, Westfield, and passed a deposit slip across the counter to a bank teller. The bank teller, who was in the process of counting cash at the counter, did not see the handwriting on the note or any monetary amount listed, and attempted to return the slip back to the person. The individual pushed the paper slip back across the counter and ordered the teller to “read it.” The teller read the handwritten note, which stated, “I want all the money lose (sic) bills.”
The teller stepped back upon reading the demand note. The bank robber then reached over the counter and took the cash that the teller had been counting. The bank’s video surveillance camera recorded the entire incident and captured images of the bank robber.Bustamonte told law enforcement he had discussed robbing the vault with the alleged bank robber and others. He said he advised the bank robber to go with one other person to rob the vault, and that the robber agreed to give Bustamonte up to $50,000 of the money from the vault. Bustamonte said he discussed with the robber the layout of the Westfield branch, and other information, including that he should ask for “loose bills” and not strapped money. He also said he was working at the bank the day it was robbed and recognized the bank robber, but did not disclose his identity to bank personnel or law enforcement.
In addition to the prison term, Judge Pisano sentenced Bustamonte to two years of supervised release and ordered him to pay $5,721 in restitution.U.S. Attorney Fishman credited special agents of the FBI under the direction of Acting Special Agent in Charge David Velazquez; the Westfield Police Department, under the direction of Police Chief David Wayman; and the Union County Prosecutor’s Office, under the direction of Prosecutor Theodore J. Romankow, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Jane H. Yoon of the U.S. Attorney’s Office in Newark.
13-076
Defense counsel: James P. Nolan Esq., Woodbridge, N.J.Union County, N.J., Bank Employee Sentenced to 37 Months in Prison for Conspiracy to Commit Bank RobberyRead the Press Release
TRENTON, N.J. – A Union County, N.J., man employed by the Westfield, N.J., branch of TD Bank was sentenced today to 37 months in prison for his role in a plan to rob the bank, U.S. Attorney Paul J. Fishman announced.
Jelani Bustamonte, 23, of Elizabeth, N.J., previously pleaded guilty before U.S. District Judge Joel A. Pisano to an Information charging him with two counts of criminal conspiracy. On Jan. 26, 2012, Bustamonte was arrested at his home and charged by Complaint. Judge Pisano imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:
The first conspiracy involved a scheme to rob the TD bank tellers in Westfield. The second conspiracy was a plot to rob the vault inside the same bank. The bank was, in fact, robbed Sept. 11, 2011, although the vault was never robbed. Bustamonte admitted that he provided information about the bank’s layout, security and business operations, information he had gained through his employment, to conspirator Julio Ferrer. Ferrer previously pleaded guilty to robbing the Westfield branch of TD Bank on Sept. 11, 2011, and to six other branches of TD Bank in New Jersey between October 2011 and December 2011. He is scheduled to be sentenced by Judge Pisano on March 5, 2013.
At 2:21 p.m. on Sept. 11, 2011, an individual entered the TD Bank located at 560 North Avenue East, Westfield, and passed a deposit slip across the counter to a bank teller. The bank teller, who was in the process of counting cash at the counter, did not see the handwriting on the note or any monetary amount listed, and attempted to return the slip back to the person. The individual pushed the paper slip back across the counter and ordered the teller to “read it.” The teller read the handwritten note, which stated, “I want all the money lose (sic) bills.”
The teller stepped back upon reading the demand note. The bank robber then reached over the counter and took the cash that the teller had been counting. The bank’s video surveillance camera recorded the entire incident and captured images of the bank robber.Bustamonte told law enforcement he had discussed robbing the vault with the alleged bank robber and others. He said he advised the bank robber to go with one other person to rob the vault, and that the robber agreed to give Bustamonte up to $50,000 of the money from the vault. Bustamonte said he discussed with the robber the layout of the Westfield branch, and other information, including that he should ask for “loose bills” and not strapped money. He also said he was working at the bank the day it was robbed and recognized the bank robber, but did not disclose his identity to bank personnel or law enforcement.
In addition to the prison term, Judge Pisano sentenced Bustamonte to two years of supervised release and ordered him to pay $5,721 in restitution.U.S. Attorney Fishman credited special agents of the FBI under the direction of Acting Special Agent in Charge David Velazquez; the Westfield Police Department, under the direction of Police Chief David Wayman; and the Union County Prosecutor’s Office, under the direction of Prosecutor Theodore J. Romankow, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Jane H. Yoon of the U.S. Attorney’s Office in Newark.
13-076
Defense counsel: James P. Nolan Esq., Woodbridge, N.J.President of Bogus Foreclosure Rescue Company Involved in Mortgage Fraud Pleads GuiltyRead the Press Release
NEWARK, N.J. – An Ocean County man today admitted his role in a mortgage loan fraud scheme that succeeded in obtaining $4.4 million in mortgage loans while masquerading as a foreclosure rescue operation based in Holmdel, N.J., U.S. Attorney Paul J. Fishman announced.
Vito C. Grippo, 58, of Jackson, N.J., the president of Morgan Financial Equity Shares and Vanick Holdings, LLC, pleaded guilty before U.S. District Judge Kevin McNulty to an Indictment charging him with one count of conspiracy to commit wire fraud, two counts of filing a false tax return for the years 2006 and 2007, and one count of aiding and procuring the filing of a false tax return for the year 2008.
According to documents filed in this case and statements made in court:
Between January 2008 and February 2010, Vito Grippo held Morgan Financial out to the public as a company that could help homeowners who faced foreclosure on their homes through something Grippo called the “Equity Share Program.” As described by Grippo and his associates, the Equity Share Program involved creating a limited liability company (“LLC”) in the name of the homeowner’s house, in which the homeowner would supposedly own a 90 percent interest with the rest to be owned by one or two private investors.
In reality, the so-called investors invested nothing and were instead straw buyers recruited by Vito Grippo or his son, Frederick “Freddie” Grippo, because they had good credit. The Grippos and their associates then applied for mortgages in the names of the “investors” for the purchase of the properties owned by the homeowners in distress. Freddie Grippo pleaded guilty to conspiracy to commit wire fraud before Judge McNulty on Nov. 28, 2013.
A homeowner in distress would come to a closing in Vito Grippo’s office in Holmdel and be given a stack of documents to sign to prevent foreclosure. The homeowners frequently did not understand that they would be transferring title to their homes to the “investor.”
The so-called investor was in reality a straw buyer of the homeowner’s house. The new mortgage loan applications filled out by the Grippos or their associates in the name of one of the investors contained materially false information about the loan applicant’s monthly income, his assets and whether the residence to be bought would be applicant’s primary residence.
Once the new loan application was filled out, it would be submitted to Worldwide Financial Resources for processing where Freddie Grippo, a loan officer at Worldwide, would see to it that the loan was approved. Once the loan was approved and the loan money was wired to the settlement agent for a given transaction, Vito Grippo would direct the settlement agent to forward a portion of those loan proceeds to bank accounts that Vito Grippo controlled.
Properties that lost money through the Equity Share Program were found throughout the metropolitan area, including homes in Rutherford, N.J., Monroe, N.J. and Brooklyn, N.Y.
For the year 2006, Vito Grippo did not report $289,780 in gross income from the activities of Vanick Holdings LLC. For the year 2007, he did not report $213,261; and for the year 2008, he did not report $1,366,261.
The conspiracy charge to which Vito Grippo pleaded guilty is punishable by a maximum potential penalty of 30 years in prison and a fine of $1 million. Each of the three tax charges to which Vito Grippo pleaded carries a maximum penalty of three years and a maximum fine of $100,000. Sentencing is scheduled for May 29, 2013.
U.S. Attorney Fishman credited special agents from the FBI’s Red Bank Resident Agency, under the direction of Acting Special Agent in Charge David Velazquez in Newark; special agents from IRS—Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen, and postal inspectors in the Newark Division, under the direction of Acting Inspector in Charge Maria Kelokates, for the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Bohdan Vitvitsky of the U.S. Attorney’s Economic Crimes Unit in Newark.
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Defense counsel: Patrick N. McMahon Esq., Assistant Federal Public Defender, Newark
Grippo Indictment
New Jersey Doctor Sentenced to Five Months in Prison for Taking Cash Kickbacks for Medicare and Medicaid Patient ReferralsRead the Press Release
Also Sentenced to Five Months of Home Confinement, Fined $30,000.
NEWARK, N.J. – A New Jersey doctor practicing in West Orange was sentenced today to five months in prison and five months of home confinement for his role in a payment-for-patients scheme in which he took envelopes of cash in exchange for making patient referrals, U.S. Attorney Paul J. Fishman announced.
Dov Rand, 48, of Franklin Lakes, N.J., previously pleaded guilty before U.S. District Judge Claire C. Cecchi to one count of violating the federal healthcare program anti-kickback statute. Judge Cecchi imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
On Dec. 13, 2011, Rand was arrested – along with 12 other New Jersey doctors and one nurse practitioner – and charged with accepting cash kickback payments from Orange Community MRI (“Orange MRI”), an Orange, N.J., diagnostic facility, in exchange for his referral of Medicare and Medicaid patients. During the course of the investigation, Rand and others were recorded taking envelopes of cash in exchange for their patient referrals. Orange MRI’s executive director, Chirag Patel, 37, of Warren, N.J., was arrested on Dec. 8, 2011, in connection with the scheme.
Starting in 2010, Orange MRI made monthly cash kickback payments to Rand in exchange for his referral of patients to Orange MRI for diagnostic tests. At the end of each month, individuals at Orange MRI printed patient reports that detailed how many tests Rand referred and used them to calculate the kickback payment owed to Rand. Pursuant to Rand’s agreement with Orange MRI, he was paid kickbacks for each MRI test on a Medicare or Medicaid beneficiary referred to the facility.
Rand admitted receiving cash payments on more than one occasion in October and November 2011 in exchange for his referral of patients.
In addition to the prison term and home confinement, Judge Cecchi sentenced Rand to two years of supervised release and fined him $30,000.
U.S. Attorney Fishman credited special agents of U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Tom O’Donnell, with the investigation leading to today’s sentence. He also thanked the Centers for Medicare and Medicaid Services for its vital role at the investigation’s inception.
The government is represented by Assistant U.S. Attorneys Joseph Mack and Scott B. McBride of the U.S. Attorney’s Office Healthcare and Government Fraud Unit in Newark.
13-077
Defense counsel: Anthony Pope Esq., Newark
Members of Rhino Smuggling Ring Arrested and ChargedRead the Press Release
Chinese Business Executive Arrested After Allegedly Offering Bribe
WASHINGTON – Three people have been charged this week in Newark, Miami and New York City with wildlife smuggling and related charges for their alleged roles in an international rhino horn smuggling ring, the Department of Justice announced today. The arrests and charges are the result of “Operation Crash,” a nationwide effort led by the U.S. Fish & Wildlife Service (FWS) and the Justice Department to investigate and prosecute those involved in the black market trade of endangered rhinoceros horns.
A federal grand jury in Newark, N.J., indicted Zhifei Li for international smuggling of rhinoceros horns, U.S. Attorney for the District of New Jersey Paul J. Fishman said. Li was also indicted by a federal grand jury in Miami on the same charge. Shusen Wei, a 44-year old Chinese business executive and an associate of Li, has also been charged with offering to bribe a federal agent in the Li case. Qing Wang was charged today in a related criminal complaint in federal court in the Southern District of New York for his role in smuggling libation cups carved from rhinoceros horns from New York to Li via Hong Kong.
According to the indictment filed in Newark:
Li, a 28 year-old Chinese national, conspired to smuggle more than 20 raw rhinoceros horns from the United States to Hong Kong in 2011 and 2012. Li wired hundreds of thousands of dollars over at least a year to a co-conspirator in the United States to fund purchases of rhinoceros horns. Li’s co-conspirator smuggled the rhino horns in porcelain vases and mailed them to Hong Kong and China to a person other than Li, in an effort to evade detection by U.S. officials. Li and his co-conspirator bought many of the horns in New Jersey from other members of the conspiracy. Li was arrested in January on charges previously filed in New Jersey.
Li also was indicted on Feb. 12, 2013, in Miami on wildlife trafficking and smuggling charges. According to court records and government statements made in court, shortly after arriving in Florida in January 2013 for the Original Miami Beach Antique Show, Li purchased two endangered black rhinoceros horns from an undercover U.S. Fish & Wildlife Service agent in a Miami Beach hotel room for $59,000. Li asked if the undercover officer could procure additional rhinoceros horns and mail them to his company in Hong Kong.Also arrested on a related criminal complaint filed in Miami was Shusen Wei, a Chinese business executive, who also was attending the antique show and sharing a hotel room with Li. According to documents filed in court in Miami, Wei was interviewed by agents after Li’s arrest and admitted to knowing about Li’s smuggling activities and to purchasing rhinoceros carvings from Li that apparently had been purchased in and smuggled from the United States. After being served with a grand jury subpoena to appear in New Jersey, Wei left Miami for New York en route to China. Prior to leaving Miami, Wei allegedly asked an undercover informant to invite a FWS special agent out to dinner in Miami and offer her money to assist Li. After a series of recorded phone calls and text messages, Wei was arrested as he attempted to board a flight bound for China at JFK International Airport in New York on Saturday, Feb. 3, 2013, on charges of bribing a federal official. According to documents filed in court, Wei proposed that the undercover informant offer the agent as much as $10,000.
Qing Wang is scheduled to appear in court today to face charges in a criminal complaint in the Southern District of New York for his role in smuggling libation cups carved from rhinoceros horns from New York to Li in Hong Kong. According to documents unsealed today, Wang was one of several that purchased items in the United States for Li. In China, there is a tradition dating back centuries of intricately carved rhinoceros horn cups . Drinking from such a cup was believed to bring good health and such carvings are highly prized by collectors. Wang is alleged to have been smuggling rhinoceros horn cups as well as ivory carvings to Li in Hong Kong.
An indictment or criminal complaint contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty.
Rhinoceros are an herbivore species of prehistoric origin and one of the largest remaining mega-fauna on earth. They have no known predators other than humans. All species of rhinoceros are protected under United States and international law, and all black rhinoceros species are endangered. Since 1976, trade in rhinoceros horn has been regulated under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), a treaty signed by more than 175 countries around the world to protect fish, wildlife and plants that are or may become imperiled due to the demands of international markets. Nevertheless, the demand for rhinoceros horn and black market prices have skyrocketed in recent years due to the value that some cultures have placed on ornamental carvings, good luck charms or alleged medicinal purposes, leading to a decimation of the global rhinoceros population. As a result, rhino populations have declined by more than 90 percent since 1970. South Africa, for example, has witnessed a rapid escalation in poaching of live animals, rising from 13 in 2007 to more than 618 in 2012.
Operation Crash (named for the term used to describe a herd of rhinoceros) is an ongoing multi-agency effort to detect, deter and prosecute those engaged in the illegal killing of rhinoceros and the unlawful trafficking of rhinoceros horns. The investigation resulting in the charges announced today has been conducted by the Special Investigations Unit of the FWS Office of Law Enforcement, with assistance from the Department of Homeland Security.The Li case is being prosecuted by the U.S. Attorney’s Office of the District of New Jersey by Assistant U.S. Attorney Kathleen O’Leary. The Wei case is being prosecuted by Assistant U.S. Attorney Tom Watts-FitzGerald in the Southern District of Florida. The Wang case is being prosecuted by Assistant U.S. Attorney Janis Echenberg in the U.S. Attorney’s Office of the Southern District of New York. Senior Trial Attorney Richard A. Udell of the Environmental Crimes Section of the U.S. Department of Justice is assisting in and coordinating all of the prosecutions. Additional support has been provided by the U.S. Attorney’s Office in the Eastern District of New York.
13-078Li Indictment
Two Defendants Admit Roles in $65 Million Stolen Identity Income Tax Refund Fraud SchemeRead the Press Release
NEWARK, N.J. – Two defendants today admitted their roles in one of the nation’s largest and longest running stolen identity refund fraud schemes ever identified, U.S. Attorney Paul J. Fishman.
The scheme caused more than 8,000 fraudulent U.S. income tax returns to be filed, which sought more than $65 million in tax refunds, and which resulted in the losses to the United States of more than $12 million.
Bennie Haynes, 53, of Dayton, N.J., a former U.S. Postal Service carrier, and Manuel Rodriguez, 50, of New Brunswick, N.J., both pleaded guilty before U.S. District Judge Claire C. Cecchi. Haynes pleaded guilty to an Information charging him with conspiracy to defraud the United States, theft of government property, and theft of mail by a postal employee. Rodriguez pleaded guilty to an Information charging him with conspiracy to defraud the United States, theft of government property and aggravated identity theft.The conspiracy counts are punishable by a maximum potential penalty of five years in prison and up to a $250,000 fine. The substantive counts of theft of government property carry a maximum potential penalty of 10 years in prison and up to a $250,000 fine. The theft of mail by a postal employee carries a maximum potential penalty of five years in prison and up to a $250,000 fine. The aggravated identity theft count is punishable by a statutory mandatory minimum sentence of two years in prison, which must run consecutively to any other sentence.
According to documents filed in this case and statements made in court:
Stolen Identity Refund Fraud
Stolen Identity Refund Fraud (“SIRF”) is a common type of fraud committed against the United States government that results in more than $2 billion in losses annually to the United States Treasury. SIRF schemes generally share a number of hallmarks:
· SIRF perpetrators obtain personal identifying information, including Social Security numbers and dates of birth, from unwitting individuals, who often reside in the Commonwealth of Puerto Rico.
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· SIRF perpetrators complete Individual Income Tax Return Form 1040s (“Form 1040”) using the fraudulently-obtained information, and falsifying wages earned, taxes withheld and other data. Perpetrators use data to make it appear that the “taxpayers” listed on the fraudulent 1040 forms are entitled to tax refunds – when in fact, the various tax withholdings indicated on the fraudulent 1040s have not been paid by the listed “taxpayers,” and no refunds are due.· Perpetrators direct the U.S.Treasury Department to issue the refunds through checks (“Tax Refund Treasury Checks”) generated by the fraudulent 1049 forms to locations they control or can access, in various ways.
· With Tax Refund Treasury Checks now in hand, SIRF perpetrators generate cash proceeds. Certain SIRF perpetrators sell Tax Refund Treasury Checks at a discount to face value. In turn, the buyers then cash the Tax Refund Treasury Checks, either themselves or using straw account holders, by cashing checks at banks or check cashing businesses, or by depositing checks into bank accounts. When cashing or depositing Tax Refund Treasury Checks, SIRF perpetrators often present false or fraudulent identification documents in the names of the “taxpayers” to whom the checks are payable.
The Investigation
Federal law enforcement agencies created a multi-agency task force in New Jersey composed of investigators from the IRS and the U.S. Postal Inspection Service, along with the U.S. Secret Service, and with assistance from the Drug Enforcement Administration (the “New Jersey Task Force”).
An investigation led by the New Jersey Task Force, with assistance from U.S. Immigration and Customs Enforcement, Homeland Security Investigations, revealed that from at least 2007, dozens of individuals in the New Jersey and New York area have been engaged in a large-scale, long running SIRF scheme that caused more than 8,000 fraudulent 1040 forms to be filed, seeking more than $65 million in tax refunds, with more than $12 million in losses to the U.S. Treasury.
Defendant Manuel Rodriguez and others obtained personal identifiers, such as dates of birth and Social Security numbers, belonging to Puerto Rican citizens. Rodriguez and others used those identifiers to create fraudulent 1040 forms, which falsely reported wages purportedly earned by the “taxpayers” and taxes purportedly withheld, to create the appearance that the “taxpayers” were entitled to tax refunds.
The fraudulent 1040 forms were created and filed electronically. By tracing the specific IP addresses that submitted the electronically-filed 1040s, law enforcement officers learned that just a handful of IP addresses created many of the fraudulent 1040 forms, which, in turn, led to the issuance of Tax Refund Treasury Checks that the conspirators obtained, sold, cashed, and spent.
Rodriguez and others then gained control of the refund checks, in various ways, which followed the pattern of a classic SIRF scheme. Sometimes, conspirators obtained Tax Refund Treasury Checks by bribing mail carriers, including defendant Benny Haynes, to intercept checks and deliver them to other conspirators. In exchange for cash payments, Haynes gave Tax Refund Treasury Checks to conspirators. In turn, these conspirators then sold these checks to yet other conspirators. Tax Refund Treasury Checks mailed to addresses along Haynes’ mail route in Somerset, N.J., were deposited into accounts controlled by Rodriguez and other conspirators.
Conspirators also purchased “mail routes,” that is, lists of addresses covered by a single mail carrier. Conspirators applied for Tax Refund Treasury Checks, inserted addresses along the mail route as the purported home addresses of the “taxpayers,” and obtained the Tax Refund Treasury Checks sent to the addresses. In other instances, the conspirators applied for checks using addresses otherwise controlled by, or accessible by, certain conspirators, and collected the checks after they were delivered to those addresses. During the course of the scheme, hundreds of Tax Refund Treasury Checks were mailed to just a few different addresses in a few different towns, including Nutley, Somerset and Newark, N.J., and Shirley, N.Y.
Certain conspirators then sold Tax Refund Treasury Checks to Rodriguez and others. After buying the Tax Refund Treasury Checks, Rodriguez and others deposited and cashed the checks. The conspirators used third parties (the “Straw Account Holders”), to open bank accounts at various banks in New Jersey and elsewhere. Once the Tax Refund Treasury Checks were deposited into the Straw Account Holders’ accounts or accounts controlled by conspirators, Rodriguez and others withdrew the funds.
Rodriguez and others also obtained proceeds from Tax Refund Treasury Checks by causing checks to be cashed at check cashing institutions, and then causing the proceeds to be deposited into bank accounts controlled by conspirators.
During the course of the investigation, members of the New Jersey Task Force identified certain “hot spots” of activity related to the Scheme – that is, Conspirators were directing millions of dollars of Tax Refund Treasury Checks to just a few towns and cities in and around New Jersey. New Jersey Task Force members then interacted with U.S. Postal Service employees in these hot spots, and identified the characteristics of Tax Refund Treasury Checks connected to the scheme. As a result of these efforts, more than $22 million in fraudulently applied for Tax Refund Treasury Checks that had been issued by the U.S. Treasury were not delivered to the conspirators or others, but were interdicted by law enforcement officers.
Sentencing for both defendants is scheduled for June 5, 2013.
U.S. Attorney Fishman praised special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen; and inspectors of the U.S. Postal Inspection Service, under the direction of Phillip R. Bartlett, with the investigation leading to today’s guilty pleas. He also thanked the special agents of the U.S. Secret Service, under the direction of Special Agent in Charge James Mottola; the Drug Enforcement Administration, under the direction of Acting Special Agent in Charge Robert G. Koval; and HSI-ICE, under the direction of Special Agent in Charge Andrew M. McLees, for their roles.
The government is represented by Assistant U.S. Attorneys Mala Ahuja Harker, Lakshmi Srinavasan Herman, Zach Intrater, and Danielle Walsman of the U.S. Attorney’s Office Criminal Division in Newark.13-073
Defense Counsel:
Manuel Rodriguez: Mark A. Berman, River Edge, NJ
Benny Haynes: David Holman Esq., Assistant Federal Public Defender, NewarkHaynes Information
Rodriguez InformationFormer Newark Deputy Mayor Sentenced to One Year in Prison for Extortion ConspiracyRead the Press Release
TRENTON, N.J. – Former Newark, N.J., Deputy Mayor for Public Safety Ronald Salahuddin was sentenced today to one year and one day in prison for conspiring to commit extortion by using his official position to steer demolition work to co-defendant Sonnie L. Cooper, a Newark businessman, and obtain contributions to organizations favored by Newark officials, 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 Salahuddin, 61, and Cooper, 69, following a five-week 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.
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”).
Salahuddin solicited and accepted contributions from the cooperating witness to organizations favored by Newark officials in exchange for his official action and influence. 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, loaned money to Cooper for payroll and received money from Cooper related to the company’s operations.
In addition to the prison term, Judge Wolfson sentenced Salahuddin to two years of supervised release and a $5,000 fine.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 sentencing.
The government is represented by Assistant U.S. Attorney Harvey Bartle of the U.S. Attorney’s Office in Trenton, and Assistant U.S. Attorneys James B. Nobile, chief of the U.S. Attorney’s Office Special Prosecutions Division, and Zahid N. Quraishi of the U.S. Attorney’s Office Special Prosecutions Division, in Newark.
13-072
Defense counsel: Thomas Ashley Esq., NewarkFormer New Jersey Resident Sentenced to Four Years in Prison for Role in Real Estate Scam That Defrauded Family FriendsRead the Press Release
Judge Also Orders Defendant to Pay $4.7 Million in Restitution
TRENTON, N.J. – An Oklahoma woman who formerly lived in Ridgewood, N.J., was sentenced today to 48 months in prison for a scheme to defraud two New Jersey families relating to the purchase, financing, and improvement of real estate in Oklahoma, U.S. Attorney Paul J. Fishman announced.
Taya Romano, (a/k/a “Taya Waldon”), 36, previously pleaded guilty before U.S. District Judge Peter G. Sheridan to an Information charging her with conspiracy to commit wire fraud. Judge Sheridan imposed the sentence today in Trenton federal court.According to documents filed in this and a related case and statements made in court:
In 2008 and 2009, Taya Romano conspired with her then-husband to solicit and obtain money from two sets of family friends in New Jersey for investments in what Romano represented to be purchases of apartment complexes and undeveloped land in Oklahoma. Romano solicited a series of investments from each of the two sets of family friends, obtaining a total of $1,032,750 from one couple and $890,000 from the other couple. Romano and her husband did not use these funds for the purposes for which they had represented.
In addition to the prison term, Judge Sheridan sentenced Romano to three years of supervised release and ordered her to pay $4.7 million in restitution.
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 today’s sentence.The government is represented by Assistant U.S. Attorney Bohdan Vitvitsky of the U.S. Attorney’s Economic Crimes Unit.
13-074Defense counsel: Brian J. Neary Esq., Hackensack, N.J.
Morris County, N.J., Man – Former Police Officer – Charged with Attempting to Collect Debts by ExtortionRead the Press Release
NEWARK, N.J. – A former Passaic police officer and organized crime associate from Morris County, N.J., appeared in Newark federal court today on charges he attempted to collect a debt by extortion, U S. Attorney Paul J. Fishman announced.
Stefano Mazzola, 68, of Rockaway, is charged in a Complaint with one count of using extortion to collect or attempt to collect a debt and to punish a person for non-repayment of a debt. Mazzola appeared this afternoon before U. S. Magistrate Judge Madeline Cox Arleo and was detained.
According to the criminal Complaint:In 2012, the victim obtained a loan of $30,000 from an individual, who subsequently transferred the loan to Mazzola. The victim periodically made payments on the loan to Mazzola. In late 2012, Mazzola began to threaten that if the victim did not repay the loan, he would physically harm the victim.
The victim made a number of consensually recorded phone calls to Mazzola, during which Mazzola threatened the victim. During a phone call on Jan. 17, 2013, Mazzola acknowledged that an individual had transferred the loan to him, stating: “He gave me that debt, I’ve paid out $20-something-thousand, if not more, for him.”
Later in the conversation, Mazzola threatened the victim. “Let me explain something to ya, and I really mean this, and I don’t care who is listening to my phone or not, if I want to do something to ya, I don’t give a f–k if you give me a million dollars. If I’m looking to hurt ya, I’ll take the money and still hurt ya. It has nothing to do with it,” Mazzola said.
On another call that occurred on Jan. 23, 2013, the victim told Mazzola: “You know you’re gonna get paid.” In response, Mazzola said : “You say you know I’m gonna get paid, I don’t believe nothing. .. If I write it off in my head, it doesn’t matter. Because I’m a firm believer in time. ... But listen, I know what I’m gonna do. ’Cause it doesn’t matter to me. It don’t matter whether it’s now or ten years from now. It don’t matter. You don’t understand. You just don’t know me. I don’t give a f–k if an agent is listening.”
The charge of extortionate collection of a debt is punishable by a maximum potential penalty of 20 years in prison and a fine of $250,000.
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 Waterfront Commission of New York Harbor, under the direction of Commissioner Jan Gilhooly, with the investigation that led to today’s charges.
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 contained in the Complaint are merely accusations and the defendant is considered innocent unless and until proven guilty.
13-072
Defense counsel: Miles Feinstein Esq., Clifton, N.J.
Mazzola Complaint
Alleged Fugitive for Three Years Makes Initial Court AppearanceRead the Press Release
NEWARK, N.J. – A former Passaic County man who had been a fugitive since being charged in 2009 with multiple crimes in connection with an investigation into several loosely connected Balkan criminal enterprises operating throughout New Jersey, New York, Chicago, Philadelphia, Canada, and the Netherlands made his initial court appearance today, U.S. Attorney Paul J. Fishman announced.
Kujtim Lika, 47, (a/k/a “Timmy”) was arrested by the Toronto Police Department/Toronto Task Force in Canada on May 24, 2012. He had been using the alias “Dashamir Cela” at the time of his arrest. He made his initial appearance today before U.S. Magistrate Judge Madeline Cox Arleo in Newark federal court. He was detained without bail.
Three years ago, the FBI, in conjunction with Immigration and Customs Enforcement (ICE) and Alcohol, Tobacco and Firearms (ATF) charged 26 individuals – including Lika – with numerous crimes, including narcotics and firearms trafficking, money laundering, interstate transportation of stolen property, and criminal conspiracy. The arrests were part of a joint operation between federal agencies that began in late 2003 with targets in Albania, Macedonia, Kosovo, Serbia, Canada, the Netherlands and the United States.
Lika’s case has been featured on the television program “America’s Most Wanted.”
U.S. Attorney Fishman credited the FBI, under the direction of Acting Special Agent in Charge David Velazquez; Immigration and Customs Enforcement (ICE) HSI, under the direction of Special Agent in Charge Andrew M. McLees; special agents of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, under the direction of Acting Special Agent in Charge Donald J. Soranno; and the Waterfront Commission of New York Harbor, under the direction of Commissioner Jan Gilhooly.
The government is represented by Assistant U.S. Attorney David E. Malagold, chief of the Organized Crime/Gangs Unit in Newark.
The charges and allegations against Lika are merely accusations, and the defendant is considered innocent unless and until proven guilty.
13-071
Defense counsel: Miles Feinstein Esq., Clifton, N.J.
Two Lawyers Admit Structuring $354,000 into Their Attorney Trust AccountRead the Press Release
NEWARK, N.J. – Two lawyers with a Fairfield, N.J., law firm today admitted they structured $354,000 in client funds into their attorney accounts to avoid currency reporting requirements, U. S. Attorney Paul Fishman announced.
Goldie Sommer, 61, of Montville, and Edward Engelhart, 61, of Rockaway, attorneys with the firm of Sommer and Engelhart, pleaded guilty before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court to conspiring to structure transactions to avoid reporting large amounts of currency. They had surrendered to IRS agents in Newark on Nov. 16, 2011.
According to documents filed in this case and statements made in court:
Between Aug. 13, 2010, and Sept. 22, 2010, Sommer and Engelhart made numerous deposits totaling $354,000 into their attorney trust account in large, even dollar amounts. None of these deposits were made in an amount greater than $10,000, the amount that would have triggered the filing of a currency transaction report (“CTR”) with the IRS.CTR forms require disclosure of the identity of the individual who conducted the transaction and the individual or organization for whom the transaction was completed. Many individuals involved in illegal activities, such as narcotics trafficking, tax evasion, and money laundering, are aware of these reporting requirements and take active steps to cause financial institutions to fail to file CTRs in order to avoid detection of the movement of large amounts of U.S. currency. These steps are referred to as “structuring” and involve making multiple cash deposits or withdrawals in amounts of $10,000 or less on the same day or consecutive days in order to avoid the filing of CTRs. Structuring transactions to avoid the filing of a CTR is prohibited by law.
The charge to which Sommer and Engelhart pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for May 14, 2013.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.
The government is represented by Assistant U.S. Attorney Evan Weitz of the U.S. Attorney’s Office Asset Forfeiture and Money Laundering Unit in Newark.13- 071
Defense counsel:
Sommer: Erich H. Jaso Esq., New York
Engelhart: Howard Brownstein Esq., Union City, N.J.Sommer Information
Engelhart InformationOhio Woman Charged with Making False Accusations and Fabricating EvidenceRead the Press Release
NEWARK, N.J. – An Ohio woman who claims she investigates labor unions on behalf of attorneys was arrested today and charged by Complaint with making false accusations against former officers of an international labor union, falsely claiming she was the victim of a shooting, and fabricating evidence to support her false allegations, U.S. Attorney Paul J. Fishman announced.
Debbie Shank Morgan, 54, of Euclid, Ohio, was arrested this morning and made her initial appearance before U.S. Magistrate Judge Madeline Cox Arleo in Newark federal court.According to the Complaint:
In May 2012. Morgan contacted federal agents from the U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations (“DOL-OIG”) in New Jersey. The DOL-OIG is a federal law enforcement agency that investigates allegations related to federal crimes, such as bribery and theft, committed by and against labor unions, union officers, and employee benefit plans, among others.She claimed that she was a non-practicing lawyer who investigates crimes associated with labor unions, employee benefit plans, and other alleged violations of federal criminal and civil law. Morgan reported that she had information that a former union officer and his father from an international labor union had committed serious violations of federal law. Morgan alleged that the former union officer had admitted to her that the father had embezzled at least $30 million from a Political Action Committee (“PAC”) associated with the International.
In support of her allegations, Morgan claimed that she had a relationship with the former union officer, and he had sent her numerous incriminating text messages. Morgan “cut and pasted” these alleged text messages, which she claimed were communications between herself and the former union officer, into e-mails and sent them to a DOL-OIG agent in New Jersey.
Federal agents obtained information from the service provider of the phone number provided by Morgan. This information revealed that the phone number had not been in service and was associated with a “land line” or “hard line,” which cannot be used to transmit text messages.In September 2012, Morgan claimed that an unknown individual had fired a weapon at her car in Ohio, but damaged only the mirror. A police officer found no damage or holes in the mirror’s housing.
Morgan is charged with two counts of making false statements (Counts One and Two), each punishable by a maximum of five years in prison and a statutory maximum fine of $250,000. Morgan is also charged with obstruction of justice (Count Three), punishable by a maximum prison term of 20 years and a statutory maximum fine of $250,000
U.S. Attorney Fishman credited special agents of the Department of Labor-Office of Inspector General, under the direction of Special Agent in Charge Robert Panella; and special agents of the U.S. Department of Labor Office of Inspector General Office of Labor Racketeering and Fraud Investigations, Chicago Region, under the direction of Special Agent in Charge James Vanderberg, for their assistance in the investigation leading to today’s arrest.
The government is represented by Assistant U.S. Attorney Anthony Moscato of the U.S. Attorney’s Office Organized Crime/Gangs Unit in Newark.
The charges and allegations contained in the Complaint are merely accusations, and the defendant is considered innocent unless and until proven guilty.13-070
Morgan Complaint
Former New Jersey Corrections Officer Sentenced to 30 Months in Prison for ExtortionRead the Press Release
CAMDEN, N.J. – Jermel Brown, a former senior corrections officer with the N.J. Department of Corrections (NJDOC) was sentenced today to 30 months in prison for using his official position to smuggle contraband to a prisoner in the Garden State Youth Correctional Facility in Yardville, N.J., (Yardville Prison) in exchange for $12,000, U.S. Attorney Paul J. Fishman announced.
Brown, 35, of Camden, N.J., previously pleaded guilty before Senior U.S. District Judge Joseph H. Rodriguez to an Information charging him with conspiracy to extort a cooperating witness who was incarcerated at Yardville Prison and who was identified in court filings as “CW1.” Judge Rodriguez imposed the sentence today in Camden federal court.According to documents filed in this case and statements made in court:
Brown agreed to use his position as a senior corrections officer to smuggle items, including mobile telephones and music players, into Yardville Prison for delivery to a prisoner – CW1 – in exchange for cash payments. Between July 2010 and July 2011, Brown and his co-conspirators, Kenneth Richards and Maurice Brown-Harden, conducted three transactions in which another cooperating witness outside the prison provided Richards and Brown-Harden with two mobile telephones and two portable music players and three cash payments of $4,000, $4,500, and $3,500 each. Brown then used his official position at the prison to deliver the mobile telephones and music players to the prisoner inside the facility.
In addition to the prison term, Judge Rodriguez sentenced Brown to three years of supervised release, 500 hours of community service and fined him $1,000. Richards and Brown-Harden previously pleaded guilty before Judge Rodriguez and both were sentenced in 2012 to 18 months’ imprisonment.U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Charge David Velazquez, for the investigation leading to today’s sentence. He also thanked the N.J. Department of Corrections, Special Investigation Division, for its cooperation and assistance throughout the investigation.
The government was represented by Assistant U.S. Attorney Lee M. Cortes Jr. of the U.S. Attorney’s Office Special Prosecutions Division.
13-069Defense counsel: Joseph M. Marrone Esq., Philadelphia, PA
Eleven People Arrested in Large-Scale Medicaid Fraud SchemeRead the Press Release
Bribery and Money Laundering Charges Also Lodged Against One Defendant
NEWARK, N.J. – Federal and state agents this morning arrested 11 people who are charged by Complaint, along with two corporations, in connection with a large-scale scheme to defraud the Medicaid program of millions of dollars, U.S. Attorney Paul J. Fishman announced today.
The Complaint also charges the owner of a home health aide business headquartered in Linden, N.J., with attempting on two occasions to hinder a state investigation by bribing a state regulator – who was working with the FBI – and with conspiring with the owner of another home health aide business in Elizabeth, N.J., to launder money.
The defendants arrested this morning are scheduled to appear this afternoon before U.S. Magistrate Judge Madeline Cox Arleo in Newark federal court.“The defendants in this case allegedly enriched themselves by gaming the Medicaid system,” U.S. Attorney Fishman said. “The actions described in this Complaint are especially egregious, because the taxpayer dollars that were stolen were intended to provide necessary health care for our most vulnerable citizens. I’m especially proud that federal and state law enforcement agencies worked together effectively to uncover this alleged fraud.”
David Velazquez, Acting Special Agent in Charge of the FBI, Newark, said, “The FBI views health care fraud as a severe crime problem that poses a potential risk to patients and increases health care costs for all. Today's arrests are the result of a four-year investigation into a sophisticated scheme, involving multiple layers of fraud, money laundering and bribery, in order to defraud the New Jersey Medicaid program of millions of dollars. This case is indicative of how the FBI, along with its federal partners, and the State of New Jersey, will continue to work together to pursue those that steal from our health care system.”“Falsely billing Medicaid for millions of dollars as alleged in today’s Complaint is a serious crime,” IRS-Criminal Investigation Acting Special Agent in Charge Shantelle P. Kitchen, Newark Field Office, said. “Financial fraud schemes such as this are often described as a house of cards. The underlying structure can fall apart at any time and expose the individuals responsible. “IRS-Criminal Investigation is committed to unraveling complex financial transactions and money laundering schemes where individuals attempt to conceal the true source of their money.”
New Jersey Attorney General Jeffrey Chiesa said: “The New Jersey Division of Consumer Affairs regulates nurses, home health aides, and home health agencies in our state, and the Division's Enforcement Bureau aggressively investigates any allegations of fraud or wrongdoing by those regulated professionals and businesses. We are proud to have worked with the FBI on this investigation. Alleged billing fraud by health professionals affects the entire economy, and will not be tolerated.”
According to the Complaint filed in this case:
Irina Krutoyarsky, 58, of Springfield, N.J., was the owner and operator of HHCH Health Care Inc. (HHCH), a for-profit home health aide business located in Linden. HHCH billed Medicaid for services purportedly provided by home health aides to Medicaid-eligible patients. Medicaid is a jointly funded, federal-state health insurance program that provides certain health benefits to the disabled and individuals and families with low incomes and resources. Paul Mil, 68, of Springfield, was the owner and operator of People Choice Home Care Inc. (People Choice), another for-profit home health business located in Linden and Elizabeth, which also billed Medicaid for services purportedly provided by home health aides.
Krutoyarsky, Mil and their conspirators allegedly defrauded Medicaid of millions of dollars through a variety of schemes, including:
● billing Medicaid for treatment and services not actually rendered;
● obtaining fraudulent home health aide certifications for employees and others;
● using illegal aliens and/or non-certified individuals to provide home health aide services and billing Medicaid, claiming the services had been provided by certified home health aides.
According to the Complaint:
During the investigation, an individual working with the FBI – “Cooperating Witness Three” (CW3) – met Krutoyarsky, Mil, and others at HHCH and consensually recorded a number of conversations. For example, on Jan. 31, 2012, CW3 met with Krutoyarsky and Mil to discuss obtaining a home health aide license. During this consensually recorded conversation (audio and video), they discussed fraudulently billing Medicaid providing false information about the patients, known as a “bait and switch:”
Krutoyarsky: You know, it's just the free money . . . coming in.
CW3: That's true.Mil described how they billed Medicaid for services not actually rendered:
Mil: It’s a lot of people, a lot of people who . . . Medicaid. Government pay for the service. We can get, you know, between 10 and 18 hours [of Medicaid billing per week per patient]. Look, people can work in a week and get paid hundred bucks a week doing nothing. Why not?
Krutoyarsky: . . . But as long as these people doesn't live in the same address, so Medicaid is not gonna trace.
CW3: Oh, so otherwise they will trace. Okay.
Krutoyarsky: Because they do the tracings, you know. They gonna see who's working, who's not working, this and that. . . . So this way, they gonna have a free money. . . . Government, free money.
After meeting with Krutoyarsky and Mil, CW3 met with defendant Nekadam S. Galibova, an HHCH office employee, who assisted CW3 in obtaining a home health aide license without taking the required course or test. CW3 underwent neither the required training nor testing, but in March 2012, CW3 received a home health aide license from the New Jersey. Krutoyarsky, Mil, and others billed Medicaid under CW3’s license, knowing that CW3 provided no treatment to any patients.
Galibova was also a purported HHCH home health aide. The investigation revealed that she conspired with Krutoyarsky and others to bill Medicaid for services not rendered. Galibova and HHCH billed Medicaid for a patient (referred to as Patient M.N.) from July 27 to 31, 2009, and August 3 to 4, 2009, periods when that patient was, in fact, out of the country.
Krutoyarsky and Mil also dispatched undocumented aliens and other unlicensed individuals to patients’ homes. Defendant Sonia Mesa was observed by the FBI visiting a patient’s home, however, Medicaid was billed using the names of others, including Alla Neymet and Leonora Popesku.
Krutoyarsky also bribed a N.J. Department of Labor employee on two occasions to stop wage and hour investigations into HHCH and People Choice. This state employee, however, was cooperating with the FBI and is referred to in the Complaint as “Cooperating Witness Two” (CW2). On June 14, 2010, Krutoyarsky met CW2 about the state investigation into HHCH. Krutoyarsky did not want to provide CW2 with records related the HHCH and handed CW2 an envelope containing approximately $1,000 in cash.
Krutoyarsky and CW2 passed notes back and forth, negotiating the bribe. Eventually, Krutoyarsky agreed to pay CW2 $10,000, which she later paid. On April 14, 2011, Krutoyarsky paid another $15,000 to CW2 to subvert a state investigation into People Choice.Krutoyarsky and Mil then allegedly laundered the proceeds of the Medicaid fraud to conceal their scheme and allow it to continue. Krutoyarsky and defendant Gulmira Shayakhmetova are alleged to have conspired to structure money, by making numerous cash withdrawals in amounts under $10,000, to evade the banks requirement to file a report with the United States Treasury.
Count One charges conspiracy to commit health care fraud and carries a maximum penalty of 20 years in prison and a $250,000 fine. Counts Two and Three each charge bribery, and each charge carries a maximum penalty of 10 years in prison and a $250,000 fine. Count Four charges conspiracy to commit money laundering and carries a maximum penalty of 20 years in prison and a $500,000 fine. Count Five charges conspiracy to unlawfully structure financial transactions and carries a maximum penalty of five years in prison and a $250,000 fine.
In addition, HHCH and People Choice were charged in Count One of the Criminal Complaint with conspiracy to commit health care fraud.
The Criminal Complaint also alleges forfeiture and provides notice of the federal government’s intent to forfeit at least $3.45 million in proceeds from the alleged offense and numerous properties in Krutoyarsky’s name in New Jersey, Florida and New York.
U.S. Attorney Fishman praised agents of the FBI, under the direction of Acting Special Agent in Charge David Velazquez in Newark, IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen; U.S. Citizenship and Immigration Services; N.J. Attorney General Jeffrey Chiesa; N.J. State Comptroller Matthew Boxer; Division Director Mark Anderson, Office of the State Comptroller, Medicaid Fraud Division; N.J., Division of Consumer Affairs, under the direction of Director Eric T. Kanefsky, Board of Nursing; Hal Wirth, Commissioner, N.J. Department of Labor; U.S. Department of State-Diplomatic Security; and the Marlboro Police Department, under the direction of Chief Bruce Hall, for the investigation leading to today’s charges.
The government is represented by Assistant U.S. Attorneys Anthony Moscato and Jonathan W. Romankow of the Organized Crime/Gangs Unit, Lakshmi Srinivasan Herman of the Economic Crimes Unit and Peter W. Gaeta of the Asset Forfeiture and Money Laundering Unit.
The charges and allegations contained in the Complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
13-067
The following individual defendants were charged:
Name
Residence
Age
Charge(s)
Springfield, NJ
58
Counts One, Two, Three, Four, and Five
Paul Mil
Springfield, NJ
68
Counts One and Four
Nekadam S. Galibova
Union, NJ
51
Count One
Lilia Berstein
Old Bridge, NJ
57
Count One
Bella Fridman
East Brunswick, NJ
66
Count One
Malvina Frolova
Old Bridge, NJ
41
Count One
Sonia Mesa
Elizabeth, NJ
Count One
Nelson Mesa
Elizabeth, NJ
68
Count One
Alla Neymet
Edison, NJ
56 or 57
Count One
Leonora Popesku
Edison, NJ
65
Count One
Gulmira Shayakhmetova
Howell, NJ
46
Count Five
Additional information:
Certified Homemaker Home Health Aide employees who will be locked out of their place of employment and are looking for work should call: Home Health Assembly 732-877-1100 (Central NJ), 609-275-6100 (Southern NJ); Home Health Services Association of NJ 732-864-6111.To help care for family members in their homes or in a community-based system that will lose their homemaker home health aide due to the closing, please contact the NJ Division of Aging Services at 1-877-222-3737. The division's direct toll-free number, 1-800-792-8820, can only be used from in-state. They may also contact their HMO directly.
For Home-maker Home Health Aide applicants who were trained by these companies and are waiting to be certified (that is, their applications are still in process), the state Board of Nursing will be contacting each individual shortly with guidance.
HHCH Health Care Complaint
Albanian National Admits Robbing Two TD Banks in Passaic and Bergen CountiesRead the Press Release
NEWARK, N.J. – An Albanian national who was living in Clifton, N.J., admitted in federal court today to robbing two TD Bank branches while armed with a gun in late 2011, U.S. Attorney Paul J. Fishman announced.
Shpend Mazari, 30, also known as “Arlind Hyseni”and “Luie Belushi,” pleaded guilty to an Information charging him with two counts of bank robbery at two TD Bank branches. One occurred on Nov. 2, 2011, in Clifton in Passaic County, N.J. and the other on Dec. 30, 2011, in Wallington in Bergen County, N.J.
Mazari pleaded guilty before U.S. District Judge Esther Salas. At his plea hearing, he admitted Arlind Hyseni is his real name. He was previously arrested on Feb. 28, 2012, in New York City.
According to documents filed in this case and statements made in court:
On Nov. 2, 2011, Mazari entered a TD Bank in Clifton armed with a handgun and disguised with a baseball cap and a flesh-colored mask covering the lower part of his face. He ordered two bank employees to go to the vault and turn over cash, which they placed into a dark nylon bag.
Mazari left the bank with $286,000 in cash, which included several “bait” bills and a dye pack. Mazari dropped the money a short distance from the scene after the dye pack concealed within the bills exploded.
On Dec. 30, 2011, Mazari entered a TD Bank in Wallington shortly after it opened. He vaulted over the teller counter wearing a ski mask and armed with a handgun. He again ordered bank employees to go to the vault and hand over cash, this time making off with $182,000.
The charges to which Mazari pleaded guilty carry a maximum penalty of 25 years in prison and a fine of $250,000, or twice the total loss or gain, whichever is greatest. Sentencing is scheduled for May 20, 2013.
Mazari was wanted by Interpol in a 2004 homicide in Albania. He was since convicted in absentia and sentenced to 25 years. It is the U.S. Attorney’s position that he must serve his time in the U.S. first.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Charge David Velazquez in Newark, and Department of Homeland Security, Immigration and Customs Enforcement, under the direction of Andrew M. McLees, for the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Mala Ahuja Harker of the U.S. Attorney’s Office Economic Crimes Unit in Newark.13-068
Defense counsel: David Holman Esq., Assistant Federal Public DefenderMazari, Shpend Information
Union County, N.J., Man Indicted for Distributing Child Sexual Abuse Images over the InternetRead the Press Release
NEWARK, N.J. – A Union County, N.J., man was indicted today by a federal grand jury for possessing and distributing over the Internet images depicting child sex abuse, U.S. Attorney Paul J. Fishman announced.
Carl Tullis Sr., 48, of Plainfield, N.J., was previously arrested in June 2011. He was indicted today on two counts of distribution of child pornography and one count of possession.
According to documents filed in the case and statements made in court:
On June 2, 2011, special agents of the FBI executed a search warrant at Tullis’ residence. They seized digital evidence that contained more than 1,600 images and 1,400 videos depicting child sexual abuse, including material that involved prepubescent minors and material that portrays sadistic or masochistic conduct. The digital evidence seized included files previously downloaded from Tullis by law enforcement agents working in an undercover capacity on a publicly available peer-to-peer network.
On the distribution counts, Tullis faces a mandatory minimum penalty of five years in prison, a maximum potential penalty of 20 years and a $250,000 fine. On the possession count, he faces a maximum penalty of five years in prison and a $250,000 fine.
U.S. Attorney Fishman credited special agents of the FBI Newark Division’s Child Exploitation Task Force, under the direction of Acting Special Agent in Charge David Velazquez in Newark, with the investigation leading to today’s indictment.
The government is represented by Assistant U.S. Attorney Osmar J. Benvenuto and Courtney M. Oliva of the U.S. Attorney’s Office General Crimes Unit in Newark.
13-065
Defense counsel: Carol Gillen Esq., Newark, NJTullis Indictment
Former Mortgage Broker and Bank Officer Charged with Conspiring to Commit Bank FraudRead the Press Release
NEWARK, N.J. – A former mortgage broker and bank officer from Bergen County, N.J., was arrested this morning for allegedly conspiring to commit bank fraud to secure a $1.5 million residential loan, U.S. Attorney Paul J. Fishman announced.
James Cockinos, 58, a resident of Englewood Cliffs, is charged by Complaint with one count of conspiracy to commit bank fraud. The defendant allegedly defrauded Washington Mutual Bank (later acquired by JPMorgan Chase) in New York, to secure the loan. He is expected to make his initial court appearance before U.S. Magistrate Judge Madeline Cox Arleo in Newark federal court this afternoon.
According to the criminal Complaint:
Cockinos was the owner and president of Federated Mortgage Company of America (FMCA) as well as on the Board of Directors at Mariner’s Bank. Through FMCA, Cockinos served as the mortgage broker on a $1.5 million residential loan with Washington Mutual Bank in an application dated April 19, 2007. The borrower, identified as “Individual Two” in the Complaint, applied for the loan at the request of a spouse, identified as “Individual One” in the Complaint. There was no co-borrower on the loan.
The loan application indicated it was for the purchase of a $1.9 million home located in Englewood Cliffs, N.J. Cockinos fraudulently indicated in the application that he had obtained the information through a face-to-face interview with Individual Two, when no such interview took place. The application, in fact, falsely represented the employment, income and assets of the applicant.
The application indicated that there was $400,000 in a joint account held by Individuals One and Two at Mariner’s Bank in New Jersey. Cockinos and Individual One had temporarily deposited $350,000 into the joint account for the purpose of misrepresenting Individual Two’s assets. Cockinos also directed a Mariner’s Bank employee to falsely verify that the account held $350,000 during the prior two months, when there was significantly less in the account during that time.
Washington Mutual ultimately approved a loan of $1.5 million. On Sept. 25, 2008, JPMorgan Chase acquired the banking operations of Washington Mutual Bank. In 2010, Individual Two defaulted on the loan and the home went into foreclosure. It was sold March 16, 2012, leaving JPMorgan Chase with a loss of more than $500,000.
The bank fraud conspiracy charge carries a maximum potential penalty of 30 years in prison and a fine of $1 million.U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent In Charge David Velazquez in Newark, and criminal investigators from the U.S. Attorney’s Office in Newark, with the investigation leading to the charges and today’s arrest.
The government is represented by Assistant U.S. Attorney Zahid N. Quraishi of the U.S. Attorney’s Office Special Prosecutions Division in Newark.
The charge and allegations in the Complaint are merely accusations and the defendant is considered innocent unless and until proven guilty.
13-064
Defense counsel: Edward J. Plaza Esq., Red Bank, N.J.Cockinos Complaint
Former International Longshoreman’s Union Official Admits Stealing Union FundsRead the Press Release
TRENTON, N.J. – The former secretary-treasurer of a Newark union today admitted embezzling $71,000 from Local 1233 of the International Longshoreman’s Association, U.S. Attorney Paul J. Fishman announced.
Gregory Taylor, 57, of Edison, N.J., pleaded guilty to Count 26 of an Indictment that charged him with issuing a vacation check for $7,852 to himself without authorization. Taylor also admitted to embezzling an additional $63,148 in union funds while he was in control of the union’s finances. Taylor entered his guilty plea before U.S. District Judge Joel A. Pisano in Trenton federal court.
According to documents in this case and statements made in court:
Taylor admitted he had been removed from his elected position as secretary-treasurer in April 2010, yet continued to write himself checks, including a $7,852 vacation check to which he was not entitled. Taylor admitted that between 2007 and 2010, while secretary-treasurer, he embezzled a total of $71,000 by improperly cashing duplicate paychecks, as well as other checks from the union’s operating account, including for unauthorized credit card expenditures.
The charge to which Taylor pleaded carries a maximum potential penalty of five years in prison and a $250,000 fine. Taylor is scheduled to be sentenced on May 6, 2013.U.S. Attorney Fishman credited special agents of the Department of Labor-Office of Inspector General, under the direction of Special Agent in Charge Robert Panella and detectives and auditors from the Waterfront Commission, under the supervision of Assistant Counsel Michelle Demeri, with the investigation leading to today’s guilty plea.
The government is represented by V. Grady O’Malley, Senior Litigation Counsel of the U.S. Attorney’s Office Organized Crime/Gangs Unit in Newark.
13- 066
Defense counsel: Lorraine Gauli-Rufo Esq., Federal Public Defender’s Office, Trenton
Taylor Indictment
Hunterdon County, N.J., Landscaper Admits Under-Reporting $1.38M in IncomeRead the Press Release
NEWARK, N.J. – A Hunterdon County man who owns and operates P.H. Robinson Design and Landscaping Company Inc. (“P.H. Design”) today admitted under-reporting $1.38 million in money paid to his business by customers, U.S. Attorney Paul J. Fishman announced.
Paul Robinson, 45, of High Bridge, N.J., pleaded guilty before U.S. District Judge Katharine S. Hayden to an Information charging him with one count of filing a false tax return.
According to documents filed in this case and statements made in court:
Robinson owned and operated P.H. Design, a landscaping business located in Scotch Plains, N.J. Despite maintaining several different bank accounts into which he deposited P.H. Design customer monies, Robinson only provided his accountant with records for one bank account. Robinson caused false corporate returns to be filed for P.H. Design for 2005, 2006, 2007, and 2008, and caused false personal returns to be filed for 2006, 2007, and 2008. Under terms of the plea agreement, Robinson admitted to causing tax losses of $200,000 and $400,000.
On the false filing count, Robinson faces a maximum potential penalty of three years in prison and a fine of $100,000. Sentencing is scheduled for May 15, 2013.
Fishman credited special agents with IRS - Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen, with the investigation leading to the guilty plea.
The government is represented by Assistant U.S. Attorney Joseph Mack of the Healthcare and Government Fraud Unit in Newark.
13-062
Defense counsel: John P. McDonald Esq., Somerville, N.J.
Robinson Information
Essex County, N.J., Woman Admits Lying in Federal CourtRead the Press Release
NEWARK, N.J. – An Essex County, N.J., woman today admitted to committing perjury while testifying in a federal trial, U.S. Attorney Paul J. Fishman announced.
Debora Medeiros Da Silva, 27, of Newark, pleaded guilty before U.S. District Judge Katharine S. Hayden in Newark federal court to an Information charging her with knowingly making false declarations before a grand jury or court.According to documents filed in this case and statements made in court:
On Sept. 23, 2009, while appearing as a witness under oath before the federal grand jury, Da Silva testified that she witnessed Peter Ventricelli, the target of a grand jury investigation, retrieve a bag of guns from her bedroom closet, and that he later gave the bag of guns to his brother, Mark Ventricelli. Da Silva subsequently appeared as a witness under oath at the trial in the matter of United States v. Peter Ventricelli and Mark Ventricelli, where she denied ever seeing any guns in a bag.
The federal charge of knowingly making false declarations before a grand jury or court carries a maximum potential penalty of five years in prison and a maximum fine of $250,000.
U.S. Attorney Fishman credited special agents with the FBI, under the direction of Acting Special Agent in Charge David Velazquez in Newark, with the investigation leading to today’s guilty plea.
Sentencing before Judge Hayden is scheduled for May 16, 2013.
The government is represented by Assistant U.S. Attorney Dara Aquila Govan of the Organized Crime/Gangs Unit in Newark.
13-063
Defense counsel: Lorraine Gauli-Rufo Esq., Assistant Federal Public Defender, NewarkDa Silva Information
Eighteen People Charged in International, $200 Million Credit Card Fraud ScamRead the Press Release
Crime Ring Invented 7,000 Fake Identities to Obtain Tens of Thousands of Credit Cards
NEWARK, N.J. – Federal agents in four states arrested 13 people today for allegedly creating thousands of phony identities to steal at least $200 million in one of the largest credit card fraud schemes ever charged by the Department of Justice, U.S. Attorney Paul J. Fishman announced.
The activity described in a Complaint unsealed today describes a sprawling criminal enterprise that stretched across dozens of states and numerous countries. The defendants charged in the Complaint allegedly fabricated identities to obtain credits cards and doctored credit reports to pump up the spending and borrowing power associated with the cards. They would then borrow or spend as much as they could based on their fraudulently obtained credit history and not repay the debts, looting businesses and financial institutions of more than $200 million in confirmed losses.
This morning, hundreds of law enforcement officers from the FBI and the U.S. Postal Inspection Service arrested 13 defendants and searched 13 locations in New Jersey, New York, Pennsylvania, and Connecticut. All of the defendants are charged with one count of bank fraud. The defendants are scheduled to appear later today before U.S. Magistrate Judge Madeline Cox Arleo in Newark federal court.
“This type of fraud increases the costs of doing business for every American consumer, every day,” U.S. Attorney Fishman said. “Through their greed and their arrogance, the individuals arrested today and their conspirators allegedly harmed not only the credit card issuers, but everyone who deals with increased interest rates and fees because of the money sucked out of the system by criminals acting in fraud rings like this one.”
“The criminal activity described in today’s complaint highlights the activity of an extensive, sophisticated, organized scheme, executed against U.S. financial institutions, which, in turn, effects every citizen of the United States,” Acting Special Agent in Charge Velazquez said. “This elaborate network utilized thousands of false identities, fraudulent bank accounts , fake companies, and collusive merchants, to defraud financial institutions of hundreds of millions of dollars, in order to facilitate extravagant lifestyles they could otherwise not afford. The arrests today are the result of the relentless and tenacious work of the United States Attorney’s Office, U.S. Postal Inspection, U.S. Secret Service, the Social Security Administration, the Federal Bureau of Investigation and numerous financial institutions.”
According to documents filed in this case:
The defendants and their conspirators stole hundreds of millions of dollars through a scheme repeated thousands of times to create more than 7,000 false identities and fraudulently obtain tens of thousands of credit cards (the “Fraud Cards”). The scheme involved a three-step process in which the defendants would:
- “Make up” a false identity by creating fraudulent identification documents and a fraudulent credit profile with the major credit bureaus.
- “Pump up” the credit of the false identity by providing false information about that identity’s creditworthiness to the credit bureaus. Believing the furnished information to be accurate, the credit bureaus would incorporate this material into the false identity’s credit report, making it appear that the false identity had excellent credit.
- “Run up” large loans using the false identity. The higher the fraudulent credit score, the larger the loans that the defendants could obtain. These loans were never repaid, and the defendants reaped the profits.
The Sham Companies
The enormous size and scope of the Criminal Fraud Enterprise required the defendants and others to construct an elaborate network of false identities. Across the country, the defendants and their co-conspirators maintained more than 1,800 “drop addresses,” including houses, apartments, and post office boxes, which they used as the mailing addresses of the false identities.
They created dozens of sham companies that did little or no legitimate business, obtained credit card terminals for the companies and then ran up charges on the Fraud Cards. To accept payments in the form of credit cards, a business must establish a merchant account with an entity known as a merchant processor. The merchant processor provides the business with equipment to process credit cards, receives payments from credit card companies for credit cards run at the business, and deposits those payments, minus a fee, into the business’ bank account. When the merchant processors shut down accounts operated by the conspirators for fraud, they would apply for new terminals and create new companies.
The Sham Companies also served as “furnishers,” providing the credit bureaus with false information about the credit history of numerous false identities of people who purportedly worked at or owned the Sham Companies.
Tradelines
The defendants used sophisticated methods – including a network of black-market businesses called “tradelines” providers – to commit fraud.
Tradelines come in two varieties: primary tradelines and authorized user tradelines. Primary tradelines are lines of credit in a credit history. If a credit card user has primary tradelines in good standing, it can have a significant impact on the user’s credit score, enabling the user to borrow more from credit card issuers. The defendants, however, trafficked in fraudulent primary tradelines.
A second kind of tradeline is the “authorized user” tradeline, where a credit card holder adds another, so-called “authorized user,” to a credit card account. This raises the credit score of the authorized user, who inherits some of the primary user’s credit history.
Some defendants created and sold fake lines of credit for false identities made up by other defendants. These fraudulent primary tradelines were then used to increase the credit limits on Fraud Cards, so that the defendants could reap even larger profits. Defendants used the authorized user tradelines to create new identities.
Complicit Businesses
The defendats also relied upon complicit businesses, including several jewelry stores in the Jersey City, N.J., area, to extract money from the Fraud Cards. The complicit businesses would allow the defendants to conduct sham transactions on the Fraud Cards and would then receive the proceeds from the credit card companies and split them with the other conspirators. These complicit businesses maintained multiple credit card merchant processing accounts at the same time. By operating dozens of accounts, these businesses furthered the conspiracy by allowing more fraudulent transactions to be processed before the merchant processors shut down the account. The proceeds from these merchant terminals were deposited into various business checking accounts, and the money was paid out to the owners of the complicit businesses, along with other defendants and conspirators.
Lavish spendingThe conspiracy generated enormous profits for the defendants – even though they spent millions of dollars sustaining the elaborate network of drop addresses and running credit reports on the thousands of false identities. Records of the New York and New Jersey Departments of Labor reveal that many of the defendants have no reported legitimate employment in the last five years. Nonetheless, the defendants used the proceeds of the criminal enterprise to buy luxury automobiles, electronics, spa treatments, expensive clothing and millions of dollars in gold. They also stockpiled large sums of cash. Law enforcement discovered approximately $70,000 in cash in the oven of one defendant.
The defendants also moved millions of dollars through accounts under their control, and wired millions of dollars overseas. An analysis of 169 bank accounts of the defendants, sham companies, and complicit businesses has identified $60 million dollars in proceeds that flowed through the accounts, much of it withdrawn in cash. The conspirators wired millions of dollars to Pakistan, India, the United Arab Emirates, Canada, Romania, China and Japan. Due to the massive scope of the conspiracy, which involved over 25,000 fraudulent credit cards, loss calculations are ongoing. Final figures may grow beyond the present confirmed losses of more than $200 million.
The investigation that produced today’s arrests involved cyber crime investigators from the FBI and has been ongoing for more than 18 months. It previously resulted in the arrest of four other individuals and the seizure of more than $2 million in gold from a jewelry store in Jersey City.
The bank fraud count with which the defendants are charged is punishable by a maximum potential penalty of 30 years in prison and a fine of $1 million.
U.S. Attorney Fishman praised special agents of the FBI’s Cyber Division, under the direction of Acting Special Agent in Charge David Velazquez, for the investigation leading to today’s arrests, as well as postal inspectors under the direction of Acting Postal Inspector in Charge Marie Kelokates and the U.S. Secret Service, under the direction of Special Agent in Charge James Mottola. He also thanked the U.S. Social Security Administration for its role in the investigation.
The government is represented by Assistant U.S. Attorney Erez Liebermann, chief of the Computer Hacking and Intellectual Property section of the Economic Crimes Unit, and Assistant U.S. Attorneys Daniel V. Shapiro of the General Crimes Unit, Zach Intrater of the Economic Crimes Unit, and Barbara Ward of the Asset Forfeiture Unit of the U.S. Attorney’s Office in Newark.
The charge and allegations contained in the Complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Defendants:Name
Age
Residence
59
Iselin, N.J.
Muhammad Shafiq
38
Bellerose, N.Y.
Ijaz Butt
53
Hicksville, N.Y.
Qaiser Khan
48
Valley Stream, N.Y.
Shafique Ahmed
52
Floral Park, N.Y.
Habib Chaudhry
45
Valley Stream, N.Y.
Raghbir Singh
57
Hicksville, N.Y.
Muhammad Naveed
35
Flushing, N.Y.
Khawaja Ikram
40
Staten Island, N.Y.
Nasreen Akhtar
37
Jersey City, N.J.
Mohammad Khan
48
Staten Island, N.Y.
Azhar Ikram
39
Howard Beach, N.Y.
Shahid Raza, a/k/a “Abid Mian”
44
Valley Stream, N.Y.
Vernina Adams
31
Philadelphia, Pa.
Sat Verma
60
Iselin, N.J.
Vijay Verma
45
Iselin, N.J.
Tarsem Lal
74
Iselin, N.J.
Vinod Dadlani
49
Lyndhurst, N.J.
13-061
Qureshi, Babar, et al., Complaint
New York Man Admits His Role in Large-Scale Identity Theft Ring and Tax EvasionRead the Press Release
NEWARK, N.J. – A New York man today admitted his role in a large scale and sophisticated identity theft scheme, U.S. Attorney Paul J. Fishman announced.
Young-Woo Ji, 38, Bayside, N.Y., pleaded guilty before U.S. District Judge Katharine S. Hayden to an Information charging him with conspiracy to commit wire fraud affecting financial institutions and bank fraud, aggravated identity theft and false claims. He was arrested on Sept. 16, 2010 and released on a $250,000 bail.
According to documents filed in this case and statements made in court:
Ji conspired with Sang-Hyun Park, a/k/a “Jimmy,” and others to defraud banks, credit card companies, and other lenders. Ji admitted that in February 2008, he traveled to Illinois and used a Social Security card, beginning with the prefix “586” and belonging to a person with the initials F.C., to fraudulently obtain a driver’s licenses. These “586” Social Security cards were issued by the United States to individuals, usually from China, who were employed in American territories, such as Guam. Park is alleged to have been the leader of a criminal organization headquartered in Bergen County, N.J. that obtained, brokered, and sold identity documents to customers for the purpose of committing credit card fraud, bank fraud, tax fraud, and other crimes. Park pleaded guilty on Jan. 9, 2012, to his role in the enterprise and is awaiting sentencing.
The Park Criminal Enterprise engaged in the fraudulent “build up” of credit scores associated with the Chinese identities. They did so by adding the Chinese identity as an authorized user to the credit card accounts of various conspirators who received a fee for this service – members of the enterprise’s credit build-up teams. By attaching the Chinese identities to these existing credit card accounts, the teams increased the credit scores associated with the Chinese identities to between 700 and 800. The members of the build-up teams knew neither the real person to whom the identity belonged nor virtually any of the customers who had purchased the identities.
After building up the credit scores associated with these identities, Park and his conspirators directed, coached, and assisted his customers to open bank accounts and obtain credit cards. Park and his conspirators then used these accounts and credit cards to commit fraud. Park relied on several collusive merchants who possessed credit card processing, or swipe, machines. For a fee, known as a “kkang fee,” these collusive merchants charged the fraudulently obtained credit cards, although no transaction took place. After receiving the money into their merchant accounts from the credit card elated to these fraudulent transactions, the collusive merchants gave the money to Park and his conspirators, minus their “kkang fee.”Ji admitted that he used the F.C. identity to fraudulently obtain credit cards. He then used these credit cards, in the name of F.C., to fraudulently build up credit scores and credit histories for Park’s customers who had obtained “586” identities from the Park Criminal Enterprise.
Ji also admitted that he used the F.C. identity to establish a merchant account for ZZ Entertainment, Inc., a completely fictitious business. By establishing this account, Ji obtained a credit card processing machine and thereafter served as a “collusive merchant” for the Park Criminal Enterprise. Ji acknowledged that between Oct. 5, 2008, and Oct. 20, 2008, he charged $50,000 in fraudulent credit card charges through his ZZ Entertainment Corp. account and then shared portions of this fraud with Park. In total, Ji caused more than $400,000 in financial losses to bank, credit card companies, and others.
Ji admitted that he used the “586” identities that he had obtained from Park to file fraudulent tax returns with the IRS. Ji admitted that he used these identities, together with fraudulent Forms W-2, to claim hundreds of thousands of dollars in tax refunds.
Ji faces the following statutory maximums: 30 years’ in prison on the conspiracy count, two years in prison on the identity theft count and two years on the false claims count. Sentencing is scheduled for May 15, 2013.
U.S. Attorney Fishman praised special agents of the FBI, under the direction of Special Agent in Charge David Velazquez in Newark; IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen; the Department of Homeland Security’s Immigration and Customs Enforcement, under the direction of Special Agent in Charge Andrew M. McLees; and the Bergen County Prosecutor’s Office, under the direction of Prosecutor John L. Molinelli; and the Office’s Chief of Detectives Steven Cucciniello for the investigation leading to today’s plea.
The government is represented by Assistant U.S. Attorney Anthony Moscato of the U.S. Attorney’s Office Organized Crime/Gangs Unit in Newark.
As for other members of the Park Criminal Enterprise, the charges and allegations contained in the Complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
13-060
Defense Counsel: James K. Grace Esq., Mount Holly, N.J.Ji, Young-Woo Information
Multimillion-Dollar Real Estate Ponzi Schemer Admits Securities Fraud and Money LaunderingRead the Press Release
NEWARK, N.J. – A Somerset County, N.J., man pleaded guilty today to one count of securities fraud and one count of money laundering, admitting that he defrauded victims of an investment scheme by misusing their capital contributions and misrepresenting the performance of their investments, U.S. Attorney Paul J. Fishman announced.
David Connolly, 51, of Watchung, N.J., pleaded guilty to Counts One and Ten of a Superseding Indictment before U.S. District Judge William J. Martini in Newark federal court.
Connolly was originally charged by Indictment on May 16, 2012. On Jan. 23, 2013, the grand jury returned a 15-count Superseding Indictment charging Connolly with one count of securities fraud, six counts of mail fraud, two counts of wire fraud, and six counts of money laundering.
According to documents filed in this case and statements made in court:
From at least 2006 through October 2009, Connolly orchestrated a real estate investment fraud scheme in which he took in more than $50 million from more than 200 victims, causing losses of at least $9 million.
To induce victims to invest, Connolly made various types of materially false and misleading statements and omissions. He told victims their money would be used to purchase a specific property, and the property would generate rental income that would be used to pay investors monthly distributions. Connolly also told victims their money would be held in escrow until the closing of a purported real estate transaction and each property would be financially independent from all the others. Connolly misrepresented the amount of equity victims had in the properties, the condition of the properties, and the financial performance of the properties. Although the investment properties experienced significant negative cash flow, Connolly told investors they were performing well.
Connolly took significant portions of his victims’ money, which had been provided for specific real estate transactions, and used it for other purposes, without disclosing the diversions of funds to victims. These included funding unrelated real estate transactions in which Connolly was engaged; paying prior victims; and paying himself. The scheme collapsed in the summer of 2009, after Connolly began to default on the mortgage payments for the investment properties.
Connolly faces a maximum potential penalty of 20 years in prison and a $5 million fine on the securities fraud count and a maximum potential penalty of 10 years in prison and a $250,000 fine on the money laundering charges. He also agreed to forfeit $9.92 million as part of the plea agreement. Sentencing is scheduled for June 4, 2013.
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 indictment. He also thanked special agents of IRS – Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen, for their important contributions to the investigation.
The government is represented by Assistant U.S. Attorney Charlton A. Rugg of the OCDETF Unit and Senior Litigation Counsel Leslie F. Schwartz of the Economic Crimes Unit.
If you believe you are a victim of or otherwise have information concerning this alleged scheme, you are encouraged to contact the FBI at 973-792-3000.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. 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.
13-059
Defense counsel: Gerald M. Saluti Esq., Newark
Connolly Superseding Indictment
Former Jersey City Public School Teacher Admits Preparing False Tax Returns, Tax EvasionRead the Press Release
NEWARK, N.J. – A Hudson County, N.J., man who worked as a tax preparer admitted today that he filed falsified returns on behalf of his clients, and also failed to report his own income, U.S. Attorney Paul J. Fishman announced.
Elijah Washington, Jr., of Jersey City, N.J., pleaded guilty before U.S. District Judge Jose L. Linares in Newark federal court to an Indictment charging him with aiding in the preparation of false tax returns and tax evasion. Washington was arrested after preparing a false tax return for an undercover law enforcement agent and was indicted in April 2012 by a federal grand jury.
According to documents filed in this case and statements made in court:
In addition to being a public school teacher, Washington owned and operated a tax preparation business – Elijah’s Professional Tax Service – in Jersey City, where he prepared tax returns for tax years 2005 through 2008. He fabricated various items to obtain larger refunds for clients, including tuition and fees deductions, child tax credits, charitable contributions and job expenses. Washington also failed to report his own income on the money he earned from the tax preparation business.
On the tax evasion charges, Washington faces a maximum penalty of five years in prison and a maximum fine of $250,000, or twice the loss sustained by the Government, or twice the gain derived from the offense, whichever is greatest. Sentencing is scheduled for April 24, 2013.
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 guilty plea.
The government is represented by Assistant U.S. Attorney Andrew J. Bruck of the U.S. Attorney’s Office General Crimes Unit in Newark.
13-058
Defense counsel: Peter Willis Esq., Jersey CityWashington, Elijah Indictment
Woodland Park, N.J. Man Admits Scheme to Defraud More Than 17 Charities and Non-Profit OrganizationsRead the Press Release
NEWARK, N.J. – The owner and president of GAC Consulting Group LLC (“GAC”) today admitted his role in a scheme to defraud at least 17 charities and non-profit organizations, costing them more than $750,000 in losses, U.S. Attorney Paul J. Fishman announced.
Gregory Ciccone, 36, of Woodland Park, N.J., pleaded guilty before U.S. District Judge Katharine S. Hayden in Newark federal court to one count of wire fraud and one count of filing a false tax return. On Oct. 26, 2010, Ciccone was arrested and charged with mail fraud and wire fraud in connection with his charity fraud scheme, which promised high-end prizes that were never delivered.
A Superseding Indictment returned by a federal grand jury on May 15, 2012, charged Ciccone with mail fraud, wire fraud and filing a false 2009 tax return.
According to documents filed in the case and statements made in court:
Ciccone owned and operated GAC, a business which contracted with charities and non-profit organizations and arranged for high-end prizes to be auctioned off to bidders during fund-raising events. They included: a walk-on role on the “Desperate Housewives” television show; tickets to the 2009 Tony Awards; an appearance by “C.A.,” a celebrity who is a cancer survivor; and rounds of golf at the Augusta National Golf Course in Augusta, Ga.
Ciccone convinced the charities and non-profit organizations to pay GAC both an up-front retainer and commission fees based upon his ability to provide certain prizes. Ciccone not only did not deliver the vast majority of the prizes offered to his victims, he never had the ability to do so. From October 2006 through April 2010, Ciccone’s actions caused more than $768,000 in losses to at least 17 different charities and non-profit organizations.
After his Oct. 26, 2010, arrest, Ciccone filed a false 2009 tax return on May 13, 2011, in which he failed to list certain retainer fees and commissions received from his victims, as well as gambling winnings. As part of his plea, Ciccone agreed to pay back $267,778 in criminal forfeiture.
The fraud charges to which Ciccone pleaded guilty are punishable by a maximum penalty of 20 years in prison and a maximum fine of $250,000, or twice the gain or loss caused by the offense; and a maximum penalty of three years in prison and a fine of $100,000 on the tax fraud count. Judge Hayden continued Ciccone’s bail pending sentencing. Sentencing is scheduled for May 14, 2013.
U.S. Attorney Fishman credited special agents with the FBI under the direction of Acting Special Agent in Charge David Velazquez, special agents of the IRS - Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen, and criminal investigators with the U.S. Attorney’s Office’s criminal investigator program, for the investigation leading to the guilty plea.The government is represented by Assistant U.S. Attorneys Joseph Mack and Kathleen P. O’Leary of the U.S. Attorney’s Healthcare and Government Fraud Unit.
13-057
Defense counsel: Salvatore T. Alfano Esq., Bloomfield, N.J., and Louis C. Esposito Esq., Cedar Grove, N.J.
Ciccone, Gregory Superseding Indictment
New York Doctor Admits Oxycodone Distribution and ConspiracyRead the Press Release
TRENTON, N.J. – A physician who wrote illegal prescriptions for oxycodone today admitted his participation in a conspiracy to illegally distribute the medication, and admitted that he distributed it on numerous occasions, U.S. Attorney Paul J. Fishman announced.
Dr. Hassan Lahham, 54, of New York, was charged by Indictment with one count of conspiracy to distribute oxycodone and eleven counts of distribution of oxycodone. He pleaded guilty before U.S. District Judge Freda L. Wolfson in Trenton federal court to Count One of the Indictment, which charges that he conspired to distribute oxycodone.
According to documents filed in this case and statements made in court:
Since January 2009, Lahham issued prescriptions to co-conspirators for drugs containing oxycodone, outside the usual course of medical practice and not for any legitimate medical purpose. The prescriptions were filled at various New Jersey pharmacies located in and around Monmouth, Ocean, and Atlantic counties and redistributed by others. Lahham wrote the prescriptions in exchange for cash payments, and knew the pills were to be redistributed.
Oxycodone, the active ingredient in brand name pills such as Oxycontin, Roxicodone and Percocet, is a Schedule II controlled substance – meaning that it has a high potential for abuse, a currently accepted medical use with severe restrictions, and abuse of the drug may lead to severe psychological or physical dependence.
The charge to which Lahham pleaded guilty is punishable by a maximum potential penalty of 20 years in prison and a $1 million fine. Sentencing is scheduled for May 10, 2013.U.S. Attorney Fishman credited the Drug Enforcement Administration’s New Jersey Division under the direction of Acting Special Agent in Charge Robert G. Koval, along with the Special Agents, Diversion Investigators, Task Force Officers, Detectives and Intelligence Analysts of the Atlantic City Resident Office; Camden Resident Office Diversion Group; Seaside Heights Police Department; Barnegat Police Department; Ship Bottom Police Department; and the N.J. DEA Tactical Diversion Squad, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorneys R. Joseph Gribko and Fabiana Pierre-Louis of the U.S. Attorney’s Office in Trenton.
13-052
Defense counsel: Frank P. Arleo Esq., West Orange, N.J.
Lahham Indictment
Health Care Practitioner Sentenced to Six Months in Prison, Six Months Home Detention, for Accepting Cash Kickbacks for Patient ReferralsRead the Press Release
NEWARK, N.J. – Daisy Deguzman, a New Jersey doctor who practiced in Newark, today was sentenced to six months in prison and six months of home detention for her role in a cash-for-patients scheme with a diagnostic facility in Orange, N.J., U.S. Attorney Paul J. Fishman announced.
Deguzman, 70, of Livingston, N.J., pleaded guilty June 4, 2012, before U.S. District Judge Claire C. Cecchi in Newark federal court to an Information charging her with one count of violating the federal healthcare program anti-kickback statute.
“Patients have every right to expect their doctors will recommend medical service providers because they do the best job, not because they provide the best bribes,” said U.S. Attorney Fishman. “The sentence handed down today shows the federal healthcare system cannot be abused by those practitioners who see a person in need of care as an opportunity to illegally make an extra buck.”“Buying patient referrals has absolutely no place in a modern health care system,” said Tom O’Donnell, Special Agent in Charge of the U.S. Department of Health and Human Services Office of Inspector General’s region including New Jersey. “The country's taxpayers are fed up with footing the bill for health care fraud, so these criminals can expect to pay the price.”
According to documents filed in this case and statements made in court:On Dec. 13, 2011, Deguzman was arrested and charged with accepting cash kickback payments from Orange Community MRI (“Orange MRI”), a diagnostic facility, in exchange for her referral of Medicare and Medicaid patients. Twelve other New Jersey doctors and one nurse practitioner were arrested that day and charged in separate Complaints with accepting similar cash kickback payments from Orange MRI. Each defendant was recorded taking envelopes of cash in exchange for their patient referrals. On Dec. 8, 2011, an Orange MRI executive was arrested and charged in a separate Complaint in connection with his participation in the scheme. Deguzman is the first of the defendants to be sentenced.
Starting in at least 2010, Orange MRI began making monthly cash kickback payments to Deguzman in exchange for her referral of patients for diagnostic tests. At the end of each calendar month, individuals at Orange MRI printed Orange MRI patient reports that detailed how many magnetic resonance imagings (“MRIs”) and computed axial tomographies (“CAT Scans”) were referred by Deguzman. These patient reports were used to calculate the kickback payment owed to Deguzman. Pursuant to Deguzman’s agreement with Orange MRI, she was paid kickbacks for each Medicare or Medicaid beneficiary MRI or CAT Scan referred.
Deguzman received three separate payments from a cooperating government witness during the course of the investigation. On Oct. 11, 2011, Deguzman accepted $1,700 in cash for her September 2011 referrals to Orange MRI; she accepted another $1,130 on Nov. 17, 2011 for her October 2011 referrals to Orange MRI, and another $1,000 on Dec. 6, 2011 for her November 2011 referrals to Orange MRI.
In addition to the prison term, Judge Cecchi sentenced Deguzman to two years of supervised release, fined her $20,000 and ordered her to forfeit $23,595.
With respect to the other defendants charged in the investigation:
• Jose Castaneda, a nurse practitioner formerly practicing in Newark, pleaded guilty before Judge Cecchi on April 3, 2012, and is scheduled to be sentenced on June 18, 2013.• Yash Khanna, M.D., a doctor practicing in East Orange, was indicted on May 4, 2012, by a federal grand jury on one count of accepting kickbacks; Judge Cecchi has not yet set a trial date.
• Dov Rand, M.D., a doctor practicing in West Orange, pleaded guilty before Judge Cecchi on May 18, 2012, and is scheduled to be sentenced on Feb. 13, 2013.
• William Lagrada, M.D., another Newark doctor, pleaded guilty before Judge Cecchi on July 11, 2012, and is scheduled to be sentenced on June 4, 2013.
• Maryam Jafari, M.D., another Newark doctor, was indicted on July 13, 2012, by a federal grand jury on one count of accepting kickbacks. On Sept. 14, 2012, the same grand jury handed up a superseding indictment against Dr. Jafari, charging her with one count of conspiracy and two counts of accepting kickbacks. The trial of Dr. Jafari ended with a hung jury and mistrial on Dec. 6, 2012. Judge Cecchi has set the retrial date for March 1, 2013.
• Chikezie Onyenso, M.D., an Irvington doctor, was indicted on Sept. 7, 2012, by a federal grand jury on one count of accepting kickbacks; Judge Cecchi has not yet set a trial date. • Dinesh Patel, M.D., another Newark doctor, pleaded guilty before Judge Cecchi on Sept. 19, 2012, and is scheduled to be sentenced on Feb. 26, 2013.
• Ashokkumar Babaria, M.D., a Moorestown radiologist and Orange MRI’s former medical director and owner-in-fact, pleaded guilty before Judge Cecchi on Sept. 27, 2012, and is scheduled to be sentenced on March 21, 2013.
• Lucio Cardoso, M.D., a North Arlington physician, pleaded guilty before Judge Cecchi on Oct. 10, 2012, and is scheduled to be sentenced on March 27, 2013.
• Rameshcha Kania, M.D., an East Orange doctor, pleaded guilty before Judge Cecchi on Oct. 12, 2012, and is scheduled to be sentenced Feb. 14, 2013.
• Chirag Patel, Orange MRI’s former executive director, pleaded guilty before Judge Cecchi on Oct. 16, 2012, and is scheduled to be sentenced on July 15, 2013.
U.S. Attorney Fishman credited special agents with the Department of Health and Human Services, Office of the Inspector General, under the direction of Special Agent in Charge O’Donnell, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorneys Joseph Mack and Scott B. McBride of the Office’s Healthcare and Government Fraud Unit.
13-055
Defense counsel: Daniel A. Giaquinto Esq., Bridgewater, N.J.
Four Charged in $15 Million Mortgage Fraud SchemeRead the Press Release
CAMDEN, N.J. – Four individuals from New Jersey were taken into custody today for their alleged roles in a $15 million mortgage fraud scheme on an Indictment returned by a federal grand jury on Jan. 30, 2013, U.S. Attorney Paul J. Fishman announced.
The four defendants are: Fredric M. Diantonio, 40, of Wildwood, N.J.; Louis V. Catarro, 60, of Runnemede, N.J.; Kathryn W. Lockwood, 43, of Wildwood Crest, N.J.; and Thomas E. Morello, 55, of Mt. Laurel, N.J. All defendants were charged with conspiracy to commit wire fraud. Diantonio, Catarro, and Lockwood were also charged with conspiracy to commit money laundering. In addition, Diantonio and Catarro were charged with making false statements to the U.S. Department of Housing and Urban Development. The defendants are expected to appear today before U.S. Magistrate Judge Karen M. Williams in Camden federal court.
According to the Indictment:
Real estate agents Diantonio, Catarro, and Lockwood located properties in Wildwood and North Wildwood, N.J., for sale by real estate developers such as Morello. Diantonio, Catarro, and Lockwood caused real estate sales contracts to be created, which listed deposit monies from buyers that often were not collected. The conspirators also agreed that sellers such as Morello would pay kickbacks to the buyers of the properties without disclosing the kickbacks to the lending institutions funding mortgages used by the buyers to purchase the properties. The conspirators caused fraudulent documents to be signed at real estate closings, including U.S. Department of Housing and Urban Development Settlement Statements, which failed to disclose the kickbacks paid to the buyers or which falsely stated that a deposit toward the purchase of the property had been collected. Diantonio, Catarro, and Lockwood received real estate sales commissions for putting the transactions together.
The wire fraud conspiracy charge is punishable by 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. The false statements charge carries a maximum potential penalty of two years in prison and a $250,000 fine.
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 Velasquez in Newark; special agents from the FBI’s Newtown Square Resident Agency, under the direction of Acting Special Agent in Charge John J. Brosnan in Philadelphia; special agents from IRS – Criminal Investigation in Philadelphia, under the direction of Special Agent in Charge Akeia Conner; and special agents from the Department of Housing and Urban Development Office of Inspector General, under the direction of Special Agent in Charge Joseph Clarke in Philadelphia for the investigation leading to the Indictment and arrests.The government is represented by R. Stephen Stigall, Attorney in Charge of the U.S. Attorney’s Office in Camden.
The charges and allegations contained in the Indictment are merely accusations, and the defendants are considered innocent unless and until proven guilty.
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Diantonio, Fredric, et al. Indictment
Former NFL Player Sentenced to Seven Months in Prison for Failure to File Tax ReturnRead the Press Release
CAMDEN, N.J. – A former National Football League player who formerly resided in Passaic County was sentenced today to seven months in prison for failing to file a federal income tax return, U.S. Attorney Paul J. Fishman announced.
William James, 33, of Brownsville, Pa., formerly known as William J. Peterson, pleaded guilty on May 23, 2012, before U.S. District Court Judge Jerome B Simandle to Count One of a five-count Information. Count One charged James, who formerly resided in Woodland Park, N.J., with having willfully failed to file a tax return for the tax year 2005.
According to documents filed in this case:
James was a professional football player from 2001 to 2010, having played for teams that included the New York Giants and the Philadelphia Eagles. While playing professionally, James earned a substantial income from the NFL teams for which he played. In 2005 his salary was $5.5 million. James was required to file an individual income tax return because his gross income exceeded the sum of the personal and standard deductions available to him that year.
Although he had repeatedly been advised by the IRS and by his personal accountant that he was obligated to file a tax return, James ignored their notices and failed to file a return.
In addition to the prison term, Judge Simandle sentenced James to one year of supervised release. As part of the plea agreement, James has agreed to file back returns and to pay back taxes and penalties, which total $470,254. He has already served four months in custody.
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 sentence.
The government is represented by Assistant U.S. Attorney Bohdan Vitvitsky of the U.S. Attorney’s Economic Crimes Unit in Newark.
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Defense Counsel: Lori Koch Esq., Assistant Federal Public Defender, CamdenFormer Camden Police Officer Sentenced to 46 Months in Prison for Conspiracy to Deprive Others of Civil RightsRead the Press Release
CAMDEN, N.J. – A former Camden police officer was sentenced today to 46 months in prison for conspiring with fellow officers to deprive others of their civil rights, U.S. Attorney Paul J. Fishman announced.
Jason Stetser, 34, of Waterford Township, N.J., previously pleaded guilty before U.S. District Judge Robert B. Kugler in Camden federal court. He admitted he conspired with Antonio Figueroa, 36, of Camden; Dan Morris, 49, of Mount Laurel, N.J.; and Kevin Parry, 32, of Brooklawn, N.J., to deprive others of their due process rights and their right to be free from unreasonable searches and seizures.“The punishment handed down today is a just response to Jason Stetser’s betrayal of his oath of office,” U.S. Attorney Fishman said. “He also betrayed the trust of those whose rights he violated, the public he was sworn to protect, and all of the honest police officers who risk everything to keep us safe.”
According to documents filed in this case and statements made in court:
From May 2007 to October 2009, while on duty as a uniformed police officer with the Camden Police Department, Stetser engaged in a conspiracy with other Camden Police officers to deprive individuals of their due process rights by charging them with planted evidence; threatening certain individuals with arrest using planted evidence if they did not cooperate with law enforcement; conducting illegal searches without a search warrant or consent; stealing money during illegal searches and arrests; paying for cooperation and information with illegal drugs; failing to report found drugs and stashing them to use as planted evidence; and preparing false police reports or testifying falsely in court to conceal his actions.
In addition to the prison term, Judge Kugler sentenced Stetser to two years of supervised release.Morris previously pleaded guilty to conspiracy to deprive others of civil rights and was sentenced Dec. 11, 2012, to eight months in prison. Parry was sentenced Oct. 10, 2012, to 20 months in prison. Figueroa was convicted following a three-and-a-half week trial before Judge Kugler and was sentenced on Sept. 7, 2012, to 120 months in prison.
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 J. Brosnan; investigators and prosecutors of the Camden County Prosecutor’s Office, under the direction of Prosecutor Warren W. Faulk; deputy attorney generals from the N.J. Attorney General’s Office, Division of Criminal Justice, under the direction of Attorney General Jeffrey Chiesa; and the Camden Police Department, under the direction of Chief John S. Thomson, with the investigation leading to today’s sentence.
The government is represented by Assistant U.S. Attorneys William E. Fitzpatrick and Matthew J. Skahill of the U.S. Attorney’s Office in Camden.
13-051Defense counsel: Frederick W. Klepp Esq., Cherry Hill, N.J.
Business Owner Admits Orchestrating $3 Million Bank FraudRead the Press Release
NEWARK, N.J. – The owner of a Phillipsburg, N.J., luggage manufacturing company admitted today that he defrauded the Lakeland Bank of Oak Ridge, N.J., of $3 million, U. S. Attorney Paul J. Fishman announced.
Richard Rekuc, 59, of Asbury, N. J., pleaded guilty before U. S. District Judge William J. Martini in Newark federal court to an Information charging him with one count of bank fraud.According to the documents filed in this case and statements made in court:
Rekuc operated a luggage manufacturing company called Royalox International Inc, based in Phillipsburg. Rekuc arranged with Lakeland Bank to obtain a line of credit for Royalox that was based on Royalox’s accounts receivable: the higher Royalox’s sales, the more money it could borrow from the line of credit.
An investigation led by the Federal Deposit Insurance Corporation revealed that between 2004 and December 2009, Rekuc was submitting false invoices and copies of payments to Lakeland so that he could draw on his line of credit. Rekuc first opened fake bank accounts in names very similar to some of the clients with whom Royalox did business. Rekuc moved money from bank accounts he controlled to the fake accounts. He then created fictitious invoices, billed the fictitious “companies,” and made payments from the fake company accounts to Royalox. Rekuc submitted the false invoices and the copies of the payments from the fake company accounts to the Royalox accounts.
These false documents gave Lakeland the impression that Royalox was doing a substantial amount of business and was entitled to draw off the accounts receivable line of credit to cover payments for materials and other expenses. In fact, Rekuc was pocketing the money. Rekuc’s actions caused Lakeland Bank to lose $3 million.
The bank fraud charge to which Rekuc pleaded guilty carries a maximum potential penalty of 30 years in prison and a $1 million fine. Sentencing is set for May 6, 2013.
U.S. Attorney Fishman credited special agents of the Federal Deposit Insurance Corporation under the direction of FDIC-Office of Inspector General, Inspector General Jon. T. Rymer, with the investigation which led to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Zach Intrater of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
This case was brought in coordination with President Barack Obama’s interagency Financial Fraud Enforcement Task Force, which was established 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.
13-056Defense counsel: Donald McCauley Esq., Newark, N.J.
Rekuc, Richard Information
Union County, N.J., Woman Admits Serving as the Getaway Driver During A Middlesex, N.J. Bank RobberyRead the Press Release
NEWARK, N.J. – A Union County, N.J., woman today admitted serving as the getaway driver during the July 12, 2012, bank robbery of Unity Bank located at 1230 Bound Brook Road (Route 28) in Middlesex, N.J., U.S. Attorney Paul J. Fishman announced.
Teresa Webb, 41, of Plainfield, N.J., pleaded guilty before U.S. District Court Kevin McNulty in Newark federal court to an Information charging her with one count of bank robbery.
According to documents filed in this case and statements made in court:
On July 31, 2012, Claude Williams, 60, of Elizabeth, N.J., was charged by Complaint with six counts of bank robbery and two counts of using a firearm in furtherance of a crime of violence. In the course of those robberies, Williams would generally send an accomplice into the bank to case it shortly before he entered to commit the robbery.
Before the July 12, 2012, robbery, Webb entered the Unity Bank twice without doing any banking. A short while later, an unarmed, off-duty police officer observed Williams leave the bank, get into the rear of the getaway car, and crouch down. After noting the license plate number, the officer followed the car. Webb, who was driving the getaway car, attempted to elude the officer.
After Webb’s unsuccessful attempt to elude the officer, Williams got out of the car and pointed his gun at the officer, forcing her to leave the scene without apprehending Williams and Webb.
The bank robbery count to which Webb pleaded guilty is punishable by a maximum potential penalty of 25 years in prison and a $250,000 fine, or twice the gain or loss from the offense. Sentencing is scheduled for May 8, 2013.U.S. Attorney Fishman credited special agents with the FBI, under the direction of Acting Special Agent in Charge David Velazquez in Newark with the investigation leading to the arrest. He also thanked the Somerset County Prosecutors Office and the Middlesex Borough, Piscataway, Clifton, Metuchen, North Plainfield, and Plainfield Police Departments for their work in this case.
The government is represented by Assistant U.S. Attorney Osmar J. Benvenuto of the U.S. Attorney’s Office General Crimes Unit in Newark.
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Defense counsel: Bruce S. Rosen Esq., Toms River, N.J.Webb Information
Ocean County, N.J., Woman Admits Bankruptcy FraudRead the Press Release
TRENTON, N.J. – An Ocean County, N.J., woman today admitted concealing from a bankruptcy trustee profits she had made on a Ponzi scheme investment, U.S. Attorney Paul J. Fishman announced.
Marjorie Parise, 51, of Manahawkin, N.J., pleaded guilty before U.S. District Judge Freda L. Wolfson in Trenton federal court to one count of bankruptcy fraud.
According to documents filed in this case and statements made in court:
In 2003, Parise and her husband invested approximately $115,750 with a company known as Global Trading Investments, LLC, and received in return, profits totaling $429,154.91. However, the owners of Global Trading were operating a Ponzi scheme and the profits that Parise received were actually the investments of other individuals. Global Trading subsequently filed for Chapter Seven bankruptcy protection.
On Aug. 24, 2006, a judgment was entered against Parise requiring her to return the profits she had made from her investments in the scheme. However, Parise took numerous steps to fraudulently conceal a significant amount of funds and assets from the Trustee, including making false statements and omissions during a deposition in the bankruptcy proceeding.
Parise also took other steps to avoid detection and to keep assets from being seized as part of this proceeding. From Sept. 14, 2006, through Dec. 8, 2006, she withdrew at least $455,850 in cash from the bank accounts which had not been disclosed to the trustee. Parise made 67 currency withdrawals, none of which exceeded the $10,000 threshold for the filing of Currency Transaction Reports. In November 2006, Parise transferred ownership of her residence from her name only to the names of both her and her husband, and increased the home equity line of credit on the home.
On July 7, 2008, Parise filed for individual Chapter Seven bankruptcy protection. On her bankruptcy petition, she fraudulently failed to report millions of dollars in real estate holdings plus hundreds of thousands of personal assets.
The count of bankruptcy fraud to which Parise pleaded guilty is punishable by a maximum potential penalty of five years in prison and a fine of $250,000. Sentencing is scheduled for May 10, 2013.
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 for the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney R. Joseph Gribko, of the U.S. Attorney’s Office in Trenton.
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Defense counsel: Michael Pinsky Esq., Haddon Township, N.J.
Parise Indictment
Former 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.
Eric Reilly, 34, of Galloway, N.J., pleaded guilty to an Information charging him with one count of conspiracy to commit mail and wire fraud. Reilly entered his 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, purported to offer owners of timeshares consulting services, including timeshare cancellation services. In September 2010, Reilly started working at the VO Group and was trained by VO Group managers to call customers using a prepared script and regularly lie to customers. Reilly would call customers and falsely state that he was calling in response to a complaint they had made to timeshare developers and lenders. He gave customers the false impression that he was working for Wyndham Vacation Resorts, a developer of timeshare resorts. Reilly then would falsely represent that the VO Group could pay off the customers’ timeshares or have their timeshares cancelled. Reilly falsely told some customers that their credit would not be damaged if they stopped paying for their timeshares. Reilly gave some customers “references” who were actually VO Group employees posing as satisfied customers. After hearing Reilly’s false representations, some customers sent checks to the VO Group, including one customer who sent the VO Group a $31,385 check. Reilly admitted to causing more than $70,000 in losses.
At 2:00 p.m. today, other former members of the VO Group who were charged in a Superseding Indictment on Jan. 23, 2013, will be arraigned before Judge Hillman.
The mail and wire fraud conspiracy charge to which Reilly pleaded guilty is punishable by 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 scheduled for May 17, 2013.
U.S. Attorney Fishman credited special agents from the FBI’s Atlantic City Resident
Agency, under the direction of 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 the investigation leading to today’s guilty plea.
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.13-048
Defense counsel: Gilbert J. Scutti Esq., Somerdale, Camden, N.J.
Bergen County, N.J., Man Admits His Role in Large-Scale Identity Theft Ring and Tax EvasionRead the Press Release
NEWARK, N.J. – A Bergen County man today admitted his role in a large-scale and sophisticated identity theft scheme, U.S. Attorney Paul J. Fishman announced.
Sang-Kyu Seo, 63, of Palisades Park, N.J., pleaded guilty before U.S. District Judge Katharine S. Hayden to a five-count Information that charged him with conspiracy to unlawfully produce identification documents and false identification documents (Count One), aggravated identity theft (Count Two), conspiracy to commit wire fraud (Count Three); conspiracy to commit bank fraud (Count Four), and tax evasion (Count Five). He was arrested on Sept. 16, 2010, and released on $250,000 bail.
According to documents filed in this case and statements made in Newark federal court:
Seo was the owner and operator of Hang Jin Yi Inc., d/b/a Hwangini, a salon located in North Bergen, N.J., and Pier 7 Corporation, a purported small business located in Palisades Park. Seo conspired with Sang-Hyun Park, a/k/a “Jimmy,” and others to obtain a Social Security card beginning with the prefix “586” for another individual. These “586” Social Security cards were issued by the United States to individuals, usually from China, who were employed in American territories, such as Guam. Park is alleged to have been the leader of a criminal organization headquartered in Bergen County, N.J. that obtained, brokered, and sold identity documents to customers for the purpose of committing credit card fraud, bank fraud, tax fraud, and other crimes. Park pleaded guilty on Jan. 9, 2012, to his role in the enterprise and is awaiting sentencing.
The Park Criminal Enterprise engaged in the fraudulent “build up” of credit scores associated with the Chinese identities. They did so by adding the Chinese identity as an authorized user to the credit card accounts of various co-conspirators who received a fee for this service – members of the enterprise’s credit build up teams. By attaching the Chinese identities to these existing credit card accounts, the teams increased the credit scores associated with the Chinese identities to between 700 and 800. The members of the build up teams knew neither the real person to whom the identity belonged nor virtually any of the customers who had purchased the identities.
After building up the credit associated with these identities, Park and his co-conspirators directed, coached, and assisted the customers in opening bank accounts and obtaining credit cards. Park and his co-conspirators then used these accounts and credit cards to commit fraud. In particular, Park relied on several collusive merchants who possessed credit card processing, or swipe, machines. For a fee, known as a “kkang fee,” these collusive merchants charged the fraudulently obtained credit cards, although no transaction took place. After receiving the money into their merchant accounts from the credit cards related to these fraudulent transactions, the collusive merchants gave the money to Park and his co-conspirators, minus their “kkang fee.”Seo admitted that he obtained a “586” Social Security card and counterfeit driver’s licenses through Park for a family member, who then used this identity to “bust out” credit cards.
Seo also admitted that he gave his corporate and personal credit cards to Park for the purpose of “busting out” these maxed out credit cards. In furtherance of this conspiracy, Park and his co-conspirators issued worthless checks, drawn on bank accounts that had been established using the “586” identities, as payment toward the balances on Seo’s credit cards. Before the banks and credit card companies realized that these checks were bogus, Park and his co-conspirators charged Seo’s credit cards through collusive merchants or used them to purchase merchandise. On Oct. 3, 2009, Park and Seo spoke over the phone concerning this scheme. During this intercepted call, the following conversation ensued:
Park: You know it. If you don't pay for the debt, the score becomes bad.
Seo: That's right. Anyhow, it was already dropped.
Park: And then, you don't have to worry about if someone will come from a bank.
Seo: Yes, yes. Anyway, later . . . . I will declare Chapter 7 or Chapter 13 bankruptcy.
Seo also admitted that in mid-2007, with the assistance of a loan broker, fraudulently obtained a $100,000 commercial loan on behalf of Pier 7. Seo admitted that he and the loan broker made false statements to obtain the loan, including falsely representing this his business’ annual revenue was approximately $620,000.
Finally, Seo admitted that he committed tax evasion by issuing checks to himself and others, representing income derived through the operation of Hwangini, and then failing to report this income on his personal tax returns. For example, Seo admitted that on or about April 15, 2008, he filed an individual income tax return for tax year 2007. This return declared that his taxable income for calendar year 2007 was approximately $197, and the amount of tax due and owing was approximately $19. Seo admitted that this return failed to include $304,848 in additional taxable income that he had received in 2007, thus having an additional tax of $81,643 due and owing to the United States.
Seo faces the following statutory maximums: 15 years in prison (Count One); two years in prison, mandatory minimum (Count Two); 30 years in prison (Counts Three and Four); and five years in prison (Count Five). Sentencing is scheduled for May 14, 2013.
U.S. Attorney Fishman praised special agents of the FBI, under the direction of Special
Agent in Charge David Velazquez in Newark; IRS – Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen; the Department of Homeland Security’s
Immigration and Customs Enforcement, under the direction of Special Agent in Charge Andrew M. McLees; and the Bergen County Prosecutor’s Office, under the direction of Prosecutor John L. Molinelli and the Office’s Chief of Detectives Steven Cucciniello, for the investigation leading to today’s plea.The government is represented by Assistant U.S. Attorney Anthony Moscato of the U.S. Attorney’s Office Organized Crime/Gangs Unit in Newark.
As for other members of the Park Criminal Enterprise, the charges and allegations contained in the Complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
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Defense Counsel: Wanda M. Akin Esq., Newark
Seo Information
Atlantic County, N.J., Man Sentenced to 151 Months in Prison for Bank RobberyRead the Press Release
CAMDEN, N.J. – An Atlantic County, N.J., man was sentenced today to 151 months in prison for robbing Wells Fargo Bank in Atlantic City, N.J., and Sun National Bank in Ventnor, N.J., on Jan. 12, 2012, U.S. Attorney Paul J. Fishman announced.
Larry Patrick Kearns, 46, of Landisville, N.J., previously pleaded guilty before U.S. District Judge Jerome B. Simandle to an Information charging him with two counts of bank robbery. Judge Simandle imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
On Jan. 12, 2012, Kearns entered a Wells Fargo Bank in Atlantic City, approached a bank teller, threatened her, and demanded money from her. The bank teller complied with Kearns’ demand, and Kearns fled the bank with the money. Kearns traveled to Margate, N.J., and stole a car, which he used in the robbery of the Sun National Bank in Ventnor that same day. Again, Kearns approached a bank teller, threatened her, and demanded money from her. The bank teller complied and Kearns fled the bank with the money in the stolen car. While fleeing from the robbery, Kearns crashed the stolen car into a tree and was apprehended by police.
In addition to the prison term, Judge Simandle sentenced Kearns to three years of supervised release and ordered him to pay $9,458 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, as well as the Atlantic City Police Department, the Ventnor Police Department, the Margate Police Department and the Atlantic County Prosecutor’s Office for the investigation leading to today’s sentence.
The government was represented by Assistant U.S. Attorney Diana Carrig of the U.S. Attorney’s Office Criminal Division in Camden.
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Defense counsel: Maggie Moy Esq., Assistant Federal Public Defender, CamdenFormer Dockworker Sentenced to 30 Months in Prison for Extortion Conspiracy Involving Christmastime Tribute PaymentsRead the Press Release
NEWARK, N.J. – A former International Longshoremen’s Association (“ILA”) member was sentenced to 30 months in prison today for conspiring to extort ILA Local 1235 longshoremen on the New Jersey piers for Christmastime tribute payments, New Jersey U.S. Attorney Paul J. Fishman and Eastern District of New York U.S. Attorney Loretta E. Lynch announced.
Edward Aulisi, 53,of Flemington, N.J., previously pleaded guilty before U.S. District Judge Dennis M. Cavanaugh in Newark federal court to conspiring to extort Christmastime tributes from the ILA Local 1235 members – Count Three of the Second Superseding Indictment against him.
According to documents filed in this case and statements made in court:Edward Aulisi conspired with his father, Vincent Aulisi – the former President of ILA Local 1235 who succeeded another co-defendant, Albert Cernadas – and Michael Coppola, a Genovese organized crime family captain, in the scheme. Coppola was convicted in July 2009 following a trial in the Eastern District of New York of racketeering and racketeering conspiracy, based in part on acts relating to extortion and wire fraud concerning ILA Local 1235.
Edward Aulisi admitted he participated in telephone calls in furtherance of the extortion conspiracy in March 2007 with Coppola – who was then a fugitive from a New Jersey state murder after having been served with a summons to provide DNA in 1996. Edward Aulisi agreed that he passed information to Coppola on the calls – specifically that Cernadas had told Vincent Aulisi the Christmastime extortion scheme would cease once Cernadas left the presidency, and Vincent Aulisi stated it would continue. Edward Aulisi also admitted Vincent Aulisi had asked him to tell Coppola the Christmastime extortion collections had almost doubled.
Edward Aulisi admitted it had been his intention to deliver Christmastime tribute money extorted from ILA Local 1235 members to Coppola had Coppola not been arrested shortly after the phone calls.
In addition to the prison term, Judge Cavanaugh sentenced Edward Aulisi to two years of supervised release and fined him $10,000.
Coppola is serving a 16-year prison term on his conviction.
U.S. Attorneys Fishman and Lynch credited the FBI in New Jersey and New York and the Department of Labor’s Office of Inspector General with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorneys Jacquelyn M. Kasulis and Jack Dennehy of the U.S. Attorney’s Office, Eastern District of New York, and Assistant U.S. Attorney Anthony Mahajan, of the U.S. Attorney’s Office, District of New Jersey.
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Defense counsel: Robert E. Lytle Esq., Lawrenceville, N.J.Federal Jury Convicts Newark, N.J., Man of Illegal Firearm/Drug PossessionRead the Press Release
CAMDEN, N.J. – A Newark, N.J., man was convicted by a federal jury today of possession of cocaine and marijuana with intent to distribute, possession of a firearm in furtherance of a drug trafficking offense and unlawful possession of a loaded handgun by a convicted felon, U.S. Attorney Paul J. Fishman announced.
Jimmil Henderson, 29, was convicted of all three counts of a Superseding Indictment following a five-day trial before U.S. District Judge Joseph H. Rodriguez in Camden federal court.According to documents filed in this case and the evidence at trial:
On Feb. 18, 2011, Newark Police Department officers were patrolling the area of Lincoln Park in Newark and saw Henderson engaging in a hand-to-hand drug transaction. Upon seeing the officers, Henderson ran through Lincoln Park, tossing a 9mm firearm loaded with 11 rounds of ammunition into the park. When the officers apprehended him at the corner of Broad and Pennington streets, they recovered quantities of cocaine and marijuana.
At sentencing, Henderson faces potential penalties as follows:
∙ Count One (possession with intent to distribute) – maximum of 20 years in prison and a $1 million fine.
∙ Count Two (possession of a firearm in furtherance of a drug trafficking offense) – minimum of 5 years in prison, maximum of life in prison, and a $250,000 fine; sentence to run consecutively to any other sentence
∙ Count Three (unlawful possession of a firearm by a convicted felon) – maximum of 10 years in prison and a $250,000 fine).U.S. Attorney Fishman credited special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Acting Special Agent in Charge Donald J. Soranno; and the Newark Police Department, under the direction of Police Director Samuel A. DeMaio and Chief Sheilah A. Coley, for the investigation leading to today’s conviction.
The government is represented by Assistant U.S. Attorney Dara A. Govan and Special Assistant U.S. Attorney James Donnelly of the U.S. Attorney’s Office Organized Crime/Gangs Unit in Newark.
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Defense counsel: Michael Huff Esq., PhiladelphiaHenderson Superseding Indictment