District of New Jersey

NEWARK, N.J. – A permanent substitute teacher at a private school in Jersey City was arrested today after law enforcement officers discovered alleged child pornography on a computer at his residence, U.S. Attorney Paul J. Fishman announced.

Guy West, 44, of Jersey City, N.J., is charged by Complaint with one count of distributing images of child sex abuse over the Internet. West will make his initial court appearance tomorrow before U.S. Magistrate Judge Patty Shwartz in Newark federal court.

According to the criminal Complaint;

On Dec. 18, 2012, West distributed videos and images depicting child sexual abuse on the Internet via peer-to-peer file sharing software, to which others had access in shared directories. Special agents of the FBI executed a search warrant today at West’s residence, seizing digital evidence that contained numerous images depicting child sexual abuse, including material that involved prepubescent minors and material that portrays sadistic or masochistic conduct. The digital evidence seized included three files previously downloaded from West by law enforcement agents working in an undercover capacity on the peer-to-peer network.

On the child pornography distribution count, West faces a mandatory minimum penalty of five years in prison, a maximum potential penalty of 20 years, and a $250,000 fine.

U.S. Attorney Fishman credited special agents of the FBI Child Exploitation Task Force, under the direction of Acting Special Agent in Charge David Velazquez in Newark, the Jersey City Police Department and the Hudson County Prosecutor’s Office with the investigation leading to today’s arrest.

The government is represented by Assistant U.S. Attorney Danielle Alfonzo Walsman of the U.S. Attorney’s Office General Crimes Unit in Newark.

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Defense counsel: Candace Hom Esq., Assistant Federal Public Defender, Newark

West, Guy Complaint

NEWARK, N.J. – An attorney formerly licensed in New Jersey was arrested this morning in connection with a long-running, large-scale mortgage fraud scheme which caused losses of more than $30 million, U.S. Attorney Paul J. Fishman announced.

Michael Rumore, 54, of Lyndhurst, N.J., is charged by Complaint with conspiracy to commit bank fraud and with money laundering. Rumore and seven other co-conspirators were charged by complaint in September 2012. He made his initial appearance and had a bail hearing this afternoon before U.S. Magistrate Judge Patty Shwartz in Newark.

According to the Complaint:

From September 2006 to May 2008, the Rumore and the other defendants engaged in a long-running, large-scale mortgage fraud conspiracy through a mortgage company called Premier Mortgage Services (“PMS”). The conspirators targeted properties in low-income areas of New Jersey (the “subject properties”). After recruiting “straw buyers,” the defendants used a variety of fraudulent documents to make it appear as though the straw buyers possessed far more assets, and earned far more income, than they actually did. The defendants then submitted these fraudulent documents as part of mortgage loan applications to financial institutions.

Relying on these fraudulent documents, financial institutions provided mortgage loans for the subject properties. The defendants then split the proceeds from the mortgages among themselves and others by using fraudulent settlement statements (“HUD-1s”), which hid the true sources and destinations of the mortgage funds provided by financial institutions. Once the money was entered into accounts they controlled, the defendants shuttled funds among various other accounts, in amounts greater than $10,000 per transaction. In reality, as opposed to the defendants’ false representations and fraudulent documents, the straw buyers had no means of paying the mortgages on the subject properties, and many of the subject properties entered into foreclosure proceedings. In total, the conspirators and others defrauded financial institutions out of more than $30 million.

Rumore, an attorney licensed in the State of New Jersey, served as the settlement agent on mortgage loans brokered by other conspirators – Isaac DePaula, Adilson Silva, and Lester Soto – for various Subject Properties. Rumore used his status as an attorney to further the fraudulent scheme, including by convening closings, receiving funds from lenders, and preparing HUD-1s that purported to reflect the sources and destinations of funds for mortgages on subject properties, when in fact, the HUD-1s were neither true nor accurate. At or following the closings, Rumore disbursed mortgage loan proceeds directly to PMS, Soto, DePaula, and Silva, including amounts not reflected on the HUD-1s. Rumore received a fee for each fraudulent loan in which he participated.

The criminal Complaint charges Rumore with one count of bank fraud conspiracy. If convicted, he faces a maximum potential penalty of 30 years in prison and a fine of $1,000,000.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge David Velazquez; and special agents of the IRS, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen for the investigation leading to today’s Complaint. Fishman also thanked the Social Security Administration, under the direction of Special Agent in Charge Edward Ryan, for its role in the investigation.

The government is represented by Assistant U.S. Attorneys Rahul Agarwal of the U.S. Attorney’s Office General Crimes Unit and Zach Intrater of the Economic Crimes Unit in Newark.

This case was brought in coordination with President Barack nObama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

The charge and allegations contained in the Complaint against each defendant are merely accusations, and the defendants are considered innocent unless and until proven guilty.

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Rumore, Michael Complaint

TRENTON, N.J. – An Ocean County, N.J., man was sentenced today to 22 years in prison for taking pornographic pictures of two minors, ages 6 and 3, in Pennsylvania, and distributing those pictures to other individuals between 2008 and 2010, U.S. Attorney Paul J. Fishman announced.

Dwayne Tucker, 26, of Bayville, N.J., previously pleaded guilty before U.S. District Judge Joel A. Pisano to an Information charging him with one count of production of child pornography and one count of possession of child pornography. Judge Pisano imposed the sentence today in Trenton federal court.

“The severe sentence imposed on this defendant is commensurate with the harm he caused his victims,” U.S. Attorney Fishman said. “As this case shows once again, so-called ‘child pornography’ is the recorded sexual assault of a child. The producers of this material are dangerous and must be treated accordingly by the judicial system.”

“This sentence should serve as a warning to those who seek to victimize and rob young children of their innocence,” said Andrew McLees, special agent in charge of Homeland Security Investigations Newark. “HSI will maintain its unrelenting commitment to protecting our children by bringing child predators to justice, a fact evidenced by the significant sentence which Tucker received.”

According to documents filed in this case and statements made in court:

In addition to taking and distributing the pictures, Tucker admitted to possessing more than 600 images of child pornography on his computer and accessories, which were seized from his Bayville residence in December 2010. Tucker acknowledged that among the images of child pornography he possessed were images which depicted minors engaging in sexually explicit conduct with other minors and adults, including material portraying sadistic or masochistic conduct or other depictions of violence.

Tucker was previously charged by Criminal Complaint with possession of child pornography in December 2010, and by Indictment with distribution and possession of child pornography in February 2012. He has been in custody since his arrest in December 2010.

In addition to the prison term, Judge Pisano sentenced Tucker to lifetime supervised release.

U.S. Attorney Fishman credited special agentsU.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI), under the direction of Special Agent in Charge McLees, with the investigation leading to today’s sentence.

The government is represented by Assistant U.S. Attorney Sarah Wolfe of the U.S. Attorney’s Office Criminal Division in Trenton.

Defense Counsel: Hal Haveson Esq., Princeton, N.J.

NEWARK, N.J. – A medical assistant at a pair of large medical services companies with offices in New Jersey and New York admitted today to conspiring with the companies’ chief executive officer to defraud Medicare over a four-year period by performing illegal, unlicensed physicians’ services for patients, U.S. Attorney Paul J. Fishman announced.

Mario Roncal, 61, of Woodland Park, New Jersey, pleaded guilty before U.S. District Judge Jose L. Linares in Newark federal court to an Indictment charging him with one count of conspiracy to commit health care fraud.

According to documents filed in this case and statements made in court:

In 1988, Roncal received a medical degree from San Juan Bautista School of Medicine in San Juan, Puerto Rico. Since that time, however, he was never licensed to practice medicine in New Jersey, New York, or any other state in the United States. In 2000 and 2002, Roncal was advised by the N.J. Board of Medical Examiners that he were ineligible to obtain a medical license in New Jersey because his medical school was not accredited and he lacked certain requirements for international medical students to obtain a license in the United States.

From 2004 to the present, Roncal was employed ostensibly as a medical assistant for Cardio-Med Services LLC, in New Jersey, and for Comprehensive Healthcare & Medical Services LLC, in Manhattan and Queens, New York. These companies were owned and operated by the CEO and head physician at Cardio-Med and Comprehensive Healthcare, who is a board-certified cardiologist licensed to practice medicine in New Jersey and New York, and who is identified in the Indictment as the “CEO-Physician.”

According to Roncal, from 2004 through at least 2008, he conspired with the CEO-Physician to cause Cardio-Med and Comprehensive Healthcare to submit false billing claims to Medicare representing that physicians’ services had been provided by the CEO-Physician when those services had, in fact, been provided by Roncal. Roncal admitted that he held himself out to fellow employees and to patients as “Dr. Roncal,” and that he examined new patients as well as the CEO-Physician’s follow-up patients. He also admitted that he ordered diagnostic tests for patients; diagnosed patients with medical conditions, diseases, and the like; and recommended and prescribed courses of treatment, including surgery and enhanced external counter pulsation (or “EECP”), for patients. Roncal stated that he intentionally ordered unnecessary diagnostic tests for the patients he unlawfully treated, and that he willfully misdiagnosed patients with diseases and conditions such as coronary artery disease and angina, for the purpose of fraudulently prescribing and administering treatments of EECP, at the direction of the CEO-Physician. To disguise that he, rather than the CEO-Physician, was providing these physicians’ services to patients, Roncal forged the CEO-Physician’s signature on paperwork associated with these unlawful services, including on prescription pads and patient charts.

The count to which Roncal pleaded guilty is punishable by a maximum potential penalty of 10 years in prison. Sentencing is scheduled for April 17, 2013.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Charge David Velazquez; the U.S. Department of Health and Human Services, Office of the Inspector General, under the direction of Special Agent in Charge Thomas F. O’Donnell; the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Marie Kelokates; the Social Security Administration, Office of the Inspector General, under the direction of Special Agent in Charge Edward J. Ryan; IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen; and criminal investigators at the U.S. Attorney’s Office, for the investigation leading to the guilty plea.

The case is being prosecuted by Assistant U.S. Attorney Scott B. McBride the U.S. Attorney’s Office’s Health Care and Government Fraud Unit.

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Defense counsel: Alan D. Bowman Esq., Newark

Roncal Indictment

NEWARK, N.J. – A medical assistant at a pair of large medical services companies with offices in New Jersey and New York admitted today to conspiring with the companies’ chief executive officer to defraud Medicare over a four-year period by performing illegal, unlicensed physicians’ services for patients, U.S. Attorney Paul J. Fishman announced.

Mario Roncal, 61, of Woodland Park, New Jersey, pleaded guilty before U.S. District Judge Jose L. Linares in Newark federal court to an Indictment charging him with one count of conspiracy to commit health care fraud.

According to documents filed in this case and statements made in court:

In 1988, Roncal received a medical degree from San Juan Bautista School of Medicine in San Juan, Puerto Rico. Since that time, however, he was never licensed to practice medicine in New Jersey, New York, or any other state in the United States. In 2000 and 2002, Roncal was advised by the N.J. Board of Medical Examiners that he were ineligible to obtain a medical license in New Jersey because his medical school was not accredited and he lacked certain requirements for international medical students to obtain a license in the United States.

From 2004 to the present, Roncal was employed ostensibly as a medical assistant for Cardio-Med Services LLC, in New Jersey, and for Comprehensive Healthcare & Medical Services LLC, in Manhattan and Queens, New York. These companies were owned and operated by the CEO and head physician at Cardio-Med and Comprehensive Healthcare, who is a board-certified cardiologist licensed to practice medicine in New Jersey and New York, and who is identified in the Indictment as the “CEO-Physician.”

According to Roncal, from 2004 through at least 2008, he conspired with the CEO-Physician to cause Cardio-Med and Comprehensive Healthcare to submit false billing claims to Medicare representing that physicians’ services had been provided by the CEO-Physician when those services had, in fact, been provided by Roncal. Roncal admitted that he held himself out to fellow employees and to patients as “Dr. Roncal,” and that he examined new patients as well as the CEO-Physician’s follow-up patients. He also admitted that he ordered diagnostic tests for patients; diagnosed patients with medical conditions, diseases, and the like; and recommended and prescribed courses of treatment, including surgery and enhanced external counter pulsation (or “EECP”), for patients. Roncal stated that he intentionally ordered unnecessary diagnostic tests for the patients he unlawfully treated, and that he willfully misdiagnosed patients with diseases and conditions such as coronary artery disease and angina, for the purpose of fraudulently prescribing and administering treatments of EECP, at the direction of the CEO-Physician. To disguise that he, rather than the CEO-Physician, was providing these physicians’ services to patients, Roncal forged the CEO-Physician’s signature on paperwork associated with these unlawful services, including on prescription pads and patient charts.

The count to which Roncal pleaded guilty is punishable by a maximum potential penalty of 10 years in prison. Sentencing is scheduled for April 17, 2013.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Charge David Velazquez; the U.S. Department of Health and Human Services, Office of the Inspector General, under the direction of Special Agent in Charge Thomas F. O’Donnell; the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Marie Kelokates; the Social Security Administration, Office of the Inspector General, under the direction of Special Agent in Charge Edward J. Ryan; IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen; and criminal investigators at the U.S. Attorney’s Office, for the investigation leading to the guilty plea.

The case is being prosecuted by Assistant U.S. Attorney Scott B. McBride the U.S. Attorney’s Office’s Health Care and Government Fraud Unit.

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Defense counsel: Alan D. Bowman Esq., Newark

Roncal Indictment

TRENTON, N.J. – The founder and president of Venture Development Associates Inc. (“VDA”), a Farmingdale, N.J., company that presents itself as a provider of corporate financing, was sentenced today to 15 months in prison for defrauding an Illinois man out of nearly $50,000, U.S. Attorney Paul J. Fishman announced.

Michael Peniston, 54, of Farmingdale, previously pleaded guilty before U.S. District Judge Anne E. Thompson to an Information charging him with one count of wire fraud in connection with obtaining nearly $50,000 in a false investment scheme from a victim who resided in La Grange, Ill. As part of his plea agreement, Peniston also agreed to pay back $199,169 to a total of four victims. Judge Thompson imposed the sentence today in Trenton federal court.

According to documents filed in this case and statements made in court:

In February 2008, Peniston, through VDA, presented an agreement to the victim that falsely represented that Peniston would use the victim’s capital to acquire “via lease procedure” a “bank instrument” valued at 500,000,000 Euros. The agreement falsely stated that Peniston would use this bank instrument to purchase “Medium Term Notes” that he would sell at a profit, and that he would pay half the profits to the victim investor. That month, in reliance on these false promises, the purported investor made three wire transfers totaling almost $50,000 to a VDA bank account controlled by Peniston.

After these transfers, Peniston and VDA continued to falsely communicate with the investor that the transactions for Medium Term Notes were imminent, and, later, that they had taken place. Later in February, Peniston promised the Illinois investor a $37.4 million payment per week over a period of 40 out of 56 weeks. In April 2008, Peniston sent a letter to the victim, stating that the “transaction” had been concluded and the funds had been forwarded to the Bank of New York.

Peniston never acquired a “bank instrument,” nor any Medium Term Notes. Instead, he spent the investor’s money on personal expenditures.

In late July 2011, Peniston again communicated with the Illinois investor, promising him restitution. To follow up that communication, Peniston faxed the victim a copy of a check for $200,000 and a shipping label, to make it appear that Peniston was providing these funds to an attorney for payment to the victim. Peniston admitted that he made these communications knowing that they were false.

In addition to the prison term, Judge Thompson sentenced Peniston to three years of supervised release.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Charge David Velazquez in Newark, for the investigation leading to today’s sentence.

The government is represented by Assistant U.S. Attorney John E. Clabby of the U.S. Attorney’s Office Criminal Division in Trenton.

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Defense counsel: David Schafer Esq., Assistant Federal Public Defender, Trenton

TRENTON, N.J. – The former bookkeeper of a law firm based in Ocean County, N.J., was sentenced to 21 months for defrauding her former employer by stealing more than $500,000 from the firm, U.S. Attorney Paul J. Fishman announced.

Sharon Wetter, 53, of Forked River, N.J., previously pleaded guilty before U.S. District Judge Mary L. Cooper to an Information charging her with one count of mail fraud. Judge Cooper imposed the sentence today in Trenton federal court.

According to documents filed in this case and statements made in court:

Wetter admitted that between 2004 and October 2010, she embezzled from her former employer, referred to in court documents only as the “law firm,” by wrongfully writing checks from the bank accounts of the firm to pay her outstanding personal credit card balances and to make car payments. Wetter concealed those payments by altering the law firm’s electronic books and records to make it appear that the checks were for legitimate business expenses. Wetter, who had access to checks and bank accounts in order to perform her duties as the firm’s bookkeeper, used that access to divert more than $500,000.

In addition to the prison term, Judge Cooper sentenced Wetter to three years of supervised release, ordered Wetter to make restitution in the amount of $521,596.

U.S. Attorney Fishman credited special agents of the Red Bank office of the FBI, under the direction of Special Agent in Charge David Velazquez, for their work in the investigation of this case.

The government is represented by Assistant U.S. Attorney Harvey Bartle of the U.S. Attorney’s Trenton Office.

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Defense counsel: Anthony Simonetti Esq., Hightstown, N.J.

TRENTON, N.J. – The former bookkeeper of a law firm based in Ocean County, N.J., was sentenced to 21 months for defrauding her former employer by stealing more than $500,000 from the firm, U.S. Attorney Paul J. Fishman announced.

Sharon Wetter, 53, of Forked River, N.J., previously pleaded guilty before U.S. District Judge Mary L. Cooper to an Information charging her with one count of mail fraud. Judge Cooper imposed the sentence today in Trenton federal court.

According to documents filed in this case and statements made in court:

Wetter admitted that between 2004 and October 2010, she embezzled from her former employer, referred to in court documents only as the “law firm,” by wrongfully writing checks from the bank accounts of the firm to pay her outstanding personal credit card balances and to make car payments. Wetter concealed those payments by altering the law firm’s electronic books and records to make it appear that the checks were for legitimate business expenses. Wetter, who had access to checks and bank accounts in order to perform her duties as the firm’s bookkeeper, used that access to divert more than $500,000.

In addition to the prison term, Judge Cooper sentenced Wetter to three years of supervised release, ordered Wetter to make restitution in the amount of $521,596.

U.S. Attorney Fishman credited special agents of the Red Bank office of the FBI, under the direction of Special Agent in Charge David Velazquez, for their work in the investigation of this case.

The government is represented by Assistant U.S. Attorney Harvey Bartle of the U.S. Attorney’s Trenton Office.

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Defense counsel: Anthony Simonetti Esq., Hightstown, N.J.

NEWARK, N.J. – Two Essex County, N.J., men appeared in Newark federal court today in connection with charges arising out of three carjackings that occurred on the same day in March 2012 in Essex and Hudson counties, U.S. Attorney Paul J. Fishman announced.

Louis Holmes, 24, of Newark, is charged in a five-count Complaint with one count of conspiracy to commit carjacking; three counts of theft of a motor vehicle by force, violence, and intimidation; and one count of use of a firearm in furtherance of a crime of violence. Rosendo Perez, 24, of Irvington, is charged in the same Complaint with one count of conspiracy to commit carjacking; one count of theft of a motor vehicle by force, violence, and intimidation; and one count of use of a firearm in furtherance of a crime of violence.

Both were already in state custody when they were charged by Complaint on Dec. 20, 2012. They both made their initial appearances before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court today.

According to the criminal Complaint:

On the afternoon of March 27, 2012, Holmes and Perez approached two individuals who were sitting in a parked 2009 Acura TL in the area of South 17th Street in Newark. Holmes pointed a firearm at the victims, and both Holmes and Perez ordered the victims out of the car. Holmes and Perez then fled the area in the carjacked vehicle.

That night, Holmes accosted an individual who was approaching a parked 2010 Nissan Maxima, in which another individual was sitting. The car was parked in a McDonald’s parking lot on Communipaw Avenue in Jersey City. Holmes pointed a firearm at the victims, demanded the car keys, and ordered one victim out of the car. Holmes then fled the area in the carjacked vehicle.

One hour later, Holmes approached an individual who was standing near a 2008 Nissan Altima in the area of Mt. Pleasant Avenue in Newark. Holmes pointed a firearm at the victim and demanded the car keys. Holmes then fled the area in the carjacked vehicle.

Defrauded Investors in Multiple States and Abroad; Defendant Faces
Up to 25 Years in Prison

TRENTON, N.J. – An Ocean County, N.J., man today admitted that he ran a real estate investment fraud scheme that caused $200 million in losses and then laundered the proceeds of the scheme, U.S. Attorney Paul J. Fishman announced.

Eliyahu Weinstein, a/k/a “Eli Weinstein,” a/k/a “Edward Weinstein,” a/k/a “Eddie Weinstein,” 37, of Lakewood, N.J., pleaded guilty before U.S. District Judge Joel A. Pisano in Trenton federal court to two counts of the Indictment pending against him: one count of conspiracy to commit wire fraud, and one count of money laundering. Weinstein’s trial on these charges was scheduled to start Jan. 7, 2013. Weinstein’s co-defendant, Vladimir Siforov, is charged in the Indictment with three counts of wire fraud and remains a fugitive.

Under the terms of the plea agreement, which Judge Pisano accepted today, Weinstein may be sentenced to up to 25 years in prison and up to three years of supervised release. He must also provide a full accounting of all monies paid to him during the period covered by the Indictment. Weinstein has also agreed to forfeit $2 million in seized property and pay restitution to the victims of his offenses. Sentencing is scheduled for April 2, 2013.

“Weinstein shamelessly exploited investors’ trust, using doctored documents for properties he didn’t own – including in a town that doesn’t exist – and continued to commit crimes while out on bail,” U.S. Attorney Fishman said. “With false promises of sound investments and charitable donations, he stole $200 million, spending freely on fancy cars, jewelry and gambling trips. And in using victims’ money to collect Judaica, Weinstein robbed from his own community’s present to stockpile artifacts of its past.”

FBI Acting Special Agent in Charge David Velazquez said: “Mr. Weinstein came to the wrong conclusion when he assumed he would never be held accountable for his criminal activity. His greed got the best of him and he will pay a heavy price before the law for the frauds he committed.”
According to documents filed in this case and statements made in court:

From June 2004 through August 2011, Weinstein orchestrated – with the help of Siforov and others – a real estate investment fraud scheme, headquartered in Lakewood, that has resulted in multi-million dollar losses to victim investors.

To induce victims to invest, Weinstein and others made various types of materially false and misleading statements and omissions. Weinstein and others told victims that Weinstein’s inside access to certain real estate opportunities allowed him to buy a particular piece of property at a below-market price. Weinstein and others also told victims that their money would be used to purchase a specific property, and the property would be quickly resold – or “flipped” – to a third-party purchaser that Weinstein had lined up. Victims were also told that the victims’ money would be held in escrow until the closing of a purported real estate transaction.

Weinstein bolstered his lies by creating, and causing to be created, various types of fraudulent documents, including “show checks,” which Weinstein led victims to believe represented Weinstein’s investments in specific transactions, but which in fact were never deposited; forged checks, which had actually been negotiated for small amounts, but which Weinstein altered so as to appear worth millions of dollars; and various kinds of phony legal documents, including mortgages, and deeds.

Weinstein and others initially targeted victims from the Orthodox Jewish community to which Weinstein belonged, exploiting his standing in, and knowledge of, the customs and practices of this community to further the scheme. This type of illegal activity is commonly referred to as “affinity fraud,” and refers to investment scams that prey upon members of identifiable groups, such as religious or ethnic communities, the elderly, or professional groups. The perpetrators of affinity fraud scams frequently are, or pretend to be, members of the group, and they exploit the trust and friendship that exist in groups of people who have something in common.

Weinstein abused the Orthodox community’s practice of engaging in transactions based on trust, and without paperwork, to obtain money from his victims without substantial written records. He would then falsely represent that specific real estate transactions existed, that the victims’ monies were used to fund those transactions, or that the victims’ profits from those transactions were being “rolled” into new investments. Weinstein also used a portion of the fraud’s proceeds to fund “charitable and religious contributions,” which he used to elevate his reputation within the Orthodox Jewish community.

By 2010, Weinstein had tarnished his reputation in the Orthodox Jewish community due to the massive losses caused by his fraud scheme and found it difficult to obtain more money to further the scheme from within the Orthodox Jewish community. In April 2010, Weinstein and others began soliciting victims from outside of the Orthodox Jewish community, whom they defrauded out of additional millions of dollars.

Weinstein also used millions of dollars fraudulently obtained from his victims to fund his own lavish spending, including millions of dollars worth of antique Judaica and other artwork; a multi-million dollar collection of jewelry and watches; gambling in Las Vegas and elsewhere; and Weinstein’s personal expenses, including millions of dollars in credit card bills, millions of dollars in legal bills, and luxury car-lease payments.

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 guilty plea. He also credited agents of the 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. Attorneys Zach Intrater and Gurbir S. Grewal of the U.S. Attorney’s Office Economic Crimes Unit and by Rachael A. Honig, Deputy Chief of the Office’s Criminal Division.

The charges and allegations against Siforov are merely accusations, and he is considered innocent unless and until proven guilty.

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 crime.

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Defense counsel: Robert J. Cleary Esq., New York

Weinstein, Eliyahu Indictment

TRENTON, N.J. – Lydell B. Sherrer, a former deputy commissioner of the N.J. Department of Corrections (“NJDOC”), was sentenced today to 46 months in prison for attempting to obtain $10,000 from an employee in exchange for securing that person’s continued employment with the department or its private contractor, U.S. Attorney Paul J. Fishman announced.

Sherrer, 53, of Neptune, N.J., who previously served as deputy commissioner of the NJDOC and as assistant commissioner of its Division of Programs and Community Services, pleaded guilty before U.S. District Judge Joel A. Pisano to Count One of an Indictment charging him with the extortion of a cooperating witness identified in court filings as “Individual One.” Sherrer was previously charged in a 12-count Indictment with extortion and bribery for soliciting money from five separate employees or former employees of NJDOC between February 2010 and October 2010 in exchange for his official action and assistance. Judge Pisano imposed the sentence today in Trenton federal court.

According to documents filed in this case and statements made in court:

Following Individual One’s layoff notice from the NJDOC in April 2010, Sherrer said he could secure Individual One’s continued employment with the NJDOC or with private entities that contracted with the NJDOC in exchange for $10,000. Sherrer admitted that on May 17, 2010, he accepted $5,000 in cash from Individual One as an installment of the agreed upon $10,000. Sherrer said he solicited and received $69,000 in bribes between 2006 and 2008 from the five individuals identified in the Indictment and from three additional people. Sherrer agreed to forfeit $9,000, which represented proceeds of his criminal activity, and to pay approximately $22,500 in restitution.

In addition to the prison term, Judge Pisano sentenced Sherrer to three years of supervised release and ordered him to pay $22,500 in restitution.

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 their cooperation and assistance throughout the investigation.

The government is represented by Assistant U.S. Attorneys Matthew J. Skahill and J Fortier Imbert of the U.S. Attorney’s Office Special Prosecutions Division.

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Defense counsel: Lisa Van Hoeck Esq., Assistant Federal Public Defender, Trenton

NEWARK, N.J. – A Morris County, N.J., man today admitted possessing and distributing over the Internet images of child sexual abuse, U.S. Attorney Paul J. Fishman announced.

Khalil Survey, 39, of Lake Hiawatha, N.J., was previously arrested on a Complaint and later charged by Indictment with one count of possession of child pornography and one count of distributing child pornography. He pleaded guilty to both counts of the Indictment today before U.S. District Judge William H. Walls in Newark federal court.

According to documents filed in this case and statements made in court:

Special agents of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations and other law enforcement officers executed a search warrant at Survey's home on August 4, 2011, and seized a computer, an iPhone, and several electronic storage devices that contained images and videos of child pornography. The devices included 46,353 images of child sexual abuse, including 983 images involving infants or toddlers and 783 images involving sadomasochistic abuse. On Survey’s iPhone law enforcement found photographs he had taken of himself downloading child pornography onto his home computer.

On the distribution count, Survey faces a mandatory minimum sentence of 5 years in prison and a maximum sentence of 20 years in prison and a $250,000 fine. Sentencing is scheduled for April 9, 2013.

U.S. Attorney Fishman credited special agents of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations, under the direction of Special Agent in Charge Andrew M. McLees 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.

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Defense counsel: Joseph Rotella Esq., Newark

Survey Indictment